Savient fourth quarter net loss increases to $30.9 million

Feb 27 2012

Savient Pharmaceuticals, Inc. (NASDAQ: SVNT) reported financial results for the three months ended December 31, 2011, which reflect the Company's continuing investment in the U.S. launch of KRYSTEXXA®(pegloticase). Savient ended the quarter with approximately $170 million in cash and short-term investments, a decrease of $33 million for the quarter. For the fourth quarter of 2011, the Company had a net loss of $30.9 million, or $0.44 per share, on total revenues of $3.7 million, compared with a net loss of $0.5 million, or $0.01 per share, on total revenues of $1.0 million for the same period in 2010. The net loss for the year ended December 31, 2011 was $102.0 million, or $1.46 per share, on total revenues of $9.6 million, compared with a net loss of $73.1 million, or $1.08 per share, on total revenues of $4.0 million for the same period in 2010.

David Y. Norton, Interim Chief Executive Officer of Savient, said, "Savient has made great strides in the commercialization of KRYSTEXXA since we launched a year ago. We are well positioned to leverage our one of a kind treatment, and as we begin 2012, we have a strong team in place, a firm understanding of refractory chronic gout and the KRYSTEXXA marketplace, and a permanent J-code. We look forward to continuing to build on this momentum to further our position in the marketplace, expand the depth and breadth of KRYSTEXXA sales and fill an unmet need for patients suffering from refractory chronic gout."

Operational Highlights:

• KRYSTEXXA net sales grew to $3.0 million from $1.9 million for the previous quarter.

• Submitted responses to Day 120 questions to CHMP.

• Appointed David Veitch as President of Savient Europe to lead Savient's European efforts for the future growth of KRYSTEXXA.

• Assigned a permanent J-code, J2507, by the Centers for Medicare and Medicaid Services for KRYSTEXXA, which became effective on January 1, 2012.

• Presented new data surrounding KRYSTEXXA and the impact of refractory chronic gout at The American College of Rheumatology Meeting.

• Launched a new educational campaign, "Check Out Your Gout," to raise awareness about gout and a severe form of the condition known as RCG.

Financial Results of Operations for the Three Months Ended December 31, 2011

Total revenues increased by $2.7 million, or 286%, to $3.7 million for the three months ended December 31, 2011, from $1.0 million for the three months ended December 31, 2010. The higher net sales for the three months ended December 31, 2011 were the result of the Company's launch of KRYSTEXXA, which generated $3.0 million in net sales for the quarter.

Cost of sales increased by $1.6 million, or 97%, to $3.3 million for the three months ended December 31, 2011, from $1.7 million for the three months ended December 31, 2010. The increase for the three months ended December 31, 2011 is primarily due to a $1.0 million charge to reserve for excess KRYSTEXXA inventory. In addition, cost of sales increased from the prior year quarter due to royalty and sales based milestones pursuant to our third party license and grant agreements, as a result of the commercialization and commencement of sales of KRYSTEXXA in 2011.

Research and development expenses decreased by $2.3 million, or 24%, to $7.5 million for the three months ended December 31, 2011, from $9.8 million for the three months ended December 31, 2010. The decrease for the three months ended December 31, 2011 was primarily due to prior year process technology transfer expenses to facilitate the implementation of our potential secondary source supplier, partially offset by expenses incurred the current quarter associated with our KRYSTEXXA post marketing studies.

Selling, general and administrative expenses increased $19.9 million, or 242%, to $28.1 million for the three months ended December 31, 2011, from $8.2 million for the three months ended December 31, 2010. The higher expenses for the three months ended December 31, 2011 were primarily due to increased selling and marketing expenses associated with the full commercial launch of KRYSTEXXA.

Interest expense on the Company's convertible notes was $4.3 million for the three months ended December 31, 2011.