<PAGE>

                                                                   EXHIBIT 10.27

                          SALIX PHARMACEUTICALS, LTD.
                        COMMON STOCK PURCHASE AGREEMENT

     THIS COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered
                                                 ---------
into as of May 29, 2001 by and among Salix Pharmaceuticals, Ltd., a British
Virgin Islands corporation (the "Company"), and the parties listed on the
                                 -------
Schedule of Investors separately delivered to the Investors (the "Schedule of
                                                                  -----------
Investors") (each hereinafter individually referred to as an "Investor" and
---------                                                     --------
collectively referred to as the "Investors").
                                 ---------

     1.   AGREEMENT TO PURCHASE AND SELL STOCK.
          ------------------------------------

          1.1   Authorization.  As of the Closing (as defined below) the Company
                -------------
will have authorized the issuance, pursuant to the terms and conditions of this
Agreement, of up to 2,000,000 shares of the Company's Common Stock, no par value
(the "Common Stock").
      ------------

          1.2   Agreement to Purchase and Sell.  The Company agrees to sell to
                ------------------------------
each Investor at the Closing, and each Investor agrees, severally and not
jointly, to purchase from the Company at the Closing, the number of shares of
Common Stock for the aggregate price set forth beside such Investor's name on
the Schedule of Investors, at the price per share for such Investor set forth on
the Schedule of Investors.  The shares of Common Stock purchased and sold
pursuant to this Agreement will be collectively hereinafter referred to as the
"Purchased Shares."
-----------------

     2.   CLOSING.
          -------

          2.1   The Closing.  The purchase and sale of the Purchased Shares will
                -----------
take place at the offices of Wyrick Robbins Yates & Ponton LLP, at 4101 Lake
Boone Trail, Suite 300, Raleigh, North Carolina, at 2:00 p.m., Eastern Time, on
the date hereof, or at such other time and place as the Company and Investors
who have agreed to purchase a majority of the Purchased Shares listed on the
Schedule of Investors mutually agree upon (which time and place is referred to
in this Agreement as the "Closing"), provided that the Closing may not be
                          -------
delayed more than five business days without the consent of all Investors.  At
the Closing, the Company will deliver to each Investor a certificate
representing the number of Purchased Shares that such Investor has agreed to
purchase hereunder as shown on the Schedule of Investors against delivery to the
Company by such Investor of the full purchase price of such Purchased Shares,
paid by (i) a check payable to the Company's order, (ii) wire transfer of funds
to the Company or (iii) any combination of the foregoing.

     3.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  The Company hereby
          ---------------------------------------------
represents and warrants to Investor that, except as set forth in the Disclosure
Schedule and Schedule of Exceptions (the "Disclosure Schedule") separately
                                          -------------------
delivered by the Company to the Investors (which Disclosure Schedule shall be
deemed to be representations and warranties to the Investors by the Company
under this Section and to qualify each of the representations and warranties set
forth herein), the statements in the following paragraphs of this Section 3 are
all true and correct:
<PAGE>

          3.1   Organization, Good Standing and Qualification.  The Company is a
                ---------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the British Virgin Islands, and has all requisite corporate power and
authority to conduct its business as currently conducted.  The Company is
qualified to do business as a foreign corporation in each jurisdiction where
failure to be so qualified could reasonably be expected to have a material
adverse effect on the business, assets, financial condition or results of
operations or assets of the Company (the "Business") (such effect referred to as
                                          --------
a "Material Adverse Effect").
   -----------------------

          3.2   Capitalization.  Immediately before the Closing the
                --------------
capitalization of the Company will consist of the following:

                (a)    Preferred Stock. A total of 5,000,000 authorized shares
                       ---------------
of Preferred Stock, no par value per share (the "Preferred Stock"), none of
                                                 ---------------
which are issued and outstanding.

                (b)    Common Stock. A total of 40,000,000 authorized shares of
                       ------------
Common Stock, of which approximately 13,939,899 shares were issued and
outstanding as of May 24, 2001.

                (c)    Options, Warrants, Reserved Shares.  Except for:  (i) the
                       ----------------------------------
approximately 1,607,478 shares of Common Stock issuable upon exercise of options
outstanding as of May 24, 2001, (ii) approximately 2,677,207 (subject to
increase to 4,500,000 pending stockholder approval at the Annual Meeting to be
held June 14, 2001) additional shares of Common Stock reserved for issuance
under the Company's 1996 Stock Option Plan, (iii) approximately 52,000
additional shares of Common Stock reserved for issuance under the Company's 1994
Stock Plan and (iv) warrants to purchase an aggregate of approximately 624,699
shares of Common Stock, there are not outstanding any options, warrants, rights
or agreements for the purchase or acquisition from the Company of any shares of
its capital stock or any securities convertible into or ultimately exchangeable
or exercisable for any shares of the Company's capital stock.

          3.3   Subsidiaries.  Except for Salix Pharmaceuticals, Inc., a
                ------------
California corporation, and Glycyx Pharmaceuticals, Ltd., a Bermuda corporation,
each of which is wholly owned by the Company, the Company does not currently own
or control, directly or indirectly, any interest in any other corporation,
partnership, trust, joint venture, association, or other entity.

