Auxilium Pharma has a market cap of $971.4 million; its shares were traded at around $20.095 with and P/S ratio of 3.7.
Highlight of Business Operations:We are a specialty biopharmaceutical company with a focus on developing and marketing products to predominantly specialist audiences. We reported net revenues in 2011 of $264.3 million, an increase of 25% over the $211.4 million reported in 2010. Our net loss for 2011 was $32.9 million ($0.69 per share) compared to $51.2 million ($1.08 per share) of net loss in 2010. We are a fully integrated company and had approximately 530 employees at the end of 2011, including approximately 298 employees in our commercial organizations, 118 employees in manufacturing and quality, 68 employees in research and development and 46 employees in administrative support. As of December 31, 2011 we had $154.3 million in cash, cash equivalents and short-term investments and no debt.
Testim is approved in the U.S., Canada and much of Europe. We commercialize Testim in the U. S., while 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 2011 were $207.9 million, an 8% increase over the $193.0 million recorded in 2010. 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% as more large pharmaceutical companies launched products to 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. Our sales force of approximately 150 representatives focuses on approximately 12% of the approximately 165,000 physicians in the U.S. who prescribe TRT products. These physicians are responsible for roughly half of all gel TRT prescriptions. Our strategy to focus on these high prescribing physicians combined with our tactics with select managed care organizations resulted in a minimal loss of market share in 2011, despite the new competitors in the market. Although our goal is to maximize our total TRT market share organically through 2012 in the face of aggressive competition, we will also continue to assess any opportunities that may arise to supplement our current targeted focus on the most prolific writers of gel TRT prescriptions.
Worldwide revenues for Testim were $207.9 million for the year ending December 31, 2011, up 8% over 2010. Testim U.S. revenues were up 8% over the prior year to a record $205.1 million. Testim U.S. prescriptions grew by 9% over 2010. Total prescriptions for the testosterone replacement gel market segment grew 15% in 2011. Testims total prescription market share of the once daily gel segment at the end of December 2011 was 20%, compared to 22% at the end of December 2010.
Including the change in revenue recognition discussed above, total revenues for XIAFLEX for 2011 were $56.4 million compared to $18.4 million for the comparable period of 2010. Net revenues for 2011 include $42.2 million of net U.S. product sales of XIAFLEX compared to the $14.1 million for 2010. XIAFLEX international contract revenues relate to our out-licensing agreements for XIAFLEX and represent cumulative catch-up adjustments for milestone payments received during the period, the ongoing amortization of deferred up-front and milestone payment amounts and royalties received. The increase in XIAFLEX international contract revenue for 2011 compared to 2010 is principally due to cumulative catch-up revenue adjustments aggregating $4.8 million related to the $45.0 million of regulatory milestones earned under the Pfizer Agreement during 2011, and incremental revenue amortization relating to these milestone payments and the $15.0 million up-front payment received under the Asahi Agreement.
Cost of goods sold. Cost of goods sold were $55.7 million and $49.7 million for the years ended December 31, 2011 and 2010, respectively. Cost of goods sold reflects the cost of product sold, royalty obligations due to our licensors, and the amortization of the deferred costs associated with the Pfizer Agreement and Asahi Agreement. The increase in cost of goods sold in 2011 over 2010 was directly attributable to the increase in products sold, offset in part by a non-recurring $3.9 million provision taken in 2010 for short dated XIAFLEX inventory. The gross margin rate on our net revenues was 79% for 2011 compared to 76% for 2010. The increase in the gross margin rate is principally due to the non-recurring $3.9 million inventory provision taken in 2010 and increased high margin XIAFLEX product sales in 2011, offset by the net negative impact of higher Testim rebates and year-over-year price increases on U.S. Testim revenues.
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