RALEIGH, N.C. (AP) — Shares of Salix Pharmaceuticals rose 9 percent in premarket trading Thursday after regulators approved the sale of its drug to treat neurological problems associated with liver failure.

Xifaxan is currently used to treat diarrhea.

Late Wednesday, the company said that the Food and Drug Administration approved Xifaxan for the treatment of overt hepatic encephalopathy, which can lead to coordination problems, irritability and potentially a coma when the liver is not functioning.

Jefferies & Co. analyst Corey Davis raised his share price target to $42 from $38, and reaffirmed a “Buy” rating.

“Salix proved it has the credibility to execute an on time FDA approval with yesterday’s new indication for hepatic encephalopathy,” he wrote.

The company is also developing Xiaxan as an irritable bowel syndrome drug. Davis said the stock will continue to perform well if the company can deliver positive study data in that indication.