Savient Pharmaceuticals Reports Second Quarter 2011 Financial Results
Makes Significant Investment In and Progress Towards Building Long-Term Foundation for Success
New Comprehensive Market Research Study Defines Refractory Chronic Gout Market in U.S.
there are many biotech stocks now on my radar
Press Release Source: Savient Pharmaceuticals, Inc. On Thursday August 4, 2011, 7:00 am EDT
EAST BRUNSWICK, N.J., Aug. 4, 2011 /PRNewswire/ -- Savient Pharmaceuticals, Inc. (NASDAQ:SVNT - News) today reported financial results for the three and six months ended June 30, 2011, which are reflective of significant investments in the U.S. launch of KRYSTEXXA® (pegloticase). Savient ended the quarter with $240.3 million in cash and short-term investments, a decrease of $27.7 million for the quarter. For the second quarter of 2011, the Company had a net loss of $30.2 million, or $0.43 per share, on total revenues of $2.0 million. This compares with a net loss of $5.0 million, or $0.07 per share, on total revenues of $1.0 million for the same period in 2010. The net loss for the first six months of 2011 was $43.8 million, or $0.63 per share on total revenues of $3.3 million compared with a net loss of $13.3 million, or $0.20 per share, on total revenues of $2.1 million for the same period in 2010.
"The second quarter was a busy and exciting time at Savient and we are off to a promising start as we continue to build and develop a market for the first and only FDA approved treatment for Refractory Chronic Gout," said John H. Johnson, Chief Executive Officer and President of Savient. "By making key investments to build out our capabilities and implement new programs to support the commercialization of KRYSTEXXA, we believe we are effectively laying the groundwork to position KRYSTEXXA for success and build shareholder value."
Savient also today announced the results from a Company commissioned comprehensive U.S. Refractory Chronic Gout (RCG) market research study evaluating the market size of the RCG population. This market research study was sponsored by the Company in conjunction with a leading independent life sciences consulting firm. The results of the study indicate that there are approximately 120,000 RCG patients in the U.S., which represents 4.2% of the overall annual treated gout population. The study used a statistical approach using both primary and secondary data sources, including published literature, NHANES data, Medicare data and commercial claims data, and primary market research, including chart reviews.
"We believe this study represents the most comprehensive refractory chronic gout market research conducted to date, and the results provide critical data about the market for KRYSTEXXA," Johnson continued. "We are extremely pleased with the completion of this comprehensive assessment and we believe there is significant long-term market opportunity for KRYSTEXXA."
Operational Highlights:
Completed a comprehensive market research study of the U.S. refractory chronic gout market.
Received validation of the Marketing Authorization Application (MAA) that was filed with the European Medicines Agency (EMA) for KRYSTEXXA for the treatment of chronic gout in adult patients refractory to conventional therapy.
Appointed Dr. Kenneth Bahrt as Chief Medical Officer.
KRYSTEXXA has been stocked or is on formulary at 38 of the 127 institutions targeted.
Established 104 new accounts in the quarter to further KRYSTEXXA sales, bringing total accounts to 140.
Implemented the KRYSTEXXA Patient Initiation Program (KPIP), which provides patients suffering with RCG with a limited offer of two free doses of KRYSTEXXA.
Presented three abstracts at the European League Against Rheumatism (EULAR) 2011 Annual Congress: two for oral presentation and one for poster presentation.
Financial Results of Operations for the Three and Six Months Ended June 30, 2011
Total revenues increased $1.0 million, or 101%, to $2.0 million for the three months ended June 30, 2011, as compared to $1.0 million for the three months ended June 30, 2010. Total revenues increased $1.2 million, or 57%, to $3.3 million for the six months ended June 30, 2011, as compared to $2.1 million for the six months ended June 30, 2010. The higher net sales for the three and six months ended June 30, 2011 resulted primarily from the Company's full commercial launch of KRYSTEXXA in the first quarter of 2011 generating approximately $1.1 million and $1.4 million, respectively, in incremental net sales.
Research and development expenses increased by $0.5 million, or 7%, to $7.7 million for the three months ended June 30, 2011, from $7.2 million for the three months ended June 30, 2010 and decreased by $2.1 million, or 16%, to $11.5 million for the six months ended June 30, 2011, from $13.6 million for the six months ended June 30, 2010. The increase for the three months ended June 30, 2011 is primarily due to fees incurred during the current quarter to reserve manufacturing capacity at our potential secondary source supplier of pegloticase drug substance. The decrease in expenses for the six months ended June 30, 2011 resulted primarily from lower outside laboratory and clinical research organization expenses associated with the wind down of our open label extension clinical study in 2010.
Selling, general and administrative expenses increased $19.3 million to $23.9 million for the three months ended June 30, 2011, from $4.6 million for the three months ended June 30, 2010 and increased $31.0 million to $40.5 million for the six months ended June 30, 2011, from $9.5 million for the six months ended June 30, 2010. The higher costs were primarily due to increased selling and marketing expenses associated with the full commercial launch of KRYSTEXXA coupled with increased headcount relating to the hiring of our KRYSTEXXA sales force, reimbursement specialists and additional marketing personnel. We also ramped up our marketing efforts for KRYSTEXXA with an extensive presence at congresses including EULAR coupled with an increase in journal advertising and web-based promotion.
Interest expense on the Company's convertible notes was $4.9 million for the three months ended June 30, 2011, comprised of $2.7 million of interest expense and $2.2 million of non-cash amortization expense. Interest expense was $8.0 million for the six months ended June 30, 2011, comprised of $4.4 million of interest expense and $3.6 million of non-cash amortization expense.
Conference Call
Savient's management team will host a live conference call and webcast beginning at 9:00 a.m. Eastern Time on August 4, 2011, to discuss these results and to answer questions.
To participate by telephone, please dial 877-278-8171 (Domestic) or 574-941-7303 (International). The conference ID number is 84217509. The live and archived webcast can be accessed on the investor relations section of the Savient website at www.savient.com. Please log on to Savient's website fifteen minutes prior to the start of the call to ensure adequate time for any downloads that may be necessary.
A telephone replay will be available from 12:00 p.m. Eastern Time on August 4, 2011, through 12:00 a.m. Eastern Time on August 14, 2011, by dialing 855-859-2056 (Domestic) or 404-537-3406 (International) and entering conference ID number 84217509.
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