Santarus' CEO Discusses Q2 2012 Results - Earnings Call Transcript

Santarus, Inc. (SNTS)

Q2 2012 Earnings Call

August 7, 2012 4:30 pm ET

Executives

Martha L. Hough – Vice President, Finance and Investor Relations

Gerald T. Proehl – President, Chief Executive Officer, Director

Debra P. Crawford – Chief Financial Officer, Senior Vice President, Treasurer, Secretary

William C. Denby III – Senior Vice President-Commercial Operations

Wendell Wierenga – Executive Vice President-Research and Development

Analysts

Frank Henry Pinkerton – SunTrust Robinson Humphrey

Annabel Samimy – Stifel, Nicolaus & Co., Inc.

Scott R. Henry – ROTH Capital Partners LLC

Presentation

Operator

Good afternoon, ladies and gentlemen. My name is Martina and I will be your conference operator for today. At this time, I’d like to welcome everyone to the Santarus Second Quarter 2012 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) As a reminder, this conference call is being recorded today August 7, 2012.

I’d now like to turn the call over to our host Martha Hough.

Martha L. Hough

Thank you, Martina. Good afternoon, and welcome to today’s call. This is Martha Hough, Vice President of Finance and Investor Relations. Joining me today on the call are Gerry Proehl, President and Chief Executive Officer; Debbie Crawford, Senior Vice President and Chief Financial Officer; and Bill Denby, Senior Vice President of Commercial Operations. Dr. Wendell Wierenga, Executive Vice President of Research and Development will also be available during the question-and-answer session.

Earlier today Santarus issued a press release announcing our second quarter 2012 financial results, which is available on our website at www.santarus.com. Also a replay of this call will be available for the next two weeks on the Investor Relations section of our website.

Please keep in mind that risks and uncertainties involved in the company’s business may affect the matters referred to in forward-looking statements made by management during today’s call. As a result, the company’s performance may differ from those expressed in or indicated by such forward-looking statements, which are qualified in their entirety by the cautionary statements contained in the press release and the company’s Securities and Exchange Commission filings.

The content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast on August 7, 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.

Gerald T. Proehl

Thank you, Martha, and welcome to this afternoon’s call. Today, we reported our fifth consecutive quarter of profitability with $3.4 million in net income in the second quarter. Total revenues for the quarter were $47.2 million reflecting an approximately 77% increase in revenue over the prior year period.

GLUMETZA continues to drive our top line results with net sales of approximately $32 million during the second quarter. This represents a 98% increase over net sales reported by Depomed in the second quarter of 2011 prior to restructuring our GLUMETZA commercialization agreement.

Our financial progress for the first half of this year keeps us on track to achieve our guidance for the year. Total revenues grew 88% in the six months ended June 30, 2012, compared with the same period in 2011. And net income was up 86% compared with the first half of 2011. In addition, script trends for our promoted commercial products showed sequential quarter-over-quarter growth in the first half of this year.

In recent months, we focus significant activity on our late-stage development products. Our NDA for UCERIS for the induction of remission of mild to moderate active ulcerative colitis is under active review at the FDA with a PDUFA target action date of October 16. With the FDA action date less than three months away our commercial team has initiated activities to prepare for launch of UCERIS in early 2013, subject to approval by the FDA. We’ll then, we will outline some of these activities later in the call.

Our Phase IIIb clinical study to evaluate UCERIS as an add on therapy to current 5-ASA treatments for the induction of remission of mild to moderate active ulcerative colitis has enrolled more than 60 patients out of an expected total enrollment of 500. We are adding clinical sites to accelerate our recruitment with the goal of completing patient enrolments in the first half of 2013. We have provided educational grants to CME programs including online medical education directed to gastroenterologists this summer and to conduct CME symposia for two GI medical meetings in the second half of this year.

Manuscripts from our pivotal studies are in progress and we expect that the first paper for those studies will be published in a peer-reviewed gastroenterology journal in the coming months.

Moving to our second late stage development product in the early July, our partner Pharming announced they had completed enrollment of all 75 patients planned in the Phase III clinical study with RUCONEST, which was formally known in U.S. as RHUCIN.

RUCONEST is a recombinant human C1 inhibitor being developed for the treatment of acute attacks of hereditary angioedema. Topline data from the trials should be available in the fourth quarter after a follow-up period of up to 90 days required as part of the special protocol assessment agreement with the FDA.

Under our licensing agreement the successful completion of this study will trigger a $10 million milestone payable to Pharming. We are planning to purpose the trade name RUCONEST to the FDA, which is also the trade name used for the product in Europe.

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