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FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________________to ______________________
Commission file number: 0-19825
SCICLONE PHARMACEUTICALS, INC.
------------------------------
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-3116852
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(State or other jurisdiction of (I.R.S. employer
incorporation or organization) Identification no.)
901 MARINER'S ISLAND BLVD., SUITE 205, SAN MATEO, CALIFORNIA 94404
------------------------------------------------------------ -----
(Address of principal executive offices) (Zip code)
(650) 358-3456
(Registrant's telephone number, including area code)
NOT APPLICABLE
--------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
As of October 31, 2000, 31,832,335 shares of the registrant's
Common Stock, no par value, were issued and outstanding.
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SCICLONE PHARMACEUTICALS, INC.
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
- ------- --------------------- --------
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of September 30,
2000 and December 31, 1999 3
Condensed Consolidated Statements of Operations for the
Three month and Nine-month periods ended September 30,
2000 and 1999 4
Condensed Consolidated Statements of Cash Flows for the
Nine-month periods ended September 30, 2000 and 1999 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk 21
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds 22
Item 6. Exhibits and Reports on Form 8-K 23
Signatures 24
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PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SCICLONE PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
September 30, December 31,
2000 1999
------------- -------------
(unaudited) (Note 1)
Current assets:
Cash and cash equivalents $ 17,542,000 $ 1,828,000
Short-term investments 9,000 1,793,000
Accounts receivable, net 9,423,000 4,343,000
Inventory 1,706,000 1,081,000
Prepaid expenses and other current assets 664,000 685,000
Assets available-for sale 1,184,000 1,184,000
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Total current assets 30,528,000 10,914,000
Property and equipment, net 244,000 235,000
Other assets 1,682,000 1,975,000
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Total assets $ 32,454,000 $ 13,124,000
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,971,000 $ 825,000
Accrued compensation and benefits 693,000 730,000
Accrued clinical trials expense 1,082,000 258,000
Accrued professional fees 756,000 865,000
Other accrued expenses 71,000 203,000
Other current liabilities 932,000 942,000
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Total current liabilities 5,505,000 3,823,000
Shareholders' equity:
Common stock, no par value; 75,000,000 shares authorized;
31,752,335 and 25,258,395 shares issued and outstanding at
September 30, 2000 and December 31, 1999, respectively 143,571,000 124,328,000
Net unrealized gain on available-for-sale securities 7,000 2,000
Accumulated deficit (116,629,000) (115,029,000)
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Total shareholders' equity 26,949,000 9,301,000
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Total liabilities and shareholders' equity $ 32,454,000 $ 13,124,000
============= =============
See notes to condensed consolidated financial statements
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SCICLONE PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three months ended Nine months ended
September 30, September 30,
2000 1999 2000 1999
------------ ------------ ------------ ------------
Product revenue $ 4,675,000 $ 2,513,000 $ 12,380,000 $ 6,091,000
Contract revenue -- -- -- 307,000
------------ ------------ ------------ ------------
Total revenue 4,675,000 2,513,000 12,380,000 6,398,000
Cost of product sales 914,000 429,000 2,497,000 1,185,000
------------ ------------ ------------ ------------
Gross profit 3,761,000 2,084,000 9,883,000 5,213,000
Operating expenses:
Research and development 1,340,000 836,000 3,896,000 3,639,000
Marketing 2,204,000 1,548,000 6,156,000 4,305,000
General and administrative 659,000 541,000 2,199,000 2,313,000
------------ ------------ ------------ ------------
Total operating expenses 4,203,000 2,925,000 12,251,000 10,257,000
------------ ------------ ------------ ------------
Loss from operations (442,000) (841,000) (2,368,000) (5,044,000)
Interest and investment income, net 305,000 44,000 768,000 113,000
------------ ------------ ------------ ------------
Net loss $ (137,000) $ (797,000) $ (1,600,000) $ (4,931,000)
============ ============ ============ ============
Net loss per common share (basic &
diluted) $ (0.00) $ (0.03) $ (0.05) $ (0.23)
============ ============ ============ ============
Weighted average shares used in
computing per share amounts 31,685,177 24,384,502 29,766,480 21,694,890
============ ============ ============ ============
See notes to condensed consolidated financial statements
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SCICLONE PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Nine months ended
September 30,
2000 1999
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OPERATING ACTIVITIES:
Net loss $ (1,600,000) $ (4,931,000)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization 219,000 141,000
Changes in operating assets and liabilities:
Prepaid expenses and other assets 8,000 531,000
Accounts receivable (5,081,000) (2,323,000)
Inventory (625,000) 499,000
Accounts payable and other accrued expenses 1,005,000 (100,000)
