Salix's Relistor has its chance to get a jump on AZ's new constipation med

Salix Pharmaceuticals ($SLXP) nabbed the new Relistor approval it was counting on. The FDA blessed the injectable drug as a treatment for all patients with constipation caused by opioid pain relievers, boosting its target market more than tenfold.

Previously, Relistor was approved to treat opioid-induced constipation (OIC) in cancer patients, a population of about 1 million, CEO Carolyn Logan said during last quarter's earnings call. The new pool of potential patients? 11 million.

The new approval will put Relistor in a head-to-head fight with AstraZeneca's ($AZN) brand-new Movantik, which won the FDA nod last week for the general OIC market. And therein lies the challenge for Salix: Movantik is a pill, whereas Relistor goes the subcutaneous injection route.

Salix is optimistic about the drug's chances, predicting peak sales of $300 million-plus, more than double previous estimates. So far, Relistor sales haven't reached the point where they're material enough to break out on their own; Salix books them with more than a half-dozen other drugs, which together brought in $41 million so far this year. Reuters reports that Salix accounted for about $9 million in second-quarter sales.

Cantor Fitzgerald analyst Irina Koffler is less bullish: She's looking at $86.4 million in 2020 sales. "We are more conservative than management because we assume fewer patients may utilize injectables, especially if oral Relistor launches during this time," Koffler told Reuters. She's looking at peak sales of $344 million of an oral version by 2023.

Salix does have a chance to get out in front of AstraZeneca's Movantik. Relistor is already on the market, and AstraZeneca is figuring on a Movantik launch in the first half of next year, thanks to some Drug Enforcement Administration red tape. So, Salix will have some time to get doctors and patients onto the OIC use before AstraZeneca can actually deliver its pills.

Meanwhile, Salix is the subject of some serious deal talk, with Allergan ($AGN) said to be close to inking a buyout deal with the company. But that potential acquisition faces roadblocks from Valeant Pharmaceuticals ($VRX), which is trying to buy Allergan in partnership with Pershing Square Capital Management. Pershing Square's top dog, Bill Ackman, says he'll sue Allergan if a deal goes through, while some top Allergan shareholders are demanding that the company hold off on dealmaking till they have the chance to weigh in on Valeant's offer.

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