Santarus Reports Second Quarter 2006 Financial Results; Conference Call to Begin Today at 5:00 p.m. Eastern Time.SAN DIEGO San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. -- Santarus, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :SNTS SNTS Society for New Testament Studies SNTS Standalone NMD Training System ), a specialty pharmaceutical company focused on therapies for gastrointestinal diseases gastrointestinal disease, n an abnormal state or function of the GI system. and disorders, today reported financial and operating results for the quarter ended June 30, 2006. Key financial results for the second quarter of 2006 included: --Total second quarter revenue of $9.4 million --Net product sales of $8.7 million, compared with net product sales of $3.1 million in the prior year period and $5.8 million in the first quarter of 2006 --Net loss of $16.7 million, or $0.36 per share, a decrease of $3.2 million compared with $19.9 million in net loss in the first quarter of 2006 "We have made good progress since the commercial launch of ZEGERID(R) Capsules in late March," said Gerald T. Proehl, president and chief executive officer of Santarus. "Product sales in the second quarter grew approximately 180 percent over the prior year period, and 50 percent compared with the first quarter of this year. While we continue to invest in launch activities, we also continue to closely manage our expenses, which resulted in an improved bottom line for the quarter." Second Quarter 2006 Financial Results Net product sales were $8.7 million in the second quarter of 2006 and consisted of sales of ZEGERID Capsules and ZEGERID Powder for Oral Suspension. Net product sales were $3.1 million in the second quarter of 2005 and consisted of sales of ZEGERID Powder for Oral Suspension. Product sales are recognized net of allowances for product returns, contractual allowances and other discounts. Total revenues for the second quarter of 2006 were $9.4 million, consisting of $8.7 million in net product sales and $715,000 in co-promotion revenue from the amortization of a $15.0 million upfront payment received from Otsuka America Pharmaceutical, Inc. (Otsuka America) in October 2004. Revenues in the second quarter of 2005 were $3.8 million, consisting of $3.1 million in net product sales and $715,000 in co-promotion revenue from the amortization of the Otsuka America upfront payment. Santarus reported a net loss of $16.7 million, or $0.36 per share, for the second quarter of 2006, compared to a net loss of $19.5 million, or $0.54 per share, for the second quarter of 2005. The 2006 second quarter results included approximately $2.4 million, or $0.05 per share, in stock-based compensation expense. Effective January 1, 2006, the company adopted the fair value recognition provisions of Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 123(R)) using the modified prospective transition method. Under this transition method, Santarus is not adjusting its historical financial statements to reflect the impact of SFAS No. 123(R) stock-based compensation expense. The cost of sales was $1.4 million for the second quarter of 2006 and $506,000 for the second quarter of 2005, or approximately 16% of net product sales in each quarter. Santarus reported license fees and royalties of $1.2 million in the second quarter of 2006 and $432,000 in the second quarter of 2005, both of which consisted of royalties payable to the University of Missouri Missouri, state, United States Missouri (mĭz  r`ē, –ə), one of the midwestern states of the United States. and to Otsuka America based on net product sales.Research and development expenses for the second quarter of 2006 were $1.7 million versus $2.5 million in the second quarter of 2005. The lower expenses in the second quarter of 2006 reflect a decrease in manufacturing development activities associated with ZEGERID with Magnesium Hydroxide magnesium hydroxide: see milk of magnesia. Chewable chew v. chewed, chew·ing, chews v.tr. 1. To bite and grind with the teeth; masticate. 2. To meditate on; ponder: chew a problem over. v. Tablets and lower compensation costs associated with a decrease in research and development personnel. Selling, general and administrative expenses were $22.4 million for the second quarter of 2006 and $20.4 million for the second quarter of 2005. The increase in selling, general and administrative expenses was primarily attributable to approximately $1.7 million of additional stock-based compensation expense and increased promotional costs for the launch of ZEGERID Capsules. For the six months ended June 30, 2006, the company reported revenues of $15.9 million, consisting of $14.5 million in net product sales and $1.4 million in co-promotion revenue from the amortization of the $15.0 million upfront payment received from Otsuka America. This compares with total revenues of $16.0 million for the first half of 2005, consisting of $4.5 million in net product sales, $1.4 million in co-promotion revenue and a $10.0 million milestone payment received from TAP Pharmaceutical Products, Inc. in February 2005 under a sublicense sub·li·cense n. A license giving rights of production or marketing of products or services to a person or company that is not the primary holder of such rights. tr.v. agreement that was subsequently terminated in March 2006. Santarus reported a net loss of $36.6 million, or $0.80 per share, for the first six months of 2006, compared with a net loss of $33.1 million, or $0.91 per share, for the first six months of 2005. The results for the first six months of 2006 included approximately $4.8 million, or $0.11 per share, in stock-based compensation expense. As of June 30, 2006, Santarus had cash, cash equivalents and short-term investments of $54.5 million, a decrease of $14.9 million compared with $69.4 million as of December 31, 2005. This decrease resulted primarily from the company's net loss for the six months ended June 30, 2006, offset in part by net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of approximately $16.4 million from two draw downs under the committed equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. facility (CEFF CEFF Colorado Environmental Film Festival ) entered into in February 2006 with Kingsbridge Capital Limited, a private investment group. Under the CEFF, the company may be able to sell up to the lesser of an additional $58.4 million or 6,128,296 shares of common stock, subject to certain conditions, over the remaining 30-month term of the facility. The CEFF is designed to allow Santarus to raise capital, at its discretion, to support Santarus' corporate activities. Additional Business Highlights --The number of physicians prescribing ZEGERID products on a weekly basis increased to approximately 3,700 in mid-July, up from approximately 2,000 physicians at the time of the launch of ZEGERID Capsules in late March. --Santarus has recently negotiated improved formulary formulary /for·mu·lary/ (for´mu-lar?e) a collection of recipes, formulas, and prescriptions. National Formulary see under N. for·mu·lar·y n. positions in certain key managed health care plans which have the potential to positively impact prescriptions for ZEGERID products in the latter part of the year and in 2007. --An additional indication of progress in managed care contracting is that average copays for ZEGERID products have declined from $32.00 per monthly prescription in January to $27.00 per prescription in June. --Data from a Phase IV clinical study presented at the Digestive Disease All diseases that pertain to the gastrointestinal tract are labelled as digestive diseases. This includes diseases of the esophagus, stomach, first, second and third part of the duodenum, jejunum, ileum, the ileo-cecal complex, large intestine (ascending, transverse and descending Week meeting in May further support the effectiveness of ZEGERID Powder for Oral Suspension in controlling nocturnal nocturnal /noc·tur·nal/ (nok-tur´n'l) pertaining to, occurring at, or active at night. noc·tur·nal adj. 1. Of, relating to, or occurring in the night. 2. acid breakthrough. In this study, patients treated over seven days experienced fewer episodes of nocturnal acid breakthrough with immediate-release ZEGERID than when treated over seven days with delayed-release proton pump inhibitors Proton Pump Inhibitors Definition The proton pump inhibitors are a group of drugs that reduce the secretion of gastric (stomach) acid. They act by binding with the enzyme H+, K(+)-ATPase, hydrogen/potassium adenosine triphosphatase (PPIs), Nexium(R) and Prevacid(R), with statistical significance. --Santarus announced in early August that it had obtained a three-year $20 million revolving line of credit Revolving line of credit A bank line of credit on which the customer pays a commitment fee and can take and repay funds at will. Normally a revolving LOC involves a firm commitment from the bank for a period of several years. with Comerica Bank for working capital and general corporate purposes. Conference Call Santarus has scheduled an investor conference call regarding this announcement at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) today, August 8, 2006. Individuals interested in participating in the call may do so by dialing 888-803-8275 for domestic callers, or 706-643-7736 for international callers. A telephone replay will be available for 48 hours following conclusion of the call by dialing 800-642-1687 for domestic callers, or 706-645-9291 for international callers, and entering reservation code 2848484. The live conference call also will be available via the Internet by visiting the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the company's Web site at www.santarus.com, and a recording of the call will be available on the company's Web site for 14 days following the completion of the call. About Santarus Santarus, Inc. is a specialty pharmaceutical company focused on acquiring, developing and commercializing proprietary products that treat gastrointestinal diseases and disorders and enhance the quality of life for patients. The company's products are immediate-release formulations of omeprazole omeprazole /omep·ra·zole/ (o-mep´ra-zol) an inhibitor of gastric acid secretion used in the treatment of dyspepsia , gastroesophageal reflux disease, disorders of gastric hypersecretion, and peptic ulcer, including that associated with , a widely prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). PPI (1) (Pixels Per Inch) The measurement of the resolution of a monitor or scanner. For example, a monitor that is 16 inches wide and displays 1600 pixels across its width would have a resolution of 100 ppi (1600 divided by 16). . The company's marketed products include ZEGERID(R) Capsules (launched in late March 