Accrued compensation and benefits (37,000) 141,000
Accrued clinical trials expense 823,000 (1,987,000)
Accrued professional fees (109,000) 74,000
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Net cash used in operating activities (5,397,000) (7,955,000)
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INVESTING ACTIVITIES:
Disposal and purchase of property and equipment 79,000 (24,000)
Sale (purchase) of marketable securities, net 1,789,000 (1,203,000)
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Net cash provided by (used in) investing activities 1,868,000 (1,227,000)
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FINANCING ACTIVITIES:
Proceeds from issuance of common stock net of financing cost 19,243,000 6,565,000
Payment on notes receivable from officer -- 235,000
------------ ------------
Net cash provided by financing activities 19,243,000 6,800,000
------------ ------------
Net increase (decrease) in cash and cash equivalents 15,714,000 (2,382,000)
Cash and cash equivalents, beginning of period 1,828,000 3,490,000
------------ ------------
Cash and cash equivalents, end of period $ 17,542,000 $ 1,108,000
============ ============
Supplemental disclosures of non-cash financing activities:
Issuance of common stock as payment in lieu for accrued
compensation and benefits -- $ 565,000
See notes to condensed consolidated financial statements
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SCICLONE PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. The accompanying unaudited consolidated financial statements have been
prepared in conformity with generally accepted accounting principles
consistent with those applied in, and should be read in conjunction
with, the audited financial statements for the year ended December 31,
1999. The interim financial information reflects all normal recurring
adjustments which are, in the opinion of management, necessary for a
fair presentation of the results for the interim periods presented. The
balance sheet data at December 31, 1999 is derived from the audited
financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. The interim results are
not necessarily indicative of results for subsequent interim periods or
for the full year.
2. In June 1998, the Financial Accounting Standards Board issued Statement
No. 133, "Accounting for Derivative Instruments and Hedging Activities"
("SFAS 133"), which is required to be adopted for the year ending
December 31, 2001. Management does not anticipate that the adoption of
SFAS 133 will have a significant impact on results of operations or the
financial position of the Company.
3. In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements" ("SAB 101"). This bulletin summarizes certain areas of the
staff's views in applying generally accepted accounting principles to
revenue recognition in financial statements. SAB 101 is required to be
adopted in the quarter ended December 31, 2000. The Company is currently
evaluating the impact of SAB 101 on its results of operations and
financial position.
4. For the nine-month periods ended September 30, 2000 and 1999, the
Company's total comprehensive loss amounted to $(1,596,000) and
$(4,940,000), respectively.
5. The following is a summary of inventories at September 30, 2000:
Raw materials $1,592,000
Finished goods 114,000
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$1,706,000
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6. The following is a summary of other assets at September 30, 2000:
Intangible product rights - net $1,603,000
Other 79,000
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$1,682,000
==========
ZADAXIN product rights that the Company acquired are being amortized
over six years beginning in September 1998. The Company identifies and
records impairment losses, as circumstances dictate, on intangible
product rights when events and circumstances indicate that the assets
might be impaired and the undiscounted cash flows estimated to be
generated by those assets are less than the carrying amounts of those
assets.
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7. For the three-month period ended September 30, 2000, the Company
received approximately $98,000 in connection with exercises of
outstanding options to purchase 72,821 shares of common stock.
8. The Company does not have any minimum purchase requirements under its
contract manufacturing supply agreements for ZADAXIN(R) and CPX.
9. The Company recognizes revenue from product sales to its distributors at
the time of shipment when legal title to the products is transferred to
them. The Company's distributors do not have a contractual right of
return. The Company recognizes contract/grant revenue when services have
been performed.
10. The Company accounts for equity instruments issued to non-employees in
accordance with the provisions of SFAS 123 and Emerging Issues Task
Force ("EITF") 96-18. Warrants issued in connection with equity and debt
arrangements are valued using the Black-Scholes option valuation model.
Warrants issued to placement agents and similar parties in connection
with equity financing efforts are accounted as stock issuance cost with
an equal amount recorded as additional paid-in capital. Warrants issued
to purchasers of the Company's equities are not specifically accounted
for as their value is a sub-component of additional paid-in capital. The
fair value of warrants issued in connection with debt arrangements, if
material, is accounted for as a debt discount and amortized as
additional interest expense over the term of the related debt.
