Top Performer for Wed: Santarus (SNTS)

It hasn't been that long since we last featured Santarus, Inc. (SNTS) (it was the Zacks #1 Rank Top Performer on Nov 11), but it deserves another mention now that shares are up more than 15% on Wednesday.

The company announced some good news yesterday from the FDA. Merck's over-the-counter version of SNTS' heartburn drug Zegerid was approved by the agency, earning the specialty biopharmaceutical company a $20 million milestone payment. It could also be entitled to receive up to $37.5 million in sales milestones.

(Santarus and Schering-Plough teamed up on the OTC version. Merck has since acquired Schering-Plough.)

"We are pleased that Schering-Plough HealthCare Products has achieved this significant regulatory milestone for ZEGERID OTC and we look forward to seeing the product on retail store shelves across the United States in the first half of 2010," said Santarus President/CEO Gerald T. Proehl. "We believe the consumer advertising and publicity associated with the launch of ZEGERID OTC will increase awareness of the ZEGERID brand."

Volume today is up to 7.7 million, which is a bit higher than the daily average of 282,000.

Earnings Estimates for Santarus

It's uncertain whether or not today's announcement will move Santarus' earnings estimates. However, a solid third-quarter report had already put the company on an upward trajectory.

The Zacks Consensus Estimate for this year is currently at 28 cents per share, which is 55.5% better than the guidance from 1 month ago of 18 cents. Four out of 5 covering analysts revised higher.

Meanwhile, the Zacks Consensus Estimate for next year is up 15% in 30 days to 23 cents per share. There are 5 covering analysts for next year as well, but only 2 of them contributed to this advance.

Third-Quarter Results

In addition to the favorable ruling out of the FDA, Santarus also put together a strong third-quarter report that it announced on Nov 4.

The company earned 9 cents per share in the quarter, which was substantially better than the Zacks Consensus Estimate for a loss of a penny per share. It was also a sharp improvement over a loss of 8 cents a year ago.

SNTS has now beaten the Zacks Consensus Estimate for 9 straight quarters. Its average surprise over the last 4 quarters is 560%, which can be expected when all of the surprises are in the triple digits...or higher. (In each of those quarters, the company reported a profit while the Zacks Consensus Estimate was pegging a loss.)

Santarus announced that total revenues increased 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. Thanks in part to those solid performances for ZEGERID and GLUMETZA, SNTS raised its guidance for 2009. The company now expects:

• Product-related revenue of at least $141 million, instead of its previous outlook of $138 million.

• Total revenues of at least $150 million, instead of $145 million.

• Net income of at least $10 million, versus the prior guidance of breakeven to $1 million.

Lower overall expenses and the signing of its licensing agreement for Europe also contributed to the decision to raise estimates.

About Santarus

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 part of the Medical-Drugs industry. There is 1 other company from this space on today's Zacks #1 Rank List: SuperGen, Inc. (SUPG).

Read the full analyst report on SUPG

Read the full analyst report on SNTS