2006) and ZEGERID Powder for Oral Suspension. Santarus received U.S. Food and Drug Administration approval for its third dosage form A dosage form is the physical form of a dose of medication, such as a capsule or injection. The route of administration is dependent on the dosage form of a given drug. , ZEGERID with Magnesium Hydroxide Chewable Tablets, in March 2006. More information about Santarus is available on the company's Web site at www.santarus.com. Santarus cautions you that statements included in this press release that are not a description of historical facts are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . The inclusion of forward-looking statements should not be regarded as a representation by Santarus that any of its plans will be achieved. Actual results may differ materially from those set forth in this release due to the risks and uncertainties inherent in Santarus' business, including, without limitation: Santarus' ability to drive increased market demand for, and generate increased sales of, ZEGERID Capsules, ZEGERID Powder for Oral Suspension and any other products that may be marketed; Santarus' ability to obtain and maintain favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. from managed care organizations and other third party payors for its ZEGERID products and any other products that may be marketed; the scope and validity of patent protection for Santarus' products and Santarus' ability to commercialize its products without infringing the patent rights of others; unexpected adverse side effects Side effects Effects of a proposed project on other parts of the firm. or inadequate therapeutic efficacy of Santarus' products that could delay or prevent product development or commercialization, or that could result in recalls or product liability claims; competition from other pharmaceutical or biotechnology companies Top 100 Biotechnology Companies The following is a list of the top 100 biotechnology companies ranked by revenue. The first nine companies qualify for the list of the top 50 pharmaceutical companies. ; other difficulties or delays relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the development, testing, manufacturing and marketing of Santarus' products; Santarus' ability to obtain additional financing as needed as needed prn. See prn order. to support its operations; and other risks detailed in Santarus' prior press releases as well as in public periodic filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . All forward-looking statements are qualified in their entirety The whole, in contradistinction to a moiety or part only. When land is conveyed to Husband and Wife, they do not take by moieties, but both are seised of the entirety. by this cautionary statement and Santarus undertakes no obligation to revise or update this news release to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date hereof. This caution is made under the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of Section 21E of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Santarus(R) and ZEGERID(R) are trademarks of Santarus, Inc.
Santarus, Inc.
Condensed Balance Sheets
(in thousands)
(unaudited)
June 30, December 31,
2006 2005
------------ ------------
Assets
Current assets:
Cash and cash equivalents and short-term
investments $54,459 $69,367
Accounts receivable, net 8,534 2,663
Inventories, net 3,451 3,133
Other current assets 1,361 1,253
------------ ------------
Total current assets 67,805 76,416
Long-term restricted cash 1,700 1,950
Property and equipment, net 463 617
Other assets 827 952
------------ ------------
Total assets $70,795 $79,935
============ ============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities $13,102 $9,485
Allowance for product returns 6,971 4,464
Current portion of deferred revenue 2,857 2,857
Current portion of long-term debt - 38
------------ ------------
Total current liabilities 22,930 16,844
Deferred revenue, less current portion 7,143 8,571
Total stockholders' equity 40,722 54,520
------------ ------------
Total liabilities and stockholders' equity $70,795 $79,935
============ ============
Santarus, Inc.
Condensed Statements of Operations
(in thousands, except share and per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
Revenues:
Product sales, net $8,678 $3,085 $14,468 $4,534
Sublicense and co-
promotion revenue 715 715 1,429 11,429
----------- ----------- ----------- -----------
Total revenues 9,393 3,800 15,897 15,963
Costs and expenses:
Cost of sales 1,421 506 2,352 764
License fees and
royalties 1,215 432 2,025 2,135
Research and
development 1,726 2,527 4,098 5,646
Selling, general
and administrative 22,415 20,427 45,443 43,837
----------- ----------- ----------- -----------
Total costs and
expenses 26,777 23,892 53,918 52,382
----------- ----------- ----------- -----------
Loss from operations (17,384) (20,092) (38,021) (36,419)
Interest and other
income, net 711 549 1,423 3,309
----------- ----------- ----------- -----------
Net loss $(16,673) $(19,543) $(36,598) $(33,110)
=========== =========== =========== ===========
Basic and diluted net
loss per share $(0.36) $(0.54) $(0.80) $(0.91)
=========== =========== =========== ===========
Weighted average shares
outstanding to
calculate basic and
diluted net loss per
share 46,602,366 36,410,782 45,637,918 36,321,310
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion