SciClone Reports Results for the First Quarter 2008Revenues Increase 23% for First Quarter 2008; Final Data From Phase 3 HCV Trial Expected in the Third Quarter 2008
FOSTER CITY, CA -- 05/08/2008 -- SciClone Pharmaceuticals, Inc. (NASDAQ: SCLN) today reported results for the first quarter ended March 31, 2008.
"Over the course of the first quarter, product revenues from ZADAXIN® sales increased 23% to exceed $10 million, and for the first time, we are providing quarterly financial data for SciClone China to quantify the value of this unique asset," said Friedhelm Blobel, Ph.D., President and Chief Executive Officer of SciClone Pharmaceuticals, Inc. "In the United States and Europe, we advanced our pipeline of development-stage compounds by initiating our phase 2 RP101 clinical trial for pancreatic cancer and continuing enrollment in the phase 2 SCV-07 proof-of-concept trial in hepatitis C (HCV). In addition, we look forward to unblinding and reporting final data for our phase 3 trial evaluating thymalfasin in triple therapy to treat patients infected with HCV who have not responded to standard therapy in the third quarter of 2008."
Financial Results
For the first quarter 2008, product revenues from the sale of ZADAXIN increased by 23% to $10,634,000, compared with product revenues of $8,644,000 for the first quarter 2007. The increase in product revenues for the first quarter 2008 is primarily attributable to an increase in the quantity of ZADAXIN sold in the People's Republic of China ("China"), which accounted for approximately 94% of total ZADAXIN sales for the quarter.
Research and development expenses for the first quarter 2008, including related party research and development, totaled $7,549,000, compared with $2,423,000 for the first quarter 2007. The increase was due to expenses associated with clinical development activities for RP101, SCV-07, and thymalfasin and includes a $1.3 million milestone payment paid to RESprotect GmbH upon initiation of the phase 2 RP101 clinical trial. General and administrative expenses for the first quarter 2008 were $3,021,000, compared with $2,610,000 for the first quarter of 2007.
Net loss for the first quarter 2008 totaled $5,659,000, or $0.12 per share, compared with $624,000, or $0.01 per share, for the first quarter 2007.
Cash, cash equivalents and short-term investments totaled $25,767,000 at March 31, 2008, compared with $35,281,000 at December 31, 2007 and $38,986,000 at March 31, 2007.
SciClone China Quarterly Financial Data
For the first quarter of 2008, SciClone China generated product revenues of $9,990,000 from sales of ZADAXIN, a 26% increase compared with $7,918,000 of product revenues for the first quarter 2007. SciClone China operating income for the first quarter of 2008 was $4,807,000. These SciClone China results are provided on a GAAP basis and exclude inter-company expenses. Inter-company expenses payable to the Company from SciClone China were $597,000 in the first quarter.
Recent Highlights
- -- SciClone presented a corporate overview at several investor
conferences.
- -- SciClone hosted symposia at the European Association for the Study of
the Liver and the Asian Pacific Association for the Study of the Liver
where medical experts presented the benefits and use of thymalfasin for the
treatment of hepatitis B, hepatitis C, and liver cancer.
- -- SciClone Pharmaceuticals International Ltd. (SPIL) received approval
from the Russian Ministry of Health and Social Development to commercialize
ZADAXIN for treatment of hepatitis B and hepatitis C. SPIL expects to
record initial sales of ZADAXIN in Russia during the second quarter of
2008.
Financial Guidance for 2008
For the full year 2008, SciClone expects product revenues of $42 million to $44 million, a 14 to 19% increase compared with revenues of $37 million for 2007, primarily due to the continued growth of ZADAXIN sales to China. SciClone expects research and development expenses of approximately $27 million for 2008, of which approximately $12 million relate to the ongoing phase 2 pancreatic cancer clinical trial for RP101. Beyond 2008, the Company expects a substantial reduction in expenses required to complete the phase 2 RP101 clinical trial. For the full year 2008, SciClone expects net loss to be $17 million to $19 million, or $0.38 to $0.41 per share, and expects to end 2008 with $10 million in cash, cash equivalents, and short-term investments.
For SciClone China, SciClone expects product revenues of between $40 million to $42 million and operating income of $16 million to $18 million for the full year 2008.
Conference Call
SciClone will host a conference call at 11:00 a.m. ET (8:00 a.m. PT) today, Thursday, May 8, 2008. Management will review its operating results for the first quarter 2008 and give a business update. A live webcast can be accessed by visiting the Investor Relations section of SciClone's website at www.sciclone.com.
DATE: Thursday, May 8, 2008
TIME: 11:00 a.m. ET (8:00 a.m. PT)
WEBCAST: Live call and replay accessible at www.sciclone.com
LIVE CALL: 877-419-6600 (U.S./Canada)
719-325-4896 (International)
REPLAY: 888-203-1112 (U.S./Canada)
719-457-0820 (International)
Passcode: 2400325
(Replay and available from 2:00 p.m. ET on May 8, 2008
through 11:59 p.m. ET on June 6, 2008)
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 a late-stage clinical trial for the treatment of hepatitis C, and successfully completed a phase 2 clinical trial in malignant melanoma. 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 Bead™. For the U.S. market, SciClone's other 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 2008, and progress, timing 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, 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 2008.
