- Supply levels of Salix Pharmaceuticals' top drug Xifaxan (rifaximin), an antibiotic, are higher than previously communicated by a factor of several months' supply. It's possible that this miscommunication was intentional, though it is not clear.
- Many have speculated that Allergan did not move forward with a planned buy-out of Salix as a result of wholesaler inventory discrepancies. This does not bode well for either company. Allergan is still at risk of a Valeant buy-out, and Salix has downgraded its 2014 net income forecast from $475 million to $400 million.
- At one point, it seemed that Allergan was counting on buying Salix to shore up its defenses against Valeant. But now, speculation has shifted to the possibility of an Allergan-Actavis merger.
Inventory concerns may seem like a minor challenge, but if the inventory issues are directly related to a company's top drug—in this case, Xifaxan—and the actual inventory reflects a discrepancy of several months' supply, they can have far-reaching consequences.
At one point, it seemed that Salix was in the market to buy the Italian pharma company, Cosmo Pharmaceuticals, but that didn't go through, either. In a worst-case scenario for Allergan, the inability to purchase Salix could make the company more vulnerable to a Valeant buyout, though rumor has it that Actavis and Allergan are currently in talks.