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Santarus, Inc. (SNTS), Jazz Pharmaceuticals plc – Ordinary Shares (JAZZ): Three Earning Catalysts That Could Push This Biotech Even Higher

Santarus, Inc. (NASDAQ:SNTS)Santarus, Inc. (NASDAQ:SNTS) has traded higher by 250% over the last year, and much of those gains have been created after the company’s last two quarterly reports. The company is scheduled to report earnings in two weeks, and will be closely watched. Here are three things that Santarus must prove in order to continue its epic trend higher.

The Big Driver Of Success

In Q1, $66.1 million of Santarus, Inc. (NASDAQ:SNTS)’ $79.4 million in revenue came from its type 2 diabetes drug Glumetza and its heartburn/acid reflux drug Zegerid. The company markets five drugs, but their immediate growth is tied to the performance of these two products.

During the last quarter, new prescriptions of Glumetza grew 21% year-over-year. Zegerid re-launched after regaining market exclusivity in 2012.

The market needs to see that sales of these two drugs remain strong. Zegerid was on the market for two months in Q1, but still produced $24.6 million. Therefore, its Q2 sales should be strong.

Strangely, many investors are concerned with Santarus, Inc. (NASDAQ:SNTS)’ reliance upon two of its five drugs. Personally, I think this is a bonus. Sure, two products contribute 83% of its total sales, but most biotech companies with a $1.6 billion market cap only have one product on the market.

Jazz Pharmaceuticals plc – Ordinary Shares (NASDAQ:JAZZ) is my closest example to explain the strength of Santarus, Inc. (NASDAQ:SNTS). Jazz Pharmaceuticals plc – Ordinary Shares (NASDAQ:JAZZ) markets nearly a dozen drugs, but relies on its narcolepsy drug Xyrem to produce most of its sales. In Jazz Pharmaceuticals plc – Ordinary Shares (NASDAQ:JAZZ)’s last quarter, Xyrem produced 60% of its total sales. In addition, Xyrem’s revenue grew 60% year over year in that quarter. However, unlike Santarus, Inc. (NASDAQ:SNTS)’ main products, sales growth for Xyrem is mostly related to price increases.

Therefore, Santarus’ product dependence and their growth is strong relative to other companies of similar size. The key is that prescription volume continues to grow, which investors will monitor.

Uceris Keeps On Rolling

Santarus, Inc. (NASDAQ:SNTS)’ new drug for ulcerative colitis, Uceris, was the big surprise of Q1. Uceris produced total sales of $6.6 million in the quarter, in just five weeks on the market. Initially, Santarus was very cautious in discussing Uceris, and only guided for peak revenue of $300 million when analysts projected $500 million.

Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA)’ high-profile leukemia drug Iclusig produced sales of $6.46 million in Q1, which was also its first quarter of launch. Iclusig is expected to produce peak sales over $1.5 billion, and is Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA)’s sole product.

Analysts viewed Iclusig’s launch as extremely successful, as it beat expectations by $1.5 million dollars. As a result, upgrades have been plentiful for the $3.6 billion company Ariad.

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