Savient Pharmaceuticals Reports Third Quarter 2009 Financial Results

EAST BRUNSWICK, N.J., Nov. 4 /PRNewswire-FirstCall/ -- Savient
Pharmaceuticals, Inc. (Nasdaq: SVNT) today reported financial results for the
three and nine months ended September 30, 2009, ending the quarter with $67.5
million in cash and short-term investments, a reduction of $11.1 million from
December 31, 2008. In October 2009, we raised $60.9 million in cash, net of
$4.8 million of offering costs from an underwritten public offering of
4,945,000 shares of our common stock. The effect of combining the offering
with our existing cash brings Savient to approximately $128.4 million in cash
and short-term investments as of September 30, 2009, on a pro forma basis.

"Our strengthened cash position will support future important initiatives in
addition to our focused efforts for the resubmission of our Biologics License
Application for KRYSTEXXA(TM) to the U.S. Food and Drug Administration for the
treatment of chronic gout in patients refractory to conventional treatment,
which we expect will be submitted in early 2010," stated Paul Hamelin,
President of Savient.

Operational Key Events:

-- During July 2009, we completed the dosing phase of our open label
extension (OLE) study for KRYSTEXXA. This study is currently in an
observation only stage.

-- In July 2009, we received a complete response letter (CRL) from the
U.S.
Food and Drug Administration (FDA) stating that the FDA at that time
could not approve our Biologics License Application (BLA) for
KRYSTEXXA.
The complete response letter cited deficiencies with the chemistry,
manufacturing and controls (CMC) section of the BLA and also provided
a
draft of the proposed labeling and further guidance regarding a Risk
Evaluation and Mitigation Strategy (REMS).

-- Our requested Type A meeting with the FDA occurred on September 14,
2009
to discuss the CRL and next steps. The meeting with the FDA provided
clarification and alignment on a resubmission plan for us to fully
address all deficiencies and issues identified in the CRL. Since the
resubmission will include REMS materials, this is subject to a Class 2
review cycle, meaning a Prescription Drug User Fee Act date for all
components of our filing six months after the date of our
resubmission.

-- In September 2009, we committed to a corporate restructuring plan
where
we reduced our workforce by 25 employees. We expect that this cost
savings initiative will save $2.9 million through the year ending
December 31, 2010, net of $1.2 million of severance-related expenses.

-- In October 2009, we raised $65.7 million from an underwritten public
offering of 4,945,000 shares of our common stock that yielded $60.9
million in cash, net of $4.8 million of offering costs.

The net loss for the third quarter of 2009 was $13.9 million, or $0.23 per
basic and diluted share, on total revenues of $0.3 million, compared with a
net loss of $18.2 million, or $0.34 per basic and diluted share, on total
revenues of $0.5 million for the third quarter of 2008. Partially offsetting
our net loss for the three months ended September 30, 2009 was non-cash gain
of $11.8 million due to a valuation adjustment relating to warrants that we
issued in connection with our April 2009 registered direct offering. On a
non-Generally Accepted Accounting Principles (GAAP) basis and excluding the
$11.8 million non-cash gain due to a valuation adjustment on our warrants, our
net loss for the third quarter of 2009 was $25.7 million, or $0.42 per basic
and diluted share, compared with a GAAP net loss for the third quarter of 2008
of $18.2 million, or $0.34 per basic and diluted share.

The net loss for the first nine months of 2009 was $90.6 million, or $1.56 per
basic and diluted share, on total revenues of $2.1 million, compared with a
net loss of $60.0 million, or $1.12 per basic and diluted share, on total
revenues of $2.1 million for the same period in 2008. The net loss for the
nine months ended September 30, 2009 includes a non-cash charge of $24.1
million due to a valuation adjustment relating to warrants that we issued in
connection with our April 2009 registered direct offering. On a non-GAAP
basis, excluding the $24.1 million non-cash charge, our net loss for the first
nine months of 2009 was $66.5 million, or $1.15 per basic and diluted share,
compared with a GAAP net loss of $60.0 million for the nine months ended
September 30, 2008, or $1.12 per basic and diluted share.

