Basis of Presentation and Going Concern

9 Months Ended

Sep. 30, 2013

Basis of Presentation and Going Concern

Note 1—Basis of Presentation and Going Concern

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments necessary for a fair presentation of Savient Pharmaceuticals, Inc.’s financial position at September 30, 2013, the results of its operations for the three and nine-month periods ended September 30, 2013 and 2012, and cash flows for the nine-month periods ended September 30, 2013 and 2012. Interim financial statements are prepared on a basis consistent with the Company’s annual financial statements. Results of operations for the three and nine-month periods ended September 30, 2013 are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2013.

The consolidated balance sheet at December 31, 2012 was derived from the audited financial statements at that date and does not include all of the information and notes required by GAAP for complete financial statements. The interim statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

The commencement of the Chapter 11 Cases (defined in Note 15 below) raises substantial doubt as to whether the Company will be able to continue as a going concern. The unaudited consolidated financial statements have been prepared using the same GAAP and the rules and regulations of the Securities Exchange Commission, or SEC, as applied by the Company prior to the Chapter 11 Cases. While the Company and its wholly owned subsidiary Savient Pharma Holdings, Inc., or SPHI, have filed for Chapter 11 and been granted creditor protection, the unaudited consolidated financial statements continue to be prepared using the going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. As a result of the Chapter 11 Cases, realization of assets and liquidation of liabilities are subject to uncertainty. Further, a plan of reorganization or liquidation or a sale of assets could or will materially change the amounts and classifications reported in the consolidated financial statements, which do not give effect to any adjustments to the carrying value of assets or amounts of liabilities that might be necessary as a consequence of confirmation of a Chapter 11 plan or a sale of assets. If the going concern basis is no longer appropriate, adjustments will be necessary to the carrying amounts and/or classification of the Company’s assets and liabilities. The unaudited consolidated financial statements do not reflect any adjustments related to conditions that arose subsequent to September 30, 2013. On November 4, 2013, the Bankruptcy Court approved a motion authorizing the Company to take such actions necessary to liquidate its Irish subsidiary, Savient Pharma Ireland Limited, or SPIL, under Irish law. As a result, KRYSTEXXA will not be commercially available in the EU in the near term, and during the Chapter 11 process, the Company will be focusing its efforts on the commercialization of KRYSTEXXA in the United States.

Throughout this Quarterly Report on Form 10-Q, we refer to Savient Pharmaceuticals, Inc. as Savient, the Company, or, unless the context otherwise requires, we, us and ours.

Basis of consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries SPHI, SPIL, and Savient International Limited, or SIL.

Use of estimates in preparation of financial statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to investments, accounts receivable, reserve for product returns, inventories, rebates, property and equipment, share-based compensation and income taxes. The estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities. Results may differ from these estimates due to actual outcomes differing from those on which the Company bases its assumptions.