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Auxilium Pharmaceuticals Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: July 31, 2012 11:15AM

Auxilium Pharmaceuticals Inc. (AUXL) filed Quarterly Report for the period ended 2012-06-30. Auxilium Pharmaceuticals, Inc. has a market cap of $1.29 billion; its shares were traded at around $28.81 with and P/S ratio of 4.9.



Highlight of Business Operations:

We are a specialty biopharmaceutical company with a focus on developing and marketing products to predominantly specialist audiences and a growing primary care physician audience. We reported net revenues in the second quarter of 2012 of $78.2 million, an increase of 19% over the $65.9 million reported in the second quarter of 2011. We reported net income of $7.7 million, or $0.16 per share (on both a basic and diluted basis), compared to a net loss of ($5.1) million, or ($0.11) per share, reported for the second quarter of 2011. We are a fully integrated company and had approximately 521 employees at the end of the first six months of 2012, including approximately 292 employees in our commercial organization, 119 employees in manufacturing and quality, 59 employees in research and development and 51 employees in administrative support. As of June 30, 2012 we had $181.3 million in cash, cash equivalents and short-term investments and no debt.

Testim is approved in the U.S., Canada and much of Europe for the treatment of hypogonadism. We commercialize Testim in the U.S., and, commencing in July 2012, GlaxoSmithKline LLC (“GSK”) also markets Testim in the U.S. pursuant to a co-promotion agreement we and GSK entered into in May 2012 (the “GSK Agreement”). Internationally, Ferring International Center S.A. (“Ferring”) and Paladin Labs Inc. (“Paladin”) market Testim on our behalf in certain European countries and Canada, respectively. Testim worldwide net revenues for the second quarter of 2012 were $63.7 million, a 26% increase over the $50.5 million recorded in second quarter of 2011. Testim represents an attractive and profitable revenue platform in the Testosterone Replacement Therapies (“TRT”) market in the U.S. which was $1.6 billion in 2011 and exhibited growth of 24% from 2010 as more large pharmaceutical companies launched products and increased promotional activities in this underserved market. The once daily gel segment of the TRT market in which Testim competes has experienced a 27% compound annual growth rate since 2007, and represents 88% or $1.4 billion of the total U.S. TRT market. Prior to the GSK co-promotion arrangement, our sales force of approximately 159 representatives focused on approximately 13% of the approximately 165,000 physicians in the U.S. who prescribe TRT products, which physicians are responsible for roughly one-half of all gel TRT prescriptions. With GSK having recently commenced marketing Testim in the U.S. in July 2012, we believe that the combined efforts of our and GSK’s respective sales forces will focus on 25% of the approximately 165,000 physicians in the U.S. who prescribe TRT products, which physicians are responsible for approximately 80% of all gel TRT prescriptions.

We are seeking a partner or partners for development and commercialization in the rest of the world. U.S. XIAFLEX net revenues increased to $11.9 million compared to $9.9 million for the 2011 period. Despite this increase, worldwide net revenues for XIAFLEX were $14.4 million for the second quarter of 2012, a decline as compared to $15.4 million in the second quarter of 2011. International XIAFLEX net revenues decreased for the second quarter of 2012 from the comparable 2011 period since the second quarter 2011 included cumulative catch-up revenue adjustments aggregating $3.8 million relating to international contract milestones earned in the period. International XIAFLEX revenue for the second quarter of 2012 did not include any cumulative catch-up revenue amortization since no contract milestones were earned in the period. Net of the 2011 catch-up revenue amortization, XIAFLEX international revenues in the second quarter of 2012 increased $0.8 million compared to the second quarter of 2011.

Total revenues for XIAFLEX in the second quarter of 2012 were $14.4 million compared to $15.4 million in the second quarter of 2011. Net revenues for the three months ended June 30, 2012 include $11.9 million of net U.S. product sales of XIAFLEX compared to the $9.9 million recorded in the second quarter of 2011. This increase represents the growth in product shipments offset by the cost of a co-pay assistance program established in late 2011. XIAFLEX international revenues in the second quarter of 2012 decreased compared to the second quarter of 2011 due principally to the catch-up milestone amortization of approximately $3.8 million that was recognized in 2011 on milestone payments earned in the period. Net of the 2011 catch-up revenue amortization, XIAFLEX international revenues in the second quarter of 2012 increased $0.8 million compared to the second quarter of 2011.

Total revenues for XIAFLEX in the first half of 2012 were $29.4 million compared to $27.6 million in the first half of 2011, including the impact of the 2011 change in revenue recognition. Net revenues for the six months ended June 30, 2012 include $24.5 million of net U.S. product sales of XIAFLEX compared to the $18.5 million recorded in the first half of 2011. This increase represents the growth in product shipments offset by the cost of a co-pay assistance program established in late 2011. XIAFLEX international revenues for the six months ended June 30, 2012 decreased compared to the corresponding 2011 period due principally to the catch-up milestone amortization of approximately $3.8 million that was recognized in 2011 on milestone payments earned in

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