Analysis of Case Study on Salix Pharmaceuticals

711 Words Jul 15th, 2014 3 Pages
Analysis of Case Study on Salix Pharmaceuticals, Inc Founded by two mutual acquaintances and former staff members of California Biotechnology Inc. (CalBio), Lorin Johnson and Randy Hamilton set out to build a company specializing in a specific area of need, such as inflammatory bowel disease. Their search throughout the international landscape was focused on the chemical compounds that would be the foundation for therapeutic drugs that serve as a benefit to the management gastric disorders. As these compounds were discovered by way of research, with the intent to align and contract with already licensed agreements if the price allows for the newly formed company to take part. One such compound that fit the need for the company was found …show more content…
(Kyriazis and Swayne) Salix required supplementary funds in 1996 to endure its testing activities, requiring the team to go public on the Toronto Stock exchange allowing them to raise $10 million. During the same time period, Salix acknowledged a second compound, rifaximin, and licensed its privileges from an Italian company, Alfa Wassermann. Then not too far off, balsalazide disodium was approved in Europe; and Astra began endorsing it in Europe under the brand name COLAZIDE. Interestingly enough, there were some influences in the external environment that would affect the relationship with Astra. Much like other industries in 1990s and early 2000s, the pharmaceutical industry responded to the challenges of globalization and smaller companies merged to form large conglomerates to create worldwide strength. (Kyriazis and Swayne) Astra merged with Zeneca, increasing the international exposure of the new merger as the seventh largest pharmaceutical company in the world. In such a situation, AstraZeneca had Colazide low on their list of priorities and attempted to return the licensing to Salix. This would require some adjustments and avoidance of legal implications on the part of AstraZeneca, which led to their payment of Salix’s full contract and lending for acquisition of another partner. This opportunity led to several dealings that would result in Shire Pharmaceuticals purchasing the rights to Europe and Salix to
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