EXHIBIT 99.1
[SANTARUS INC. (R) LOGO]
COMPANY CONTACT: INVESTOR CONTACT:
Martha L. Hough Lippert/Heilshorn & Associates, Inc.
VP Finance & Investor Relations Jody Cain (jcain@lhai.com)
(858) 314-5824 Bruce Voss (bvoss@lhai.com)
Debra P. Crawford (310) 691-7100
Chief Financial Officer
(858) 314-5708
FOR IMMEDIATE RELEASE
SANTARUS REPORTS FIRST QUARTER 2005 FINANCIAL RESULTS
CONFERENCE CALL TO BEGIN AT 5:00 P.M. EASTERN TIME TODAY
SAN DIEGO (MAY 12, 2005) - Santarus, Inc. (NASDAQ: SNTS), a specialty
pharmaceutical company focused on therapies for gastrointestinal diseases and
disorders, today reported financial and operating results for the quarter ended
March 31, 2005.
COMMERCIAL PROGRESS
Santarus launched ZEGERID(R) (omeprazole) Powder for Oral Suspension 40 mg in
February 2005 and 20 mg in October 2004. ZEGERID Powder for Oral Suspension is
the first and only immediate-release oral proton pump inhibitor (PPI) for the
treatment of heartburn and other symptoms associated with gastroesophageal
reflux disease (GERD), erosive esophagitis, duodenal ulcers, gastric ulcers and
the reduction of risk of upper gastrointestinal bleeding in critically ill
patients.
"The late February introduction of our immediate-release 40 mg ZEGERID product
marked an important milestone, as PPIs predominantly are prescribed at
comparable higher dosage levels. Total prescriptions written for the ZEGERID
brand grew from approximately 4,000 in February, prior to the launch of our
ZEGERID 40 mg product, to an estimated 7,000 in April, a 75% increase. As
planned, product sampling of ZEGERID has been substantial, with over 200,000
samples distributed to physicians' offices in the first month of launch. We
believe that total prescriptions will continue to grow as we move through this
period of heavy sampling and as many of our new marketing initiatives begin to
gain traction with our target physicians. We anticipate these programs will
support increased sales in the second half of the year," said Gerald T. Proehl,
president and chief executive officer of Santarus.
"We are also making significant progress in the development of our ZEGERID
products in solid dosage forms, which we believe will enhance our
immediate-release ZEGERID products' appeal to a broader base of physicians and
patients," added Mr. Proehl. "Last month we announced the submission of a new
drug application (NDA) for ZEGERID Capsules 40 mg and 20 mg, ahead of our
previously announced third quarter target. Further, we have accelerated the
anticipated timetable for submitting our ZEGERID Chewable Tablets 40 mg and 20
mg NDA to the late second quarter or early third quarter of this year."
FIRST QUARTER 2005 FINANCIAL RESULTS
Revenues for the first quarter of 2005 were $12.2 million, consisting of $1.4
million in net product sales, $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, and a $10.0 million
milestone payment received from TAP Pharmaceutical Products Inc. (TAP). The
company received the TAP milestone payment in February 2005 after it prevailed
in an alternative dispute resolution proceeding in which the company alleged
that TAP had achieved a development milestone. Product sales are recognized net
of allowances for product returns, managed care rebates, reimbursements relating
to Medicaid, patient coupons, chargebacks from distributors, wholesaler fees and
prompt payment and other discounts. The company had no revenues in the first
quarter of 2004.
Santarus reported a net loss attributable to common stockholders of $13.6
million, or $0.37 per share, for the first quarter of 2005, compared with a net
loss attributable to common stockholders of $11.3 million for the first quarter
of 2004.
The cost of sales was $258,000 in the first quarter of 2005. Cost of sales
included third party manufacturing costs, freight and indirect and other
overhead costs associated with ZEGERID Powder for Oral Suspension 40 mg and 20
mg.
Santarus reported license fees and royalties of $1.7 million in the first
quarter of 2005, which consisted of $1.5 million paid to the University of
Missouri, representing 15% of the milestone fee received pursuant to the
company's sublicense agreement with TAP, and royalties payable to the University
of Missouri and to Otsuka America based on net product sales. There were no
license fees or royalties in the first quarter of 2004.
Research and development expenses for the three months ended March 31, 2005 were
$2.9 million, compared with $5.0 million for the three months ended March 31,
2004. The decrease in research and development expenses was primarily
attributable to spending for the three months ended March 31, 2004, which
included expenses associated with the company's clinical trial to evaluate the
safety of ZEGERID Powder for Oral Suspension 40 mg, the company's clinical trial
evaluating ZEGERID Powder for Oral Suspension as compared to Protonix(R)
(delayed-release pantoprazole capsules) for control of nocturnal gastric acidity
and the user fee associated with the submission of the company's NDA for ZEGERID
Powder for Oral Suspension 40 mg in February 2004. There were no costs
associated with these activities in the three months ended March 31, 2005.
Additionally, a decrease in costs associated with preparation for commercial
manufacturing of ZEGERID Powder for Oral Suspension and the formulation
development and production of clinical trial materials for ZEGERID Capsules
contributed to the decrease in the company's research and development expenses
in the period ended March 31, 2005.
Selling, general and administrative expenses were $23.0 million for the three
months ended March 31, 2005, compared with $3.4 million for the three months
ended March 31, 2004. The increase in selling, general and administrative
expenses was primarily attributable to the hiring of sales and marketing
personnel during 2004, including the company's field sales organization, which
included approximately 230 sales representatives at March 31, 2005.
