Optimer Pharmaceuticals Inc. Reports Operating Results (10-Q)
Optimer Pharmaceuticals, Inc. has a market cap of $678.5 million; its shares were traded at around $14.71 with and P/S ratio of 4.7.
Highlight of Business Operations:Inventory is stated at the lower of cost or market. Cost is determined in a manner which approximates the first-in, first-out (FIFO) method. We capitalize inventory produced in preparation for product launches upon FDA approval when costs are expected to be recoverable through the commercialization of the product. We reserve for potentially excess, dated or obsolete inventories based on an analysis of inventory on hand compared to forecasts of future sales. As of June 30, 2012, inventories consisted of $6.6 million in raw materials, $0.6 million in work in process and $1.3 million in finished goods. During the second quarter, we reserved $0.5 million of our inventory cost.
Total revenues for the three months ended June 30, 2012 and 2011 were $49.8 million and $33,000, respectively, an increase of $49.8 million. In April 2012, pursuant to our collaboration and license agreement, we received a $20.0 million up-front payment from Astellas Japan. We assessed the deliverable for stand alone value under the contract and recognized $19.9 million as contract revenue during the second quarter of 2012 upon delivery of the license know-how. A portion of the up-front payment was deferred for undelivered items. We also recognized revenue on the 10.0 million Euros milestone payment from APEL in association with the first sales of fidaxomicin in an APEL territory. In addition, we recognized $15.2 million of net product revenue from sales of DIFICID. We launched DIFICID in the U.S. in July 2011 and in Canada in June 2012.
Total revenues for the six months ended June 30, 2012 and 2011 were $64.1 million and $69.3 million, respectively. In 2012, our revenues were made up of $29.6 million in DIFICID product sales and $34.5 million in contract revenue. The decrease of $5.2 million was primarily due to the $69.2 million up-front payment we received from APEL in the first quarter of the 2011, partially offset by the receipt in April 2012 of the $20.0 million up-front payment from Astellas Japan and the 10.0 million Euro milestone payment from APEL in association with the first commercial sale of DIFICLIR in an APEL territory. In addition, we recognized $29.6 million of net product sales of DIFICID in the six months ended June 2012. We launched DIFICID in the U.S. in July 2011 and in Canada in June 2012.
Cost of contract revenue. Cost of contract revenue for the six months ended June 30, 2012 and 2011 was $1.7 million and $4.3 million, respectively, a decrease of $2.6 million. The decrease is due to lower collaboration revenue in the current period as compared to the same period in the prior year.
Co-promotion expenses with Cubist. The $15.1 million represented certain expenses that may be due Cubist under our April 2011 DIFICID co-promotion agreement. Based on the level of sales to date and the estimated continued growth in revenues, Optimer achieved the first year sales target and has accrued $10.4 million, representing the quarterly service fee and a pro-rated portion of the $5.0 million bonus payment as well as pro-rated portion of gross profit. We did not incur similar expenses in the six months ended June 30, 2011.
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