FOSTER CITY, CA -- 11/13/2007 -- SciClone Pharmaceuticals, Inc. (NASDAQ: SCLN) today reported results for the third quarter ended September 30, 2007. For the third quarter 2007, product revenues from the sale of ZADAXIN® (thymalfasin), SciClone's lead product, increased by 14% to $9,421,000, compared with revenues of $8,270,000 for the third quarter 2006. For the nine months ended September 30, 2007, product revenues increased by 13% to $27,020,000, compared with product revenues of $23,969,000 for the same period of 2006. The increase in product revenues for the third quarter and nine months ended September 30, 2007 is primarily attributable to an increase in the quantity of ZADAXIN sold in China, which accounted for approximately 92% of total ZADAXIN sales for the quarter.
"Our revenues from the sales of ZADAXIN to China continue to grow as we expand our reach in this important and growing pharmaceutical market," said Friedhelm Blobel, Ph.D., President and Chief Executive Officer of SciClone Pharmaceuticals, Inc. "Simultaneously, we continue to advance our clinical-stage pipeline of products targeting approvals in the United States and Europe as we are on track to begin a phase 2 clinical trial using RP101 to treat pancreatic cancer patients in the fourth quarter of 2007 and a phase 3 clinical trial using thymalfasin to treat malignant melanoma patients in the first quarter of 2008."
Net loss for the third quarter 2007 totaled $3,055,000, or $0.07 per share, compared with $1,306,000, or $0.03 per share, for the third quarter 2006. A higher level of research and development expenditure associated with the initiation of the RP101 clinical trial accounted for the majority of the increase in net loss for the 2007 period. For the nine months ended September 30, 2007, net loss was $6,336,000, or $0.14 per share, compared with net income of $2,230,000, or $0.05 per share, for the same period of 2006. Net income for the nine months ended September 30, 2006 included an $8,000,000 settlement received in April 2006; there was no similar income received during the corresponding periods of 2007.
Research and development expenses for the third quarter 2007 totaled $4,793,000, compared with $3,167,000 for the third quarter 2006. For the nine months ended September 30, 2007, research and development expenses were $11,928,000, compared with $10,897,000 for the same period of 2006.
Cash, cash equivalents and short-term investments totaled $37,516,000 at September 30, 2007, compared with $37,481,000 at June 30, 2007 and $42,073,000 at September 30, 2006.
Financial Guidance for Full Year 2007
SciClone now expects to exceed its previous revenue guidance of $35,000,000 to $36,000,000 driven primarily by the continued growth in sales of ZADAXIN to China. With the planned initiation of the RP101 clinical trial in the fourth quarter SciClone increases its 2007 estimates for research and development expenses from approximately $19,000,000 to $22,000,000 for the full year 2007, and net loss estimate increases from approximately $13,000,000, or $0.28 net loss per share, to $14,000,000, or $0.31 net loss per share for the full year 2007. The guidance for cash, cash equivalents and short-term investments at December 31, 2007 is maintained at approximately $26,000,000.
Recent Highlights
- -- SCV-07 demonstrated positive results in preclinical animal models of
mucositis, lung cancer and malignant melanoma.
- -- SciClone appointed Eric Hoechstetter Vice President of Legal Affairs.
Mr. Hoechstetter brings to SciClone 16 years of legal experience with a
majority focused on international business. At Chiron Corporation he was
Senior Corporate Counsel at the UK headquarters and oversaw all legal
affairs of the Biopharmaceutical Division's European activities as well as
the company's corporate governance activities ex-United States. From 1995
to 2003 he served in legal capacities of increasing responsibility in
Europe for three rapidly growing communications companies, Wanadoo S.A.,
Level (3) Communications Ltd., and Global One Communications S.A. He began
his legal career with White & Case in New York. He earned a Bachelor of
Business Administration from the University of Michigan and a law degree
from Columbia University School of Law.
- -- SciClone presented at the UBS Global Healthcare Conference in
September and will present at the BIO Europe Partnering Conference on
November 14, 2007.
Conference Call
SciClone will host a conference call at 11:00 a.m. ET (8:00 a.m. PT) today, Tuesday, November 13, 2007. The call will contain forward-looking statements. Financial and statistical information to be discussed in the conference call will be posted on the Investor Relations section of SciClone's web site at www.sciclone.com prior to the commencement of the conference call.
