Note 1 - Business Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2015 |
Disclosure Text Block [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | 1. Business Organization and Basis of Presentation |
Description of the Business |
|
Sucampo Pharmaceuticals, Inc., (the Company) is a global biopharmaceutical company focused on the development and commercialization of medicines that meet major unmet medical needs of patients worldwide. |
|
The Company is currently focused on developing compounds known as prostones, which are ion channel activators, to treat gastrointestinal and oncology-based inflammatory disorders. |
|
The Company currently generates revenue primarily from product royalties, development milestone payments, product sales and reimbursements for clinical development activities. The Company expects to continue to incur significant expenses for the next several years as the Company continues its research and development activities, seeks regulatory approvals and additional indications for approved products and other compounds and seeks strategic opportunities for in-licensing non-prostone clinical candidates. |
|
AMITIZA® (lubiprostone) is marketed in the United States (U.S.) for three gastrointestinal indications under the collaboration and license agreement (as amended in October 2014, the North America Takeda Agreement) with Takeda Pharmaceutical Company Limited (Takeda). These indications are chronic idiopathic constipation (CIC) in adults, irritable bowel syndrome with constipation (IBS-C) in adult women and opioid-induced constipation (OIC) in adults suffering from chronic non-cancer related pain. Under the North America Takeda Agreement, the Company is primarily responsible for clinical development activities while Takeda is responsible for commercialization of AMITIZA in the U.S. and Canada. In Canada, the Company has filed a New Drug Submission (NDS) for AMITIZA for the CIC and OIC indications and anticipates a decision in the second half of 2015. In October 2014, the Company and Takeda executed amendments (Takeda Amendment) to the North America Takeda Agreement as well as to the ancillary agreements which, among other things, extended the term of the North America Takeda Agreement beyond December 2020. During the extended term, Takeda and the Company will split the annual net sales revenue of the branded AMITIZA products. In addition, the North America Takeda Agreement was amended to terminate the Company’s right to perform commercialization activities with respect to AMITIZA and Takeda’s obligation to reimburse the Company for such commercialization activities. |
|
In Japan, AMITIZA is marketed under a license, commercialization and supply agreement (the Japan Mylan Agreement) that was purchased by Mylan, Inc. (Mylan) from Abbott Laboratories, Inc. (Abbott), as of February 25, 2015, as part of Mylan’s acquisition of a product portfolio from Abbott. Mylan markets AMITIZA in Japan for the gastrointestinal indication of chronic constipation (CC) excluding constipation caused by organic diseases. AMITIZA is Japan’s only prescription medicine for CC. The Company does not expect any significant changes in the commercialization of AMITIZA in Japan as a result of the transfer of the Japan Mylan Agreement from Abbott to Mylan. |
|
In October 2014, the Company entered into an exclusive license, development, commercialization and supply agreement (the Global Takeda License Agreement) for lubiprostone with Takeda, where Takeda has the exclusive rights to further develop and commercialize AMITIZA in all global markets, except the U.S., Canada, Japan and the People’s Republic of China. In addition, Takeda will become the marketing authorization holder and will be responsible for all commercialization and regulatory activities in the areas covered by the Global License Agreement. In the United Kingdom (U.K.), Takeda markets AMITIZA for CIC and in Switzerland, CIC and OIC. The Company filed for the OIC indication in the U.K., but in March 2014 the Company received notification from the Medicines and Healthcare Products Regulatory Agency (MHRA) that the application for the OIC indication was not approved and we have since resubmitted the application for OIC for re-review to MHRA. The Company currently awaits MHRA’s decision on the OIC indication. In January 2015, the Company successfully completed the European mutual recognition procedure (MRP) for AMITIZA for the treatment of CIC in select European countries, resulting in a recommendation for marketing authorization. As a result of that recommendation, Ireland, Belgium, the Netherlands and Luxembourg have approved AMITIZA for CIC and the Company anticipates receiving approvals by Germany, Italy, Spain and Austria in the second half of 2015. |
|
The Company ceased marketing RESCULA® (unoprostone isopropyl) in the fourth quarter of 2014 and in February 2015, the Company alerted physicians, pharmacists and all wholesalers that after the March 2015 expiration date, there will be no further product available. |
|
The Company’s other clinical development programs include the following: |
|
Lubiprostone Alternate Formulation |
|
The Company is developing an alternate formulation of lubiprostone, both for adult and pediatric patients who are unable to take capsules and for naso-gastric tube fed patients. Takeda is funding 100% of the costs of this alternate formulation work and the Company expects to initiate a phase 3 trial of the alternate formulation of lubiprostone in the second half of 2015. |