SCICLONE PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
March 31,
2008 2007
============ ============
Product sales $ 10,634,000 $ 8,644,000
Cost of product sales 1,967,000 1,628,000
------------ ------------
Gross margin 8,667,000 7,016,000
Operating expenses:
Research and development 7,422,000 2,296,000
Related party research and development 127,000 127,000
Sales and marketing 3,948,000 3,024,000
General and administrative 3,021,000 2,610,000
------------ ------------
Total operating expenses 14,518,000 8,057,000
------------ ------------
Loss from operations (5,851,000) (1,041,000)
Interest and investment income 261,000 453,000
Interest and investment expense - (10,000)
Other income (expense), net 37,000 (5,000)
------------ ------------
Loss before provision for income tax (5,553,000) (603,000)
Provision for income tax 106,000 21,000
------------ ------------
Net loss $ (5,659,000) (624,000)
============ ============
Basic and diluted net loss per share $ (0.12) $ (0.01)
Weighted average shares used in computing
basic and diluted net loss per share 46,190,046 46,073,995
SCICLONE PHARMACEUTICALS, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, December 31,
2008 2007
============ ============
(unaudited)
Current assets:
Cash and cash equivalents $ 25,157,000 $ 31,817,000
Restricted short-term investments 78,000 72,000
Other short-term investments 532,000 3,392,000
Accounts receivable, net of allowance of
$15,000 at March 31, 2008 and
December 31, 2007 14,078,000 12,650,000
Inventories 5,466,000 5,579,000
Prepaid expenses and other current assets 2,946,000 2,949,000
------------ ------------
Total current assets 48,257,000 56,459,000
Property and equipment, net 730,000 774,000
Intangible assets, net 315,000 332,000
Long-term investments 1,713,000 -
Other assets 1,025,000 1,094,000
------------ ------------
Total assets $ 52,040,000 $ 58,659,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,495,000 $ 1,937,000
Accrued compensation and employee benefits 1,202,000 1,758,000
Accrued professional fees 782,000 699,000
Other accrued expenses 3,077,000 3,394,000
Accrued clinical trials expense 1,313,000 1,614,000
Accrued clinical trials expense due to
related party 1,747,000 1,620,000
Deferred revenue 26,000 37,000
------------ ------------
Total current liabilities 9,642,000 11,059,000
Other long-term liabilities 203,000 341,000
Commitments and contingencies
Stockholders' equity:
Preferred stock; $0.001 par value; 10,000,000
shares authorized; no shares outstanding - -
Common stock; $0.001 par value; 75,000,000
shares authorized; 46,219,562
and 46,121,562 shares issued and
outstanding at March 31, 2008
and December 31, 2007, respectively 46,000 46,000
Additional paid-in capital 216,288,000 215,633,000
Accumulated other comprehensive income 22,000 82,000
Accumulated deficit (174,161,000) (168,502,000)
------------ ------------
Total stockholders' equity 42,195,000 47,259,000
------------ ------------
Total liabilities and stockholders' equity $ 52,040,000 $ 58,659,000
============ ============
SCICLONE PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended
March 31,
2008 2007
============ ============
Operating activities:
Net loss $ (5,659,000) $ (624,000)
Adjustments to reconcile net loss
to net cash used in operating activities:
Non cash expense related to employee stock
options 497,000 588,000
Amortization of interest on investments
held-to-maturity - (51,000)
Depreciation and amortization 76,000 54,000
Changes in operating assets and liabilities:
Accounts receivable, net (1,428,000) (2,622,000)
Inventories 125,000 (299,000)
Prepaid expenses and other assets 72,000 (61,000)
Accounts payable and other accrued expenses (759,000) 472,000
Accrued compensation and employee benefits (556,000) (789,000)
Accrued clinical trials expenses (301,000) -
Accrued clinical trials expense due to
related party 127,000 (359,000)
Accrued professional fees 83,000 (100,000)
Deferred revenue (11,000) (57,000)
Long-term liabilities (138,000) 29,000
------------ ------------
Net cash used in operating activities (7,872,000) (3,819,000)
------------ ------------
Investing activities:
Purchases of property and equipment (15,000) (6,000)
Sales (purchases) of short-term investments 1,025,000 (57,000)
------------ ------------
Net cash provided by (used in) investing
activities 1,010,000 (63,000)
------------ ------------
Financing activities:
Proceeds from issuances of common stock, 146,000 166,000
------------ ------------
Net cash provided by financing activities 146,000 166,000
------------ ------------
Effect of exchange rate changes on cash and
cash equivalents 56,000 -
------------ ------------
Net decrease in cash and cash equivalents (6,660,000) (3,716,000)
Cash and cash equivalents, beginning of period 31,817,000 25,615,000
------------ ------------
Cash and cash equivalents, end of period $ 25,157,000 $ 21,899,000
============ ============
Corporate Contact:
Friedhelm Blobel, Ph.D.
President and Chief Executive Officer
SciClone Pharmaceuticals, Inc.
650-358-3437
