Auxilium Pharmaceuticals, Inc. (AUXL) and GlaxoSmithKline LLC, the U.S. subsidiary of GlaxoSmithKline plc (GSK,GSK.L), announced that they have entered into an agreement for the co-promotion of Testim 1% (testosterone gel), which is indicated for testosterone replacement therapy in adult males for conditions associated with a deficiency or absence of testosterone.
As per the agreement terms, Auxilium granted GSK the exclusive right to co-promote the sale of Testim with Auxilium in the U.S. through September 30, 2015. GSK will promote Testim using a sizeable established field sales force which has relationships with current Testosterone Replacement Therapy prescribers, particularly primary care physicians, in the U.S.
Both the companies have agreed on a baseline revenue forecast for Testim through September 30, 2015, and GSK will be compensated to the extent that Testim net sales exceed this baseline. In addition, in certain circumstances, Auxilium will pay GSK specified tail payments following the term of the agreement. The GSK sales force is expected to begin promoting Testim to physicians early in the third quarter 2012.
In a separate press release, Auxilium Pharma said it is raising its full year 2012 revenue guidance to a range of $293 million to $315 million from prior forecast of $283 million- $305 million.
The company also said it is reducing its full-year guidance for net loss to a range of $5 to $10 million from the previous range of $5 to $15 million.
Analysts polled by Thomson Reuters expect the company to report loss of $0.27 per share, on revenues of $299.16 million. Analysts' estimates typically exclude special items.
"As a result of this morning's announcement concerning the Testim U.S. co-promotion agreement, we are increasing Testim revenue guidance and trimming net loss guidance for 2012," said Jim Fickenscher, Chief Financial Officer of Auxilium. "While we have not changed our previously stated guidance for Selling, General & Administrative expense, it is likely that we will be near the top end of the range."
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