BoneCare doubles options and profits as fiscal year closes

Middleton, Wis.—BoneCare International, a Wisconsin-based pharmaceutical firm, reported turning a profit for two straight quarters, seeing a 103 percent increase in sales and raising the prediction for 2005 sales growth to 74 percent.
BoneCare’s fourth-quarter net income has been reported as $757,000, a quarter ahead of schedule and twice the last quarter’s first-ever profit of $302,000. Net sales have also doubled over the quarter from $7.3 million to $14.7 million, bringing the year’s total to $43.6 million—more than twice 2003’s reported sales of $19.5 million. Costs also took a sharp turn with a reported net loss of only $1.5 million, a dramatic contrast to $11.7 million for the previous year.
The praise for the burst of profit and success is centered mainly on the shoulders of commercially minded CEO Paul Berns, who since coming to BoneCare two years ago has changed a great deal of the company’s structure. Berns has restructured and expanded the company’s sales force to construct a commercial infrastructure, putting skilled workers in a place where the company has become, in his words, “positioned for future success.”
A partnership with the Ohio-based firm of Cardinal Health Inc. has also proven to be a smart business choice, providing a promotional advantage in launching the product to nephrologists.
“They’re upward and onward … firing all cylinders in terms of expanding their financial success,” said Chris Raymond of Baird U.S. Equity Research. “They have a CEO who is a professional if nothing else—he has professionalized his organization to a level where even I am impressed.”
Another reason attributed to the company’s success is the opening of new markets for its primary product, the vitamin D hormone Hectorol. Used to treat secondary hyperparathyroidism—a condition that causes patients with chronic kidney disease to suffer organ damage and bone loss—the drug has recently been converted to a half-microgram capsule so it can be provided to patients not yet on dialysis. Expanding into this market provides a huge boost, opening the drug’s use to at least 8 million patients.
“The market will exceed $500 million,” BoneCare CFO Brian Hayden, said “and [BoneCare] is first in line with the product.”