Auxilium Pharmaceuticals Inc. Reports Operating Results (10-K)

Author's Avatar
Mar 01, 2011
Auxilium Pharmaceuticals Inc. (AUXL, Financial) filed Annual Report for the period ended 2010-12-31.

Auxilium Pharmaceuticals Inc. has a market cap of $1.07 billion; its shares were traded at around $22.47 with and P/S ratio of 5.1. Hedge Fund Gurus that owns AUXL: Steven Cohen of SAC Capital Advisors, Stanley Druckenmiller of Duquesne Capital Management, LLC. Mutual Fund and Other Gurus that owns AUXL: Columbia Wanger of Columbia Wanger Asset Management.

Highlight of Business Operations:

We are a specialty biopharmaceutical company with a focus on developing and marketing products to predominantly specialist audiences, such as urologists, endocrinologists, certain targeted primary care physicians, hand surgeons, subsets of orthopedic, general, and plastic surgeons who focus on the hand, and rheumatologists. We currently have approximately 565 employees, including a sales and marketing organization of over 300 people. We reported revenues in 2010 of $211.4 million, an increase of 29% over the $164.0 million reported in 2009.

Testim® testosterone gel is a proprietary, topical 1% testosterone once-a-day gel indicated for the treatment of hypogonadism. Hypogonadism is defined as reduced or absent secretion of testosterone which can lead to symptoms such as low energy, loss of libido, adverse changes in body composition, irritability and poor concentration. Testim is approved in the U.S., Belgium, Canada, Denmark, Finland, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden and the United Kingdom (U.K.). Ferring International Center S.A. (Ferring) and Paladin Labs Inc. (Paladin) market Testim on our behalf in certain European countries and Canada, respectively. Testim global net revenues for 2010 were $193 million, a 20% increase over the $160.5 million recorded in 2009.

Worldwide revenues for XIAFLEX were $18.4 million for the year ending December 31, 2010, including $14.1 million in U.S. sales and $4.3 million in contract revenues recognized from Pfizer, compared to $3.6 million in 2009, comprised solely of contract revenues recognized from Pfizer. Sales of XIAFLEX in the U.S. in 2010 represent approximately 4,500 vials of XIAFLEX. Based on usage, we believe that the average Dupuytrens cord requires approximately 1.1 vials to reach patient satisfaction, which would indicate approximately 4,100 cords were treated with XIAFLEX in 2010. This represents roughly 6% of the 70,000 surgeries that we estimate occur every year for Dupuytrens. While we are encouraged by our progress to date, we are focused on increasing our market share in 2011 and expanding the market.

In addition to the $75 million upfront payment we received from Pfizer in December 2008 and the $15 million milestone payment we received in February 2010 for acceptance of the EU Marketing Authorization Application (MAA), Pfizer may make up to an additional $395 million in potential payments to us upon the

achievement of certain specified additional regulatory and commercial milestones for XIAFLEX (on an indication-by-indication basis or for the product as a whole, as the case may be). Of those milestone payments, a total of $60 million will be payable to us by Pfizer upon Pfizers achievement of first commercial sale of XIAPEX for Dupuytrens within the major markets in Europe. Of this $60 million, $30 million will be payable upon first commercial sale in the first country, and a total of $30 million will be payable upon the respective first commercial sales in each of the remaining major markets. In addition, subject to the requirement to make certain specified minimum commercialization payments, Pfizer will make commercialization payments to us based on a percentage of the aggregate annual net sales of the Product in the Pfizer Territory on a quarterly basis.

Maximizing Revenues of Testim. After being on the market for eight years, Testim continued to post double-digit prescription growth and generated record U.S. sales in the fourth quarter of 2010. Testim global net revenues for 2010 were $193 million, a 20% increase over the $160.5 million recorded in 2009. In the U.S., Testim net revenues were $190 million, a 25% increase over 2009s net revenues of $151.9 million. IMS (Xponent PlanTrack data) estimates that approximately 180,000 total prescriptions for Testim were dispensed in the fourth quarter of 2010, which is an increase of 10% over the fourth quarter of 2009, while the overall gel market grew 12% over that same period. According to IMS (Xponent PlanTrack data), Testims share of the gel market was 22% in December 2010 compared to 22.5% in December 2009; and, within this market share:

Read the The complete Report