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Santarus Reports Second Quarter 2013 Financial Results

Santarus, Inc. (NASDAQ: SNTS) today reported financial and operating results for the quarter ended June 30, 2013. Key financial results include:
  • Total revenues of $89.4 million grew 89% compared with total revenues of $47.2 million in the second quarter of 2012
  • Non-GAAP adjusted earnings were $24.3 million and diluted non-GAAP adjusted earnings per share (EPS) were $0.31 in the second quarter of 2013 compared with non-GAAP adjusted earnings of $7.1 million and diluted non-GAAP adjusted EPS of $0.10 for the second quarter of 2012
  • Net income of $73.5 million, or $0.94 diluted EPS, which included a $5.0 million expense for a success-based regulatory milestone, and a one-time income tax benefit of $54.9 million, or $0.70 per share fully diluted, resulting from the release of the company’s valuation allowance for deferred tax assets as further described below. For the second quarter of 2012, net income was $3.4 million, or $0.05 diluted EPS.
  • Cash, cash equivalents and short-term investments were $142.7 million as of June 30, 2013, an increase of $48.0 million compared with $94.7 million at December 31, 2012

“Our commercial efforts continue to drive strong financial performance with encouraging market uptake for UCERIS ® and significant contributions from GLUMETZA ® and ZEGERID ®,” said Gerald T. Proehl, president and chief executive officer of Santarus. “Based on our robust second quarter performance, we are raising our financial outlook for 2013.”

Mr. Proehl added, “Following an analysis of the impact of sales call frequency on UCERIS prescription trends, as well as on our other marketed products, we have decided to add approximately 25 sales representatives by the fourth quarter. We expect the additional sales representatives to contribute to increased prescriptions in 2014.”

“Our clinical development programs continue to progress and we completed enrollment in the UCERIS CONTRIBUTE study as planned in mid-July,” said Wendell Wierenga, Ph.D., executive vice president of research and development. “During the next several months, we expect to request meetings with the U.S. Food and Drug Administration (FDA) to discuss clinical trial designs for additional indications for both UCERIS and RUCONEST ®. We also expect to file an Investigational New Drug (IND) application with the FDA for our monoclonal antibody, SAN-300, with the goal of beginning a Phase IIa clinical study in the treatment of patients with rheumatoid arthritis by the end of 2013.”

Business Highlights

Key second quarter and recent business activities include the following:
  • In June 2013, the FDA accepted for review the RUCONEST (recombinant human C1 esterase inhibitor) Biologics License Application (BLA) for the treatment of acute angioedema attacks in patients with hereditary angioedema. Pursuant to the Prescription Drug User Fee Act (PDUFA), Santarus expects the FDA will complete its review or otherwise respond to the RUCONEST BLA by April 16, 2014.
  • In July 2013, Santarus completed enrollment in the UCERIS (budesonide) CONTRIBUTE clinical study designed to evaluate the incremental benefit of adding UCERIS extended release tablets 9 mg to oral aminosalicylate (5-ASA) therapy for the induction of clinical remission in adult patients with active, mild to moderate ulcerative colitis. The company expects to report top-line data from the study by the end of 2013 or in early 2014.
  • UCERIS total prescriptions were approximately 11,528 in the second quarter of 2013. Through the end of June more than 3,500 physicians have prescribed UCERIS at least one time, a number that has doubled since mid-April. The commercial launch for UCERIS began in mid-February 2013.
  • ZEGERID (omeprazole/sodium bicarbonate) brand and authorized generic total prescriptions were stable at approximately 93,000 prescriptions in the second quarter of 2013, consistent with prescription levels in the first quarter of 2013. The company resumed promotion of ZEGERID to gastroenterologists and other selected physicians in February 2013, with the initial goal of stopping the decline in total prescriptions for the product franchise.
  • GLUMETZA (metformin HCl extended release tablets) total prescriptions increased 13% in the second quarter of 2013 compared with the second quarter of 2012.
  • CYCLOSET (bromocriptine mesylate) tablets total prescriptions were up 20% in the second quarter of 2013 compared with the second quarter of 2012.

Second Quarter 2013 Financial Results

Total revenues increased to $89.4 million for the second quarter of 2013, compared with $47.2 million for the second quarter of 2012 as indicated below ($ in millions):
       
Three Months Ended Increase
June 30, (Decrease)
2013     2012
Product sales, net
GLUMETZA $ 44.4 $ 31.9 $ 12.5
ZEGERID 21.6 10.3 11.3
UCERIS 16.2 - 16.2
CYCLOSET 4.3 2.0 2.3
FENOGLIDE   2.0   2.1   (0.1 )
Total product sales, net 88.5 46.3 42.2
Other revenue   0.9   0.9   -  
Total revenues $ 89.4 $ 47.2 $ 42.2
 

Net income for the second quarter of 2013 was $73.5 million and diluted EPS was $0.94, which included a $5.0 million expense for a success-based regulatory milestone and a one-time income tax benefit of $54.9 million resulting from the release of the company’s valuation allowance for deferred tax assets as further described below. Non-GAAP adjusted earnings for the second quarter of 2013 were $24.3 million and diluted non-GAAP adjusted EPS were $0.31. In the second quarter of 2012 the company reported net income of $3.4 million, diluted EPS of $0.05, non-GAAP adjusted earnings of $7.1 million and diluted non-GAAP adjusted EPS of $0.10.

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