          3.4   Due Authorization; No Violation.  All corporate action on the
                -------------------------------
part of the Company and its officers, directors and shareholders necessary for
the authorization, execution and delivery of, and the performance of all
obligations of the Company under, this Agreement, and the authorization,
issuance, reservation for issuance and delivery of all of the Purchased Shares
being sold under this Agreement, has been taken or will be taken prior to the
Closing, and this Agreement constitutes a valid and legally binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except as enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization or other laws of general application relating to or
affecting the enforcement of creditors' rights generally and (ii) the effect of
rules of law governing the availability of equitable remedies.  Neither the
execution, delivery or performance by the Company of this Agreement nor the
consummation by the Company of the transactions

                                       2
<PAGE>

contemplated hereby will (i) conflict with or result in a breach of any
provision of the Articles of Association of the Company (the "Articles") or the
                                                              --------
Company's Memorandum of Association, (ii) conflict with, result in a violation
or breach of, or cause a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or provisions
of any agreement, instrument or obligation to which the Company is a party,
which default could reasonably be expected to have a Material Adverse Effect or
(iii) violate any law, statute, rule or regulation or judgment, order, writ,
injunction or decree of any governmental authority, in each case applicable to
the Company or its properties or assets and which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

          3.5   Valid Issuance of Stock. The Purchased Shares, when issued, sold
                -----------------------
and delivered in accordance with the terms of this Agreement for the
consideration provided for herein, will be duly and validly issued, fully paid
and nonassessable and are not subject to preemptive or other similar rights of
any shareholder of the Company.

          3.6   Governmental Consents.  No consent, approval, order or
                ---------------------
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the valid execution and delivery of
this Agreement, the offer, sale and issuance of the Purchased Shares, or the
consummation of the transactions contemplated by this Agreement, except for
qualifications or filings under the Securities Act of 1933, as amended (the
"Act"), and the applicable rules and regulations (the "Rules and Regulations")
 ---                                                   ---------------------
of the Securities and Exchange Commission (the "Commission") under the Act, and
                                                ----------
all other applicable securities laws as may be required in connection with the
transactions contemplated by this Agreement.  All such qualifications will be
effective on the Closing, and all such filings be made within the time
prescribed by law.

          3.7   Absence of Changes.  After the respective dates as of which
                ------------------
information is given in the Company's Proxy Statement for the annual meeting of
shareholders to be held on June 14, 2001, the Company's Annual Report on Form
10-K for the year ended December 31, 2000, the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 2001, and the Company's Current
Reports on Form 8-K filed May 24, 2001, May 16, 2001, May 2, 2001, April 9, 2001
and February 27, 2001, respectively (such documents, together with the
Disclosure Schedule, referred to collectively as the "Disclosure Documents"),
                                                      --------------------
there has not been (i) any material adverse change in the Business, (ii) any
transaction that is material to the Company, (iii) any obligation, direct or
contingent, that is material to the Company, incurred by the Company, (iv) any
change in the outstanding indebtedness of the Company that is material to the
Company, (v) any dividend declared, paid or made on the capital stock of the
Company or (vi) any loss or damage (whether or not insured) to the property of
the Company which has been sustained which could reasonably be expected to have
a Material Adverse Effect.

          3.8   Litigation.  There is no action, suit, proceeding, claim,
                ----------
arbitration or investigation ("Action") pending (or, to the Company's knowledge,
                               ------
currently threatened) against the Company, its activities, properties or assets,
which (i) might prevent the consummation of the transactions contemplated hereby
or (ii) if adversely resolved against the Company could reasonably be expected
to have a Material Adverse Effect.

                                       3
<PAGE>

          3.9   Nasdaq Listing.  The Common Stock is registered pursuant to
                --------------
Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange
                                                                       --------
Act"), and is listed on the Nasdaq Stock Market (Nasdaq National Market).  The
---
Company has not received any notification that the Commission or the National
Association of Securities Dealers, Inc. is contemplating the termination of such
registration or listing.  Before the Shelf Registration Statement (as defined in
Section 7.2) is declared effective by the Commission, the Purchased Shares will,
if required by the listing rules of the Nasdaq Stock Market, have been approved
for quotation on the Nasdaq Stock Market, subject to notice of issuance.

          3.10  Exchange Act Filings.  The Company has filed in a timely manner
                --------------------
all reports and other information required to be filed ("Filings") with the
                                                         -------
Commission pursuant to the Exchange Act during the preceding twelve calendar
months.  On their respective dates of filing, the Filings complied as to form in
all material respects with the requirements of the Exchange Act, and the
published rules and regulations of the Commission promulgated thereunder.  On
their respective dates of filing, the Filings did not include any untrue
statement of a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, and all financial statements contained in the Filings fairly
present the financial position of the Company on the dates of such statements
and the results of operations for the periods covered thereby in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved and prior periods, except as otherwise indicated in the notes
to such financial statements.

          3.11  Disclosure.  The representations and warranties made by the
                ----------
Company in this Agreement (including the Disclosure Schedule) and the Filings
when read together do not contain any untrue statement of a material fact and do
not omit to state a material fact necessary to make the statements herein as a
whole not misleading.

          3.12  Governmental Permits, Etc.  The Company possesses all licenses,
                --------------------------
franchises, governmental approvals, permits or other governmental authorizations
(collectively, "Authorizations") relating to the operation of the Business,
                --------------
except for those Authorizations the failure of which to possess would not,
separately or in the aggregate, have a Material Adverse Effect.  To the
Company's knowledge after reasonable investigation, the Company is in compliance
with the terms of all Authorizations and all laws, ordinances, regulations and
decrees which to the Company's knowledge are applicable to the Business, except
for such non-compliance which does not, separately or in the aggregate, have a
Material Adverse Effect.

