SciClone Reports Second Quarter 2015 Financial Results
- 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 theUS 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 theSEC's governing Commission. The Company has not yet reached a resolution of these matters with theDepartment of Justice (DOJ) and management continues to work diligently to obtain closure on this matter.
Revenues in the second quarter of 2015 were
On a GAAP basis, SciClone reported a net loss in the second quarter of 2015 of
SciClone's non-GAAP net income in the second quarter of 2015 was
"We are especially pleased to have reached a settlement agreement in principle with the
"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
"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
Research and development (R&D) expenses for the three months ended
For the second quarter of 2015, general and administrative (G&A) expenses were
As of
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
The Company currently anticipates the price reduction will have limited impact on its overall revenue, and it is maintaining its full-year revenue guidance of between
SciClone believes that the Chinese government's healthcare reform initiatives have the potential to make medical care, including insurance coverage, more accessible to millions of Chinese people. The Company believes that its product portfolio of differentiated products in established therapeutic indications, led by ZADAXIN, can continue to meet these growing healthcare needs, and that the Company is well positioned to continue to manage the challenges of the evolving
Conference Call Today
SciClone is hosting a conference call today at
LIVE CALL: |
877.674.6420 (US/ |
920.663.6281 (International) |
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Passcode: 78094566 |
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REPLAY: |
855.859.2056 (US/ |
404.537.3406 (International) |
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Passcode: 78094566 |
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(Replay available from |
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The conference call will contain forward-looking statements. Interested parties who wish to listen to the webcast should visit the Investor Relations section of SciClone's website at www.sciclone.com. The information provided on the teleconference is accurate only at the time of the conference call, and SciClone will take no responsibility for providing updated information except as required by law.
About SciClone
Forward-Looking Statements
This press release contains forward-looking statements regarding expected financial results and expectations. 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 risks and uncertainties relating to: the course, cost and outcome of regulatory matters, including the impact of recent and future provincial pricing decisions, on the Company's average selling price for its products; the on-going regulatory investigations and expenses related thereto, including potential fines and/or other remedies; the Company's ability to execute on its goals in
SciClone, SciClone Pharmaceuticals, the SciClone Pharmaceuticals design, the SciClone logo and ZADAXIN are registered trademarks of
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UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||
(in thousands, except per share amounts) |
||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||
|
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|||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||
Revenues: |
||||||||||||
Product sales, net |
$ |
37,202 |
$ |
31,551 |
$ |
70,370 |
$ |
57,615 |
||||
Promotion services |
744 |
962 |
1,144 |
1,463 |
||||||||
Total net revenues |
37,946 |
32,513 |
71,514 |
59,078 |
||||||||
Operating expenses: |
||||||||||||
Cost of product sales |
5,681 |
5,011 |
10,278 |
9,572 |
||||||||
Sales and marketing |
12,964 |
11,242 |
24,021 |
21,076 |
||||||||
Research and development |
6,581 |
804 |
7,669 |
2,280 |
||||||||
General and administrative |
6,777 |
5,816 |
14,120 |
11,849 |
||||||||
Estimated |
10,800 |
— |
10,800 |
— |
||||||||
Total operating expenses |
42,803 |
22,873 |
66,888 |
44,777 |
||||||||
Income (loss) from operations |
(4,857) |
9,640 |
4,626 |
14,301 |
||||||||
Non-operating income (expense): |
||||||||||||
Interest and investment income |
250 |
23 |
362 |
42 |
||||||||
Interest and investment expense |
— |
(19) |
— |
(48) |
||||||||
Other income (expense), net |
39 |
30 |
(24) |
(89) |
||||||||
Income (loss) before (benefit) provision for income tax |
(4,568) |
9,674 |
4,964 |
14,206 |
||||||||
(Benefit) provision for income tax |
(546) |
34 |
24 |
432 |
||||||||
Net income (loss) |
$ |
(4,022) |
$ |
9,640 |
$ |
4,940 |
$ |
13,774 |
||||
Basic net income (loss) per share |
$ |
(0.08) |
$ |
0.19 |
$ |
0.10 |
$ |
0.27 |
||||
Diluted net income (loss) per share |
$ |
(0.08) |
$ |
0.18 |
$ |
0.09 |
$ |
0.26 |
||||
Basic shares outstanding |
49,929 |
51,620 |
49,947 |
51,788 |
||||||||
Diluted shares outstanding |
49,929 |
52,812 |
52,426 |
52,987 |
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RECONCILIATION OF GAAP TO NON-GAAP NET INCOME |
||||||||||||
(in thousands, except per share amounts) |
||||||||||||
(unaudited) |
||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||
|
|
|||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||
GAAP net income (loss) |
$ |
(4,022) |
$ |
9,640 |
$ |
4,940 |
$ |
13,774 |
||||
Non-GAAP adjustment: |
||||||||||||
Employee stock-based compensation |
1,270 |
893 |
2,076 |
1,775 |
||||||||
In-license upfront costs |
5,500 |
— |
5,500 |
— |
||||||||
Estimated |
10,800 |
— |
10,800 |
— |
||||||||
Non-GAAP net income |
$ |
13,548 |
$ |
10,533 |
$ |
23,316 |
$ |
15,549 |
||||
Non-GAAP basic net income per share |
$ |
0.27 |
$ |
0.20 |
$ |
0.47 |
$ |
0.30 |
||||
Non-GAAP diluted net income per share |
$ |
0.26 |
$ |
0.20 |
$ |
0.44 |
$ |
0.29 |
||||
Weighted average shares used in computing |
||||||||||||
Non-GAAP basic net income per share |
49,929 |
51,620 |
49,947 |
51,788 |
||||||||
Non-GAAP diluted net income per share |
52,552 |
52,812 |
52,426 |
52,987 |
||||||||
SciClone management uses these non-GAAP financial measures to monitor and evaluate the Company's operating results and trends on an on-going basis and internally for operations, budgeting and financial planning purposes. SciClone believes the non-GAAP information is useful for investors by offering them the ability to better understand how management evaluates the business. These non-GAAP measures have limitations, however, because they do not include all items of income and expenses that affect SciClone. These non-GAAP financial measures that management uses are not prepared in accordance with, and should not be considered in isolation of, or as an alternative to, measurements required by GAAP.
SciClone's non-GAAP financial measures exclude the following items from GAAP net income (loss) and net income (loss) per share:
- Employee stock-based compensation. The effects of non-cash employee stock-based compensation.
- In-license upfront costs. SciClone recorded
$5.5 million to R&D expense related to upfront payments incurred under licensing agreements established in the second quarter of 2015. - Estimated
SEC and DOJ investigations loss: The Company has recorded expense representing an estimated probable loss related to its ongoing investigations with theSEC and DOJ which is expected to require future cash settlement.
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UNAUDITED SELECTED BALANCE SHEET DATA |
||||||
(in thousands) |
||||||
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|||||
2015 |
2014 |
|||||
Cash, cash equivalents, and short-term investment |
$ |
93,049 |
$ |
86,303 |
||
Accounts receivable, net |
37,900 |
40,268 |
||||
Inventories |
12,017 |
10,703 |
||||
Goodwill |
34,500 |
34,521 |
||||
Total assets |
195,900 |
181,831 |
||||
Total current liabilities |
35,238 |
26,443 |
||||
Total shareholders' equity |
160,600 |
155,274 |
Corporate Contacts |
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Chief Financial Officer |
Investors/Media |
650.358.3434 |
650.358.1447 |
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