Additionally, outside services and professional fees associated with the
company's commercial activities increased for the three months ended March 31,
2005, including advertising and promotion, holding a national sales meeting in
connection with the launch of ZEGERID Powder for Oral Suspension 40 mg,
initiation of speaker programs and the cost of product samples. The company had
no commercial products during the three months ended March 31, 2004.
Interest and other income increased in the period ended March 31, 2005 primarily
due to interest income awarded to Santarus in connection with the $10.0 million
milestone payment the company received from TAP in February 2005 after the
company prevailed in an alternative dispute resolution proceeding.
As of March 31, 2005, Santarus had cash, cash equivalents and short-term
investments of $94.9 million, compared with $114.0 million as of December 31,
2004, a decrease of $19.1 million. This decrease resulted primarily from the
company's net loss for the three months ended March 31, 2005.
In light of the recent commercial launches of ZEGERID Powder for Oral Suspension
40 mg and 20 mg and Santarus' limited history of product sales, the company has
not provided financial guidance for 2005. The company plans to provide sales and
earnings guidance when sales trends for ZEGERID Powder for Oral Suspension 40 mg
and 20 mg are sufficiently established to provide meaningful estimates. With the
majority of PPI prescriptions being written at higher doses, the company
believes that ZEGERID Powder for Oral Suspension 40 mg launched in February 2005
is an important new product offering for physicians and their patients. The
company anticipates that its advertising and promotional campaign during the
launch period in the first half of 2005, which is expected to include
significant medical trade journal advertising and product sampling for ZEGERID
Powder for Oral Suspension 40 mg, will generate increased prescriptions for
ZEGERID Powder for Oral Suspension in the second half of the year.
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, May 12, 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 the conclusion of the
call by dialing 800-642-1687 for domestic callers, or 706-645-9291 for
international callers, and entering reservation code 5630456. The live
conference call also will be available via the Internet by visiting the Investor
Relations 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, a widely
prescribed PPI. 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 to the FDA in April 2005 and is also developing a chewable tablet
formulation of ZEGERID. 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. 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 40 mg and 20 mg; unexpected adverse side
effects 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; whether the FDA accepts the NDA for ZEGERID Capsules for filing or
ultimately approves the NDA under Section 505(b)(2) of the Federal Food, Drug,
and Cosmetic Act
for one or more of the desired indications in a timely manner or at all;
whether, subject to receipt of FDA approval, Santarus is able to generate market
demand and acceptance for ZEGERID Capsules; difficulties or delays in
development, testing, manufacturing and marketing of and obtaining regulatory
approval for any of Santarus' products under development; Santarus' ability to
obtain additional financing as needed 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. All forward-looking
statements are qualified in their entirety by this cautionary statement and
Santarus undertakes no obligation to revise or update this news release to
reflect events or circumstances after the date hereof. This caution is made
under the safe harbor provisions of Section 21E of the Private Securities
Litigation Reform Act of 1995.
Santarus(R) and ZEGERID(R) are trademarks of Santarus, Inc.
[Tables to Follow]
SANTARUS, INC.
CONDENSED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
MARCH 31, DECEMBER 31,
2005 2004
--------- ------------
ASSETS
Current assets:
Cash and cash equivalents and short-term investments $ 94,886 $ 114,008
Accounts receivable, net 871 801
Inventories, net 2,565 1,962
Other current assets 2,538 2,481
--------- ------------
Total current assets 100,860 119,252
Long-term restricted cash 1,950 950
Property and equipment, net 842 949
Other assets 1,162 1,065
--------- ------------
Total assets $ 104,814 $ 122,216
========= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 11,518 $ 14,806
Allowance for product returns 6,648 7,057
Current portion of deferred revenue 2,857 2,857
Current portion of long-term debt 134 186
--------- ------------
Total current liabilities 21,157 24,906
Deferred revenue, less current portion 10,714 11,429
Long-term debt, less current portion 22 38
Total stockholders' equity 72,921 85,843
--------- ------------
Total liabilities and stockholders' equity $ 104,814 $ 122,216
========= ============
SANTARUS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
---------------------------
2005 2004
------------ -----------
Revenues:
Product sales, net $ 1,449 $ -
Sublicense and co-promotion revenue 10,714 -
------------ -----------
Total revenues 12,163 -
Costs and expenses:
Cost of sales 258 -
License fees and royalties 1,703 -
Research and development 2,919 5,039
Selling, general and administrative 23,004 3,438
Stock-based compensation 606 1,824
------------ -----------
Total costs and expenses 28,490 10,301
------------ -----------
Loss from operations (16,327) (10,301)
Interest and other income, net 2,760 114
------------ -----------
Net loss (13,567) (10,187)
Accretion to redemption value of redeemable
convertible preferred stock - (1,124)
------------ -----------
Net loss attributable to common stockholders $ (13,567) $ (11,311)
============ ===========
Basic and diluted net loss per share $ (0.37) $ (4.94)
============ ===========
Weighted average shares outstanding to calculate
basic and diluted net loss per share 36,230,843 2,289,319
The composition of stock-based compensation is
as follows:
Research and development $ 200 $ 414
Selling, general and administrative 406 1,410
------------ -----------
$ 606 $ 1,824
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