          3.13  Insurance.  The Company is covered by insurance with companies
                ---------
the Company believes to be responsible and in such amounts and covering such
risks as it believes to be adequate for the conduct of its Business and the
value of its properties and as is customary for companies engaged in similar
businesses in similar industries.  The Company has no knowledge that any such
carrier has grounds or intends to cancel or fail to renew such policies.

          3.14  Intellectual Property. To the Company's knowledge after
                ---------------------
reasonable investigation, the Company owns or possesses the patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures) and other rights or interests in items of intellectual
property as are necessary for the operation of the Business operated by it

                                       4
<PAGE>

(the "Patent and Proprietary Rights"), except where the failure to own or
      -----------------------------
possess such rights would not have a Material Adverse Effect; the Company has
not received notice of any asserted rights with respect to any of the Patent and
Proprietary Rights which, if determined unfavorably with respect to the
interests of the Company would have a Material Adverse Effect; and the Company
has not received notice or is otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any of the Patent or Proprietary
Rights, which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding), individually or in the aggregate, would result in
a Material Adverse Effect.

     4.   REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF INVESTORS.  Each
          ---------------------------------------------------------------
Investor hereby represents and warrants to, and agrees with, the Company, that:

          4.1   Authorization.  All corporate action on the part of the Investor
                -------------
and its officers, directors and stockholders necessary for the authorization,
execution and delivery of, and the performance of all obligations of the
Investor under, this Agreement has been taken or will be taken prior to the
Closing, and this Agreement constitutes a valid and legally binding obligation
of the Investor, enforceable against the Investor in accordance with its terms,
except as enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization or other laws of general application relating to or
affecting the enforcement of creditors' rights generally and (ii) the effect of
rules of law governing the availability of equitable remedies.

          4.2   Purchase for Own Account.  The Purchased Shares to be purchased
                ------------------------
by such Investor hereunder will be acquired for investment for such Investor's
own account, not as a nominee or agent, and not with a view to the public resale
or distribution thereof within the meaning of the Act, and such Investor has no
present intention of selling, granting any participation in, or otherwise
distributing the same.  If not an individual, such Investor also represents that
such Investor has not been formed for the specific purpose of acquiring
Purchased Shares.

          4.3   Disclosure of Information.  The Investor has received a copy of
                -------------------------
the Disclosure Documents and has received or has had full access to all the
information it considers necessary or appropriate to make an informed investment
decision with respect to the Purchased Shares to be purchased by the Investor
under this Agreement.  Investor further has had an opportunity to ask questions
and receive answers from the Company regarding the terms and conditions of the
offering of the Purchased Shares and to obtain additional information (to the
extent the Company possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify any information furnished to
the Investor or to which the Investor had access.  The foregoing, however, does
not in any way limit or modify the representations and warranties made by the
Company in Section 3.

          4.4   Investment Experience.  Such Investor understands that the
                ---------------------
purchase of the Purchased Shares involves substantial risk.  Such Investor:  (i)
has experience as an investor in securities of companies like the Company and
acknowledges that such Investor is able to fend for itself, can bear the
economic risk of such Investor's investment in the Purchased Shares and has such
knowledge and experience in financial or business matters that such Investor is
capable of evaluating the merits and risks of this investment in the Purchased
Shares and protecting its

                                       5
<PAGE>

own interests in connection with this investment and/or (ii) has a preexisting
personal or business relationship with the Company and certain of its officers,
directors or controlling persons of a nature and duration that enables such
Investor to be aware of the character, business acumen and financial
circumstances of such persons.

          4.5   Accredited Investor Status.  Unless otherwise expressly
                --------------------------
indicated on the Schedule of Investors to this Agreement, such Investor is an
"accredited investor" within the meaning of Regulation D promulgated under the
Act.

          4.6   Restricted Securities.  Such Investor understands that the
                ---------------------
Purchased Shares are characterized as "restricted securities" under the Act
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under the Act and the Rules and Regulations
such securities may be resold without registration under the Act only in limited
circumstances.  In this connection, such Investor represents that such Investor
is familiar with Rule 144 of the Commission and understands the resale
limitations imposed thereby and by the Act.  Such Investor understands that the
Company is under no obligation to register any of the Purchased Shares except as
provided in Section 7 below.

         4.7    Further Limitations on Disposition.  Without in any way limiting
                ----------------------------------
the representations set forth above, such Investor further agrees not to make
any disposition of all or any portion of the Purchased Shares unless and until:

                (a)    there is then in effect a registration statement under
the Act covering such proposed disposition and such disposition is made in
accordance with such registration statement and the provisions of Section 7 of
this Agreement; or

                (b)    (i)  such Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a statement of
the circumstances surrounding the proposed disposition, and (ii) such Investor
shall have furnished the Company, at the expense of such Investor or its
transferee, with an opinion of counsel, reasonably satisfactory to the Company,
that such disposition will not require registration of such securities under the
Act.

          Notwithstanding the provisions of paragraphs (a) and (b) above, no
such registration statement or opinion of counsel shall be required: (i) for any
routine transfer of any Purchased Shares in compliance with Rule 144 or Rule
144A (except that an opinion of counsel may be required for other than routine
Rule 144 transactions), or (ii) for any transfer of Purchased Shares by an
Investor that is a partnership or a corporation to (A) a partner of such
partnership or shareholder of such corporation, or (B) the estate of any such
partner or shareholder, or (iii) for the transfer by gift, will or intestate
succession by any Investor to his or her spouse or lineal descendants or
ancestors or any trust for any of the foregoing; provided, that in each of the
foregoing cases the transferee agrees in writing to be subject to the terms of
this Section 4 (other than Section 4.5) to the same extent as if the transferee
were an original Investor hereunder.

                                       6
<PAGE>

          4.8   Legends.  It is understood that the certificates evidencing the
                -------
Purchased Shares will bear legends substantially as set forth below:

                (a)    THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT
THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION
OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT
ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.

                (b)    THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
THE PROVISIONS OF, AND MAY HAVE CERTAIN REGISTRATION RIGHTS PURSUANT TO, THE
PROVISIONS OF A PURCHASE AGREEMENT BETWEEN THE COMPANY AND THE HOLDER, WHICH MAY
RESTRICT THE TRANSFER OF SUCH SHARES IN CERTAIN CIRCUMSTANCES. A COPY OF SUCH
AGREEMENT MAY BE OBTAINED, WITHOUT CHARGE, AT THE COMPANY'S PRINCIPAL OFFICE.

     The legends set forth in (a) and (b) above shall, upon the request of an
Investor, be promptly removed by the Company from any certificate evidencing
Purchased Shares upon delivery to the Company of an opinion of counsel to the
Company, that the legended security can be freely transferred in a public sale
without a registration statement being in effect under the Act and in compliance
with exemption requirements under applicable state securities laws and that such
transfer will not jeopardize the exemption or exemptions from registration
pursuant to which the Company issued the Purchased Shares; provided, however,
that no such opinion shall be required in connection with routine sales of
Purchased Shares pursuant to the Shelf Registration Statement (as defined
below).  In connection with any such opinion, the Investor shall provide such
certifications as may be reasonably be deemed necessary for the delivery of such
opinion.

     5.   CONDITIONS TO INVESTOR'S OBLIGATIONS AT CLOSING.
          -----------------------------------------------

          5.1   Closing.  The obligations of each Investor under Section 2 of
                -------
this Agreement to purchase the Purchased Shares at the Closing are subject to
the fulfillment or waiver, on or before the Closing, of each of the following
conditions, and the Company shall use all reasonable efforts to cause such
conditions to be satisfied on or before the Closing:

                5.1.1  Representations and Warranties True.  Each of the
                       -----------------------------------
representations and warranties of the Company contained in Section 3 shall be
true and correct on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the Closing.

                                       7
<PAGE>

                5.1.2  Performance. The Company shall have performed and
                       -----------
complied with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing and shall have obtained all approvals, consents and qualifications
necessary to complete the purchase and sale described herein.

                5.1.3  Compliance Certificate. The Company shall have delivered
                       ----------------------
to the Investors at the Closing a certificate signed on its behalf by its
President, Chief Executive Officer, or Chief Financial Officer certifying that
the conditions specified in Sections 5.1.1 and 5.1.2 have been fulfilled.

                5.1.4  Registration; Securities Exemptions. The offer and sale
                       -----------------------------------
of the Purchased Shares to the Investors pursuant to this Agreement shall be
exempt from the registration requirements under the Act and the registration
and/or qualification requirements of all applicable state securities laws.

                5.1.5  No Material Change.  There shall have been no material
                       ------------------
adverse change in the Business from the date of this Agreement.

                5.1.6  Opinion of Counsel.  The Investors shall have received an
                       ------------------
opinion of counsel to the Company substantially in the form of Exhibit B
attached hereto.

     6.   CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING.
          --------------------------------------------------

          6.1.  Closing.  The obligations of the Company under this Agreement to
                -------
sell the Purchased Shares to the Investors at the Closing are subject to the
fulfillment or waiver on or before the Closing of each of the following
conditions by the Investor, and each Investor shall use all reasonable efforts
to cause such conditions to be satisfied on or before the Closing:

                6.1.1  Representations and Warranties.  The representations and
                       ------------------------------
warranties of the Investor contained in Section 4 shall be true and correct on
and as of the Closing with the same effect as though such representations and
warranties had been made on and as of the Closing.

                6.1.2  Payment of Purchase Price.  The Investor shall have
                       -------------------------
delivered to the Company the purchase price for the Purchased Shares specified
for such Investor on the Schedule of Investors attached hereto, in accordance
with the provisions of Section 2.

                6.1.3  Registration; Securities Exemptions. The offer and sale
                       -----------------------------------
of the Purchased Shares to the Investor pursuant to this Agreement shall be
exempt from the registration requirements under the Act and the registration
and/or qualification requirements of all other applicable state securities laws.

                                       8
<PAGE>

     7.   REGISTRATION RIGHTS.
          -------------------

          7.1   Definitions.  For purposes of this Agreement:
                -----------

                (a)    Form S-3. The term "Form S-3" means such form under the
                       --------
Act as is in effect on the date hereof or any successor registration form under
the Act subsequently adopted by the Commission which permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the Commission.

                (b)    Holder. The term "Holders" shall mean holders of
                       ------
Registrable Securities that have registration rights pursuant to this Agreement.

