8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) March 13, 2008

SALIX PHARMACEUTICALS, LTD.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

000-23265	94-3267443
(Commission File Number)	(IRS Employer ID Number)

1700 Perimeter Park Drive, Morrisville, North Carolina	27560
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (919) 862-1000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On March 13, 2008, Salix Pharmaceuticals, Ltd. entered into a License Agreement with Dr. Falk Pharma GmbH, that provides Salix with an exclusive license to develop and commercialize in the United States Dr. Falk Pharma’s budesonide products. The products covered in the License Agreement include U.S. patent-protected budesonide rectal foam and budesonide gastro-resistent capsule, patents for which expire 2015 and 2016, respectively. Salix is required to make an up-front payment and regulatory milestone payments that could total up to $23.0 million to Dr. Falk Pharma, with the majority contingent upon achievement of U.S. regulatory approval. In addition, Salix will pay royalties on net sales, subject to annual minimums.

The term of the License Agreement continues with respect to each budesonide product until the later of the expiration of the U.S. patent covering the product or the 17^th anniversary of the commencement of commercial sale of the product in the United States. Salix may terminate the agreement in part, with respect to a specific budesonide product, upon 30 days written notice to Dr. Falk Pharma, upon the occurrence of any of the following events:

(1) the product is recalled outside the United States;

(2) commercialization of the product outside the United States is suspended;

(3) products containing the product are recalled or suspended in the United States; or

(4) Salix reasonably considers that the product will not obtain FDA approval.

Salix can also terminate on 24 months notice if after FDA approval it decides continued sale of the product is no longer in its commercial interests. Both Salix and Dr. Falk Pharma have the right to terminate the License Agreement, in whole or in part, for an uncured material adverse breach by the other party. Within 30 days of receiving notice of a Salix change in control, Dr. Falk Pharma may terminate the License Agreement upon four months written notice to Salix.

A copy of the press release announcing the agreement is attached to this current report on Form 8-K as Exhibit 99.1. A copy of the agreement will be filed as an exhibit to Salix’s Quarterly Report on Form 10-Q for the quarter ending March 31, 2008.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	Press release dated March 13, 2008 announcing Salix’s acquisition of budesonide products from Dr. Falk Pharma.

SIGNATURE

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: March 19, 2008
	/s/ Adam C. Derbyshire
	Adam C. Derbyshire
	Senior Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Contact:	Adam C. Derbyshire	Mike Freeman
	Senior Vice President and	Executive Director, Investor Relations and
	Chief Financial Officer	Corporate Communications
	919-862-1000	919-862-1000

SALIX ACQUIRES BUDESONIDE PRODUCTS FROM DR. FALK PHARMA

RALEIGH, NC, March 13, 2008—Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) today announced that Dr Falk Pharma has granted Salix a license to its family of budesonide products in the United States, which includes a patent-protected budesonide rectal foam and a budesonide gastro-resistant capsule. The products are approved and marketed in Europe, in the United Kingdom and Germany. In the United States the rectal foam and gastro-resistant capsule products have patent coverage until 2015 and 2016, respectively. Salix is required to make an up-front payment and regulatory milestone payments to Dr. Falk Pharma, with the majority contingent upon achievement of U.S. regulatory approval. In addition, Salix will pay royalties on net sales. The up-front payment and any 2008 development-related costs associated with these products are incorporated into the Company’s previously stated guidance for 2008.

Budesonide is a potent steroid that undergoes rapid and extensive first pass metabolism. Dr. Falk Pharma markets budesonide in the United Kingdom as Budenofalk^® 2mg Rectal Foam for the treatment of distal active ulcerative colitis and as Budenofalk^® 3mg Gastro-resistant Capsules for the induction of remission of mild to moderate active Crohn’s disease or the symptomatic relief of chronic diarrhea due to collagenous colitis.

Salix Pharmaceuticals, Ltd., headquartered in Raleigh, North Carolina, 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.

Salix trades on the NASDAQ Global Select Market under the ticker symbol “SLXP.”

For more information please visit our web site at www.salix.com . Information on our web site is not incorporated in our SEC filings.

Please Note: The materials provided herein contain projections and other forward-looking statements regarding future events. Such statements are just predictions and are subject to risks and uncertainties that could cause the actual events or results to differ materially. These risks and uncertainties include, among others: our need to return to profitability; the high cost and uncertainty of the research, clinical trials and other development activities involving pharmaceutical products; the unpredictability of the duration and results of regulatory review of New

Drug Applications and Investigational NDAs; market acceptance for approved products; the need to acquire new products; generic and other competition and the possible impairment of, or inability to obtain, intellectual property rights and the costs of obtaining such rights from third parties. The reader is referred to the documents that the Company files from time to time with the Securities and Exchange Commission.