Santarus Reports Third Quarter 2005 Financial Results; Conference Call to Begin at 5:00 p.m. Eastern Time Today.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 September 30, 2005. Key financial results for the third quarter of 2005 included: --Total revenue of $4.9 million, including net product sales of $4.2 million --Net loss of $16.1 million, or $0.40 per share "We grew ZEGERID(R) product sales by approximately 35 percent over the second quarter of 2005 and together with our efforts to manage expenses, reduced our net loss by $3.5 million compared to the second quarter of this year," said Gerald T. Proehl, president and chief executive officer of Santarus. "Through our sales and marketing programs, we are continuing to focus on establishing the differential clinical features of our immediate-release ZEGERID brand with physicians who are high prescribers of 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)." Third Quarter 2005 Financial Results Revenues for the third quarter of 2005 were $4.9 million, consisting of $4.2 million in net product sales and $714,000 in co-promotion revenue from the amortization of the $15.0 million upfront payment received from Otsuka America Pharmaceutical, Inc. (Otsuka America) in October 2004. Santarus had no revenues in the third quarter of 2004. Santarus reported a net loss attributable to common stockholders of $16.1 million, or $0.40 per share, for the third quarter of 2005, compared with a net loss attributable to common stockholders of $21.2 million for the third quarter of 2004. The cost of sales was $612,000, or approximately 15 percent of net product sales, in the third quarter of 2005. Santarus reported license fees and royalties of $583,000 in the third quarter of 2005, 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.
There were no license fees and royalties in the third quarter of 2004.Research and development expenses for the quarter ended September 30, 2005 were $2.3 million, compared with $5.8 million for the quarter ended September 30, 2004. The lower expenses in the third quarter of 2005 reflect decreases in each of the following: certain clinical trial costs, expenses associated with the preparation for commercialization of ZEGERID Powder for Oral Suspension and development activities for ZEGERID Capsules and ZEGERID 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. Selling, general and administrative expenses were $17.5 million for the quarter ended September 30, 2005, and $14.6 million for the quarter ended September 30, 2004. The increase in selling, general and administrative expenses was primarily attributable to promotional costs for ZEGERID Powder for Oral Suspension and the hiring of sales and marketing personnel during the third quarter of 2004, which were fully burdened expenses for the full three months of the quarter ended September 30, 2005. For the nine months ended September 30, 2005, the company reported revenues of $20.8 million, consisting of $8.7 million in net product sales and $2.1 million in co-promotion revenue from the amortization of the $15.0 million upfront payment received from Otsuka America, and a $10.0 million milestone payment received from TAP Pharmaceutical Products Inc. during the first quarter of 2005. Santarus reported a net loss attributable to common stockholders of $49.2 million, or $1.31 per share, for the nine months ended September 30, 2005, compared with a net loss attributable to common stockholders of $49.4 million for the nine months ended September 30, 2004. As of September 30, 2005, Santarus had cash, cash equivalents and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments of $85.8 million, compared with $114.0 million as of December 31, 2004, a decrease of $28.2 million. This decrease resulted primarily from the company's net loss for the nine months ended September 30, 2005, offset in part by the 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 $29.0 million received in August 2005 upon the completion of the company's registered direct offering of 7,350,000 shares of common stock. Key 2005 Third Quarter Accomplishments and Recent Highlights In addition to continued progress with ZEGERID Powder for Oral Suspension commercialization, key third quarter accomplishments and recent highlights include: --In July, the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. accepted for filing the New Drug Application (NDA (Non Disclosure Agreement) An agreement signed between two parties that have to disclose confidential information to each other in order to do business. In general, the NDA states why the information is being divulged and stipulates that it cannot be used for any ) for ZEGERID Chewable Tablets 40 mg and 20 mg with a March 26, 2006 PDUFA PDUFA Prescription Drug User Fee Act of 1992 (USA) date. The NDA for ZEGERID Capsules was accepted for filing by the FDA in late June, with a February 26, 2006 PDUFA date. --Santarus did not receive notice of a patent infringement patent infringement n. the manufacture and/or use of an invention or improvement for which someone else owns a patent issued by the government, without obtaining permission of the owner of the patent by contract, license or waiver. suit from AstraZeneca plc or related patent holders during the 45-day period following notice of the FDA's acceptance of the NDAs for ZEGERID Capsules and ZEGERID Chewable Tablets. --In August, Santarus raised approximately $31.2 million in gross proceeds in a registered direct offering of Santarus common stock. --A ZEGERID review article authored by Dr. Donald Castell, Professor of Medicine and Director of the Esophageal Disorders Esophageal