                (c)    Registration.  The terms "register," "registered," and
                        ------------
"registration" refer to a registration effected by preparing and filing a
registration statement in compliance with the Act, and the declaration or
ordering of effectiveness of such registration statement.

                (d)    Registrable Securities. The term "Registrable Securities"
                       ----------------------
means (1) all of the Purchased Shares, and (2) any shares of Common Stock of the
Company issued as a dividend or other distribution with respect to, or in
exchange for or in replacement of, any of the Purchased Shares; provided,
however, that the term "Registrable Securities" shall exclude in all events (and
such securities shall not constitute "Registrable Securities") (i) any
Registrable Securities sold or transferred by a person in a transaction in which
the registration rights granted under this Agreement are not assigned in
accordance with the provisions of this Agreement, (ii) any Registrable
Securities sold in a public offering pursuant to a registration statement filed
with the Commission or sold pursuant to Rule 144 promulgated under the Act
("Rule 144") or (iii) as to any Holder, the Registrable Securities held by such
Holder if all of such Registrable Securities can be publicly sold within a
three-month period pursuant to Rule 144, either because the Holder holds 1% or
less of the Company's then outstanding Common Stock or because the Holder has
held its Registrable Securities for the time period specified in Rule 144(k).

                (e)    Prospectus. The term "Prospectus" shall mean the
                       ----------
prospectus included in any Shelf Registration Statement (including, without
limitation, a prospectus that discloses information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Act), as amended or supplemented by any
prospectus supplement (including, without limitation, any prospectus supplement
with respect to the terms of the offering of any portion of the Registrable
Securities covered by such Shelf Registration Statement), and all other
amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.

                (f)    Shelf Registration Statement.  See Section 7.2(a).
                       ----------------------------

          7.2   Form S-3 Shelf Registration.
                ---------------------------

                (a)    Registration. The Company shall prepare and file with the
                       ------------
Commission within 30 days following the Closing and use all reasonable efforts
to have declared effective as soon as practicable thereafter, a registration
statement on Form S-3 (or, if the

                                       9
<PAGE>

Company is not then eligible to use Form S-3, then another appropriate form)
providing for the resale by the Holders of all of the Registrable Securities
(the "Shelf Registration Statement"). The Shelf Registration Statement may
include securities other than those held by Holders. If the Shelf Registration
Statement is not declared effective by September 30, 2001 and does not remain
effective for 45 continuous days after its effective date (except for the
duration of any Blackout Notice as described in Section 7.2(b) below), then the
Investors holding Registrable Securities shall be entitled to receive from the
Company (pro rata in accordance with their ownership of Registrable Securities)
an aggregate number of shares of Common Stock equal to 1% of the number of
Purchased Shares for each month after September 30, 2001, that the Shelf
Registration Statement is not declared effective (or does not remain effective),
up to a maximum aggregate amount of 5% of the Purchased Shares. The Company
shall use its best efforts to keep the Shelf Registration Statement continuously
effective (subject to Section 7.2(b)), pursuant to the Act and the Rules and
Regulations promulgated thereunder, until (i) the date when such Registrable
Securities cease to meet the definition of Registrable Securities pursuant to
Section 7.1, or (ii) the Company's obligations hereunder terminate. In the event
that the Shelf Registration Statement shall cease to be effective, the Company
shall promptly prepare and file a new registration statement covering the
Registrable Securities and shall use its best efforts to have such registration
statement declared effective as soon as possible. Any such registration
statement shall be considered a "Shelf Registration Statement" hereunder.

                (b)    Blackout Notice. In the event (i) that the Company
                       ---------------
concludes that it is necessary for the Company to supplement the Prospectus or
make an appropriate filing under the Exchange Act so as to cause the Prospectus
to become current, or (ii) that, in the judgment of the President, Chief
Executive Officer or the Company's Board of Directors, it is advisable to
suspend use of the Prospectus for a discrete period of time due to undisclosed
pending corporate developments or pending public filings with the Commission
(which need not be described in detail), the Company shall deliver a written
notice (the "Blackout Notice") to the Holder to the effect of the foregoing and,
             ----------------
upon delivery of the Blackout Notice, the Holder shall not sell any Purchased
Shares pursuant to the Prospectus and shall not disclose to any third party that
such a notice has been given or the contents of the notice. Following delivery
of the Blackout Notice, the Holder shall once again be entitled to sell
Purchased Shares pursuant to the Prospectus (as amended or supplemented) upon
the Holder's receipt of copies of the supplemented or amended Prospectus, or at
such time as the Holder is advised in writing by the Company that the Prospectus
may be used, and at such time as the Holder has received copies of any
additional or supplemental filings that are incorporated or deemed incorporated
by reference in such Prospectus and which are required to be delivered as part
of the Prospectus. In any event, such restrictions shall terminate no later than
45 days after the date of delivery of the Blackout Notice. If the Company has
delivered a Blackout Notice within 90 days of the date that it delivers another
Blackout Notice pursuant this section, then the 45-day time period set forth in
the preceding sentence shall be shortened so that the restrictions imposed by
the Blackout Notice shall expire no later than 10 days after delivery of such
Blackout Notice.

                (c)    Expenses. The registration fees and expenses incurred by
                       --------
the Company in connection with the Shelf Registration Statement and actions
taken by the Company in connection with each Permitted Window shall be borne by
the Company. Holder shall be responsible for any fees and expenses of its
counsel or other advisers.