11. Net loss per share is computed using the weighted average number of
shares of common stock outstanding. Common equivalent shares from stock
options and warrants are excluded, as their effect is antidilutive.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
The following discussion and analysis of our financial condition and
results of operations should be read in conjunction with our consolidated
financial statements and related notes appearing elsewhere in this report. This
discussion and analysis contains forward-looking statements that involve risks,
uncertainties and assumptions. The actual results may differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, such as those set forth under "Risk Factors" and the risks discussed in
our other SEC filings, including our Annual Report on Form 10-K filed March 30,
2000 with the SEC.
OVERVIEW
SciClone Pharmaceuticals, Inc. is a global specialty biopharmaceutical
company that acquires, develops and commercializes novel medicines for treating
a broad range of the world's most serious diseases. We believe the significance,
prevalence and diversity of our disease targets, and the known limitations of
current treatment alternatives, have created a compelling need for improved
therapies, with novel medicines often enjoying premium pricing and rapid market
acceptance. Our product development and commercial activities are focused on
this large, unmet market need. Specifically, we have focused our current product
development and commercial activities on the following diseases:
- hepatitis C, an infectious disease affecting 170 million people
worldwide;
- hepatitis B, an infectious disease affecting 350 million people
worldwide;
- hepatocellular carcinoma, the most common and deadliest form of liver
cancer worldwide;
- malignant melanoma, the deadliest form of skin cancer and one of the
most rapidly increasing types of cancer worldwide;
- HIV, the virus that causes AIDS;
- drug-resistant tuberculosis, an infectious disease reaching pandemic
proportions worldwide; and
- cystic fibrosis, the most common fatal genetic disease among
Caucasians.
Our flagship drug is ZADAXIN(R), an immunotherapy. ZADAXIN boosts the
body's immune system in its fight against multiple types of cancer and
infectious diseases. In the U.S., Europe and Japan, the world's largest
pharmaceutical markets, ZADAXIN is in, or is expected to enter, phase 2 and
phase 3 development targeting four diseases: hepatitis C, hepatitis B,
hepatocellular carcinoma and malignant melanoma. ZADAXIN has been administered
to over 3,000 subjects in over 70 clinical trials covering a broad range of life
threatening diseases and an estimated 7,000 patients commercially with virtually
no serious drug related side effects.
Unlike most biotechnology companies, we are currently selling our lead
drug -- ZADAXIN. ZADAXIN is approved for sale in Italy and 19 emerging markets
in Asia, Latin America and the Middle East, principally for the treatment of
hepatitis C and hepatitis B, and as a vaccine adjuvant for patients with
weakened immune systems. Total ZADAXIN sales for 1999 were $9,100,000, a 151%
increase over 1998 sales of $3,600,000, and for the nine-months ended
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September 30, 2000, sales were $12,400,000, a 103% increase over sales of
$6,100,000 in the nine months ended September 30, 1999.
Our second product in clinical development, CPX, is a novel, orally
available, protein-repair therapy for cystic fibrosis, the most common fatal
genetic disease among Caucasians. Currently approved drugs treat only the
symptoms of cystic fibrosis, not the underlying cause of the disease. CPX, which
we in-licensed from the United States National Institutes of Health, is designed
to repair the underlying protein-associated defect that is responsible for
cystic fibrosis in over 70% of the patients that suffer from this disease, not
just the symptoms of the disease. CPX is currently undergoing phase 2
development in the U.S.
Additional preclinical drug candidates include SCV-07, the lead orally
active compound in our new class of immunotherapies, and DAX, a potential second
generation protein-repair therapy. We expect to develop SCV-07 for
drug-resistant tuberculosis, cancer and hepatitis. DAX is targeted at cystic
fibrosis.
From commencement of our operations in 1989 through September 30, 2000,
we had incurred a cumulative net loss of approximately $116,600,000. We expect
our operating expenses to increase over the next several years consistent with
our expansion of sales, research and development, and preclincial and clinical
testing. Our ability to expand our operations or achieve and sustain
profitability is dependent in part on successful expansion of the market for
ZADAXIN in Asia, Latin America and the Middle East, obtaining additional
regulatory approvals for ZADAXIN and/or future products in the U.S., Europe and
Japan, entering into additional strategic arrangements for product development
and commercialization, where appropriate, obtaining additional financing to
support our long-term product development and commercialization efforts, and
continuing to transition from a development operation into a successful
marketing and development operation.
Our operating results may fluctuate from period to period as a result
of, among other things, market acceptance of ZADAXIN, the timing and costs
associated with preclinical and clinical development of our products,
particularly ZADAXIN, the regulatory approval process, and the acquisition of
additional product rights.
RESULTS OF OPERATIONS
Total revenue was approximately $4,675,000 and $12,380,000 for the
three-month and nine-month periods ended September 30, 2000, as compared to
approximately $2,513,000 and $6,398,000 for the corresponding periods in 1999.
For the nine-month period ended September 30, 2000, all of our total revenue was
derived from sales of ZADAXIN. For the nine-month period ended September 30,
1999, $307,000 of the $6,398,000 was contract revenue. For the three-month
period ended September 30, 2000, China, serviced by the four regional
distributors, accounted for 91% of our ZADAXIN sales. We experienced an
extraordinary sales growth in China in the period ended September 30, 2000 due
to increased interest in ZADAXIN, particularly as an addition to the drugs used
in the treatment of certain cancers as a result of recent clinical studies and
marketing initiatives. We have received ZADAXIN marketing approval in 20
countries, but we have not yet commercially launched ZADAXIN in all of these
countries. China is the largest market in the world for hepatitis B therapies.
We expect ZADAXIN sales in China to continue to grow, year on year. However,
over time, as we sell ZADAXIN in other regions, we expect revenues from China to
decrease as a percentage of our total revenues. We have filed for approval to
market ZADAXIN in 17 additional countries. As a result, if we are able to
increase sales of ZADAXIN in existing markets, and commence sales of ZADAXIN in
new markets once we have secured the requisite regulatory approvals, we expect
our product revenue to continue to increase in 2000 and 2001. Our strategy of
marketing ZADAXIN in targeted international markets is designed to generate
revenues that will contribute
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to the costs of long-term product development, including those in the U.S.,
Europe and Japan. However, because the level of ZADAXIN sales in newly approved
markets and increased sales in existing markets is dependent upon a number of
factors, including our long-term product development and commercialization
efforts, particularly those in the U.S., Europe and Japan, approved pricing
levels, increased market penetration, additional marketing approvals and
successful launch activities, we cannot assure you that our product revenue will
increase in 2000 and 2001.
Cost of product sales was approximately $914,000 and $2,497,000 for the
three-month and nine-month periods ended September 30, 2000, as compared to
approximately $429,000 and $1,185,000 for the corresponding periods in 1999. The
increase was attributable to increased ZADAXIN sales. We expect cost of product
sales to vary from quarter to quarter, dependent upon the level of ZADAXIN
sales, the absorption of fixed product-related costs, and any charges associated
with excess or expiring finished product.
Research and development expenses were approximately $1,340,000 and
$3,896,000 for the three-month and nine-month periods ended September 30, 2000,
as compared to approximately $836,000 and $3,639,000 for the corresponding
periods in 1999. The increase was primarily attributable to increases in
clinical trial expenses, legal fees and professional services partially offset
by decreased payroll expenses. We expect product research and development
expenses to increase in absolute dollars quarter to quarter as we execute our
strategies of initiating additional clinical trials and testing, particularly
trials relating to ZADAXIN in the U.S. and Japan, acquiring product rights, and
continuing and expanding regulatory activities.
Marketing expenses were approximately $2,204,000 and $6,156,000 for the
three-month and nine-month periods ended September 30, 2000, as compared to
approximately $1,548,000 and $4,305,000 for the corresponding periods in 1999.
The increase relates to increased payroll expenses and expenses for advertising
associated with the expansion in our existing ZADAXIN markets. We expect our
marketing expenses to increase in absolute dollars as we continue to expand our
commercialization and marketing efforts and strategic relationships.
General and administrative expenses were approximately $659,000 and
$2,199,000 for the three-month and nine-month periods ended September 30, 2000,
as compared to approximately $541,000 and $2,313,000 for the corresponding
periods in 1999. The increase in the comparable three-month period was primarily
attributable to increased fees for professional services and increased payroll
expenses. The decrease in the nine-month period is primarily attributable to
decreased payroll, legal and consulting expenses, partially offset by increased
fees for other professional services. In the near term, we expect general and
administrative expenses to increase in absolute dollars quarter to quarter as we
initiate and continue additional clinical trials and testing, particularly
ZADAXIN trials in the U.S. and Japan, and regulatory, pre-commercialization and
marketing activities.
Net interest and investment income was approximately $305,000 and
$768,000 for the three-month and nine-month periods ended September 30, 2000, as
compared to approximately $44,000 and $113,000 for the corresponding period in
1999. The increase primarily resulted from increased interest and investment
income due to higher average invested cash balances.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2000 and 1999, we had approximately $17,551,000 and
$4,222,000, respectively, in cash, cash equivalents and marketable securities.
The marketable securities consist primarily of highly liquid short-term
investments.
