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Santarus, Inc. (SNTS)

Q3 2011 Earnings Conference Call

November 7, 2011 4:30 PM EST

Executives

Martha Hough – VP, Finance and IR

Gerry Proehl – President and CEO

Debbie Crawford – SVP and CFO

Bill Denby – SVP, Commercial Operations

Wendell Wierenga – EVP, Research and Development

David Ballard – SVP, Medical Affairs and Pharmacovigilance

Analysts

Scott Henry – ROTH Capital

Annabel Samimy – Stifel Nicolaus

Presentation

Operator

Good afternoon, and welcome to the Santarus Third Quarter 2011 Financial Results Conference Call.

At this time, all participants are in listen-only mode. Following management’s prepared remarks, we’ll hold a Q&A session. (Operator Instructions). As a reminder, this conference is being recorded, November 7th, 2011.

I would now like to turn the call over to Ms. Martha Hough. Ms. Hough, please go ahead.

Martha Hough

Thank you, Dia. Good afternoon and welcome to today’s call. This is Martha Hough, Vice President of Finance and Investor Relations.

Joining me on the call today are Gerry Proehl, President and Chief Executive Officer; Debbie Crawford, Senior Vice President and Chief Financial Officer; Bill Denby, Senior Vice President of Commercial Operations; and Wendell Wierenga, Executive Vice President of Research and Development. Dr. David Ballard, our Senior Vice President, Medical Affairs and Pharmacovigilance will also be available during today’s question-and-answer session.

Earlier today Santarus issued a press release announcing our third quarter 2011 financial results, which is available on our website at www.santarus.com. A replay of this call also will be available on our website and can be found in the Investor Relations section for the next two weeks.

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, November 7th, 2011. 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’d now turn the call over to Gerry Proehl.

Gerry Proehl

Thank you, Martha, and welcome to this afternoon’s call. I’m very excited to discuss the steps we’re taking to accelerate the growth of GLUMETZA and CYCLOSET and to support the successful future launches of our late stage development products, UCERIS, which is the proposed trade name for our budesonide MMX and RHUCIN.

With our commercial products, we restructured our GLUMETZA agreement with Depomed. We also implemented the GLUMETZ eVoucher program lowering the copay for many patients to $10 per prescription. And we accelerated support for CYCLOSET among key endocrinologists. With our late stage development programs, we announced positive results from the UCERIS 12-month extension study and reinitiated enrollment in the RHUCIN Phase III clinical study after reaching an agreement with the FDA on the design of the Phase III study under a special protocol assessment.

As a result of our commercial initiatives, the growth of new prescriptions for both GLUMETZA and CYCLOSET has accelerated in recent weeks. To support continued product growth, we are increasing our promotions by adding 40 contract sales representatives in the first quarter of 2010, bringing our total field sales representatives to 150. This expansion will allow us to reduce the size of our larger sales rep territory resulting in an improved inVentiv sales rep productivity, while also increasing average frequency of physician calls. We believe that our expanded sales force will have a positive impact on revenue in 2012. Bill Denby will talk more about the expansion later in the call.

We continue to made good progress with our late state development products and I’m very excited about the future commercial potential of UCERIS and RHUCIN. In September, we announced positive results from our 12-month extended use study with UCERIS, and we are on track to submit the NDA next month. To support the continued development and future commercialization of UCERIS and to provide new data to potentially expand its label and market opportunity, we have decided to initiate a Phase IIIb clinical study to evaluate UCERIS 9 milligrams as an add-on therapy to current oral 5-ASA drugs for induction of remission of active ulcerative colitis.

Key thought leader for inflammatory bowel disease as well as practicing gastroenterologists have indicated to us that clinical data assessing UCERIS as an add-on therapy could help to accelerate adoption of UCERIS for the treatment of patients with active ulcerative colitis.

With regard to RHUCIN, we now have an FDA approved special protocol assessment in place and we have reinstated enrollment of patients into the Phase III clinical study, assessing RHUCIN in acute attacks of hereditary angioedema, which we expect will be completed by the third quarter of 2012. Wendell Wierenga will provide further details on our clinical programs later in the call.

Finally, the ZEGERID authorized generic capsules sold by Prasco maintained its slightly more than 50% share of the generic market during the third quarter. As of September, ZEGERID branded capsules run at approximately 7.5% of pre-generic levels. The lower court decision on the ZEGERID patent appeal is still pending and we anticipate a decision later this year, although the timing is completely at the discretion of the appellate court.

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