                                       10
<PAGE>

          7.3  Obligations of the Company.  Whenever required to effect the
               --------------------------
registration of any Registrable Securities under this Agreement, the Company
shall, as expeditiously as reasonably possible:

               (a)  Furnish to the Holder such number of copies of a Prospectus,
including a preliminary Prospectus, in conformity with the requirements of the
Act, and such other documents as it may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by it that are
included in such registration.

               (b)  Use all reasonable efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holder, provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions.

               (c)  Notify the Holder promptly (i) of any request by the
Commission or any other federal or state governmental authority during the
period of effectiveness of a registration statement for amendments or
supplements to such registration statement or related prospectus or for
additional information, (ii) of the issuance by the Commission or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a registration statement or the initiation of any proceedings
for that purpose and (iii) of the receipt by the Company of any notification
with respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose.

               (d)  Make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the Shelf Registration Statement at the
earliest possible time.

          7.4  Furnish Information.  It shall be a condition precedent to the
               -------------------
obligations of the Company to take any action pursuant to Section 7.2 that the
Holder shall furnish to the Company such information regarding it, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to timely effect the registration of its
Registrable Securities.

          7.5  Indemnification.  In the event any Registrable Securities are
               ---------------
included in a registration statement under this Agreement:

               (a)  By the Company.  To the extent permitted by law, the
                    --------------
Company will indemnify and hold harmless the Holder, the officers and directors
of the Holder and each person, if any, who controls the Holder (such persons and
entities referred to as "Holder Indemnified Parties"), against any losses,
                         --------------------------
expenses, damages or liabilities to which they may become subject under the Act,
the Exchange Act or other federal or state law (a "Loss"), insofar as such
Losses (or actions in respect thereof) arise out of any claim, action or
proceeding brought by a third party arising out of or based upon any of the
following statements, omissions or violations (collectively a "Violation"):

                                       11
<PAGE>

               (i)    any untrue statement or alleged untrue statement of a
          material fact contained in a registration statement filed
          pursuant to this Section 7;

               (ii)   the omission or alleged omission to state in a
          registration statement filed pursuant to this Section 7 a
          material fact required to be stated therein, or necessary to make
          the statements therein not misleading; or

               (iii)   any violation or alleged violation by the Company of
          the Act, the Exchange Act, any federal or state securities law or
          any rule or regulation promulgated under the Act, the Exchange
          Act or any federal or state securities law, in each case in
          connection with the offering covered by such registration
          statement;

and the Company will reimburse each Holder Indemnified Party for any legal or
other expenses reasonably incurred by them, as incurred, in connection with
investigating or defending any such Violation; provided, however, that the
indemnity agreement contained in this subsection shall not apply to amounts paid
in settlement of any such Loss, if such settlement is effected without the
consent of the Company, nor shall the Company be liable in any such case for any
such Loss to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration statement by the Holder
Indemnified Party; and provided further, that the Company will not be liable for
the reasonable legal fees and expenses of more than one counsel to the Holder
Indemnified Parties.

               (b)  By the Holder.  To the extent permitted by law, each Holder
                    -------------
will indemnify and hold harmless the Company, each of its directors, each of its
officers who have signed the registration statement, and each person, if any,
who controls the Company within the meaning of the Act (such persons and
entities referred to as "Company Indemnified Parties") against any Losses to
                         ---------------------------
which such Company Indemnified Parties may become subject under the Act, the
Exchange Act or other federal or state law, insofar as such Losses (or actions
in respect thereto) arise out of or are based upon any Violation, in each case
to the extent (and only to the extent) that such Violation occurs in reliance
upon and in conformity with written information furnished by the Holder
expressly for use in connection with such registration statement; and the Holder
will reimburse any legal or other expenses reasonably incurred by such Company
Indemnified Parties in connection with investigating or defending any such
Violation; provided, however, that the indemnity agreement contained in this
subsection shall not apply to amounts paid in settlement of any such Loss if
such settlement is effected without the consent of the Holder; provided further,
that the Holder shall not be liable for the reasonable legal fees and expenses
of more than one counsel to the Company Indemnified Parties; and provided
further, that the total amounts payable in indemnity by the Holder under this
subsection in respect of any Violation shall not exceed the net proceeds
received by the Holder in the registered offering out of which such Violation
arises.

                                       12
<PAGE>

               (c)  Notice.  Promptly after receipt by an indemnified party
                    ------
under this Section of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim for
indemnification in respect thereof is to be made against any indemnifying party
under this Section, deliver to the indemnifying party a written notice of the
commencement of such an action and the indemnifying party shall have the right
to participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel selected by the indemnifying party and reasonably
acceptable to a majority in interest of the indemnified parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the reasonable fees and expenses to be paid by the indemnifying
party, if the indemnified party has been advised in writing by counsel that
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual conflict of interests
between such indemnified party and any other party represented by such counsel
in such proceeding. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action shall
relieve such indemnifying party of liability to the indemnified party under this
Section to the extent such delay caused material prejudice to the indemnified
party, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section.

               (d)  Defect Eliminated in Final Prospectus.  The foregoing
                    -------------------------------------
indemnity agreements of the Company and the Holder are subject to the condition
that, insofar as they relate to any Violation made in a prospectus but
eliminated or remedied in an amended prospectus or a prospectus supplement on
file with the Commission (the "Final Prospectus"), such indemnity agreements
shall not inure to the benefit of any person if a copy of the Final Prospectus
was furnished in a timely manner to the indemnified party and was not furnished
to the person asserting the loss, liability, claim or damage at or prior to the
time such action is required by the Act.

