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Sucampo (SCMP) Reports Second Quarter 2017 Financial Results



8/2/2017 12:11:32 PM

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Patent Issued for Pipeline Compound VTS-270 for Niemann-Pick Disease Type C1

Diluted EPS Loss of $3.92 Resulting from $186.6M IP R&D Second Quarter Charge Due to Accounting Treatment of Vtesse Inc. Acquisition; EPS were $0.28 on an Adjusted Diluted Basis Excluding IP R&D Charge and Other Adjustments*

CPP-1X/Sulindac Phase 3 Trial for the Treatment of Familial Adenomatous Polyposis Continues After Planned Interim Futility Analysis

Company Reiterates 2017 Guidance

Company to Host Conference Call Today at 8:30 a.m. ET

ROCKVILLE, Md., Aug. 02, 2017 (GLOBE NEWSWIRE) -- Sucampo Pharmaceuticals, Inc. (Sucampo) (NASDAQ:SCMP), a global biopharmaceutical company, today reported consolidated financial results for the second quarter ended June 30, 2017.

Summary of Results Q2-17 GAAP
Basis
Q2-17 Adjusted Basis* Q2-17 Adjusted vs.
Q1-17 Adjusted
Revenue $59.9M $59.9M 6 %
Net Income (loss) ($181.2M) $16.5M 27 %
EPS – Diluted ($3.92) $0.28 22 %
EBITDA ($169.3M) $27.4M (2 %)

“We had a strong second quarter, bolstered by our financial results and the acquisition of Vtesse Inc., through which we acquired VTS-270 for Niemann-Pick Disease Type C1,” said Peter Greenleaf, Chairman and Chief Executive Officer of Sucampo. “VTS-270 is being developed to potentially provide necessary treatment for patients and families living with NPC-1, a devastating and ultimately fatal neurological disorder. The recent issuance of a U.S. patent for VTS-270 strengthens the IP position of the product by distinguishing it from other hydroxypropyl beta-cyclodextrin products, and is further evidence of VTS-270’s strong profile and differentiated composition. In addition to this, an Independent Data Monitoring Committee found no reason to advise discontinuation of the ongoing phase 3 development of CPP-1X/sulindac by Cancer Prevention Pharmaceuticals, Inc. to treat Familial Adenomatous Polyposis, after a planned interim futility analysis. Finally, we’re excited to welcome Dr. Karen Smith to our Board of Directors.”

For the three months ended June 30, 2017, Sucampo reported year-over-year total revenue growth of 15% to $59.9 million. Product sales revenue increased to $34.2 million, representing year-over-year growth of 21%, and product royalty revenue grew 10% year-over-year to $20.6 million.

Sucampo reported a GAAP net loss of $181.2 million, or ($3.92) per diluted share, during the second quarter of 2017, compared to a GAAP net loss of $0.8 million, or ($0.02) per diluted share, during the second quarter of 2016. The company recorded a one-time In-Process Research and Development (IP R&D) charge of $186.6 million in connection with the acquisition. This is due to the early adoption of recent business combination accounting guidance. Accordingly, the Company has determined the acquisition does not meet the definition of a business and thus should be accounted for as an asset acquisition. As the asset represents a phase 2b/3 asset, pre-FDA approval, the Company has expensed the asset in accordance with the latest accounting standards. By treating the acquisition as an asset acquisition, the Company has removed the future P&L impact associated with ongoing amortization of the acquired intellectual property, reduced audit and valuation costs associated with the business combination and simplified the go-forward accounting.

Sucampo reported adjusted net income (as defined below) of $16.5 million, or $0.28 per diluted share, during the second quarter of 2017, compared to adjusted net income of $10.3 million, or $0.24 per diluted share, during the second quarter of 2016.

