Salix Pharmaceuticals, a North Carolina-based developer and marketer of prescription pharmaceutical products and medical devices, and RedHill Biopharma, an emerging Israeli biopharmaceutical company, have entered into an exclusive agreement by which Salix has licensed the worldwide exclusive rights to RedHill's RHB-106 encapsulated formulation for bowel preparation and rights to other purgative developments.

Financial terms include an upfront payment of $7 million and $5 million in subsequent milestone payments to RedHill. Salix also has agreed to pay RedHill tiered royalties on net sales, ranging from low single-digit up to low double-digits. The companies also agreed on potential strategic collaborations with regard to certain other Salix products in specific territories.

Carolyn Logan, president and CEO, Salix, said, "Many patients find the taste and palatability of current bowel prep products to be unacceptable. We believe the availability of a tasteless, solid oral formulation bowel prep, if approved by the FDA, could potentially go a long way in helping to increase patient compliance and to ease patient burden associated with bowel cleansing prior to various medically important abdominal procedures."