|
Lubiprostone for Pediatric Functional Constipation |
|
The phase 3 program required for obtaining marketing approval of lubiprostone for pediatric functional constipation comprises of four clinical trials, two of which are currently ongoing and are both testing the soft gelatin capsule formulation of lubiprostone in patients 6 to 17 years of age. The first of the two trials is a pivotal 12-week, randomized, placebo-controlled trial which was initiated in December 2013. The second trial is a follow-on, long-term safety extension study which was initiated in March 2014. The Company is also evaluating the timing of the initiation of the additional two trials in our phase 3 program for pediatric functional constipation, which will be in children aged 6 months to less than 6 years and will require the alternate formulation of lubiprostone as described above. |
|
Cobiprostone for Oral Mucositis (OM) |
|
The Company completed its phase 1b trial that evaluated the safety and pharmacokinetics of an oral spray formulation of cobiprostone for OM. The results of this phase 1b trial showed that cobiprostone was well-tolerated overall and revealed low systemic exposure. The Company 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 OM in March 2015. The clinical trial is expected to begin at the end of the first half of 2015. The Company had also filed for orphan drug designation in the E.U. but in April 2015 withdrew the application as the target population estimate is too large for the orphan drug status. |
|
Cobiprostone for Non-Erosive Reflux Disease (NERD) |
|
The Company initiated a phase 2 program for cobiprostone in NERD in patients who have had a non-satisfactory response to proton pump inhibitors at the end of 2014. |
|
Unoprostone Isopropyl |
|
In March 2015, the Company announced that it would return all licenses for unoprostone isopropyl to R-Tech Ueno, Ltd (R-Tech). These licenses had provided the Company with exclusive development and commercialization rights to unoprostone isopropyl globally except for Japan, the People’s Republic of China, Taiwan and Korea, and covered certain indications including the lowering of intraocular pressure (IOP) in patients with open-angle glaucoma or ocular hypertension, retinitis pigmentosa and geographic atrophy. On May 1, 2015, the Company and R-Tech executed a transfer and termination agreement to effectuate the return of the licenses as well as regulatory, commercial and pharmacovigilance information. As a result of this agreement, the Company will receive a payment of $2.6 million from R-Tech. |
|
Basis of Presentation |
|
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) and the rules and regulations of the U.S. Securities and Exchange Commission (the SEC) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s Consolidated Financial Statements as of and for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K, which was filed with the SEC on March 9, 2015. The financial information as of March 31, 2015 and for the three months ended March 31, 2015 is unaudited. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. In the opinion of the Company’s management, all adjustments, consisting only of normal recurring adjustments or accruals, considered necessary for a fair statement of the results of these interim periods have been included. The results of the Company’s operations for any interim period are not necessarily indicative of the results that may be expected for any other interim period or for a full fiscal year. |
|
The Condensed Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries: Sucampo AG (SAG) based in Zug, Switzerland, through which the Company conducts certain of its worldwide and European operations; Sucampo Pharma, LLC (SPL) based in Tokyo and Osaka, Japan, through which the Company conducts its Asian operations; Sucampo Pharma Americas LLC, (SPA) based in Bethesda, Maryland, through which the Company conducts its North American operations; and Sucampo Pharma Europe, Ltd., (SPE) based in Oxford, United Kingdom. All significant inter-company balances and transactions have been eliminated. |
|
The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
|
Revisions to Previously Issued Financial Statements |
|
The Company has revised the Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2014 to correct errors in the recognition of indirect taxes at SAG. During that period, the Company overstated its indirect tax liability and understated net income. The Company is including herein the correction of all such immaterial errors that have not been revised in its previous periodic filings. |
|
| | Presentation as of the three months ended March 31, 2014 | |
Consolidated Statements of Operations and Comprehensive Income | | As Previously Reported | | | Revision Adjustment | | | As Revised | |
(In thousands) | | | | | | | | | |
Costs of goods sold | | $ | 3,517 | | | $ | (124 | ) | | $ | 3,393 | |
Income from operations | | | 2,605 | | | | 124 | | | | 2,729 | |
Income before income taxes | | | 1,939 | | | | 124 | | | | 2,063 | |
Income tax provision | | | (1,264 | ) | | | (44 | ) | | | (1,308 | ) |
Net income | | | 675 | | | | 80 | | | | 755 | |
Comprehensive income | | | 564 | | | | 80 | | | | 644 | |
|