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Santarus, Inc. (SNTS)
Lazard Capital Markets 9th Annual Healthcare Conference
November 13, 2012 9:00 a.m. ET
Gerald Proehl - President and Chief Executive Officer
Bill Tanner - Lazard Capital Markets
Bill Tanner - Lazard Capital Markets
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Thanks, Bill. I will be making some forward-looking statements. I refer you to our SEC filings. Santarus is a biopharmaceutical company. We have both small molecule and biologic products. Four products that are currently on the market and four products in development, three of them late stage products and one early stage product. In the first nine months of the year we had just under $150 million in revenue. We are a profitable company and we expect to be more profitable going forward based on our recent appellate court win on Zegerid, which I will talk a little bit more about.
As I mentioned, we have four products on the market. You can see here, three of the products are metabolic products, two for type 2 diabetes, one for cholesterol. Glumetza and Cycloset for the diabetes and Fenoglide for cholesterol and triglycerides. We have estimated peak sales of those three products between $300 million to $400 million. And then Zegerid, we haven’t promoted that for two years since we genericized in 2010. We did win the appellate court decision and we do expect to start promoting that product in 2013, post the approval of Uceris, which you can see in the late stage development. We have a January 16, 2013 PDUFA date. Assuming approval of Uceris, we would plan on hiring about 85 reps and launching that product in late February, early March timeframe.
Ruconest is a recombinant C1 Esterase inhibitor for Hereditary Angioedema. We just reported out the third Phase 3 study results, positive results. We plan on moving forward with putting together the BLA, submitting that product in first half of 2013. And then Rifamycin is a broad spectrum, non-systemic antibiotic for travelers’ diarrhea and we have one positive Phase 3 study completed and one about half way through. We have peak sales of those products of about $500 million. And then we have an early stage biologic program. It’s an antibody program that’s just completing phase I.
Currently we have 150 sales reps. They call on endocrinologists and primary care physicians that are high prescribers of type 2 diabetes products. And they sell all three products. With the approval of Uceris we plan on adding about 85 reps to the 150. What those reps will do is then promote all of our products. When they are calling on the gastroenterologists, they will promote Uceris and Zegerid. When they are calling on the endocrinologists, they will promote Glumetza and Cycloset. And when they are calling on primary care physicians, they will do a combination of Glumetza, Zegerid, Cycloset and Fenoglide, dependent on the value of the physician for those particular products.
With the approval of Ruconest later on hopefully in early 2014, we would look at about 25 reps to call on allergists and immunologists. If you want to think about our company and how we are trying to manage this company, it’s really to move more from what typically were more primary care products to more specialty based products. In doing that we can become more efficient with our sales organization. You need less sales reps to generate more sales dollars. Ultimately our goal and if you look at us over the next three years, we expect that SG&A as a percentage of revenue will continue to go down.
We expect to maintain our R&D as a percentage of revenue. What that will allow us to do is invest in our current portfolio. When I talk about our development products what you will see is, our products have the opportunity to actually be used in a variety of different disease states and we plan on expanding the use of these products as we move forward.
Let me talk briefly about Zegerid. The product actually went generic in 2010. We lost a lower court decision. We appealed that decision and we just recently won the appellate court ruling. Par has appealed back to the appellate court. They have appealed both to the three judge panel that rendered the ruling and they appealed (inaudible) to the entire appellate court. We expect within the couple of months for the appellate court to make a decision. Typically they only rehear about 2% of their cases so we will wait for that final decision.
If the appellate court does turn down Par’s appeal, they will send it back to the lower court and we will go to a jury trial for damages, assuming that we are not able to come to some type of an agreement with Par. Zegerid’s patent does expire in July 2016, so we have just under four years to continue to drive sales of Zegerid.