Salix Pharmaceuticals’ antibiotic Xifaxan was approved by the FDA for the treatment of traveler’s diarrhea (TD) in 2004. However, the majority of Xifaxan use is accounted for by off-label indications, growth in which is essential to its revenue potential. Taking this into account, Datamonitor forecasts sales of $106 million in 2008, ahead of Wall Street expectations of $76 million in 2008.
Xifaxan is an orally administered rifamycin antibacterial that is poorly absorbed by the gastrointestinal (GI) tract, thereby acting as a topical antibiotic in the gut. As a result, it has the potential to cause less adverse effects than systemic antibiotics.
Xifaxan is used extensively off-label in various GI diseases, with a recent physician survey suggesting that 31% of prescriptions are for the treatment of irritable bowel syndrome (IBS) with an additional 43% split primarily among hepatic encephalopathy (HE), C. difficile-associated diarrhea (CDAD) and Crohn’s disease (CD).
However, the survey also suggested that in its current approved indication of TD sales growth is limited as discounted generic formulations are widely available. As such, the continued increase in use in other GI diseases is crucial for sales growth.
Overwhelmingly, the most commonly identified barrier to use of Xifaxan by surveyed physicians is the limited third party reimbursement for use in off-label indications. On average surveyed physicians estimated that 46% of the patients to whom they would choose to prescribe Xifaxan do not receive the drug because of financial issues. As such, label expansion into various GI diseases is essential for long-term growth.
Xifaxan can be expected to receive FDA approval for the treatment of HE and CDAD in mid 2009, driving prescription growth in these indications. Surveyed physicians estimated that use of Xifaxan in HE could increase 350% over its current penetration with FDA approval, compared to peaking at 120% growth without FDA approval. Likewise, FDA approval for CDAD could increase its use by 412% compared to 80% growth through off-label use only.
Even if the drug does not receive approval for the treatment of IBS or CD within the forecast timeframe – which could increase the prescriptions of Xifaxan by more than 500% – Datamonitor still predicts sales above market expectations. Datamonitor forecasts 2006 sales of $49 million growing to $82 million in 2007 and $106 million in 2008, ahead of Wall Street expectations of $47 million in 2006, $68 million in 2007 and $76 million in 2008.
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