DATE: Tuesday, November 13, 2007
TIME: 11:00 a.m. ET (8:00 a.m. PT)
WEBCAST: Live call and replay accessible at www.sciclone.com
LIVE CALL: 888-205-6439 (U.S./Canada)
913-312-1436 (International)
REPLAY: 888-203-1112 (U.S./Canada)
719-457-0820 (International)
Passcode: 8868427
(Replay available from 2:00 p.m. ET on November 13, 2007 through
12:00 a.m. ET on December 13, 2007)
About SciClone
SciClone Pharmaceuticals is a biopharmaceutical company engaged in the development of therapeutics to treat life-threatening diseases. SciClone's lead product ZADAXIN® is currently being evaluated in late-stage clinical trials for the treatment of malignant melanoma and hepatitis C. ZADAXIN is approved for sale in select markets internationally, most notably in China where SciClone has an established sales and marketing operation. A key part of SciClone's strategy is to leverage its advantage and broaden its portfolio in the rapidly growing Chinese market by in-licensing or acquiring the marketing rights to other products, such as DC BeadTM. For the U.S. market, SciClone's clinical-stage drug development candidates are RP101 for the treatment of pancreatic cancer and SCV-07 for the treatment of hepatitis C. For more information about SciClone, visit www.sciclone.com.
The information in this press release contains forward-looking statements including our expectations and beliefs regarding future sales and financial results for 2007, and progress and results of our clinical trials. Words such as "expects," "plans," "believe," "may," "will," "anticipated," "intended" and variations of these words or similar expressions are intended to identify forward-looking statements. In addition, any statements that refer to expectations, goals, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors, including changes in demand for ZADAXIN, the progress or failure of clinical trials, our actual experience in executing on our objectives, the performance of our partners, maintenance of the sufficiency and eligibility of the enrolled patient population, unanticipated delays or additional expenses incurred during our clinical trials, our future cash requirements, delays in analyzing and synthesizing data obtained from clinical trials, the performance and future actions of our strategic partners, unexpected delays in clinical trial enrollment, future actions by the U.S. Food and Drug Administration or equivalent regulatory authorities in Europe and the fact that experimental data and clinical results derived from studies with a limited group of patients may not be predictive of the results of larger studies, as well as other risks and uncertainties described in SciClone's filings with the Securities and Exchange Commission. Further, although our financial guidance is based on our current estimates, factors such as the actual timeline and design of the phase 3 melanoma clinical trial and final decisions regarding expense sharing arrangements for the trial could alter the estimates of our research and development expenses, net loss and year end cash balance for 2007.
SCICLONE PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2007 2006 2007 2006
=========== =========== =========== ===========
Product sales $ 9,421,000 $ 8,270,000 $27,020,000 $23,969,000
Contract revenue 20,000 26,000 20,000 170,000
----------- ----------- ----------- -----------
Total revenues 9,441,000 8,296,000 27,040,000 24,139,000
Cost of product sales 1,663,000 1,616,000 4,978,000 4,555,000
----------- ----------- ----------- -----------
Gross margin 7,778,000 6,680,000 22,062,000 19,584,000
Operating expenses:
Research and
development 4,793,000 3,167,000 11,928,000 10,897,000
Sales and marketing 3,805,000 3,011,000 9,968,000 8,686,000
General and
administrative 2,594,000 2,283,000 7,648,000 6,964,000
----------- ----------- ----------- -----------
Total operating expenses 11,192,000 8,461,000 29,544,000 26,547,000
----------- ----------- ----------- -----------
Loss from operations (3,414,000) (1,781,000) (7,482,000) (6,963,000)
Interest and investment
income 408,000 492,000 1,280,000 1,290,000
Interest and investment
expense 0 (9,000) (20,000) (72,000)
Other (expense) income,
net(1) (8,000) (8,000) (24,000) 7,975,000
----------- ----------- ----------- -----------
(Loss) income before
provision for income
tax (3,014,000) (1,306,000) (6,246,000) 2,230,000
Provision for income tax 41,000 - 90,000 -
----------- ----------- ----------- -----------
Net (loss) income $(3,055,000) $(1,306,000) $(6,336,000) $ 2,230,000
=========== =========== =========== ===========
(Loss) earnings per share:
Basic net (loss)
income per share $ (0.07) $ (0.03) $ (0.14) $ 0.05
Diluted net (loss)
income per share $ (0.07) $ (0.03) $ (0.14) $ 0.05
Weighted average shares
used in computing:
Basic net (loss)
income per share 46,114,562 45,899,874 46,094,152 45,897,162
Diluted net (loss)
income per share 46,114,562 45,899,874 46,094,152 46,057,217
(1) For the nine-month period ended September 30, 2006, other income
included $8,000,000 from the settlement of a clinical trial dispute.
