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Santarus Reports Third Quarter 2012 Financial Results

Santarus, Inc. (NASDAQ: SNTS) today reported financial and operating results for the quarter ended September 30, 2012. Key financial results include:
  • Total revenues of $54.7 million grew 104% compared with $26.8 million for the third quarter of 2011
  • Net income of $9.0 million, or $0.13 diluted earnings per share (EPS), increased significantly compared with $0.6 million, or $0.01 diluted EPS for the third quarter of 2011
  • Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) improved to $12.3 million in the third quarter of 2012 compared with $2.8 million for the third quarter of 2011
  • Cash, cash equivalents and short-term investments were $81.9 million as of September 30, 2012, an increase of $23.3 million compared with $58.6 million at December 31, 2011

“We delivered strong top-line revenue growth in the third quarter and dramatically improved earnings and cash flow compared with the third quarter of 2011,” said Gerald T. Proehl, president and chief executive officer of Santarus. “In addition, our expectation of continued strong commercial performance has led us to raise our financial outlook for 2012.”

He added, “The forward momentum in our pipeline continued with positive Phase III results just announced for RUCONEST ® as well as for rifamycin SV MMX ® in September, and we remain on track for the commercial launch of UCERIS in the first quarter of 2013, subject to FDA approval.”

Business Highlights

Commercial products:
  • ZEGERID ® (omeprazole/sodium bicarbonate): In September, the U.S. Court of Appeals for the Federal Circuit upheld the validity of certain claims from two patents covering ZEGERID capsules and powder for oral suspension prescription products and upheld the Delaware District Court’s ruling that there was no inequitable conduct. Following the Federal Circuit decision, Par Pharmaceutical, Inc. announced that it has ceased further distribution of its generic ZEGERID product and has requested a rehearing of the Federal Circuit’s decision. The ZEGERID patents at issue expire in July 2016.
  • GLUMETZA ® (metformin HCl extended release tablets): New prescriptions grew 28% and total prescriptions increased 30% in the third quarter of 2012 compared with the third quarter of 2011.
  • CYCLOSET ® (bromocriptine mesylate) tablets: New prescriptions increased 49% and total prescriptions were up 74% in the third quarter of 2012 compared with the third quarter of 2011.
  • FENOGLIDE ® (fenofibrate) tablets: New prescriptions grew 9% and total prescriptions increased 12% in the third quarter of 2012 compared with the second quarter of 2012. Santarus began promoting FENOGLIDE in early February 2012.

Investigational drugs:
  • RUCONEST (recombinant human C1 esterase inhibitor): The drug demonstrated statistically significant improvement versus placebo in time to beginning of symptom relief, the primary endpoint in a pivotal Phase III clinical study evaluating the efficacy and safety of RUCONEST versus placebo for the treatment of acute attacks of angioedema in patients with hereditary angioedema (HAE). As a result of the successful trial, the company expects to pay a $10 million milestone to its development partner, Pharming Group NV, in the fourth quarter of 2012.
  • RUCONEST: Santarus and Pharming expect to submit a Biologics License Application (BLA) for RUCONEST to the U.S. Food and Drug Administration (FDA) in the first half of 2013. A $5 million milestone will be payable to Pharming upon FDA acceptance of the BLA for review.
  • Rifamycin SV MMX: The investigational drug demonstrated highly statistically significant improvement versus placebo in reducing time to last unformed stool in patients with travelers’ diarrhea, the primary endpoint of a Phase III clinical study to evaluate the safety and efficacy of rifamycin SV MMX versus placebo. A second Phase III study with rifamycin SV MMX is being conducted in India by Dr. Falk Pharma GmbH, and the study is expected to be completed in mid-2013. Assuming positive results in the second Phase III clinical study, Santarus plans to use the clinical data from Dr. Falk’s Phase III study in its submission of a New Drug Application (NDA) to the FDA.
  • UCERIS (budesonide): The FDA extended the Prescription Drug User Fee Act target action date by 90 days to January 16, 2013 for the review of an NDA for UCERIS 9 mg for the induction of remission of active, mild to moderate ulcerative colitis.
  • UCERIS: Results from the CORE I clinical study, one of two of the company’s pivotal Phase III clinical studies with UCERIS in ulcerative colitis, were published online and in the November print issue in the journal Gastroenterology.

Third Quarter 2012 Financial Results

Total revenues increased to $54.7 million for the third quarter of 2012, compared with $26.8 million for the third quarter of 2011 as indicated below ($ in millions):
Three Months Ended Increase
September 30, (Decrease)
2012   2011
Product sales, net
GLUMETZA $ 39.3 $ 7.8 $ 31.5
ZEGERID 1 8.4 9.9 (1.5 )
CYCLOSET 4.3 2.1 2.2
FENOGLIDE   1.7   -   1.7  
Total product sales, net 53.7 19.8 33.9
Other revenue 2   1.0   7.0   (6.0 )
Total revenues $ 54.7 $ 26.8 $ 27.9

1Includes ZEGERID brand and authorized generic

2Other revenue included $6.0 million of GLUMETZA promotion revenue in the third quarter of 2011

Net income for the third quarter of 2012 was $9.0 million, diluted EPS was $0.13 and adjusted EBITDA was $12.3 million. In the third quarter of 2011 the company had net income of $0.6 million, diluted EPS of $0.01, and adjusted EBITDA of $2.8 million.

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