Santarus Continues to Soar By Zacks Equity Research | Zacks – 1 hour 38 minutes ago
Riding on a strong growth momentum ahead of its second-quarter earnings release, the shares of Santarus, Inc. (SNTS) closed at $25.57 on Jul 12, 2013. Just last week, Santarus had hit a 52-week high of $24.07 and it touched $25.71 on Friday’s trading session, representing an upside of 6.8%.
The Zacks Rank #2 (Buy) specialty biopharmaceutical company has consistently delivered positive earnings surprises for the last three quarters. In the first quarter of 2013, the company posted a surprise of 108.33%.
Santarus reported revenues of almost $80 million in the first quarter of 2013. Going forward, performance should be driven by Uceris (mild-to-moderate ulcerative colitis), Zegerid (heartburn and other symptoms of gastroesophageal reflux disease) and Glumetza (type II diabetes).
Uceris, which generated sales of $6.6 million in first quarter of 2013, should continue growing on a sequential basis over the rest of 2013. The Zegerid re-launch should aid revenues as well. Glumetza, targeting the lucrative diabetes market, is expected to witness sales growth from the second quarter of 2013.
Santarus also possesses a strong pipeline consisting of interesting candidates like Ruconest for hereditary angioedema (HAE). The US Food and Drug Administration (:FDA) is reviewing the marketing application of Ruconest for the acute treatment of HAE and will render a decision by Apr 2014. Santarus also plans to develop the candidate for the prophylaxis treatment of HAE and acute pancreatitis.
On a price-to-sales basis, Santarus is trading at 7.7x, reflecting a huge premium of 133.3% compared with the peer group average of 3.3x. On a price-to-book basis, the stock is also trading at a premium to the peer group average. However, given the company’s strong fundamentals, the premium valuation is justified.