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Net cash used by us in operating activities amounted to approximately
$5,397,000 for the nine-month period ended September 30, 2000. Net cash used in
operating activities in the 2000 period was greater than our net loss for that
period due to increases in accounts receivable and decreases in accrued
compensation and benefits and accrued professional fees. These uses of cash from
increased ZADAXIN sales were partially offset by non-cash charges associated
with depreciation and amortization, and increases in accounts payable. Net cash
used by us in operating activities amounted to approximately $7,955,000 for the
nine-month period ended September 30, 1999. Net cash used in operating
activities in the 1999 period was greater than our net loss for that period due
to increases in accounts receivable from increased ZADAXIN sales and decreases
in amounts owed to third parties for clinical trials, accounts payable and other
accrued expenses.
Net cash provided by investing activities amounted to approximately
$1,868,000 for the nine-month period ended September 30, 2000 and related to the
net sale of approximately $1,789,000 of marketable securities and the disposal
of approximately $79,000 in equipment and furniture. Net cash used in investing
activities amounted to approximately $1,227,000 for the nine-month period ended
September 30, 1999 and related to the net purchase of approximately $1,203,000
of marketable securities and the purchase of approximately $24,000 in equipment
and furniture.
Net cash provided by financing activities for the nine-month period
ended September 30, 2000 amounted to approximately $19,243,000 in net proceeds,
approximately $5,611,000 of which related to a private placement of common stock
and redeemable warrants to institutional investors, approximately $8,606,000
from the exercise of outstanding redeemable warrants to purchase common stock by
institutional and accredited investors, approximately $148,000 in net proceeds
from the issuance of common stock under our employee stock purchase plan,
approximately $3,100,000 in net proceeds from a private placement to Sigma-Tau,
our European ZADAXIN development and marketing partner, and approximately
$1,778,000 in connection with exercises of outstanding options under our
employee stock option plans. Net cash provided by financing activities for the
nine-month period ended September 30, 1999 amounted to approximately $6,800,000,
primarily consisting of $5,445,000 in net proceeds received from the issuance of
common stock and redeemable warrants to institutional and accredited investors,
payment in full of $235,000 on a note receivable from an officer, and $1,120,000
in net proceeds from issuances of common stock under our employee stock purchase
plan and issuance of restricted common stock to Sigma-Tau.
Our capital requirements may change depending upon numerous factors,
including the level of ZADAXIN sales, the availability of complementary
products, technologies and businesses, the initiation and continuation of
preclinical and clinical trials and testing, particularly ZADAXIN trials in the
U.S. and Japan, the timing of regulatory approvals, developments in
relationships with existing or future collaborative parties and the status of
competitive products. Assuming ZADAXIN sales continue to increase quarter to
quarter at growth rates similar to what we have achieved over the past eleven
quarters, management believes our existing capital resources and interest on
funds available are adequate to maintain our current and planned operations. The
initiation and continuation of U.S. and Japanese clinical development programs
could, however, require additional funding either from a collaborative source or
through equity or debt financing. The timing and sustainability of our operating
profitability and capital requirements may change depending upon numerous
factors, including the level of ZADAXIN sales, the timing and amount of
manufacturing costs related to ZADAXIN and CPX, the availability of
complementary products, technologies and businesses, the initiation and
continuation of preclinical and clinical trials and testing, particularly
ZADAXIN trials in the U.S. and Japan, the timing of regulatory approvals,
developments in relationships with existing or future collaborative parties and
the status of competitive products.
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In the event we need to raise additional financing, the unavailability or the
timing of financing could prevent or delay our long-term product development and
commercialization programs.
RISK FACTORS
You should carefully consider the risks described below, together with
all of the other information included in this report on Form 10-Q, before making
an investment decision. The risks below are not the only ones we face. If any of
the following risks actually occurs, our business, financial condition or
operating results could be harmed. In such case, the trading price of our common
stock could decline, and you may lose all or part of your investment.
WE HAVE A HISTORY OF OPERATING LOSSES AND AN ACCUMULATED DEFICIT, WE EXPECT TO
CONTINUE TO INCUR LOSSES IN THE NEAR TERM AND MAY NEVER ACHIEVE PROFITABILITY.
We have experienced significant operating losses since our inception and
as of September 30, 2000, we had an accumulated deficit of $116,629,000. We
expect our operating expenses to increase over the next several years as we plan
to dedicate substantially all of our resources to expanding our development,
testing and marketing capabilities. Accordingly, we may never achieve
profitability. Our failure to achieve profitability may cause our stock price to
decline.
IF WE DO NOT INCREASE THE AMOUNT OF REVENUE WE DERIVE FROM SALES OF ZADAXIN AND
ACHIEVE OPERATING PROFITABILITY, WE WILL NEED TO OBTAIN ADDITIONAL CAPITAL TO
SUPPORT OUR LONG-TERM PRODUCT DEVELOPMENT AND COMMERCIALIZATION PROGRAMS.
