FOSTER CITY, Calif., Aug. 10, 2015 /PRNewswire/ -- SciClone Pharmaceuticals, Inc. (NASDAQ: SCLN) today reported financial results for the quarter ended June 30, 2015.
- Revenues: In the second quarter 2015, SciClone reported revenues of $37.9 million, compared to $32.5 million for the same period in 2014.
- GAAP Diluted EPS: In the second quarter 2015, SciClone reported a GAAP diluted loss per share of $0.08, compared to earnings per share of $0.18 for the same period in 2014.
- Non-GAAP Diluted EPS: In the second quarter 2015, SciClone reported non-GAAP diluted earnings per share of $0.26, compared to $0.20 for the same period in 2014.
- SEC Settlement Agreement: In July 2015, SciClone reached an agreement in principle with the staff of the US Securities and Exchange Commission (SEC) for a proposed settlement for a range of matters, including without admitting or denying possible violations of the Foreign Corrupt Practices Act (FCPA). The agreement, which includes disgorgement, prejudgment interest, and penalties totaling $12.8 million, is contingent upon the execution of formal settlement documents and approval of the settlement by the SEC’s governing Commission. The Company has not yet reached a resolution of these matters with the Department of Justice (DOJ) and management continues to work diligently to obtain closure on this matter.
Revenues in the second quarter of 2015 were $37.9 million, a $5.4 million or 17% increase, compared to $32.5 million for the same period in 2014. ZADAXIN® revenues were $35.5 million in the second quarter of 2015, a $5.2 million or 17% increase, compared to $30.3 million for the same period in 2014. Promotion services revenues were $0.7 million for the second quarter of 2015, a $0.2 million or 23% decrease, compared to $0.9 million in the same period in 2014. For the six months ended June 30, 2015, revenues were $71.5 million, compared to $59.1 million for the same period last year.
On a GAAP basis, SciClone reported a net loss in the second quarter of 2015 of $4.0 million, or $0.08 per share on both a basic and diluted basis, compared to net income of approximately $9.6 million, or $0.19 and $0.18 per share on a basic and diluted basis, respectively, for the same period in 2014. SciClone’s net income for the six months ended June 30, 2015 was $4.9 million compared with net income of $13.8 million for the same period in the prior year, or $0.10 and $0.09 per share on a basic and diluted basis for the six months ended June 30, 2015, compared with $0.27 and $0.26 on a basic and diluted basis, respectively, for the same period in 2014.
SciClone’s non-GAAP net income in the second quarter of 2015 was $13.5 million, or $0.27 and $0.26 per share on a basic and diluted basis, respectively, compared with non-GAAP net income of $10.5 million, or $0.20 per share on both a basic and diluted basis for the same period of the prior year. SciClone’s non-GAAP net income for the six months ended June 30, 2015 was $23.3 million compared with non-GAAP net income of $15.5 million for the same period in the prior year, or $0.47 and $0.44 per share on a basic and diluted basis, respectively, for the six months ended June 30, 2015, compared with non-GAAP net income of $0.30 and $0.29 on a basic and diluted basis, respectively, for the same period in 2014.
Friedhelm Blobel, PhD, SciClone’s Chief Executive Officer commented: “We are pleased with the continued growth of our core business in the second quarter, and our cumulative performance for the first half of this year. For the second quarter of 2015, both overall revenue as well as ZADAXIN revenue were 17% higher than the same period last year. We have delivered on another sequential quarter of growth, and at a level that significantly exceeded the China pharma market growth rate.
“We are especially pleased to have reached a settlement agreement in principle with the SEC, and we believe we are moving toward closure with the DOJ. Today, our high-quality company-wide compliance program is one of our most valuable assets, and our commitment to its constant improvement is woven into the fabric of our corporate culture”.
