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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________.
Commission file number: 000-23265
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SALIX PHARMACEUTICALS, LTD.
(Exact name of Registrant as specified in its charter)
British Virgin Islands 94-3267443
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3801 Wake Forest Road, Suite 205
Raleigh, North Carolina 27609
(Address of principal executive offices, including zip code)
(919) 788-8550
(Registrant's telephone number, including area code)
4101 Lake Boone Trail, Suite 418
Raleigh, NC 27607
(Former address)
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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES [X] NO [ ]
The number of shares of the Registrant's Common Stock outstanding as of
November 8, 2000 was 11,302,771.
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<PAGE>
SALIX PHARMACEUTICALS, LTD.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page No.
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Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets as of September 30, 2000
(unaudited) and December 31, 1999 (audited).............................. 1
Condensed Consolidated Statements of Operations for the
Three and Nine Months Ended September 30, 2000 and 1999
(unaudited) ............................................................. 2
Condensed Consolidated Statements of Cash Flows for the Nine
Months Ended September 30, 2000 and 1999 (unaudited)..................... 3
Notes to Condensed Consolidated Financial Statements........................ 4
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations ...................................................... 5
Item 3. Quantitative and Qualitative Disclosures About Market Risk...................... 9
PART II. OTHER INFORMATION
-------- -----------------
Item 6. Exhibits and Reports on Form 8-K .............................................. 9
Signatures ................................................................................... 10
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION.
Item 1. Condensed Consolidated Financial Statements
SALIX PHARMACEUTICALS, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(Expressed in U.S. Dollars)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- ------------
(unaudited) (audited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 7,011 $ 2,402
Accounts receivable 256 287
Inventory 2,108 378
Prepaids and other current assets 481 390
---- ----
Total current assets 9,856 3,457
Property and equipment, net 188 151
Other assets 162 51
---- ---
$ 10,206 $ 3,659
========= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and other current liabilities $ 3,049 $ 1,444
Deferred revenue 2,957 ----
Commitments ---- ----
Shareholders' equity:
Preferred stock, issuable in series, no par value;
5,000,000 shares authorized; none outstanding ---- ----
Common stock, no par value; 40,000,000 shares authorized; 11,269,447
shares issued and outstanding at September 30, 2000 and 10,208,838
shares issued and outstanding at
December 31, 1999 28,009 27,626
Accumulated deficit (23,809) (25,411)
-------- ---------
Shareholders' equity 4,200 2,215
--------- --------
$ 10,206 $ 3,659
========= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE>
SALIX PHARMACEUTICALS, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except per share data)
(Expressed in U.S. Dollars)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
------------- -------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Product revenue $ 299 $ 75 $ 852 $ 213
Other revenue 4,365 --- 13,737 1,484
---------- -------- ------- --------
Total revenues 4,664 75 14,589 1,697
Expenses:
Cost of products sold 284 111 819 674
License fees 2,522 --- 7,002 297
Research and development 1,161 1,127 2,485 3,977
Selling, general and administrative 1,239 382 2,785 1,501
---------- -------- ------- --------
Total expenses 5,206 1,620 13,091 6,449
---------- -------- ------- --------
Income (loss) from operations (542) (1,545) 1,498 (4,752)
Interest, and other income (expense), net 75 56 113 160
---------- -------- ------- --------
Net income (loss) before tax $ (467) $(1,489) $ 1,611 $ (4,592)
Income tax --- --- 9 ---
---------- -------- ------- --------
Net income (loss) $ (467) $(1,489) $ 1,602 $ (4,592)
========== ======== ======= ========
Net income (loss) per share, basic $ (0.04) $ (0.15) $ 0.15 $ (0.45)
========== ========= ========= ========
Net income (loss) per share, diluted $ (0.04) $ (0.15) $ 0.14 $ (0.45)
========== ========= ========= ========
Shares used in computing net income (loss) per share, basic 11,223 10,209 10,948 10,209
========== ========= ======== ========
Net effect of dilutive stock options based on treasury stock method
using average market price --- --- 316 ---
---------- -------- ------- --------
Shares used in computing net income (loss) per share, diluted 11,223 10,209 11,264 10,209
========== ========= ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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SALIX PHARMACEUTICALS, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands)
(Expressed in U.S. Dollars)
<TABLE>
<CAPTION>
Nine months ended
September 30,
------------------------------
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities
Net income (loss) $ 1,602 $ (4,592)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 95 68
Loss on disposal of equipment 13 ---
Changes in assets and liabilities:
Accounts receivable, inventory and other assets (1,901) 38
Accounts payable and other current liabilities 1,605 58
Deferred revenue 2,957 ---
----------- ----------
Net cash provided by (used in) operating activities 4,371 (4,428)
Cash flows from investing activities
Sale and maturity of short term investments --- 3,000
Purchases of property and equipment (145) (17)
----------- ----------
Net cash provided by (used in) investing activities (145) 2,983
Cash flows from financing activities
Proceeds from issuance of common stock 383 ---
----------- ----------