Our strategy in the near term to achieve and sustain operating
profitability depends in large part on our ability to:
- increase ZADAXIN sales in existing markets;
- launch ZADAXIN in new markets; and
- commence and continue clinical programs for, and obtain additional
regulatory approvals for, ZADAXIN, CPX, SCV-07, DAX and/or future
products, particularly in the U.S., Europe and Japan.
If we do not increase the revenue we derive from the sales of ZADAXIN
and achieve operating profitability, we will need to obtain additional financing
to support our long-term product development and commercialization programs. We
may seek additional funds through public and private stock offerings,
arrangements with corporate partners, borrowings under lease lines of credit or
other sources. If we cannot raise the necessary funds, we will have to reduce
our capital expenditures, scale back our development of new products, reduce our
workforce and license to others products or technologies that we otherwise would
seek to commercialize ourselves.
The amount of capital we need will depend on many factors, including:
- the level of future ZADAXIN sales;
- the timing, location, scope and results of ongoing and planned
preclinical studies and clinical trials;
- the cost of manufacturing or obtaining preclinical and clinical
materials;
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- the timing and cost involved in applying for and obtaining FDA and
international regulatory approvals;
- the costs involved in filing, prosecuting and enforcing patent
claims;
- competing technological and market developments;
- whether any or all of our outstanding common stock warrants are
exercised and the timing and amount of these exercises;
- our ability to establish and maintain strategic arrangements for
development, sales, manufacturing and marketing of our products; and
- whether we elect to establish additional partnering arrangements for
development, sales, manufacturing, and marketing of our products.
Many of the foregoing factors are not within our control. If we need to
raise additional funds and such funds are not available on reasonable terms, we
may be required to delay or cancel our long-term product development and
commercialization programs. Any additional equity financing will be dilutive to
shareholders, and any debt financing, if available, may include restrictive
convenants.
WE MAY NOT BE ABLE TO SUCCESSFULLY DEVELOP OR COMMERCIALIZE OUR PRODUCTS.
Many of our products are in the development stage and will require the
commitment of substantial resources, devoted to extensive research, development,
preclinical testing, clinical trials, manufacturing scale-up and regulatory
approval prior to being ready for sale. We have not yet sold any product other
than ZADAXIN. Our future revenue growth depends on increased market acceptance
and commercialization of ZADAXIN in additional countries. If we fail to
successfully market ZADAXIN, or if we cannot commercialize this drug in
additional markets, our revenue and operating results will suffer. Our future
revenue will also depend in part on our ability to develop other commercially
viable and accepted products. Market acceptance of our products will depend on
many factors, including our ability to:
- convince prospective strategic partners and customers that our
products are an attractive alternative to other treatments and
therapies; and
- manufacture products in sufficient quantities with acceptable quality
and at an acceptable cost.
In addition, all of our products other than ZADAXIN will require further
preclinical development, clinical testing and regulatory approvals, and we can
not assure you that commercially viable products will result from these efforts.
We face significant technological risks inherent in developing these products.
We may also abandon some or all of our proposed products before they become
commercially viable. If any of our products, even if developed and approved,
cannot be successfully commercialized in a timely manner, our business will be
harmed and the price of our stock may decline.
WE ARE DEPENDENT ON THE SALE OF ZADAXIN IN FOREIGN JURISDICTIONS, PARTICULARLY
CHINA, AND IF WE EXPERIENCE DIFFICULTIES IN OUR FOREIGN SALES EFFORTS, OUR
FINANCIAL CONDITION WILL BE HARMED.
Our financial condition in the near term is highly dependent on the sale
of ZADAXIN in foreign jurisdictions. If we experience difficulties in our
foreign sales efforts, our business will
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suffer and our financial condition will be harmed. The majority of our ZADAXIN
sales are to customers in China. Sales of ZADAXIN in China may be limited due to
its low average income and poorly developed infrastructure. In addition, our
ZADAXIN sales and operations in other parts of Asia, as well as in Latin America
and the Middle East, are subject to a number of risks, including:
- difficulties and delays in obtaining pricing approvals and
reimbursement;
- difficulties and delays in obtaining product health registration;
- difficulties and delays in obtaining importation permits;
- unexpected changes in regulatory requirements;
- difficulties in staffing and managing foreign operations;
- long payment cycles;
- difficulties in accounts receivable collection;
- currency fluctuations; and
- potential adverse tax consequences.
