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Optimer Pharma’s fourth quarter 2011 earnings (excluding special items but including stock-based compensation expenses) of 38 cents per share compared favorably with the year-ago loss of 31 cents and the Zacks Consensus Estimate of breakeven earnings. Higher revenues led to the improvement.

Quarter in Details

Revenues in the final quarter of 2011 jumped to $64.6 million in the final quarter of 2011 from $0.15 million in the year-ago quarter. Revenues were boosted by $53.6 million milestone payment from partner Astellas Pharma pertaining to the European approval of Dificlir in December 2011.

We remind investors that Dificlir is available as Dificid in the US for the treatment of clostridium difficile-associated diarrhea (CDAD) since July 2011. The drug is marketed by Optimer in the US in partnership with Cubist Pharmaceuticals, Inc. (CBST - Analyst Report). Revenues in the final quarter of 2011 included $11 million of net sales of Dificid (up 3.7% sequentially). The Zacks Consensus Estimate for total revenues was $41 million.

Both selling, general and administrative (SG&A) expenses (up 488%) and research & development (R&D) expenses (up 103%) were on the upswing during the reported quarter. The massive increase in SG&A expenses was primarily attributable to the costs incurred by Optimer toward the marketing of Dificid. The increase in R&D expenses was attributable to costs incurred towards the planning of Dificid’s life cycle and for advancing the pipeline.

Annual Results

For the full year 2011, Optimer earned 36 cents per share (on an adjusted basis) as opposed to the loss of $1.25 incurred in 2010. Higher revenues $145 million, up from $1.5 million) helped 2011 earnings. Net sales of Dificid stood at $21.5 million in 2011. The Zacks Consensus Estimate hinted at a loss of 4 cents per share on revenues of $122 million.

Our Recommendation

Currently, we have a Neutral stance on Optimer Pharma in the long run. The company carries a Zacks #3 Rank (Hold rating) in the short run.

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