Corporate

  • Acquired Vtesse Inc. (Vtesse), a privately-held rare disease company, for upfront consideration of $200.0 million, net of cash acquired. Sucampo funded the acquisition through the issuance of 2,782,676 shares of Sucampo Class A common stock and $170.0 million of cash on hand; no external financing was utilized. The acquisition provided Sucampo with VTS-270, currently in a pivotal study for the treatment of Niemann-Pick Disease Type C1 (NPC-1), with results expected in mid-2018. Effective treatment of NPC remains a high unmet need, with no approved products for patients in the U.S. VTS-270 has been granted orphan drug designation in both the U.S. and Europe. The acquisition of Vtesse was treated as an asset acquisition for accounting purposes.
  • Secured an issued patent for VTS-270 from the U.S. Patent and Trademark Office. The patent, U.S. No. 9,675,634, relates to proprietary cyclodextrin compositions with a specific fingerprint and purity profile that distinguish VTS-270 from other HPßCD products.
  • CPP-1X/sulindac, currently in phase 3 development with Cancer Prevention Pharmaceuticals (CPP), recently passed a pre-specified interim futility analysis. In 2016, Sucampo acquired an exclusive option to license CPP-1X/sulindac for North America. CPP-1X/sulindac is a combination therapy which is used to treat Familial Adenomatous Polyposis (FAP). A predominately genetic disease, FAP develops into colon cancer if left untreated in 100% of patients. CPP-1X/sulindac was granted orphan designation in the U.S. and Europe. FAP prevalence is estimated to be 1 in 10,000 or approximately 30,000 patients in the U.S. There are currently no approved treatments for FAP and no known products in late-stage development.
  • Filed an sNDA in July with the U.S. Food and Drug Administration for the approval of AMITIZA for pediatric functional constipation in 10-17 year old patients, based on supporting data and pronounced efficacy in this age group.
  • Karen Smith, M.D., Ph.D., M.B.A., LLM., joined the Company’s Board of Directors on July 15. Dr. Smith is Executive Vice President, R&D, and Chief Medical Officer at Jazz Pharmaceuticals. Dr. Smith brings to Sucampo over 25 years of senior leadership and executive experience with both major pharmaceutical companies and start-up biotechnology organizations. Her product development expertise spans various therapeutic areas and includes over 15 major drug and device approvals in North and Latin America, Asia, Europe and Australia at companies such as Allergan, AstraZeneca, Bristol-Myers Squibb and Boron Molecular.

AMITIZA

United States

  • AMITIZA total prescriptions in the second quarter of 2017 were 381,097, as reported by IMS, an increase of 4% compared to the second quarter of 2016. Net sales of AMITIZA, reported by Takeda Pharmaceuticals U.S.A., Inc. (Takeda) for royalty calculation purposes, increased 9% to $110.7 million for the second quarter of 2017, compared to $101.7 million in the same period in 2016. The increase was due to strong execution of AMITIZA marketing and selling by our partner Takeda, as well as overall growth in the branded chronic constipation market.
  • Royalty revenue was $20.6 million in the second quarter of 2017 compared to $18.7 million in the same period in 2016, an increase of 10%. The increase was due to higher Takeda reported AMITIZA net sales which were primarily driven by price and volume increases.

Global Markets

  • In Japan, Sucampo’s revenue from sales of AMITIZA to Mylan was $18.6 million for the second quarter of 2017, compared to $14.6 million in the same period in 2016, an increase of 27%. Unit volume as reported by Mylan grew 24% for the second quarter of 2017 compared to the second quarter of 2016, to 39.9 million units versus 32.1 million units. AMITIZA’s growth in Japan continues to reflect the strong unmet need in the region for effective treatments for chronic constipation, and Mylan’s continued strong market execution.

Second Quarter 2017 Financial Review

  • Total revenues were $59.9 million for the second quarter of 2017 compared to $52.0 million in the same period in 2016, an increase of $7.9 million or 15%. The increase was primarily due to higher AMITIZA sales in Japan.
  • EBITDA (as defined below) was ($169.3) million for the second quarter of 2017 compared to EBITDA of $17.9 million for the same period in 2016, a decrease of $187.2 million. Adjusted EBITDA (as defined below) was $27.4 million for the second quarter of 2017 compared to $25.0 million in the same period in 2016, an increase of 10%.
  • On a GAAP basis, Sucampo reported a net loss of $181.2 million and diluted EPS of ($3.92) during the second quarter of 2017 compared to a net loss of $0.8 million and a diluted EPS of ($0.02) in the same period in 2016. Adjusted net income (as defined below) was $16.5 million, or $0.28 per diluted share, during the second quarter of 2017, compared to adjusted net income of $10.3 million, or $0.24 per diluted share, in the second quarter of 2016.


  • To read full press release, please click here.


Read at BioSpace.com


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