Financial Results of Operations for the Three Months Ended September 30, 2009
Total revenues for the third quarter of 2009 were $0.3 million compared with
$0.5 million for the third quarter of 2008, a decrease of $0.2 million mainly
due to lower gross sales of Oxandrin® as a result of decreased overall demand
for the product from increased generic competition. Additionally, we adjusted
our Oxandrin product return reserve in both the current and prior year
quarters to reflect higher actual return experience. We expect that sales of
Oxandrin will continue to decline slightly or remain flat in future periods.
The decrease in Oxandrin sales was partially offset by a $0.1 million increase
in sales of our authorized generic oxandrolone, due to increased market share
being achieved by Watson Pharmaceuticals, Inc. (Watson), our authorized
generic distributor.
Research and development expenses for the third quarter of 2009 were $17.7
million, compared with $10.9 million for the third quarter of 2008, an
increase of $6.8 million, or 62%. The increase is primarily due to $4.5
million in contingency charges recorded in the third quarter of 2009 relating
to amending the fee schedule and total obligation under our services agreement
with our proposed secondary source supplier of pegloticase active
pharmaceutical ingredient (API). We also incurred $1.0 million in higher
expenses resulting from increased outside laboratory testing services
supporting our OLE study for KRYSTEXXA.
Selling, general and administrative expenses for the third quarter of 2009
were $8.5 million, compared with $7.6 million for the third quarter of 2008,
an increase of $0.9 million, or 13%, primarily due to severance expense
related to our plan of termination that reduced our workforce by 25 employees
in the third quarter of 2009.
Investment income, net for the third quarter of 2009 was $0.5 million,
compared with $0.3 million for the three months ended September 30, 2008, an
increase of $0.2 million, or 48%, primarily due to realized gains on the sale
of short-term investments.
Other income, net for the third quarter of 2009 was $11.8 million, compared
with Other expense, net of $0.1 million for the third quarter of 2008, an
increase to income of $11.9 million as a result of the non-cash gain on the
mark-to-market valuation adjustment to our warrant liability during the three
months ended September 30, 2009.

Financial Results of Operations for the Nine Months Ended September 30, 2009
Total revenues for the first nine months of 2009 were $2.1 million, consistent
with the same period of 2008.
Research and development expenses for the first nine months of 2009 were $42.1
million, compared with $37.8 million for the same period of 2008, an increase
of $4.3 million, or 11%. The increase was primarily due to higher expenses of
$3.5 million associated with the production of pegloticase API commercial
batches at BTG, severance expense of $2.5 million recorded during the current
year and contingency charges of $4.5 million recorded in the third quarter of
2009 relating to amending the fee schedule and total obligation under a
services agreement for the manufacture of conformance batches at our proposed
secondary source supplier of pegloticase API. The above increases in expense
were partially offset by approximately $3.2 million of lower technology
transfer costs from our proposed secondary source supplier of pegloticase API
as the majority of the work was performed in the prior year and has now been
substantially completed. Additionally, we incurred lower expenses for
reservation fees as the prior year period reflects a $2.2 million payment to
BTG to reserve manufacturing space in their facility.
Selling, general and administrative expenses for the first nine months of 2009
were $25.4 million, compared with $27.3 million for the same period of 2008, a
decrease of $1.9 million, or 7%. The decrease was primarily due to lower
legal fees of $3.2 million as the prior year results reflect expenses for
Oxandrin-related patent infringement litigation and $2.1 million of lower
compensation and benefits, including share-based compensation, due primarily
to decreased headcount and share-based awards. Partially offsetting the lower
costs are $1.2 million in higher severance expenses, increased pre-launch
market research and recruiting expenses of $1.1 million and $1.0 million,
respectively, both incurred in preparation for a potential commercial launch
of KRYSTEXXA.
Investment income, net for the first nine months of 2009 was $0.3 million,
compared with $1.7 million for the same period of 2008, a decrease of $1.4
million, or 84%. The lower investment income was primarily due to decreased
dividend and interest income from lower cash, cash equivalent and investment
balances and as a result of lower yields earned on those investments.
Other expense, net for the first nine months of 2009 was $24.4 million,
compared with $0.5 million for the same period of 2008, an increase of $23.9
million primarily as a result of the non-cash net loss on the mark-to-market
valuation adjustment to our warrant liability.

Use of Non-GAAP Measures
To supplement our consolidated financial statements presented in accordance
with GAAP, we use the following measures defined as non-GAAP financial
measures by the SEC: non-GAAP net loss and non-GAAP loss per basic and diluted
share. The presentation of this financial information is not intended to be
considered in isolation or as a substitute for the financial information
prepared and presented in accordance with GAAP. In addition, the non-GAAP
financial measures included in this press release may be different from, and
therefore not comparable to, similar measures used by other companies.
Although certain non-GAAP financial measures used in this release exclude the
accounting treatment of valuation adjustments associated with our outstanding
warrants to purchase shares of our common stock, these non-GAAP measures
should not be relied upon independently.

