Product-related revenue of $33.6 million increased approximately 31%, compared with $25.8 million in the prior year period.

Total revenues of $35.8 million, compared with 2008 second quarter total revenues of $36.0 million that included a $2.5 million milestone and $5.0 million of amortization of deferred revenue upon termination of a co-promotion agreement.

Net income of $1.1 million, or $0.02 per share, versus net income of $3.2 million, or $0.06 per share, in the prior year period. Net income in the second quarter of 2008 benefited from the $7.5 million in milestone and amortized deferred revenue, which had no offsetting expenses.

"We are pleased to report our second sequential quarter of profitability, which we achieved through continued growth in ZEGERID® and GLUMETZA® revenues and bykeeping expenses in check. We are also announcing improved 2009 bottom line guidance that ranges from breakeven to a slight profit, and have affirmed our expectation for total revenues of approximately $145 million," said Gerald T. Proehl, president and chief executive officer of Santarus.

"The improvement in our bottom line outlook is due to anticipated lower total expenses, based primarily on reduced research and development costs for 2009; however, we expect to remain on track with the clinical timelines for our late-stage lower GI product candidates," he added.

Business Highlights

Key second quarter accomplishments and recent business highlights include the following:

Grew ZEGERID (omeprazole/sodium bicarbonate) brand total prescriptions to approximately 298,000 in the second quarter of 2009, an increase of 13% versus total prescriptions in the second quarter of 2008.

Grew GLUMETZA (metformin HCl extended release tablets) total prescriptions to 68,000, up more than 9% sequentially compared with the first quarter of 2009. Achieved an all-time high for GLUMETZA total prescriptions in June 2009.

Announced pharmacokinetic (PK) data in an abstract and poster presented at the Digestive Disease Week meeting in May summarizing results from an investigator-initiated pilot study, supported by a grant from Santarus. The poster was titled: Immediate-Release Omeprazole has a More Rapid and More Predictable Absorption Profile than Delayed-Release Omeprazole in Patients with GERD Associated with Gastroparesis. The study assessed PK differences between immediate-release ZEGERID Powder for Oral Suspension 40 mg and delayed-release omeprazole capsules 40 mg in patients with gastroesophageal reflux disease (GERD) associated with gastroparesis (delayed gastric emptying).

Announced a December 2009 U.S. Food and Drug Administration (FDA) action date for an over-the-counter (OTC) ZEGERID branded omeprazole/sodium bicarbonate product with the dosage strength of 20 mg of omeprazole. The new action date follows Schering-Plough HealthCare Products, Inc.'s response submitted to the FDA in early June 2009. Under the terms of the license agreement with Schering-Plough, Santarus is entitled to receive a $20 million milestone upon FDA approval of Schering-Plough's New Drug Application (NDA) for OTC ZEGERID and low double-digit royalties on net sales of any OTC ZEGERID product, and may also receive up to $37.5 million in sales milestones.

Achieved membership in the Russell 3000® Index on June 26, 2009. Membership in the Russell 3000, which remains in place for one year, means automatic inclusion for Santarus in the small-cap Russell 2000® Index. Santarus also remained on the Russell Microcap® Index. Russell indexes are widely used by investment managers and institutional investors for index funds, and as benchmarks for both passive and active investment strategies.

Concluded a five-day bench trial on July 17, 2009 in the U.S. District Court for the District of Delaware in the company's patent litigation with Par Pharmaceutical, Inc. During the trial, the Court ruled that Par's proposed generic versions of ZEGERID Capsules and Powder for Oral Suspension (both 40 mg and 20 mg dosage strengths) infringe the asserted claims of five patents licensed by Santarus from the University of Missouri. The Court has not yet ruled on Par's defenses of invalidity and inequitable conduct, and post-trial briefs are due on August 14, 2009. The Court may render its decision at any time after the filing of the post-trial briefs, which may be before or after the expiration of the applicable 30-month stays of FDA approval.

Second Quarter 2009 Financial Results

Total revenues for the second quarter of 2009 were $35.8 million, consisting of $33.6 million in product-related revenue and $2.2 million in license and royalty revenue. Total revenues for the second quarter of 2008 were $36.0 million, consisting of $25.8 million in product-related revenue and $10.2 million in license and royalty revenue, which included a $2.5 million regulatory milestone that Santarus earned in May 2008 under its license agreement with Schering-Plough. In addition, with the termination of the co-promotion agreement with Otsuka America Pharmaceutical, Inc. in June 2008, the company recognized $5.0 million in amortization of deferred revenue representing the remaining balance of the upfront payment received from Otsuka America in October 2004.

Net product sales of ZEGERID were $28.0 million in the second quarter of 2009, reflecting a 17% increase over ZEGERID net product sales of $24.0 million in the second quarter of 2008. Promotion revenue in the second quarter of 2009 of $5.6 million increased significantly compared with promotion revenue of $1.8 million in the second quarter of 2008, due to revenue associated with the promotion of GLUMETZA.

Santarus reported net income of $1.1 million, or $0.02 per share, for the second quarter of 2009, compared with net income of $3.2 million, or $0.06 per share, for the second quarter of 2008. Net income in the second quarter of 2008 included the previously mentioned $7.5 million in milestone and amortized deferred revenue that had no offsetting expenses.

The cost of product sales was $2.1 million in the second quarter of 2009, or approximately 7.5% of net product sales, compared with $1.7 million in the second quarter of 2008, which was approximately 7.1% of net product sales.

Santarus reported license fees and royalties of $1.9 million in the second quarter of 2009, which consisted of royalties payable to the University of Missouri based on net product sales and amortization of the $12 million upfront fee paid to Depomed, Inc. in July 2008. License fees and royalties were $3.4 million in the second quarter of 2008, which consisted of royalties payable to the University of Missouri and to Otsuka America.

Research and development expenses were $3.3 million in the second quarter of 2009, compared with $2.2 million in the second quarter of 2008. The increase was primarily attributable to the company's 50% share of costs for the ongoing budesonide MMX® Phase III clinical trials.

Selling, general and administrative (SG&A) expenses were $27.3 million for the second quarter of 2009, and $25.8 million for the second quarter of 2008. The increase in SG&A was primarily attributable to an increase in legal fees, as well as advertising and promotional costs for GLUMETZA, offset in part by a decrease in costs associated with advertising and promotional activities related to ZEGERID.

Six Months Ended June 30, 2009

For the six months ended June 30, 2009, the company reported total revenues of $70.7 million, compared with total revenues of $60.5 million for the six months ended June 30, 2008.