“Our outlook for the future is positive. We anticipate that demand for ZADAXIN will continue to expand, utilization of newly launched DC Bead® will build, our oncology portfolio will gain momentum, and our development-stage cardiovascular and anti-infective products will advance toward the market. We are especially excited to have added the antibiotic VIBATIV® (telavancin) to our development portfolio this quarter, providing an excellent opportunity to address the large and growing anti-infective market in China.
“We are continuing to pursue business development strategies to expand our marketed product portfolio in the near term, as well as drive longer-term growth. Our reputation for high quality compliance supports our competitive positioning as a partner of choice for companies that may want to participate in the market’s growth, but reduce their risk exposure. Our cash flow and cash balance, combined with our operating efficiencies, continue to be important partnering assets, along with our excellent industry and supply chain partnerships.”
For the second quarter of 2015, sales and marketing (S&M) expenses were $13.0 million, compared with $11.2 million for the same period in 2014. The increase in S&M for second quarter of 2015, compared to the same period in 2014, related to increases in our sales and marketing efforts for ZADAXIN and DC Bead®. For the six months ended June 30, 2015, S&M expenses were $24.0 million, compared with $21.1 million, for the same period last year.
Research and development (R&D) expenses for the three months ended June 30, 2015 were $6.6 million, which included $5.5 million in upfront costs related to new in-license arrangements primarily with Theravance Biopharma, Inc. in the second quarter. Excluding these upfront costs, R&D expenses increased $0.3 million to $1.1 million for the three months ended June 30, 2015 compared to $0.8 million for the same period last year. For the six months ended June 30, 2015, R&D expenses were $7.7 million, compared with $2.3 million, for the same period last year.
For the second quarter of 2015, general and administrative (G&A) expenses were $6.8 million, compared with $5.8 million for the same period in 2014, an increase of $1.0 million primarily related to growth in our China organization. For the six months ended June 30, 2015, G&A expenses were $14.1 million, compared with $11.8 million, for the same period last year.
As of June 30, 2015, cash, cash equivalents and short-term investments totaled $93.0 million, compared to $86.3 million as of December 31, 2014. SciClone has a share repurchase program under which its Board of Directors has authorized $80.5 million, of which approximately $70.5 million had been utilized through June 30, 2015.
SciClone has presented non-GAAP information above as the Company believes this non-GAAP information is useful for investors, taken in conjunction with SciClone’s GAAP financial statements, because management uses such information internally for its operating, budgeting and financial planning purposes. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of SciClone’s operating results as reported under GAAP. The non-GAAP calculations and reconciliation are provided in the accompanying table titled “Reconciliation of GAAP to Non-GAAP Net Income.”
Second Quarter 2015 Key Events
During the second quarter of 2015, SciClone reported several important developments:
- DC Bead Launch: In the second quarter, the Company made significant progress in preparing the commercial launch of DC Bead for the embolization of malignant hypervascularized tumors, such as hepatocellular carcinoma. The Company’s sales team has been actively-premarketing to intervention oncologists, the tender process has been initiated in target provinces, and active selling and distribution of DC Bead is anticipated to begin within the next several weeks.
- Licensing Agreement with Cardiome for Aggrastat®: Subsequent to the quarter end, SciClone and Cardiome, from whom the Company licensed Aggrastat®, mutually agreed to end their collaboration, and all rights to Aggrastat will be returned to Cardiome. The Company anticipates no material impact from ending this agreement.
- VIBATIV: SciClone entered into a development and commercialization agreement with Theravance Biopharma, Inc. for exclusive rights to the antibiotic VIBATIV in China and adjacent territories. SciClone will initially develop VIBATIV for hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia (HABP/VABP), and additional indications may include complicated skin and skin structure infections (cSSSI) and potentially bacteremia.
Reaffirming Revenue and Non-GAAP EPS Guidance for 2015
Recent governmental policy changes in China have eliminated national regulation of the maximum retail drug prices for most drugs, effective as of June 1, 2015, including for those on the National Reimbursement Drug List (NDRL).
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