Earnings Call Excerpt
CollaGenex Pharmaceuticals Inc. (CGPI)
Q4 2007 Earnings Call
March 12, 2008 11:00 am ET
Executives
Evan Smith - IR
Colin Stewart - President and CEO
Presentation
Operator
Welcome to the CollaGenex Pharmaceutical fourth quarter 2007 financial results conference call. (Operator Instructions). I would now like to turn the conference over to Evan Smith. Please go ahead, Sir.
Evan Smith
Thank you. Good morning, everyone, and thank you for joining CollaGenex Pharmaceuticals fourth quarter and full year 2007 financial results conference call. With me from management are Colin Stewart, President and Chief Executive Officer; Nancy Broadbent, Chief Financial Officer; and David Pfeiffer, Senior Vice President Sales and Marketing.
Before I turn the call over to management, I would like to remind everyone that during this call, as in the Company's press release, management will make forward-looking statements that are intended to fall within the Safe Harbor provisions under the Private Securities Litigation Reform Act. As set forth in the press release, forward-looking statements involve risks and uncertainties, including those factors listed in the Company's SEC filings and annual reports that may affect the Company's business and prospects. Actual results may differ materially from the forward-looking statements.
Now, I'd like to turn the call over to Colin Stewart. Colin?
Colin Stewart
Evan, thank you, and good morning, everybody. Firstly, I'd like to comment briefly on our recently announced transaction with Galderma. On February 26th, we announced that CollaGenex had entered into a definitive merger agreement with an affiliate of Galderma Pharma S.A., pursuant to which Galderma's U.S. holding company, Galderma Laboratories, Inc., will acquire all of the outstanding shares of CollaGenex at a price of $16.60 per share in cash, representing approximately $420 million for the equity of CollaGenex.
The transaction was unanimously approved by the Boards of Directors of CollaGenex and Galderma. The transaction is expected to close before the end of the second quarter of 2008, and is subject to customary closing conditions. Due to this pending merger, we will not be providing financial guidance for 2008.
Now I'd like to turn to review of our fourth quarter financial results and the key accomplishments in 2007.
Total net revenues were $17 million in the fourth quarter of 2007 compared to $13.2 million in the fourth quarter of 2006. The key drivers of these revenues were net sales of Oracea at $15.2 million compared to $9.7 million in the prior year's quarter. During the fourth quarter of 2007, total deductions from gross sales for estimated product returns, trade discounts, government, managed care, patient rebates and wholesale distribution fees, increased to 17.4% of gross sales compared to 9.5% of gross sales during the fourth quarter of 2006, primarily the results of discounts to managed care organizations for expanded Tier II coverage.
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