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Xenoport, Inc. has a market cap of $422.6 million; its shares were traded at around $8.9 with and P/S ratio of 9.7.
Highlight of Business Operations:GSK recorded $1.6 million and $4.4 million of net sales of Horizant for the three and nine months ended September 30, 2012, respectively. Under our collaboration agreement with GSK, all allowable expenses and sales of Horizant are accounted for using a joint profit and loss, or P&L, statement, in which we and GSK share in the resulting operating pre-tax profits and losses. Our share of losses from the joint P&L will be forgiven up to a maximum of $10.0 million, of which approximately $9.6 million had been forgiven through September 30, 2012. The payment of our share of additional losses, if any, would be deferred and payable without interest over a four-year period of time following the first quarter in which the joint P&L is profitable. GSK is responsible for the development, including post-marketing commitments, of Horizant for RLS and PHN in the United States.
Our collaboration revenue consisted of the recognition of revenues from up-front and milestone payments from our collaboration with Astellas. Our net revenue from unconsolidated joint operating activities consisted of the recognition of revenues from up-front, milestone and contingent event-based payments and the recognition of our share of operating losses resulting from our election to co-promote Horizant in the United States with GSK. In connection with the amendment and restatement of our collaboration agreement with GSK in November 2010, our share of operating losses is forgiven up to a maximum of $10.0 million, of which approximately $9.6 million had been forgiven through September 30, 2012. Pursuant to the agreement, GSK is responsible for recording sales of Horizant in the United States. For the three and nine months ended September 30, 2012, net sales in the United States of Horizant as recorded by GSK were $1.6 million and $4.4 million, respectively.
The decrease in net revenue from unconsolidated joint operating activities for the nine months ended September 30, 2012 compared to the same period in 2011 was due to the recognition of a $30.0 million contingent payment from GSK in connection with the first shipment of Horizant to a wholesaler in 2011, compared to the recognition of a $10.0 million contingent payment from GSK in connection with the first commercial sale of Horizant for the management of PHN in adults in 2012.
The increase in collaboration revenue for the nine months ended September 30, 2012 compared to the same period in 2011 was due to the recognition of a $10.0 million milestone payment from Astellas in connection with the approval of Regnite in Japan in 2012, compared to the recognition of a $7.0 million milestone payment from Astellas in connection with the Horizant FDA approval in 2011.
We expect our selling, general and administrative expenses in 2012 to remain relatively constant compared to 2011 levels. Pursuant to our amended and restated collaboration agreement with GSK, we have up to three years to deploy a sales force following the April 2011 approval of Horizant in the United States. If the commercialization rights to Horizant revert to us, however, we may need to build a substantial marketing and sales force with appropriate technical expertise and supporting distribution capabilities or enter into arrangements with third parties to do so. The timing and amount of selling, general and administrative expenses incurred in support of Horizant will primarily depend upon if or when we deploy such sales force in support of the commercialization of Horizant for RLS and/or PHN, whether in the co-promotion arrangement with GSK if the collaboration agreement is not terminated or if the commercialization rights to Horizant revert to us.
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