               (e)  Survival.  The obligations of the Company and the Holder
                    --------
under this Section shall survive the completion of any offering of Registrable
Securities in a registration statement, and otherwise.

          7.6  Rule 144 Reporting.  With a view to making available the benefits
               ------------------
of certain rules and regulations of the Commission which may at any time permit
the sale of the Registrable Securities to the public without registration, for
so long as the Holder owns any Registrable Securities, the Company agrees to:

               (a)  Make and keep adequate, current public information
available, as those terms are understood and defined in Rule 144 under the Act,
at all times;

               (b)  File with the Commission in a timely manner all reports and
other documents required of the Company under the Exchange Act; and

                                       13
<PAGE>

               (c)  So long as the Holder owns any Registrable Securities, to
furnish to the Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of said Rule 144, a copy of
the most recent annual or quarterly report of the Company, and such other
reports and documents of the Company as the Holder may reasonably request in
availing itself of any rule or regulation of the Commission allowing a Holder to
sell any such securities without registration.

          7.7  Termination of Company's Obligations.  The Company shall have no
               ------------------------------------
obligation to register, or maintain, a registration statement governing
Registrable Securities, (i) if all Registrable Securities have been registered
and sold pursuant to registrations effected pursuant to this Agreement, or (ii)
with respect to any particular Holder, at such time as all Registrable
Securities held by such Holder may be sold within a three-month period under
Rule 144, either because the Holder holds 1% or less of the Company's then
outstanding Common Stock or because the Holder has held its Registrable
Securities for the time period specified in Rule 144(k).

          7.8  Piggyback Registrations.  (a) The Company shall use its best
               -----------------------
efforts to notify all Holders of Registrable Securities in writing at least
twenty (20) days before filing any registration statement under the Act for
purposes of effecting an underwritten public offering by the Company of
securities of the Company (excluding registration statements relating to any
employee benefit plan or a corporate merger, acquisition or reorganization, or
any Form S-3 or similar shelf registration statements relating to the non-
underwritten offer and sale of securities for the account of persons or entities
other than the Company) and will afford each such Holder an opportunity to
include in such registration statement all or any part of the Registrable
Securities then held by such Holder.  Each Holder desiring to include in any
such registration statement all or any part of the Registrable Securities held
by such Holder shall, within ten (10) days after receipt of the above-described
notice from the Company, so notify the Company in writing, and in such notice
shall inform the Company of the number of Registrable Securities such Holder
wishes to include in such registration statement.  If a Holder decides not to
include all of its Registrable Securities in any such registration statement
filed by the Company, such Holder shall nevertheless continue to have the right
to include any Registrable Securities in any subsequent registration statement
or registration statements as may be filed by the Company with respect to
offerings of its securities, all upon the terms and conditions set forth herein.
The Holders' rights to include any Registrable Securities in any offering under
this Section are subject in all events to the ability of the managing
underwriter for such offering to exclude some or all of the Registrable
Securities requested to be registered on the basis of a good faith determination
that inclusion of such securities might adversely affect the success of the
offering or otherwise adversely affect the Company.  Any such exclusion shall be
pro rata among all Holders who have requested to sell Registrable Securities in
such registration.

               (b)  Underwriting. If a registration statement under which the
                    ------------
Company gives notice under this Section is for an underwritten offering, then
the Company shall so advise the Holders of Registrable Securities. In such
event, the right of any such Holder's Registrable Securities to be included in a
registration pursuant to this Section shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their Registrable Securities through such
underwriting shall enter into an

                                       14
<PAGE>

underwriting agreement in customary form with the managing underwriter or
underwriters selected for such underwriting and shall furnish such information
and documents as the Company or the managing underwriter or underwriters may
reasonably request. Notwithstanding any other provision of this Agreement, if
the managing underwriter determine(s) in good faith that marketing factors
require a limitation of the number of shares to be underwritten, then the
managing underwriter(s) may exclude Registrable Securities from the registration
and the underwriting, pro rata among all Holders who have requested to sell
Registrable Securities in such registration. If any Holder disapproves of the
terms of any such underwriting, such Holder may elect to withdraw therefrom by
written notice to the Company and the underwriter, delivered at least ten (10)
business days prior to the effective date of the registration statement. Any
Registrable Securities excluded or withdrawn from such underwriting shall be
excluded and withdrawn from the registration.

               (c)  Expenses. The Holders shall be responsible for their pro
                    --------
rata share of registration fees and underwriters' and brokers' discounts and
commissions relating to any Registrable Securities included in such
registration.  Other registration expenses (such as legal and accounting fees of
counsel to the Company, printing fees, road show expenses, and the like) shall
be shall be borne by the Company.

               (d)  Number of Piggyback Registrations. The piggyback
                    ---------------------------------
registration rights granted to the Holders under this Section shall apply to the
first three registrations filed by the Company after the Closing.