We do not have any product sales in the U.S. with which to offset any
decrease in our revenue from ZADAXIN sales in Asia, Latin America and the Middle
East. In addition, some countries in these regions regulate pharmaceutical
prices and pharmaceutical importation. These regulations may reduce prices for
ZADAXIN to levels significantly below those that would prevail in a free market
or limit the volume of product which may be imported and sold, either of which
will cause our revenues to fall and our business to suffer.
IF WE FAIL TO SATISFY AND COMPLY WITH GOVERNMENTAL REGULATIONS, OUR BUSINESS
WILL SUFFER.
All new drugs, including our products which have been developed or are
under development, are subject to extensive and rigorous regulation by the FDA,
and comparable agencies in state and local jurisdictions and in foreign
countries. Our failure to satisfy and comply with these regulations can delay or
stop approval in the related countries. These regulations govern, among other
things, the development, testing, manufacturing, labeling, storage, premarket
approval, importation, advertising, promotion, sale and distribution of our
products. Satisfaction of these regulations typically takes several years and
the time needed to satisfy them vary substantially, based on the type,
complexity and novelty of the pharmaceutical product. As a result, government
regulation may cause us to delay or prevent us from marketing our existing or
potential products for a considerable period of time and to impose costly
procedures upon our activities. If regulatory approval of our products is
granted, such approval may impose limitations on the indicated uses for which
our products may be marketed.
IF WE FAIL TO OBTAIN REGULATORY APPROVALS IN THE UNITED STATES, EUROPE OR JAPAN,
OUR REVENUE MAY NOT GROW SIGNIFICANTLY AND OUR STOCK PRICE MAY DECLINE.
If we fail to obtain regulatory approvals for ZADAXIN in the U.S.,
Europe or Japan for the treatment of hepatitis C, our revenue may not grow
significantly and the price of our stock may fall. To secure these regulatory
approvals, we need favorable results from additional clinical trials of ZADAXIN.
We cannot assure you that these additional
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clinical trials will yield favorable results or that if they do, we will obtain
any regulatory approvals.
Our failure to obtain regulatory approvals for, and successfully
commercialize, CPX for the treatment of cystic fibrosis will also harm our
business. Our failure to demonstrate, in preclinical and clinical trials, the
safety and efficacy of CPX as a treatment for cystic fibrosis and to obtain
regulatory approval of CPX in the U.S. as a treatment for cystic fibrosis will
significantly impair our operations. CPX is currently undergoing phase 2
development in the U.S. We cannot assure you that we will not experience delays
and difficulties in the preclinical and clinical development of CPX. In
addition, future clinical trials may prove that CPX is not an effective
treatment for cystic fibrosis.
IF WE FAIL TO OBTAIN REGULATORY APPROVALS IN COUNTRIES IN WHICH OUR PRODUCTS
HAVE NOT BEEN APPROVED, OUR REVENUE GROWTH MAY BE HARMED.
The research, preclinical and clinical development, manufacturing,
marketing and sale of ZADAXIN, CPX and our other drug candidates are subject to
extensive regulation by governmental authorities. ZADAXIN, CPX and any other
products must be approved by the FDA or its foreign counterparts before they can
be sold in any jurisdiction. Obtaining regulatory approval is time-consuming and
expensive. In some countries where we are contemplating marketing and selling
ZADAXIN, the regulatory approval process for drugs that have not been previously
approved in countries with established clinical trial review procedures is
uncertain, and this may delay the grant of regulatory approvals for ZADAXIN. Our
failure to obtain the required regulatory approvals so that we can develop,
market and sell our products in countries where we currently do not have such
rights may limit the growth of our revenues.
We may not be able to commence or complete the clinical trials we have
sponsored or are planning relating to ZADAXIN and CPX in a timely or
cost-effective manner. Even if completed, these trials may not fulfill the
applicable regulatory approval criteria, in which case we will not be able to
obtain regulatory approvals in these countries. Failure to obtain additional
regulatory approvals will harm our operating results. In addition, adverse
results in our development programs also could result in restrictions on the use
of ZADAXIN and, if approved, CPX.
Our failure, or the failure by one or more of our partners, to comply
with applicable U.S. or foreign regulatory requirements could, among other
things, result in warning letters, fines, suspensions of regulatory approvals,
product recalls or seizures, operating restrictions, injunctions and criminal
prosecutions. In addition, government regulations may be established or imposed
which prevent or delay regulatory approval of ZADAXIN, CPX or our future
products.
WE HAVE LIMITED SALES, MARKETING AND DISTRIBUTION CAPABILITIES, WHICH MAY
ADVERSELY AFFECT OUR ABILITY TO SUCCESSFULLY COMMERCIALIZE OUR PRODUCTS.
