Santarus, Inc. (SNTS)
Q4 2011 Earnings Call
March 5, 2012 4:30 p.m. ET
Martha Hough - Vice President, Finance and Investor Relations
Gerry Proehl - President and Chief Executive Officer
Debbie Crawford - Senior Vice President and Chief Financial Officer
Bill Denby - Senior Vice President, Commercial Operations
Wendell Wierenga - Executive Vice President, Research and Development
Scott Henry - Roth Capital
Frank Pinkerton - SunTrust Robinson Humphrey
Annabel Samimy - Stifel Nicolaus
David Amsellem - Piper Jaffray
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Thank you, Jamaya. 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; and Bill Denby, Senior Vice President of Commercial Operations. Dr. Wendell Wierenga, Executive Vice President of Research and Development will also join us for today’s question-and-answer session.
Earlier today Santarus issued a press release announcing our fourth quarter 2011 financial results, which is available on our website at www.santarus.com . A replay of this call also 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 March 5, 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.
With that I’ll turn it over to Gerry Proehl.
Thank you, Martha, and welcome to this afternoon’s call. I am exceptionally pleased to report our fourth quarter financial performance in which we achieved 65% revenue growth over the prior year period and net income of $1.9 million. These strong results cap a year of transition and accomplishments and importantly our return to profitability.
For the full year we reported revenues of $118.8 million and net income of approximately $4.7 million, outperforming our guidance of $3 million. And we ended the year with $59 million in cash, a balance that reflects of our payment of $11 million upfront fee for FENOGLIDE. We are optimistic about our future which is reflected in our 2012 outlook. We expect revenues of approximately $200,000 million, up roughly 68% over 2011. Net income in the range $8 million to $11 million and adjusted EBITDA of $24 million to $29 million.
We believe that the revenues from our commercial portfolio and our strong balance sheet position us to advance our development programs. Our robust development pipeline addresses multiple specialty markets, providing us with diversification and a strong engine for future growth in revenues and profits. Fourth quarter revenue growth was driven primarily by GLUMETZA. Total GLUMETZA prescriptions grew 34% compared with the fourth quarter of 2010, and we benefited from our price increase that brought this product’s price inline with the branded competition. We expect GLUMETZA to be the primary contributor to higher revenues in 2012.
We are pleased with the settlement agreement recently announced with GLUMETZA. Under this agreement Lupin has granted the right to begin selling a generic version of GLUMETZA on February 1, 2016. We believe we are taking the right step to lengthen the runway to continue growing GLUMETZA prescriptions and revenues, while advancing our development pipeline.
CYCLOSET net sales in the fourth quarter were $3.8 million, up approximately 81% over third quarter 2011 net sales. We expect the product will continue to growth in 2012 with increased call frequency by our larger sales organization. Turning to our development programs starting with UCERIS. Our NDA for UCERIS was accepted for review by the FDA in mid-February following its submission in December. This sets the PDUFA date for completion of the FDA review at October 16, 2012. We believe that UCERIS has the potential to be an important new therapeutic option in the treatment of ulcerative colitis, a chronic disease that afflicts an estimated 600,000 to 700,000 patients in the U.S.
We also have initiated our Phase IIIb clinical study with UCERIS to evaluate the drug as an add-on therapy to current 5-ASA drugs for the induction of our mission of our active ulcerative colitis in patients who are not adequately controlled on background 5-ASA therapy. We expect to complete patient enrollment for this study in the first half of 2013. We believe this is an important study to explore new indications to UCERIS and to provide additional data to physicians on the performance of UCERIS as add-on therapy.
We are on track this year to report a number of significant milestones with our other clinical development programs. During the first half of the year we expect to complete a Phase I clinical study with SAN-300, our anti-VLA-1 antibody program. We plan to initially evaluate SAN-300 for the treatment of rheumatoid arthritis and ultimately for the treatment of inflammatory bowel disease. By the third quarter, we also expect enrollment to be completed in a Phase 3 study with RHUCIN for the treatment acute attacks of hereditary angioedema, an orphan disease. We hold to rights to RHUCIN in the U.S., Canada and Mexico.