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Zacks #1 Rank Top Performers

James Giaquinto

Top Performer for Wed: Santarus (SNTS)

AZN

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Shares of Santarus, Inc. (SNTS) have moved north of 7.5% this morning, which has made this specialty biopharmaceutical company a top-performing Zacks #1 Rank stock.

Last week, the company announced third-quarter results that included another positive earnings per share surprise, as well as a raised 2009 guidance.

Earnings estimates have responded in kind by gaining in the past 7 trading days. Volume on Wednesday is approximately 317,000 shares, which is above the daily average of nearly 250,000.

Santarus focuses on acquiring, developing and commercializing proprietary products for the prevention and treatment of gastrointestinal diseases and disorders. Its efforts are focused on ZEGERID® for the treatment of certain upper GI diseases and disorders, and GLUMETZA® to improve glycemic control in adults with type 2 diabetes.

SNTS is 1 of 4 companies from the Medical-Drugs industry on the Zacks #1 Rank List, which today includes 225 stocks in total. The other 3 names are AstraZeneca plc (AZN - Analyst Report), SuperGen, Inc. (SUPG) and Valeant Pharmaceuticals International (VRX).

Earnings Estimates

Since its third-quarter report on Nov 4, Santarus has enjoyed sharp gains in analysts' earnings estimates. The Zacks Consensus Estimate for this year is at 30 cents per share, marking a rise of more than 66% from 18 cents in just the past 7 trading days. The 4 covering analysts have unanimously contributed to this upward revision.

At the moment, the Zacks Consensus Estimate for next year is at 22 cents, marking a gain of 10% in the past week from 20 cents.

Raised 2009 Guidance

In its third-quarter report, Santarus boosted its guidance for 2009 based on a solid performance for that period, revenue growth for ZEGERID and GLUMETZA, its growth expectation for lower overall expenses, and the signing of its licensing agreement for Europe.

SNTS now expects product-related revenue of at least $141 million, instead of its previous outlook of $138 million, and also raised its total revenues expectation to at least $150 million, instead of $145 million. The company now expects net income of at least $10 million, versus breakeven to $1 million earlier, and reduced its estimate for 2009 R&D expenses.

For the quarter itself, Santarus earned 9 cents per share, which was sharply higher than the Zacks Consensus Estimate for a loss of a penny per share. It was also significantly better than the year-ago loss of 8 cents.

The medical/biotech industries can be very volatile, but SNTS has been able to consistently beat the quarterly Zacks Consensus Estimate. In the past 4 quarters, it has amassed an average surprise of more than 500%. (In each of those quarters, the company reported a profit while the Zacks Consensus Estimate was pegging a loss.)

Total revenues for Santarus advanced to $39.5 million in the quarter from $32.2 million, while product-related revenue advanced about 30% to $38.3 million from $29.5 million. Total prescriptions for ZEGERID and GLUMETZA rose, respectively, by 6.3% year over year and 9.2% sequentially.

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