Santarus, Inc. (SNTS) reported second quarter 2013 earnings of 24 cents per share, well above the year-ago earnings of 6 cents and the Zacks Consensus Estimate of 14 cents per share.
Quarterly revenues increased 89.4% year over year to $89.4 million, well above the Zacks Consensus Estimate of $82 million, with performance being driven by Glumetza, Zegerid and the newly launched Uceris.
Quarter in Detail
During the quarter, Glumetza revenues increased 39.2% to $44.4 million. Total prescription volume shot up 13% from the year-ago quarter.
Zegerid revenues (branded and authorized generic) came in at $21.6 million, recording 110% growth from the year-ago period. We note that Santarus re-launched Zegerid in Feb 2013. Zegerid total prescriptions were around 93,000 in the second quarter of 2013.
Cycloset revenues increased 115% to $4.3 million. Fenoglide revenues declined around 5% to $2 million.
Uceris revenues were $16.2 million in the reported quarter. We remind investors that Uceris, which is approved for the induction of remission in patients suffering from mild-to-moderate ulcerative colitis, was launched in the U.S. in Feb 2013.
Research and development expenses decreased 1.5% to $6.6 million. Selling, general and administrative (SG&A) expenses increased 63% to $33.5 million. Sales force expansion, higher costs associated with the Uceris launch in the first quarter and higher stock-based compensation led to the increase in SG&A spend. The company has decided to add 25 sales representatives by the end of 2013 for further promotion of Uceris.
Meanwhile, Santarus is seeking FDA approval for Ruconest for the treatment of acute attacks of angioedema in hereditary angioedema (HAE) patients. A response is expected by Apr 16, 2014.
2013 Guidance Up
Santarus raised its 2013 guidance. Santarus raised its total revenue guidance to $355 - $360 million from $330 − $340 million.
The company expects earnings per share (excluding the impact of stock-based compensation expense) of $1.21 to $1.26, above the earlier guidance of $1.03 to $1.15. Stock-based compensation expense is expected to be around $14 million.
Research and development expenses are expected to be around $34 million, down from the earlier guidance of $34 million to $38 million. SG&A expenses are estimated at $138 million, up from the old guidance of $131 million to $134 million.
The company expects to file four investigational new drug applications in the remaining quarters of 2013. Santarus is also looking to move Uceris into two programs next year and is planning a phase IIa study on SAN-300 for rheumatoid arthritis by the end of this year.
We are encouraged by the company’s second quarter results and raised outlook. Uceris is off to a strong start and should continue performing well. We expect investor focus to remain on the outcome of the FDA advisory panel meeting for Ruconest and Santarus’ effort on further development of Uceris.
We are also encouraged by the company’s efforts to stem the decline in prescription trends for branded Zegerid
Santarus carries a Zacks Rank #1 (Strong Buy). Currently, companies like Actelion Ltd. (ALIOF) look equally attractive with a Zacks Rank #1. Jazz Pharmaceuticals Public Limited Company (JAZZ) and Aegerion Pharmaceuticals, Inc. (AEGR) are also attractive with a Zacks Rank #2 (Buy).
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