SCICLONE PHARMACEUTICALS, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
September 30, December 31,
2007 2006
============= =============
(unaudited)
Current assets:
Cash and cash equivalents $ 30,506,000 $ 25,615,000
Restricted short-term investments 704,000 698,000
Other short-term investments 6,306,000 16,279,000
Accounts receivable, net of allowance of
$15,000 at September 30, 2007 and
$50,000 at December 31, 2006 13,719,000 13,277,000
Inventories 4,184,000 3,232,000
Prepaid expenses and other current assets 1,811,000 1,865,000
------------- -------------
Total current assets 57,230,000 60,966,000
Property and equipment, net 770,000 297,000
Intangible assets, net 350,000 402,000
Other assets 1,023,000 919,000
Restricted long-term investment 414,000 -
------------- -------------
Total assets $ 59,787,000 $ 62,584,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,442,000 $ 963,000
Accrued compensation and employee benefits 1,486,000 1,813,000
Accrued professional fees 971,000 754,000
Other accrued expenses 2,011,000 2,487,000
Accrued clinical trials expense 2,160,000 1,803,000
Deferred revenue - 62,000
Other current liabilities 32,000 -
------------- -------------
Total current liabilities 9,102,000 7,882,000
Long-term liabilities 340,000 68,000
Commitments and contingencies
Stockholders' equity:
Preferred stock; $0.001 par value;
10,000,000 shares authorized; no shares
outstanding in 2007 and 2006 - -
Common stock; $0.001 par value; 75,000,000
shares authorized; 46,114,562 and 46,001,249
shares issued and outstanding at September
30, 2007 and December 31, 2006,
respectively 46,000 46,000
Additional paid-in capital 215,070,000 213,064,000
Accumulated other comprehensive income 119,000 78,000
Accumulated deficit (164,890,000) (158,554,000)
------------- -------------
Total stockholders' equity 50,345,000 54,634,000
------------- -------------
Total liabilities and stockholders' equity $ 59,787,000 $ 62,584,000
============= =============
SCICLONE PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
2007 2006
============ ============
Operating activities:
Net (loss) income $ (6,336,000) $ 2,230,000
Adjustments to reconcile net (loss) income to
net cash (used in) provided by operating
activities:
Non cash expense related to employee stock
options 1,712,000 1,864,000
Amortization of interest on investments
held-to-maturity 48,000 (86,000)
Depreciation and amortization 175,000 173,000
Loss from disposal of property and equipment 1,000 -
Changes in operating assets and liabilities:
Accounts receivable, net (442,000) (3,940,000)
Inventories (883,000) 338,000
Prepaid expenses and other assets (50,000) 529,000
Accounts payable and other accrued
expenses 1,003,000 596,000
Accrued compensation and employee
benefits (327,000) (540,000)
Accrued clinical trials expenses 357,000 (34,000)
Accrued professional fees 217,000 416,000
Other current liabilities 2,000 -
Deferred revenue (62,000) (177,000)
Long-term liabilities 96,000 (29,000)
------------ ------------
Net cash (used in) provided by operating
activities (4,489,000) 1,340,000
------------ ------------
Investing activities:
Purchases of property and equipment (391,000) (68,000)
Sales (purchases) of short-term investments,
net 9,929,000 (204,000)
Purchases of restricted long-term investment (400,000) -
------------ ------------
Net cash provided by (used in) investing
activities 9,138,000 (272,000)
------------ ------------
Financing activities:
Proceeds from issuances of common stock 225,000 44,000
Repayment of notes payable - (1,600,000)
------------ ------------
Net cash provided by (used in) financing
activities 225,000 (1,556,000)
------------ ------------
Effect of exchange rate changes on cash and
cash equivalents 17,000 -
Net increase (decrease) in cash and cash
equivalents 4,891,000 (488,000)
Cash and cash equivalents, beginning of period 25,615,000 25,845,000
------------ ------------
Cash and cash equivalents, end of period $ 30,506,000 $ 25,357,000
============ ============
Corporate Contact Richard Waldron Executive Vice President and Chief Financial Officer SciClone Pharmaceuticals, Inc. 650-358-3437