Santarus, Inc. (SNTS) Q1 2012 Earnings Call May 8, 2012 4:30 pm ET Executives Martha L. Hough – Vice President, Finance and Investor Relations Gerald T. Proehl – President and Chief Executive Officer Debra P. Crawford – Senior Vice President, Chief Financial Officer and Treasurer William C. Denby, III – Senior Vice President, Commercial Operations Wendell Wierenga – Executive Vice President, Research and Development Analysts Frank Pinkerton – SunTrust Robinson Humphrey Traver A. Davis – Piper Jaffray, Inc. Annabel Samimy – Stifel, Nicolaus & Co., Inc. Presentation Operator
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The content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast on May 8, 2012. Santarus undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call.I’ll now turn the call over to Gerry Proehl. Gerry. Gerald T. Proehl Thank you, Martha, and welcome to this afternoon’s call. We are pleased to report a profitable first quarter on revenues that more than doubled from the prior year period to $45.9 million. We achieved profitability even with the $4 million regulatory milestone we paid to Cosmo Technologies for FDA acceptance for filing of the UCERIS NDA. Higher net sales for GLUMETZA were the primary driver of our first quarter revenue growth, increasing 104% from the net sales reported by Depomed in the first quarter of 2011. We also benefited from positive sales contributions from CYCLOSET and FENOGLIDE. Although, we only began actively promoting FENOGLIDE in February, we are encouraged by the recent prescription trends we have seen for this product. Importantly, our strong performance for the quarter is in line with our 2012 financial guidance for revenues of at least $200 million and adjusted EBITDA of $24 million to $29 million, which we are affirming today. Our commercial portfolio was well positioned for future growth. We have completed training of an additional 40 sales representatives bringing our total budgeted sales force to 150 physicians and we expect that the higher call frequency afforded by our larger commercial organization will translate into increased prescriptions and net sales for all of our promoted products. We are also making good progress with our development pipeline. As previous announced the NDA for UCERIS for the induction of remission of active ulcerative colitis is under review at the FDA with a PDUFA target action date of October 16, 2012. Additional data from our UCERIS 12-month extended use study will be presented in four poster session at the upcoming Digestive Disease Week Meeting, which is taking place in San Diego later this month. Three of the posters will be on Sunday, May 20, and the fourth poster will be on Tuesday, May 22. All abstracts are now available online at the DDW website.
In February, we began enrolling patients in our Phase IIIb clinical study to evaluate UCERIS as an add-on therapy to current 5-ASA drugs for the induction of remission of active ulcerative colitis. We expect to complete enrollment in this study in the first half of 2013.The Phase III clinical study with RHUCIN for the treatment of acute attacks of hereditary angioedema is on track to be completed by the third quarter of this year. As a reminder the successful completion of this study will trigger a $10 million milestone payment to our development partner Pharming. We are also on schedule with our Phase III clinical study with rifamycin SV MMX for the treatment of travelers’ diarrhea to complete enrollment in the third quarter of this year. And we expect the Phase I clinical study with our anti-VLA-1 antibody SAN-300 to be completed this year. It’s been just over a year since we had the oral arguments in ZEGERID patent appeal. As we have indicated before the timing of the ruling is entirely at the discretion of the appealing court, but we plan to update shareholders when we receive the ruling. As part of our ongoing efforts to increase the intellectual property protection on our product portfolio, we’ve recently worked with VeroScience to file a patent application for CYCLOSET under the U.S. PTO’s accelerated process. Under this process, the PTO generally completes its review in one year, and during this time the content of the application are confidential. We recently welcome two new directors to the Santarus board, Alessandro Della Chà and Dr. Matthew Strobeck. Alex is the Senior partner and a co-managing director of a boutique commercial law firm in Milan, Italy, and the director of Cosmo Pharmaceuticals, a key corporate partner. Read the rest of this transcript for free on seekingalpha.com