Our management believes that these non-GAAP financial measures provide
meaningful supplemental information regarding our performance by excluding
certain expenses and expenditures that may not be indicative of our core
business operating results. We believe that both management and investors
benefit from referring to these non-GAAP financial measures in assessing our
performance and when planning, forecasting and analyzing future periods.
These non-GAAP financial measures also facilitate management's internal
comparisons to our historical performance and our competitors' operating
results. We believe that these non-GAAP measures are useful to investors in
allowing for greater transparency with respect to supplemental information
used by management in its financial and operational decision making.

CONFERENCE CALL INFORMATION
Savient's management team will host a live conference call and Webcast on
Thursday, November 5 at 10:00 a.m. Eastern Time/7:00 a.m. Pacific Time to
review the third quarter financial results. To participate by telephone,
please dial 888-397-5354 from the U.S. or 719-457-2615 for international
callers. The conference identification number is 6621643. The live and
archived Webcast can be accessed on the investor relations section of the
Savient Web site at www.savient.com. Please log on to Savient's Web site 15
minutes prior to the start of the call to ensure adequate time for any
downloads that may be necessary.

A telephone replay will be available from 1:00 p.m. Eastern Time on November
5, 2009 through 11:59 p.m. Eastern Time on November 19, 2009 by dialing (888)
203-1112 (domestic) or (719) 457-0820 (international) and entering conference
ID number 6621643.

ABOUT SAVIENT PHARMACEUTICALS, INC.
Savient Pharmaceuticals, Inc. is a specialty biopharmaceutical company focused
on developing KRYSTEXXA(TM) (pegloticase) for the treatment of chronic gout in
patients refractory to conventional therapy. Savient has exclusively licensed
worldwide rights to the technology related to KRYSTEXXA, formerly referred to
as Puricase(R), from Duke University and Mountain View Pharmaceuticals, Inc.
Savient also manufactures and supplies Oxandrin(R) (oxandrolone tablets, USP)
CIII in the U.S. Puricase is a registered trademark of Mountain View
Pharmaceuticals, Inc.

FORWARD-LOOKING LANGUAGE
All statements other than statements of historical facts included in this
press release are forward-looking statements that are subject to certain
risks, trends and uncertainties that could cause actual results and
achievements to differ materially from those expressed in such statements.
These risks, trends and uncertainties are in some instances beyond our
control. Words such as "anticipate," "believe," "estimate," "expect,"
"intend," "plan," "will" and other similar expressions identify
forward-looking statements, although not all forward-looking statements
contain these identifying words. In particular, any statements regarding
potential FDA marketing approval for KRYSTEXXA(TM) (pegloticase), whether any
further clinical trials will be required, the actions that may be required of
Savient by the FDA in connection with the BLA, the reversion to and
revalidation of the Phase 3 manufacturing process, the timing of a
resubmission to the FDA in response to the complete response letter and the
efficacy and safety of KRYSTEXXA are forward-looking statements. These
forward-looking statements involve substantial risks and uncertainties and are
based on our assessment and interpretation of the currently available data and
information, our Phase 3 clinical data, our current understanding of the
complete response letter and on current expectations, assumptions, estimates
and projections about our business and the biopharmaceutical and specialty
pharmaceutical industries in which we operate. Important factors that may
affect our ability to achieve the matters addressed in these forward-looking
statements include, but are not limited to, the possibility that the FDA may
raise further issues regarding the BLA for KRYSTEXXA or require that we
conduct additional clinical trials, our ability to commercialize and market
acceptance of KRYSTEXXA; difficulties in obtaining financing; potential
development of alternative or more effective products by competitors; reliance
on third parties to manufacture, market and distribute many of our products;
economic, political and other risks associated with foreign operations; risks
of maintaining protection for our intellectual property; risks of an adverse
determination in intellectual property litigation; and risks associated with
stringent government regulation of the biopharmaceutical industry and other
important factors set forth more fully in our reports filed with the
Securities and Exchange Commission, to which investors are referred for
further information. We may not actually achieve the plans, intentions or
expectations disclosed in our forward-looking statements, and you should not
place undue reliance on our forward-looking statements, which speak only as of
the date of publication of this press release to shareholders. Actual results
or events could differ materially from the plans, intentions and expectations
disclosed in the forward-looking statements that we make. Our forward-looking
statements do not reflect the potential impact of any future acquisitions,
mergers, dispositions, joint ventures or investments that we may make. We do
not have a policy of updating or revising forward-looking statements and,
except as required by law, assume no obligation to update any forward-looking
statements.

