Salix Pharmaceuticals in $345 Million Convertible Senior Notes Offering

June 3, 2010

Cleary Gottlieb represented the underwriters, led by Merrill Lynch, Pierce, Fenner & Smith Incorporated and Jefferies & Company, in a recent convertible senior debt offering by Salix Pharmaceuticals. Salix issued $345 million of 2.75% convertible senior notes due 2015. Cleary Gottlieb also represented Bank of America as the counterparty to Salix in capped call transactions hedging Salix’s obligations relating to the notes. The offering (including full exercise of the related over-allotment option) closed on June 3.

Salix, based in Morrisville, North Carolina, is a specialty pharmaceutical company that develops and markets prescription pharmaceutical products for the treatment of gastrointestinal diseases. Salix’s strategy is to in–license late–stage or marketed proprietary therapeutic drugs, complete any required development and regulatory submission of these products, and market them through the Company’s gastroenterology specialty sales and marketing team. Cleary Gottlieb previously represented the underwriters in a 2008 convertible bond offering by Salix.