Strong Financial Performance Driven by
Continued Revenue and Sales Growth of AMITIZA
Strong Growth in Net Income and
EPS
Company Confirms 2015 Earnings
Guidance
Company to Host Conference Call Today at
8:30 a.m. Eastern
Sucampo Pharmaceuticals, Inc. (Sucampo) (Nasdaq:SCMP) today
reported consolidated financial results for the first quarter ended
March 31, 2015.
Sucampo reported year-over-year growth of 33% to $29.5 million
in total revenue, 17% to $15.7 million in product royalty revenue
and 77% to $11.1 million in product sales revenue. Sucampo reported
net income of $6.4 million and fully-diluted earnings per share
(EPS) of $0.14 during the first quarter of 2015.
"We are excited about the progress our company continued to make
in the first quarter, with solid financial performance driven by
our flagship product, AMITIZA," said Peter Greenleaf, Chief
Executive Officer of Sucampo. "With AMITIZA revenues continuing to
grow, a focused organization and a prioritized pipeline, we expect
the momentum of transforming Sucampo to continue through the rest
of the year. Additionally, the recently completed secondary
offering by our founding shareholders was an important step toward
diversifying our shareholder base and contributed to a
significantly lowered corporate tax rate."
First Quarter 2015 Operational Review
AMITIZA
United States
- AMITIZA total prescriptions were 342,849, an increase of 9%,
compared to the first quarter of 2014. Net sales of AMITIZA,
reported by Takeda Pharmaceuticals U.S.A., Inc. (Takeda) for
royalty calculation purposes, increased 17% to $87.5 million for
the first quarter of 2015, compared to $75.0 million in the same
period of 2014.
Global Markets
- In Japan, Sucampo's revenue from sales of AMITIZA to Abbott
Japan Co., Ltd. (Abbott) increased 83% to $11.1 million for the
first quarter of 2015, compared to $6.1 million in the same period
of 2014.
- Early in 2015, the European Mutual Recognition Procedure (MRP)
was successfully completed, resulting in a recommendation for
marketing authorization for AMITIZA for the treatment of chronic
idiopathic constipation (CIC) in Austria, Belgium, Germany, Italy,
Ireland, Luxembourg, the Netherlands and Spain. Following the
positive MRP outcome, each member state is expected to issue a
national marketing authorization. At present, Ireland, Luxembourg,
the Netherlands and Belgium have issued marketing
authorizations.
Research and Development
- In March 2015, Sucampo filed an Investigational New Drug (IND)
application for cobiprostone to initiate a phase 2a clinical trial
in patients suffering from head and neck cancer for the treatment
of oral mucositis. The clinical trial is expected to begin at the
end of the first half of 2015.
- In February 2015, the first patient was dosed in a phase 2
clinical trial of cobiprostone for non-erosive reflux disease
(NERD) in proton pump inhibitor-refractory patients.
- In March 2015, Sucampo returned all licenses for the
development and commercialization of unoprostone isopropyl to
R-Tech Ueno, Ltd. (RTU). Effective May 6, 2015, Sucampo and RTU
executed a transfer and termination agreement to effectuate the
transfer of the return of the licenses as well as regulatory,
commercial and pharmacovigilance information and Sucampo will
receive a payment of $2.6 million from RTU, consisting of $2
million for the transfer and assignment of certain rights and
assets, and $0.6 million as a reimbursement of an FDA fee.
Corporate
- Sucampo's founding shareholders sold 4.6 million shares in an
underwritten public offering, including the underwriter's option,
of Sucampo's class A common stock. These shares were sold to the
public at $14.00 per share for an aggregate offering of $64.4
million. All shares were offered by S&R Technology Holdings,
LLC (S&R Technology), S&R Foundation, Dr. Ryuji Ueno and
Dr. Sachiko Kuno. Sucampo did not sell any shares or receive any
proceeds from the offering. Drs. Ueno and Kuno have direct or
indirect interests in S&R Technology and reduced their
percentage of ownership to approximately 47% as of March 31,
2015.