Net cash provided by financing activities 383 ---
Net increase (decrease) in cash and cash equivalents 4,609 (1,445)
Cash and cash equivalents at beginning of period 2,402 2,763
----------- ----------
Cash and cash equivalents at end of period $ 7,011 $ 1,318
=========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
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SALIX PHARMACEUTICALS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2000
(Unaudited)
1. Organization and Basis of Presentation
Salix Pharmaceuticals, Ltd. was incorporated in the British Virgin
Islands in December 1993 for the purpose of acquiring all of the
outstanding capital stock of Salix Pharmaceuticals, Inc., a California
corporation ("Salix California"), and Glycyx Pharmaceuticals, Ltd., a
Bermuda corporation. Salix California was incorporated in California in
1989 and Glycyx was incorporated in Bermuda in 1992. The Company is
developing new pharmaceuticals, primarily focused in the area of
gastrointestinal disease. The Company currently intends to commercialize
its pharmaceutical products through its own direct sales force in the
United States and via third party distributors or sub-licensees in other
territories. The Company conducts its business within one industry
segment.
The condensed consolidated financial statements include the accounts
of the Company and its wholly owned subsidiaries. All significant
intercompany balances and transactions have been eliminated. All amounts
are denominated in United States dollars. Unless otherwise indicated,
all references to "dollars" or "$" refer to United States dollars.
The accompanying unaudited condensed consolidated financial
statements include all adjustments (consisting only of normal recurring
items) which, in the opinion of management, are necessary for a fair
presentation of financial position, results of operations and cash flows.
These financial statements should be read in conjunction with
Management's Discussion and Analysis of Financial Condition and Results
of Operations included elsewhere in this Report and with the audited
financial statements for the fiscal year ended December 31, 1999 included
in the Company's Annual Report on Form 10-K/A for the fiscal year ended
December 31, 1999 filed with the Securities and Exchange Commission. The
results of operations for interim periods are not necessarily indicative
of results to be expected for a full year or any future period.
These statements have been prepared in accordance with accounting
principles generally accepted in the United States. The application of
these principles conforms in all material respects with financial
statements prepared using accounting principles generally accepted in
Canada. The Company's common stock is currently traded on The Toronto
Stock Exchange under the symbol "SLX".
2. Commitments
At September 30, 2000, the Company had a binding purchase order
commitment for inventory purchases aggregating approximately $2.5 million
to be delivered before January 31, 2001.
3. Inventory
All inventories at December 31, 1999 were classified as raw
materials. Inventories at September 30, 2000 consisted of raw materials
of $1.0 million and finished goods of $1.1 million.
4. Subsequent Event
In November 2000, the Company completed a private placement of its
common stock to a limited number of accredited and sophisticated
investors. The Company raised approximately $14.1 million through the
issuance of 2,260,000 shares of common stock, along with warrants to
purchase 226,000 additional shares at an exercise price of $9.72 per
share. The Company also issued a similar warrant to purchase 158,200
shares to Leerink Swann & Company, the placement agent. The warrants have
a five-year term, and are redeemable by the Company if its
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common stock closes at over $16.90 per share for 10 consecutive trading
days. The Company has also agreed to promptly register the common stock
sold and issuable under the warrants.
5. Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities (SFAS 133). SFAS 133
establishes reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts, and for
hedging activities. SFAS 133 requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. The Company will
adopt SFAS 133 for its fiscal year ending December 31, 2001. The adoption
of this pronouncement is expected to have no impact on the Company's
results of operations or financial position.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial Statements
(SAB 101), which among other guidance clarifies certain conditions to be
met in order to recognize revenue. SAB 101 will require companies to
recognize certain up-front non-refundable fees over the term of the
related agreement unless the fee is in exchange for products delivered or
services performed that represent the culmination of a separate earnings
process. The Company has reviewed the requirements of SAB 101 as it
relates to the Shire Pharmaceuticals agreement signed in May 2000 and
discussed in "Management's Discussion and Analysis of Financial Condition
and Results of Operations" included elsewhere in this Report. A
substantial portion of the first payment from the agreement is in
consideration for prior development of balsalazide and the purchase of
the intellectual property related to balsalazide. This portion of the
first payment was recognized as revenue in the second quarter. The
Company believes that adoption of SAB 101 will not have a material impact
on the Company's results of operations or financial condition.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These forward-looking statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from historical results or anticipated results, including those set forth under
"Cautionary Statement" under "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and elsewhere in, or incorporated by
reference into, this report. The following discussion should be read in
conjunction with the Company's Condensed Consolidated Financial Statements and
notes thereto included elsewhere in this report.