Disorders Definition The esophagus is a tube that connects the back of the mouth to the stomach. Abnormalities of the esophagus generally fall into one of four categories: structural abnormalities, motility disorders, inflammatory disorders, Program at the Medical University of South Carolina “MUSC” redirects here. For Abel Santa María airport in Santa Clara, Cuba (ICAO code MUSC), see Abel Santa María Airport. The Medical University of South Carolina and past president of the American Gastroenterological Association The American Gastroenterological Association is a medical association of gastroenterologists. About 14,000 scientists and physicians are members of the organization, which was founded in 1897 and is the oldest medical association in the United States. , was published in the November 2005 issue of Expert Opinion on Pharmacotherapy pharmacotherapy /phar·ma·co·ther·a·py/ (-ther´ah-pe) treatment of disease with medicines. phar·ma·co·ther·a·py n. Treatment of disease through the use of drugs. , a peer-reviewed journal peer-reviewed journal Refereed journal Academia A professional journal that only publishes articles subjected to a rigorous peer validity review process. Cf Throwaway journal. . 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, November 7, 2005. 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 1506810. 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 to enhance the quality of life for patients with gastrointestinal diseases and disorders. The company's current 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 launched its first product, ZEGERID Powder for Oral Suspension 20 mg, in October 2004 and launched ZEGERID Powder for Oral Suspension 40 mg in February 2005. The company submitted an NDA for ZEGERID Capsules 40 mg and 20 mg to the FDA in April 2005 and submitted an NDA for ZEGERID Chewable Tablets 40 mg and 20 mg to the FDA in May 2005. 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 establish market acceptance and demand for ZEGERID Powder for Oral Suspension and any other products that may be approved for marketing; whether the FDA ultimately approves the pending NDAs for ZEGERID Capsules and ZEGERID Chewable Tablets for one or more of the desired indications in a timely manner or at all; Santarus' ability to obtain additional financing as needed as needed prn. See prn order. to support its operations; 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 ZEGERID Powder for Oral Suspension or Santarus' other products under development 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 and obtaining regulatory approval for Santarus' products; 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. (Tables to Follow)
Santarus, Inc.
Condensed Balance Sheets
(in thousands)
(unaudited)
September 30, December 31,
2005 2004
------------- ------------
Assets
Current assets:
Cash and cash equivalents and short-term
investments $85,788 $114,008
Accounts receivable, net 1,501 801
Inventories, net 3,620 1,962
Other current assets 1,859 2,481
------------- ------------
Total current assets 92,768 119,252
Long-term restricted cash 1,950 950
Property and equipment, net 702 949
Other assets 1,041 1,065
------------- ------------
Total assets $96,461 $122,216
============= ============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities $10,531 $14,806
Allowance for product returns 5,165 7,057
Current portion of deferred revenue 2,857 2,857
Current portion of long-term debt 54 186
------------- ------------
Total current liabilities 18,607 24,906
Deferred revenue, less current portion 9,286 11,429
Long-term debt, less current portion - 38
Total stockholders' equity 68,568 85,843
------------- ------------
Total liabilities and stockholders' equity $96,461 $122,216
============= ============
Santarus, Inc.
Condensed Statements of Operations
(in thousands, except share and per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- -------------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
Revenues:
Product sales,
net $ 4,164 $ - $ 8,698 $ -
Sublicense and
co-promotion
revenue 714 - 12,143 -
----------- ----------- ----------- -----------
Total revenues 4,878 - 20,841 -
Costs and expenses:
Cost of sales 612 - 1,376 -
License fees and
royalties 583 - 2,718 5,000
Research and
development 2,304 5,751 7,553 15,472
Selling, general
and administrative 17,507 14,604 60,494 24,154
Stock-based
compensation 594 1,285 1,841 4,424
----------- ----------- ----------- -----------
Total costs and
expenses 21,600 21,640 73,982 49,050
----------- ----------- ----------- -----------
Loss from
operations (16,722) (21,640) (53,141) (49,050)
Interest and other
income, net 636 448 3,945 815
----------- ----------- ----------- -----------
Net loss (16,086) (21,192) (49,196) (48,235)
Accretion to
redemption value
of redeemable
convertible
preferred stock - - - (1,124)
----------- ----------- ----------- -----------
Net loss
attributable to
common
stockholders $ (16,086) $ (21,192) $ (49,196) $ (49,359)
=========== =========== =========== ===========
Basic and diluted
net loss per share $ (0.40) $ (0.62) $ (1.31) $ (2.32)
=========== =========== =========== ===========
Weighted average
shares outstanding
to calculate basic
and diluted net
loss per share 39,855,186 33,983,523 37,512,214 21,293,866
--------------------
The composition of
stock-based compensation
is as follows:
Research and
development $ 195 $ 403 $ 592 $ 1,227
Selling, general
and administrative 399 882 1,249 3,197
----------- ----------- ----------- -----------
$ 594 $ 1,285 $ 1,841 $ 4,424
=========== =========== =========== ===========
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