First Quarter 2015 Financial Review
- Net income was $6.4 million, or $0.14 per diluted share, for
the first quarter of 2015 compared to net income of $0.8 million,
or $0.02 per diluted share, in the same period in 2014. Non-GAAP
earnings before interest, tax, depreciation, amortization and stock
option expense was $10.6 million for the first quarter of 2015
compared to $3.0 million in the same period in 2014, an increase of
254%.
- Total revenues were $29.5 million for the first quarter of 2015
compared to $22.2 million in the same period in 2014, an increase
of 33%. The increase was primarily due to the growth of AMITIZA
sales in Japan and higher product royalty revenue on AMITIZA net
sales in the U.S.
- Costs of goods sold were $6.1 million for the first quarter of
2015 compared to $3.4 million for the same period in 2014, an
increase of 80%. The increase was primarily due AMITIZA sales in
Japan.
- R&D expenses were $6.8 million for the first quarter of
2015 compared to $5.1 million for the same period of 2014, an
increase of 32%. The increase was primarily due to higher salary
related expenses of approximately $1.0 million and increased
spending on clinical trials of AMITIZA for pediatric functional
constipation and cobiprostone for NERD.
- G&A expenses were $6.3 million for the first quarter of
2015 compared to $7.3 million for the same period of 2014, a
decrease of 13%. The decrease was primarily due to a reduction in
legal, consulting and other professional expense following the
settlement of the patent infringement law suit against Par
Pharmaceuticals.
- Selling & Marketing expenses were $0.6 million for the
first quarter of 2015 compared to $3.6 million for the same period
of 2014, a decrease of 83%. The decrease was primarily due to the
result of the reduction of direct commercial operations due to
agreements entered into in the fourth quarter of 2014 in the U.S.
and Europe.
- Tax rate for the first quarter of 2015 was 31%, compared to 63%
in the same period of 2014. The effective rate for the quarter is
based on a projection of the full year rate. The reduction in tax
rate is due to the timing of the allowable deduction of intangible
impairment expense, together with the effect on the treatment of
non-U.S. income following the reduction of the founders'
shareholdings below 50% of Sucampo's outstanding shares.
Cash, Cash Equivalents, Restricted Cash and Marketable
Securities
At March 31, 2015, cash, cash equivalents, restricted cash and
investments were $118.8 million, compared to $110.0 million at
December 31, 2014. At March 31, 2015 and December 31, 2014, notes
payable were $25.8 million, including current notes payable of $8.2
million.
For the quarter ended March 31, 2015, cash flow from operations
was $4.6 million, compared to $3.6 million for the same period in
2014.
Guidance
Sucampo today confirmed its earnings guidance for 2015. Sucampo
expects full year 2015 GAAP net income to be in the range of $25.0
million to $30.0 million, or $0.55 to $0.65 per diluted share.
Company to Host Conference Call Today
Sucampo will host a conference call and webcast today at 8:30 am
EDT. To participate on the live call, please dial 877-280-4960
(domestic) or 857-244-7317 (international) and use passcode
37225960, five to ten minutes ahead of the start of the call. A
replay of the call will be available within a few hours after the
call ends. Investors may listen to the replay by dialing
888-286-8010 (domestic) or 617-801-6888 (international), passcode
47934985. Investors interested in accessing the live audio webcast
of the teleconference may do so at
http://www.sucampo.com/investors/events-presentations/ and should
log on before the teleconference begins in order to download any
software required. The archive of the teleconference will remain
available for 30 days.
About lubiprostone (AMITIZA®)
AMITIZA (lubiprostone) is a prostone, and is a locally acting
chloride channel activator, indicated in the U.S. for the treatment
of CIC in adults and OIC in adults with chronic, non-cancer pain
(24 mcg twice daily). The effectiveness in patients with OIC taking
diphenylheptane opioids (e.g., methadone) has not been established.