     8.   ASSIGNMENT. Notwithstanding anything herein to the contrary, the
          ----------
registration rights of the Holder under Section 7 hereof may be assigned only to
a party who acquires from the Holder at least 300,000 shares of Registrable
Securities (as such number may be adjusted to reflect subdivisions, combinations
and stock dividends of the Company's Common Stock), (such party is referred to
as a "Assignee"); provided, however, that (w) no party may be assigned any of
the foregoing rights until the Company is given written notice by the assigning
party at the time of such assignment stating the name and address of the
Assignee and identifying the securities of the Company as to which the rights in
question are being assigned; (x) that any such Assignee shall receive such
assigned rights subject to all the terms and conditions of this Agreement; and
(y) no such assignment or assignments shall increase the obligations of the
Company hereunder.

     9.   MISCELLANEOUS.
          -------------

          9.1  Survival of Warranties. The representations, warranties and
               ----------------------
covenants of the Company and the Investors contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Investors, their counsel or the
Company, as the case may be.

          9.2  Successors and Assigns. The terms and conditions of this
               ----------------------
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties.

                                       15
<PAGE>

          9.3  Governing Law; Consent to Jurisdiction. This Agreement shall be
               --------------------------------------
governed by and construed under the internal laws of the State of Delaware as
applied to agreements among Delaware residents entered into and to be performed
entirely within Delaware, without reference to principles of conflict of laws or
choice of laws.

          9.4  Counterparts. This Agreement may be executed in two or more
               ------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

          9.5  Headings. The headings and captions used in this Agreement are
               --------
used for convenience only and are not to be considered in construing or
interpreting this Agreement.  All references in this Agreement to sections,
paragraphs, exhibits and schedules shall, unless otherwise provided, refer to
sections and paragraphs hereof and exhibits and schedules attached hereto, all
of which exhibits and schedules are incorporated herein by this reference.

          9.6  Notices. Unless otherwise provided, any notice required or
               -------
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified, by
telecopier or upon deposit with the United States Post Office, by registered or
certified mail, postage prepaid and addressed to the party to be notified in the
case of the Company, at 8540 Colonnade Center Drive, Suite 501, Raleigh, North
Carolina 27615, or in the case of Investor, at the record address for such
Investor as reflected on the books of the Company, or at such other address as
any party may designate by giving ten (10) days advance written notice to the
other party.  Notices shall be deemed delivered upon delivery if personally
delivered, one business day after transmission with confirmation of receipt if
sent by telecopier, or three days after deposit in the mails if mailed.

          9.7  No Finder's Fees. Each Investor agrees to indemnify and to hold
               ----------------
harmless the Company from any liability for any commission or compensation in
the nature of a finder's or broker's fee (and any asserted liability) for which
the Investor or any of its officers, partners, employees, or representatives is
responsible.  The Company agrees to indemnify and to hold harmless each Investor
from any liability for any commission or compensation in the nature of a
finder's or broker's fee (and any asserted liability) for which the Company or
any of its officers, employees or representatives is responsible.

          9.8  Costs, Expenses. Each party's costs in connection with the
               ---------------
preparation, execution delivery and performance of this Agreement (including
without limitation legal fees) shall be borne by that party.

          9.9  Amendments and Waivers. Any term of this Agreement may be amended
               ----------------------
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and Investors holding a majority of the
Purchased Shares purchased hereunder; provided, however, that no amendment or
waiver of the Company's obligations under Section 7 of this Agreement that
significantly and adversely affects the rights of a holder of Purchased Shares
shall be binding upon that holder unless that holder has consented in writing to
such amendment or waiver. Subject to the limitations set forth in the preceding
sentence, any amendment or waiver effected in accordance with this Section shall
be binding upon each holder

                                       16
<PAGE>

of any Purchased Shares at the time outstanding (even if such Investor or other
holder did not vote with respect to, or voted against, such amendment or
waiver), each future holder of such securities, and the Company. The Investors
acknowledge that by virtue of this provision, holders of a majority of the
Purchased Shares may bind other holders to amendment or waivers that such other
holders may have voted to oppose.

          9.10 Severability. If one or more provisions of this Agreement are
               ------------
held to be invalid, illegal or unenforceable under applicable law, such
provision(s) shall be excluded from this Agreement and the balance of the
Agreement shall be interpreted as if such provision(s) were so excluded and
shall be enforceable in accordance with its terms.

          9.11 Entire Agreement. This Agreement, together with any exhibits or
               ----------------
schedules hereto, constitutes the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes any and all
prior negotiations, correspondence, agreements, understandings duties or
obligations between the parties with respect to the subject matter hereof.

          9.12 Further Assurances.  From and after the date of this Agreement,
               ------------------
upon the request of an Investor or the Company, the Company and the Investors
shall execute and deliver such instruments, documents or other writings as may
be reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.



               [Remainder of this page intentionally left blank]

                                       17
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Common Stock
Purchase Agreement as of the date first above written.

THE COMPANY:                               INVESTOR:
-----------                                --------

Salix Pharmaceuticals, Ltd.,               SMALLCAP World Fund, Inc.
 a British Virgin Islands corporation
                                           By:  Capital Research and Management

                                           its investment adviser

By: _________________________________      By: ________________________________

Name: _______________________________      Name:  Michael J. Downer
                                                -------------------------------
Title: ______________________________      Title:    Secretary
                                                 ------------------------------


                                           ____________________________________


                                           By: ________________________________

                                           Name: ______________________________

                                           Title: _____________________________





                          [COUNTERPART SIGNATURE PAGE
                       COMMON STOCK PURCHASE AGREEMENT]

                                       18