SEC Form 3

FORM 3

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person* Flynn James E (Last) (First) (Middle) 780 THIRD AVENUE, 37TH FLOOR (Street) NEW YORK NY 10017 (City) (State) (Zip)	2. Date of Event Requiring Statement (Month/Day/Year) 10/09/2008	3. Issuer Name and Ticker or Trading Symbol SALIX PHARMACEUTICALS LTD [ SLXP ]
		4. Relationship of Reporting Person(s) to Issuer (Check all applicable) Director X 10% Owner Officer (give title below) Other (specify below)	5. If Amendment, Date of Original Filed (Month/Day/Year)
			6. Individual or Joint/Group Filing (Check Applicable Line) Form filed by One Reporting Person X Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Beneficially Owned
1. Title of Security (Instr. 4)	2. Amount of Securities Beneficially Owned (Instr. 4)	3. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	4. Nature of Indirect Beneficial Ownership (Instr. 5)
Common Stock(1)	1,665,842	I(2)	Through Deerfield Partners, L.P.
Common Stock(1)	2,883,594	I(3)	Through Deerfield International Limited

Table II - Derivative Securities Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 4)	2. Date Exercisable and Expiration Date (Month/Day/Year)		3. Title and Amount of Securities Underlying Derivative Security (Instr. 4)		4. Conversion or Exercise Price of Derivative Security	5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Call Options	10/14/2008	10/18/2008	Common Stock	264,600	$7.51	I	Through Deerfield Partners L.P.(2)
Call Options	10/14/2008	01/17/2009	Common Stock	178,100	$7.51	I	Through Deerfield Partners L.P.(2)
Call Options	10/14/2008	10/18/2008	Common Stock	460,400	$7.51	I	Through Deerfield International Limited.(3)
Call Options	10/14/2008	01/17/2009	Common Stock	323,900	$7.51	I	Through Deerfield International Limited.(3)

1. Name and Address of Reporting Person* Flynn James E (Last) (First) (Middle) 780 THIRD AVENUE, 37TH FLOOR (Street) NEW YORK NY 10017 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* DEERFIELD CAPITAL LP (Last) (First) (Middle) 780 THIRD AVENUE 37TH FLOOR (Street) NEW YORK NY 10017 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* DEERFIELD PARTNERS, LP (Last) (First) (Middle) 780 THIRD AVENUE 37TH FLOOR (Street) NEW YORK NY 10017 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* DEERFIELD MANAGEMENT CO /NY (Last) (First) (Middle) 780 THIRD AVENUE, 37TH FLOOR (Street) NEW YORK NY 10017 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* DEERFIELD INTERNATIONAL LTD (Last) (First) (Middle) C/O HEMISPHERE MANAGEMENT (B.V.I.) COLUMBUS CENTRE, P.O. BOX 3460 (Street) ROAD TOWN, TORTOLA D8 D8 - (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

Explanation of Responses:

1. This Form 3 is being filed by the undersigned s well as the entities listed on the Joint Filer Information Statement attached as an exhibit hereto (the "Reporting Persons").

2. Deerfield Capital, L.P. is the general partner of Deerfield Partners, L.P. (the Domestic Fund). James E. Flynn is the managing member of the general partner of Deerfield Capital, L.P. In accordance with Instruction 5 (b)(iv) to Form 3, the entire amount of the Issuer's securities held by the Domestic Fund is reported herein. For purposes of Section 16 of the Securities Exchange Act of 1934, each Reporting Person disclaims beneficial ownership of any such securities, except to the extent of his/its indirect pecuniary interest therein, if any, and this report shall not be deemed an admission that such Reporting Person is the beneficial owner of such securities for purposes of Section 16 or otherwise.

3. Deerfield Management Company, L.P. is the investment manager of Deerfield International Limited (the "Offshore Fund"). James E. Flynn is the managing member of the general partner of Deerfield Management Company, L.P. In accordance with Instruction 5(b)(iv) to Form 3, the entire amount of the Issuer's securities held by the Offshore Fund is reported herein. For purposes of Section 16 of the Securities Exchange Act of 1934, each Reporting Person disclaims beneficial ownership of any such securities, except to the extent of his/its indirect pecuniary interest therein, if any, and this report shall not be deemed an admission that such Reporting Person is the beneficial owner of such securities for purposes of Section 16 or otherwise.

Remarks:

Darren Levine, Attorney-In-Fact : Power of Attorney is attached hereto as Exhibit 24

	/s/ Darren Levine	10/13/2008
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 5 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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