Overview
Salix Pharmaceuticals, Ltd. ("Salix" or "the Company") is a specialty
pharmaceutical company dedicated to acquiring, developing and commercializing
brand name, prescription pharmaceutical products used in the treatment of a
variety of gastrointestinal diseases. The Company does not do any basic research
- instead Salix engages in product "search and development" efforts. Salix's
strategy is to identify and acquire late-stage proprietary pharmaceutical
products having an existing base of safety and efficacy data in humans for the
treatment of gastrointestinal disease, and to apply the Company's regulatory,
product development, and sales and marketing expertise to commercialize these
products. Salix selects products that have potential for rapid regulatory
approval, and that are marketable to U.S. gastroenterologists through the
Company's specialized sales force. Once approval is received for an initial
indication, the Company might perform clinical studies for other broader
indications to expand the approved use of the drug. This strategy is designed to
significantly reduce the expense, time and risk typically associated with
pharmaceutical research and development, and to expedite the commercialization
of higher potential products.
COLAZAL(TM) (balsalazide disodium) and rifaximin are the Company's
first two in-licensed products. Salix in-licensed COLAZAL and completed the
development work which resulted in U.S. Food and Drug Administration (FDA)
approval in July 2000. Salix also in-licensed rifaximin and has completed Phase
III clinical trials on the product. Salix currently intends to strategically
market these and future products to U.S. gastroenterologists through its own
direct sales
5
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force, and form strategic partnerships outside the United States and in markets
where a larger sales organization is necessary.
The Company has generated limited revenues to date from the sales of
products. The Company expects both sales revenues and operating expenses to
increase as the Company intends to launch COLAZAL(TM) in the United States
through its specialized sales force and continues product development and
clinical programs for rifaximin. As of September 30, 2000, the Company had
accumulated losses of approximately $23.8 million. Since 1992, the Company has
financed its operations principally through reimbursement payments, license fees
and milestone revenues under collaborative research and licensing agreements,
and sales of equity and convertible debt securities.
In May 2000, the Company signed an agreement with Shire Pharmaceuticals
Group under which Shire purchased from Salix the exclusive rights to
balsalazide, a treatment for ulcerative colitis, for Austria, Belgium, Denmark,
Finland, France, Germany, Iceland, Republic of Ireland, Luxembourg, Norway, the
Netherlands, Switzerland, Sweden and the United Kingdom. Under the agreement,
Shire paid the Company a first payment of $11.7 million in the second quarter in
consideration for the prior development of balsalazide and the purchase of the
intellectual property related to balsalazide. During the third quarter, Shire
paid the Company a $4.4 million milestone payment in connection with the
transfer of the United Kingdom product license for balsalazide to Shire. Shire
could pay an aggregate of as much as $7.2 million consisting of several
milestone payments payable upon achievement of certain events. $3.0 million of
the first payment was deferred and will be recognized as revenue, if and when
expense is incurred for clinical trials necessary for registration of
balsalazide in France, Germany and the Netherlands.
Balsalazide was first approved in the United Kingdom in July 1997 for
the treatment of acute ulcerative colitis and launched by AstraZeneca under the
brand name COLAZIDE(R) in October 1997. Following receipt of pricing approvals
AstraZeneca launched balsalazide in Sweden and Denmark in March 1999.
AstraZeneca has also received approval for balsalazide in Argentina, Austria,
Belgium, Brazil, Czech Republic, Iceland, Luxembourg, Norway and Switzerland and
applications are pending in several other countries. Balsalazide is also
approved in Italy, where following receipt of pricing approval it will be
distributed by Menarini. On July 24, 2000, the Company announced that
COLAZAL(TM) (balsalazide disodium) was approved by the United States Food and
Drug Administration (FDA) for marketing in the United States for the treatment
of mildly to moderately active ulcerative colitis, a chronic and debilitating
inflammatory disease of the gastrointestinal tract.
Product revenues to date have resulted primarily from sales of
balsalazide in the United Kingdom, Sweden and Denmark. The Company has to date
recognized only nominal product revenues from sales of balsalazide to Menarini
for use in production trials. The Company is obligated to pay to Biorex, the
original licensor of the product, a portion of any gross profit on balsalazide
sales outside the United States, and will also share with Biorex any payments
received from distribution partners outside the United States. In addition, the
Company anticipates product costs will remain high until production volumes
increase, thereby allowing the Company to benefit from economies of scale.
