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SciClone Pharmaceuticals, Inc. (SCLN) Announces China Government-Mandated ZADAXIN® Price Reduction; Anticipates Minimal Impact on Revenue and Margins


9/18/2012 8:29:17 AM

FOSTER CITY, CA--(Marketwire - September 18, 2012) - SciClone Pharmaceuticals, Inc. (NASDAQ: SCLN) today announced that consistent with the China government's review of pharmaceutical prices once a product has been included into the Reimbursement Drug List ("RDL"), the retail list price, or hospital pharmacy level price, of ZADAXIN® has been reduced by about 18% in China. Based on agreements with SciClone's primary importers of ZADAXIN into China to share the price reduction, the actual impact on SciClone's revenue and margins is anticipated to be significantly lower than the percentage reduction at the retail level, and is expected to be less than a 5% decrease, with the importation and distribution network taking the majority of the percentage decrease.

As SciClone's prior financial guidance for 2012 included an anticipated price reduction impact in the range of approximately 7-8%, the newly announced NDRC price and related agreements with importers will result in a more favorable outcome than previously anticipated. SciClone plans to address any impact of this less than 5% price decrease on the 2012 guidance when it announces third quarter 2012 financial results.

SciClone also announced that the NDRC price of Aggrastat®, a recently launched intervention cardiology product, as well as several of its oncology products exclusively promoted in China for Pfizer and Baxter were reduced at or below the average price reduction announced by the government.

It is noteworthy that ZADAXIN, Aggrastat and several of our oncology products continue to be independently listed, a substantial benefit in the tendering process allowing for preferential pricing compared to generics.

Commented Friedhelm Blobel, Ph.D., President and Chief Executive Officer of SciClone: "We respect the China government's policy of price reviews of pharmaceuticals once listed in the RDL, and have anticipated for close to three years that a price reduction for ZADAXIN would be enacted. We are pleased that this review process has now been completed. We appreciate our importers' agreement to assume the majority of the impact of the price reduction. Their actions reflect how highly ZADAXIN is valued by our industry partners and by patients with serious medical conditions who may now have greater access to this important and more affordable therapy."

Continued Dr. Blobel: "We believe that this price revision can positively affect ZADAXIN sales through increased volume and broader penetration into tier 3 as well as tier 2 cities in target geographies, and that it can strengthen our provincial tendering strategies. We have more than 300 professionals wholly focused on building ZADAXIN sales. We are confident that ZADAXIN will continue to be a major growth engine for SciClone, fueled by successfully penetrating more deeply and widely into the China market on the national, provincial, city and institutional levels. We are also hopeful that with Aggrastat's price now set, the provincial bidding and tender processes will proceed, and we can accelerate sales for this novel cardiology product, which has significant therapeutic potential in the fast-growing coronary stent market."

ZADAXIN (thymalfasin) is approved in over 30 countries and may be used for the treatment of HBV, HCV, as a vaccine adjuvant, and certain cancers according to the approvals SciClone has in these countries. In China, thymalfasin is also included in the treatment guidelines issued by the Ministry of Health ("MOH") for liver cancer. ZADAXIN was launched by SciClone in China in 1996, and was included as a Category B product in the RDL in 2009. In 2011, ZADAXIN annual worldwide sales exceeded $100 million. ZADAXIN has strong brand recognition, is positioned as a high-quality, imported product, and is one of the largest imported pharmaceutical products in China, measured by revenue. SciClone estimates its volume market share of thymalfasin is approximately 15%. SciClone believes that it has established a strong sales and marketing organization and strong importation relationships with distribution channels which have facilitated ZADAXIN's strong growth in sales, profitability, and substantial cash flow. SciClone has built a strong commercial presence in liver disease, cancer and the intensive care setting, and is expanding geographically in China to position the Company for further growth.

About SciClone

SciClone Pharmaceuticals is a revenue-generating, profitable, specialty pharmaceutical company with a substantial commercial business in China and a product portfolio of therapies for oncology, infectious diseases and cardiovascular, urological, respiratory, and central nervous system disorders. SciClone's ZADAXIN® (thymalfasin) is approved in over 30 countries and may be used for the treatment of hepatitis B (HBV), hepatitis C (HCV) and certain cancers, and as a vaccine adjuvant, according to the local regulatory approvals. Besides ZADAXIN, SciClone markets about 15 mostly partnered products in China, including Depakine®, the most widely prescribed broad-spectrum anti-convulsant in China; Tritace®, an ACE inhibitor for the treatment of hypertension; Stilnox®, a fast-acting hypnotic for the short-term treatment of insomnia (marketed as Ambien® in the US); and Aggrastat®, a recently-launched interventional cardiology product. SciClone is also pursuing the registration of several other therapeutic products in China. SciClone is headquartered in Foster City, California. For additional information, please visit www.sciclone.com.

Forward-Looking Statements

This press release contains forward-looking statements regarding expected financial results and expectations and the effect of the announced retail price reduction. Readers are urged to consider statements that include the words "may," "will," "would," "could," "should," "might," "believes," "estimates," "projects," "potential," "expects," "plans," "anticipates," "intends," "continues," "forecast," "designed," "goal," "unaudited," "approximately" or the negative of those words or other comparable words to be uncertain and forward-looking. These statements are subject to risks and uncertainties that are difficult to predict and actual outcomes may differ materially. These include risk and uncertainties relating to: the course, cost and outcome of regulatory matters, including pricing decisions by authorities in China; the on-going regulatory investigations; the Company's ability to execute on its goals in China and on its objectives for revenue in fiscal 2012; the challenges presented by integrating an acquired business into existing operations; the variability in earnings on a GAAP basis that may result from non-cash charges related to the NovaMed acquisition; the dependence on third party license, promotion or distribution agreements including the need to renew such agreements; operating an international business; the clinical trial process, including the regulatory approval and the process of initiating trials at, and enrolling patients at, clinical sites; the effect of changes in its practices and policies related to the Company's compliance programs. SciClone cannot predict the timing or outcome of the SEC and DOJ investigations, or of the level of its efforts required to cooperate with those investigations, however the Company has incurred substantial expenses in connection with the investigations and related litigation and expects to incur additional expense and the investigations could result in fines and further changes in its internal control or other remediation measures that could adversely affect its business. Please also refer to other risks and uncertainties described in SciClone's filings with the SEC. All forward-looking statements are based on information currently available to SciClone and SciClone assumes no obligation to update any such forward-looking statements.

Ambien, Depakine, Stilnox and Tritace are registered trademarks of Sanofi and/or its affiliates.

Aggrastat is a registered trademark of Medicure International Inc. in the United States, and Iroko Cardio LLC in numerous other countries.

SciClone, SciClone Pharmaceuticals, the SciClone Pharmaceuticals design, the SciClone logo and ZADAXIN are registered trademarks of SciClone Pharmaceuticals, Inc. in the United States and numerous other countries.


Corporate Contacts

Gary Titus
Chief Financial Officer
650.358.3456
gtitus@sciclone.com

Jane Green
Investors/Media
650.358.1447
jgreen@sciclone.com


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