SVNT-I

(Tables to Follow)

SAVIENT PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share data)

September 30, December 31,
2009 2008
---- ----
ASSETS
Current Assets:
Cash and cash equivalents $67,474 $76,315
Short-term investments 3 2,282
Accounts receivable, net 592 822
Inventories, net 940 1,892
Recoverable income taxes - 5,526
Prepaid expenses and other
current assets 1,516 2,782
----- -----
Total current assets 70,525 89,619
------ ------
Deferred income taxes, net 5,200 4,200
Property and equipment, net 1,111 1,393
Other assets (including
restricted cash) 1,297 3,010
----- -----
Total assets $78,133 $98,222
======= =======

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $5,651 $5,888
Deferred revenues 327 451
Warrant liability 36,617 -
Other current liabilities 23,707 18,650
------ ------
Total current liabilities 66,302 24,989
Other liabilities 11,059 9,809
Commitments and contingencies
Stockholders' Equity:
Preferred stock-$.01 par
value 4,000,000 shares
authorized; no shares
issued - -
Common stock-$.01 par value
150,000,000 shares
authorized; 61,658,000
issued and outstanding at
September 30, 2009 and
54,654,000 shares issued
and outstanding at
December 31, 2008 617 547
Additional paid-in-capital 242,400 214,467
Accumulated deficit (242,248) (151,614)
Accumulated other
comprehensive income 3 24
-- --
Total stockholders' equity 772 63,424
--- ------
Total liabilities and
stockholders' equity $78,133 $98,222
======= =======

SAVIENT PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)

Three Months Nine Months
Ended Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
--- ---- ---- ----
Revenues:
Product sales, net $328 $499 $2,092 $1,958
Other revenues - 43 4 125
-- -- -- ---
328 542 2,096 2,083
--- --- ----- -----
Cost and expenses:
Cost of goods sold 374 303 1,237 855
Research and development 17,670 10,875 42,071 37,762
Selling, general and
administrative 8,538 7,563 25,403 27,277
----- ----- ------ ------
26,582 18,741 68,711 65,894
------ ------ ------ ------

Operating loss from
continuing operations (26,254) (18,199) (66,615) (63,811)
Investment income, net 502 340 273 1,704
Other income
(expense), net 11,812 (148) (24,356) (460)
------ ---- ------- ----

Loss from continuing
operations before
income taxes (13,940) (18,007) (90,698) (62,567)
Income tax benefit (64) (863) (64) (3,673)
--- ---- --- ------

Loss from continuing
operations (13,876) (17,144) (90,634) (58,894)
Loss from discontinued
operations, net of
taxes - (1,070) - (1,070)
-- ------ -- ------

Net loss $(13,876) $(18,214) $(90,634) $(59,964)
======== ======== ======== ========

Loss per common share,
from continuing
operations:
Basic $(0.23) $(0.32) $(1.56) $(1.10)
====== ====== ====== ======
Diluted $(0.23) $(0.32) $(1.56) $(1.10)
====== ====== ====== ======

Loss per common share,
from discontinued operations:
Basic $ - $(0.02) $ - $(0.02)
=== ====== === ======
Diluted $ - $(0.02) $ - $(0.02)
=== ====== === ======

Loss per common share:
Basic $(0.23) $(0.34) $(1.56) $(1.12)
====== ====== ====== ======
Diluted $(0.23) $(0.34) $(1.56) $(1.12)
====== ====== ====== ======

Weighted-average
number of common and
common equivalent shares:
Basic 60,922 53,617 58,192 53,479
Diluted 60,922 53,617 58,192 53,479

SAVIENT PHARMACEUTICALS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP NET LOSS TO GAAP NET LOSS
(Unaudited)
(In millions, except per share data)

Below is a reconciliation of the non-GAAP net loss and loss per basic and
diluted share amounts presented in this press release to the GAAP net loss
and loss per basic and diluted share amounts presented in this press
release (amounts in millions except per share data):

Quarter Ended Nine Months Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
GAAP net loss $(13.9) $(18.2) $(90.6) $(60.0)
Impact of change in
warrant valuation 11.8 - (24.1) -
Non-GAAP net loss $(25.7) $(18.2) $(66.5) $(60.0)

Quarter Ended Nine Months Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
GAAP loss per basic
and diluted share $(0.23) $(0.34) $(1.56) $(1.12)
Impact of change in
warrant valuation 0.19 - (0.41) -
---- -- ----- --
Non-GAAP loss per basic
and diluted share $(0.42) $(0.34) $(1.15) $(1.12)
====== ====== ====== ======

SOURCE Savient Pharmaceuticals, Inc.

Mary Coleman, Savient Pharmaceuticals, Inc., +1-732-418-9300,
information@savient.com, or Susan Neath, Burns McClellan, +1-212-213-0006,
sneath@burnsmc.com