The Company's second product, rifaximin, is currently under
development. The Company obtained the rights to develop, make, use and sell
rifaximin in Canada and the United States from Alfa Wassermann S.p.A. in
exchange for future royalties and milestone payments. Under a separate
agreement, Alfa Wassermann will supply Salix with bulk active ingredient
rifaximin at a fixed price.
The Company intends to pursue regulatory approvals for the initial
indication for rifaximin, bacterial infectious diarrhea, with the cost of the
clinical trials being borne by the Company. The Company is currently sponsoring
a Phase III trial for the treatment of bacterial infectious diarrhea in
travelers, which is expected to be completed during 2000. The Company plans
further development of rifaximin for several other possible indications, which
may include hepatic encephalopathy and antibiotic associated colitis. In
February 1998, the Company received Orphan Drug Designation from the FDA for
rifaximin to treat hepatic encephalopathy. Orphan Drug Designation can entail
advantages in the testing and approval process for the drug.
6
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Results of Operations
Three-Month and Nine-Month Periods Ended September 30, 2000 and 1999
For the three-month period ended September 30, 2000, the Company
recognized product revenue from sales to Shire Pharmaceuticals Group of $0.3
million and other revenue of $4.4 million. During the corresponding three-month
period ended September 30, 1999 the Company recorded product revenue of $0.1
million. Higher other revenues for the three-month and nine-month periods ended
September 30, 2000 were due to the signing of an agreement with Shire under
which Shire purchased from Salix the intellectual property related to
balsalazide disodium, a treatment for ulcerative colitis, for Austria, Belgium,
Denmark, Finland, France, Germany, Iceland, Republic of Ireland, Luxembourg,
Norway, the Netherlands, Switzerland and the United Kingdom. Under the
agreement, Shire paid the Company a first payment of $11.7 million in the second
quarter in consideration for the prior development of balsalazide and the
purchase of the intellectual property related to balsalazide. During the third
quarter, Shire paid the Company a $4.4 million milestone payment in connection
with the transfer of the United Kingdom product license for balsalazide to
Shire.
Total expenses for the three months ended September 30, 2000 and 1999
were $5.2 million and $1.6 million, respectively. Total expenses for the nine
months ended September 30, 2000 and 1999 were $13.1 million and $6.4 million,
respectively. The increases in operating expenses from the corresponding prior
periods were due primarily to non-recurring license fees to licensors and higher
selling, general and administrative expenses associated with the planned launch
of COLAZAL(TM).
Cost of products sold for the three-month and nine-month periods ended
September 30, 2000 were $0.3 million and $0.8 million respectively, compared
with $0.1 million and $0.7 million in the corresponding three-month and
nine-month periods in 1999.
License fees totaled $2.5 million and $7.0 million for the three-month
and nine-month periods ended September 30, 2000. License fees of $0.3 million
were recorded during the corresponding nine-month period ended September 30,
1999. The increase was due to the Company's obligation to its licensor of
balsalazide in connection with funds received under the May 2000 balsalazide
agreement with Shire.
Research and development expenses were $1.2 million and $2.5 million
for the three-month and nine-month periods ended September 30, 2000,
respectively, compared to $1.1 and $4.0 million for the comparable periods in
1999. The decrease in research and development expenses in the nine-month period
ended September 30, 2000 versus the same prior year period is primarily due to
the completion of a balsalazide disodium clinical trial initiated in late 1997
in the United States and reduced expenditures associated with the rifaximin
Phase III clinical trial and other development projects.
Selling, general and administrative expenses were $1.2 million and $2.8
million for the three-month and nine-month periods ended September 30, 2000,
respectively, compared to $0.4 million and $1.5 million in the corresponding
three-month and nine-month periods in 1999. This increase is primarily due to
sales and marketing expenses related to the Company's planned launch of
COLAZAL(TM) in the United States in first quarter 2001.
Interest and other income (expense) for the nine-month period ended
September 30, 2000 compared to the same nine-month period in the prior year is
mainly attributable to increased interest on larger average cash balances in
2000 offset by currency exchange rate fluctuations.
The Company recorded a net loss of $0.5 million for the three months
ended September 30, 2000 compared with a net loss of $1.5 million in the
corresponding three-month period prior year. The Company recorded net income of
$1.6 million for the nine-month period ended September 30, 2000 compared with a
net loss of $4.6 million in the corresponding nine-month period in the prior
year. The decrease in net loss for the three-month periods and the increase in
net income for the nine-month periods are both due to revenue resulting from the
Shire agreement.