AMITIZA is also indicated in the U.S. for irritable bowel syndrome
with constipation (8 mcg twice daily) in women 18 years of age and
older in the U.S. In Japan, AMITIZA (24 mcg twice daily) is
indicated for the treatment of chronic constipation (excluding
constipation caused by organic diseases). In the U.K., AMITIZA (24
mcg twice daily) is indicated for the treatment of CIC and
associated symptoms in adults, when response to diet and other
non-pharmacological measures (e.g., educational measures, physical
activity) are inappropriate. In Switzerland, AMITIZA (24 mcg twice
daily) is indicated for the treatment of CIC in adults and for the
treatment of OIC and associated signs and symptoms such as stool
consistency, straining, constipation severity, abdominal
discomfort, and abdominal bloating in adults with chronic,
non-cancer pain. The efficacy of AMITIZA for the treatment of OIC
in patients taking opioids of the diphenylheptane class, such as
methadone, has not been established.
About Sucampo Pharmaceuticals, Inc.
Sucampo Pharmaceuticals, Inc. is focused on the development and
commercialization of medicines that meet major unmet medical needs
of patients worldwide. Sucampo has one marketed product – AMITIZA –
and a pipeline of product candidates in clinical development. A
global company, Sucampo is headquartered in Bethesda, Maryland, and
has operations in Japan, Switzerland and the U.K. For more
information, please visit www.sucampo.com.
The Sucampo logo and the tagline, The Science of Innovation, are
registered trademarks of Sucampo AG. AMITIZA is a registered
trademark of Sucampo AG.
Follow us on Twitter (@Sucampo_Pharma). Follow us on LinkedIn
(Sucampo Pharmaceuticals).
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Sucampo Forward-Looking Statement
This press release contains "forward-looking statements" as that
term is defined in the Private Securities Litigation Reform Act of
1995. These statements are based on management's current
expectations and involve risks and uncertainties, which may cause
results to differ materially from those set forth in the
statements. The forward-looking statements may include statements
regarding product development, product potential, future financial
and operating results, and other statements that are not historical
facts. The following factors, among others, could cause actual
results to differ from those set forth in the forward-looking
statements: the impact of pharmaceutical industry regulation and
health care legislation; the ability of Sucampo to continue to
develop the market for AMITIZA; the ability of Sucampo to develop,
commercialize or license existing pipeline products or compounds or
license or acquire non-prostone products or drug candidates;
Sucampo's ability to accurately predict future market conditions;
dependence on the effectiveness of Sucampo's patents and other
protections for innovative products; he risk of new and changing
regulation and health policies in the U.S. and internationally; the
effects of competitive products on Sucampo's products; and the
exposure to litigation and/or regulatory actions.
No forward-looking statement can be guaranteed and actual
results may differ materially from those projected. Sucampo
undertakes no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events,
or otherwise. Forward-looking statements in this presentation
should be evaluated together with the many uncertainties that
affect Sucampo's business, particularly those mentioned in the risk
factors and cautionary statements in Sucampo's most recent Form
10-K as filed with the Securities and Exchange Commission on March
9, 2015 as well as its filings with the Securities and Exchange
Commission on Forms 8-K and 10-Q since the filing of the Form 10-K,
all of which Sucampo incorporates by reference.
Sucampo Pharmaceuticals,
Inc. |
Consolidated Statements
of Operations and Comprehensive
Income (unaudited) |
(in thousands, except per share
data) |
|
Three Months
Ended March 31, |
|
2015 |
2014 |
|
|
|
Revenues: |
|
|
Research and development
revenue |
$ 2,345 |
$ 1,784 |
Product royalty revenue |
15,745 |
13,501 |
Product sales revenue |
11,145 |
6,312 |
Co-promotion revenue |
-- |
362 |
Contract and collaboration
revenue |
245 |
202 |
Total revenues |
29,480 |
22,161 |
|
|
|
Costs and expenses: |
|
|
Costs of goods sold |
6,110 |
3,393 |
Intangible assets
impairment |
-- |
-- |
Research and development |
6,793 |
5,135 |
General and administrative |
6,283 |
7,257 |
Selling and marketing |
640 |
3,647 |
Total costs and expenses |
19,826 |
19,432 |
|
|
|
Income from operations |
9,654 |
2,729 |
Non-operating income (expense): |
|
|
Interest income |
40 |
57 |
Interest expense |
(276) |
(400) |
Other income (expense),
net |
(203) |
(323) |
Total non-operating income
(expense), net |
(439) |
(666) |
|
|
|
Income before income taxes |
9,215 |
2,063 |
Income tax provision |
(2,807) |
(1,308) |
Net income |
$ 6,408 |
$ 755 |
|
|
|
Net income per share: |
|
|
Basic |
$ 0.14 |
$ 0.02 |
Diluted |
$ 0.14 |
$ 0.02 |
Weighted average common shares
outstanding: |
|
|
Basic |
44,366 |
43,401 |
Diluted |
45,912 |
44,264 |
|
|
|
Reconciliation of Income
from Operations to Earnings before Interest, Tax, Depreciation,
Amortization and Stock-based Compensation (unaudited) |
Income from operations |
$ 9,654 |
$ 2,729 |
Other income (expense), net |
(203) |
(323) |
Earnings before interest and
tax (EBIT) |
9,451 |
2,406 |
|
|
|
Depreciation and amortization |
83 |
361 |
Stock-based compensation |
1,069 |
228 |
Earnings before interest, tax,
depreciation, amortization and stock-based compensation |
$ 10,603 |
$ 2,995 |
|
|
|
Sucampo Pharmaceuticals,
Inc. |
Consolidated Balance
Sheets (unaudited) |
(in thousands, except share and
per share data) |
|
March 31, |
December 31, |
|
2015 |
2014 |
ASSETS |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 59,639 |
$ 71,622 |
Investments, current |
33,232 |
22,393 |
Product royalties
receivable |
15,746 |
18,576 |
Accounts receivable, net |
8,153 |
5,338 |
Deferred tax assets,
current |
382 |
476 |
Deferred charge, current |
295 |
295 |
Restricted cash, current |
213 |
213 |
Inventory |
328 |
-- |
Prepaid expenses and other
current assets |
2,865 |
3,411 |
Total current assets |
120,853 |
122,324 |
|
|
|
Investments, non-current |
23,410 |
13,540 |
Property and equipment, net |
634 |
763 |
Intangible assets, net |
146 |
151 |
Deferred tax assets, non-current |
612 |
571 |
Deferred charge, non-current |
1,621 |
1,695 |
Restricted cash, non-current |
2,282 |
2,224 |
Other assets |
251 |
306 |
Total assets |
$ 149,809 |
$ 141,574 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable |
$ 1,411 |
$ 4,143 |
Accrued expenses |
9,658 |
8,467 |
Deferred revenue, current |
1,771 |
2,051 |
Collaboration obligation |
5,939 |
6,000 |
Income tax payable |
1,847 |
1,291 |
Notes payable, current |
8,240 |
8,240 |
Other current liabilities |
1,832 |
3,618 |
Total current liabilities |
30,698 |
33,810 |
|
|
|
Notes payable, non-current |
17,578 |
17,578 |
Deferred revenue, non-current |
4,889 |
5,118 |
Deferred tax liability, non-current |
654 |
820 |
Other liabilities |
1,957 |
1,936 |
Total liabilities |
55,776 |
59,262 |
|
|
|
Preferred stock, $0.01 par value; 5,000,000
shares authorized at March 31, 2015 and December 31, 2014; no
shares issued and outstanding at March 31, 2015 and December 31,
2014 |
-- |
-- |
Class A common stock, $0.01 par value;
270,000,000 shares authorized at March 31, 2015 and December 31,
2014; 45,119,780 and 44,602,988 shares issued and outstanding at
March 31, 2015 and December 31, 2014, respectively |
451 |
446 |
Class B common stock, $0.01 par value;
75,000,000 shares authorized at March 31, 2015 and December 31,
2014; no shares issued and outstanding at March 31, 2015 and
December 31, 2014 |
-- |
-- |
Additional paid-in capital |
88,792 |
83,646 |
Accumulated other comprehensive income |
14,427 |
14,265 |
Treasury stock, at cost; 524,792 and 524,792
shares |
(2,313) |
(2,313) |
Accumulated deficit |
(7,324) |
(13,732) |
Total stockholders' equity |
94,033 |
82,312 |
Total liabilities and
stockholders' equity |
$ 149,809 |
$ 141,574 |
CONTACT: Sucampo Pharmaceuticals, Inc.
Silvia Taylor
Senior Vice President, Investor Relations and
Corporate Communications
1-240-223-3718
staylor@sucampo.com
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