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Salix Pharmaceuticals Ltd SLXP
Q4 2012 Earnings Call Transcript

Transcript Call Date 02/28/2013

Operator: Good afternoon. My name is Katrina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Salix Pharmaceuticals Fourth Quarter 2012 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you.

Mr. Freeman, you may begin your conference.

G. Michael Freeman - Associate VP, IR and Corporate Communications: Thank you. Good afternoon. I am Mike Freeman, Associate Vice President of Investor Relations and Corporate Communications for Salix Pharmaceuticals. With me today are Carolyn Logan, President and Chief Executive Officer; Adam Derbyshire, Executive Vice President and Chief Financial Officer; and Bill Forbes, Executive Vice President, Medical and Research and Development, and Chief Development Officer.

Adam will begin the presentation with a review of the financial results for the fourth quarter and full year 2012. Carolyn then will review operations to complete the formal segment of today's call. At the conclusion of each comments, management will respond to appropriate questions.

Various remarks that management might make during this conference call about future expectations, plans and prospects for the Company constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results might differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our press releases and SEC filings, including our Form 10-K for 2011. Specifically, the information in this conference call related to projections, development plans, and other forward-looking statements is subject to the Safe Harbor.

I now will turn the call over to Adam.

Adam C. Derbyshire - EVP, Finance and Administration, and CFO: Thank you, Mike. Total product revenue was $198.2 million for the fourth quarter of 2012, a 28% increase compared to $155.2 million for the fourth quarter of 2011. Total product revenue for the full year of 2012 was $735.4 million, a 36% increase compared to $540.5 million for the full year 2011.

XIFAXAN revenue for the fourth quarter of 2012 was $147 million, a 37% increase compared to $107.2 million for the fourth quarter of 2011. XIFAXAN revenue for the full year 2012 was $514.5 million, a 38% increase compared to $371.7 million for the full year of 2011.

APRISO revenue for the fourth quarter of 2012 was $13.7 million, a 24% increase compared to $11.1 million for the fourth quarter of 2011. APRISO revenue for the full year of 2012 was $70.3 million, a 36% increase compared to $51.7 million for the full year 2011.

Total cost of products sold was $30.7 million for the fourth quarter of 2012 and $124.6 million for the full year 2012, compared to $27.5 million for the fourth quarter of 2011 and $95.4 million for the full year 2011.

Gross margin on total product revenue was 84.5% for the fourth quarter of 2012 compared to 82.3% for the fourth quarter of 2011 and 83.1% for the full year 2012 compared to 82.4% for the full year 2011.

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