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Liquidity and Capital Resources
Since inception, the Company has financed product development,
operations and capital expenditures primarily from funding arrangements with
collaborative partners and from public and private sales of debt and equity
securities.
As of September 30, 2000, the Company had approximately $7.0 million in
cash and cash equivalents. As of December 31, 1999, the Company had
approximately $2.4 million in cash and cash equivalents. The increase of $4.6
million was due to revenue from the Shire agreement offset by cash used to fund
the operating activities of the Company. In November 2000, the Company raised
approximately $14.1 million in a private placement of common stock and warrants.
See Note 4 of Notes to Condensed Consolidated Financial Statements.
As of September 30, 2000, the Company had no long-term obligations. As
of September 30, 2000 the Company had non-cancelable purchase order commitments
for inventory purchases of approximately $2.5 million to be delivered before
January 31, 2001
The Company has sustained continuing operating losses and had an
accumulated deficit of $23.8 million as of September 30, 2000. The Company
expects to incur substantial and increasing operating losses until product
revenues reach a sufficient level to support ongoing operations. The Company
believes its current cash and investment balances should be sufficient to
satisfy the cash requirements of the Company for the foreseeable future and
until such time, if at all, that it needs to raise additional funds in the form
of debt or equity financing to fund future licensing, development and
commercialization of rifaximin and new products. However, the Company's actual
cash requirements might vary materially from those now planned because of a
number of factors, including the results of research and development activities,
FDA and foreign regulatory processes, establishment of and change in
relationships with strategic partners, technological advances by the Company and
other pharmaceutical companies, the terms of the Company's collaborative
arrangements with strategic partners, and the status of competitive products.
The Company might also enter into additional collaborative arrangements with
corporate partners that could provide the Company with additional funding in the
form of equity, debt, licensing, milestone and/or royalty payments. There can be
no assurance that the Company will be able to enter into such arrangements or
raise any additional funds on terms favorable to the Company.
Cautionary Statement
The Company operates in a highly competitive environment that involves
a number of risks, some of which are beyond the Company's control. The following
statement highlights some of these risks.
Statements contained in "Management's Discussion and Analysis of
Financial Conditions and Results of Operations" which are not historical facts
are or might constitute forward-looking statements under the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Although the
Company believes the expectations reflected in such forward-looking statements
are based on reasonable assumptions, it can give no assurance that its
expectations will be attained. Forward-looking statements involve known and
unknown risks that could cause the Company's actual results to differ materially
from expected results. Factors that could cause actual results to differ
materially from the Company's expectations include, among others: the Company's
limited sales and marketing experience; the high cost and uncertainty of the
research, clinical trials and other development activities involving
pharmaceutical products; the Company's ability to fund its activities internally
or through additional financing, if necessary; the unpredictability of the
duration and results of regulatory review of New Drug Applications and
Investigational New Drug Applications; the Company's dependence on its two
pharmaceutical products, balsalazide and rifaximin, and the uncertainty of
market acceptance of those products; the possible impairment of, or inability to
obtain, intellectual property rights and the costs of obtaining such rights from
third parties; intense competition; the uncertainty of obtaining, and the
Company's dependence on, third parties to manufacture and sell its products; and
results of future litigation and other risk factors detailed from time to time
in the Company's Securities and Exchange Commission filings. The Company does
not undertake any obligation to release publicly any revisions to these
statements to reflect later events or circumstances or to reflect the occurrence
of unanticipated events.
8
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company's purchases of raw materials and its product sales to its
European distribution partners are denominated in Pounds Sterling. Translation
into the Company's reporting currency, the United States dollar, has not
historically had a material impact on the Company's financial position.
Additionally, the Company's net assets denominated in currencies other than the
functional currency have not exposed the Company to material risk associated
with fluctuations in currency rates. Given these facts, the Company has not
considered it necessary to use foreign currency contracts or other derivative
instruments to manage changes in currency rates.
Due to the nature and maturity of the Company's short-term investments,
the Company does not believe these investments present significant market risk.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.28 Salix Pharmaceuticals, Ltd. 1996 Stock Option Plan, as amended,
September 2000.
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SALIX PHARMACEUTICALS, LTD.
Date: November 14, 2000 By: /s/ Robert P. Ruscher
---------------------------
Robert P. Ruscher, President and
Chief Executive Officer
Date: November 14, 2000 By: /s/ Adam C. Derbyshire
---------------------------
Adam C. Derbyshire, Vice
President, Finance &
Administration, Chief Financial
Officer and Corporate Secretary
10