We currently have limited sales, marketing and distribution
capabilities, and we anticipate that we will be relying on third-party
collaborators to sell, market and distribute our products in the foreseeable
future. If our arrangements with these third parties are not successful, or if
we are unable to enter into third-party arrangements, we may need to
substantially expand our sales, marketing and distribution force. Our plans to
expand may not succeed, or we may lack sufficient resources to expand in a
timely manner, either of which will harm our operating results. If we are able
to further develop our sales, marketing and distribution capabilities, we will
compete with other companies that have experienced and well funded operations.
If we cannot successfully compete with them, our revenues may not grow and our
business may suffer.
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IF WE ARE NOT ABLE TO ESTABLISH AND MAINTAIN ADEQUATE MANUFACTURING AND SUPPLY
RELATIONSHIPS, THE DEVELOPMENT AND SALE OF OUR PRODUCTS COULD BE IMPAIRED.
To be successful, our products must be manufactured in commercial
quantities, in compliance with regulatory requirements and at an acceptable
cost. We may not be able to maintain the long-term manufacturing relationships
we currently have with our suppliers of ZADAXIN and CPX. Manufacturing
interruptions, if any, could significantly delay clinical development of
potential products and reduce third-party or clinical researcher interest and
support of proposed trials. These interruptions could also impede
commercialization of our products, including sales of ZADAXIN in approved
markets, and impair our competitive position. Any of these developments would
harm our business. We have recently changed our manufacturing source of ZADAXIN
for our international markets, excluding Japan. In some countries, this change
may require additional regulatory approvals. If we do not obtain the required
regulatory approvals of this manufacturing change in a timely fashion, new
ZADAXIN marketing approvals may be delayed or sales may be interrupted until the
manufacturing change is approved. Either of these results will hurt our
business.
Manufacturing, supply and quality control problems may arise as we,
either alone or with subcontractors, attempt to scale-up our manufacturing
procedures. We may not be able to scale-up in a timely manner or at a
commercially reasonable cost. Problems could lead to delays or pose a threat to
the ultimate commercialization of our products and harm us.
IF WE DO NOT OBTAIN RIGHTS TO ADDITIONAL PRODUCTS FROM THIRD PARTIES, OUR
REVENUE MAY DECLINE AND OUR FUTURE DEVELOPMENT EXPENSES MAY INCREASE.
We are only actively pursuing clinical development of ZADAXIN and CPX at
this time. If we do not advance SCV-07 and DAX, the other products to which we
have in-licensed rights, from preclinical into clinical development, or license
or otherwise acquire rights to additional drugs, we may have a shortage of drugs
to develop and commercialize. Any shortage in the number of drugs that we are
able to develop and commercialize may cause our revenues to fall and increase
our future development expenses.
COMMERCIALIZATION OF SOME OF OUR PRODUCTS DEPENDS ON COLLABORATIONS WITH OTHERS.
IF OUR COLLABORATORS ARE NOT SUCCESSFUL, OR IF WE ARE UNABLE TO FIND FUTURE
COLLABORATORS, WE MAY NOT BE ABLE TO PROPERLY DEVELOP AND COMMERCIALIZE OUR
PRODUCTS.
We depend in part on our licensees to develop and/or promote our drugs, and if
they are not successful in their efforts or fail to do so, our business will
suffer. We have exclusively sublicensed certain of our rights to ZADAXIN in
Europe to Sigma-Tau S.p.A. and in Japan to Schering-Plough K.K. However, we
generally do not have control over the amount and timing of resources that our
partners devote to ZADAXIN. If they do not perform their obligations as we
expect, our development expenses would increase and the development and sale of
our products could be limited or delayed, which could cause our business to
suffer and our stock price to decline. In addition, our relationships with these
companies may not be successful. Disputes may arise over ownership rights to
intellectual property, know-how or technologies developed with our
collaborators, and we may not be able to negotiate similar additional
arrangements in the future to develop and commercialize ZADAXIN.
IF WE FAIL TO PROTECT OUR PRODUCTS, TECHNOLOGIES AND TRADE SECRETS, WE MAY NOT
BE ABLE TO SUCCESSFULLY USE, MANUFACTURE OR MARKET AND SELL OUR PRODUCTS OR WE
MAY FAIL TO ADVANCE OR MAINTAIN OUR COMPETITIVE POSITION.
Our success depends significantly on our ability to obtain and maintain
meaningful patent protection for our products and technologies, to preserve our
trade secrets and to avoid infringing
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on the proprietary rights of third parties. Our pending patent applications may
not result in the issuance of patents in the future. Our patent applications may
not have priority over others' applications and, even if any patents are issued,
they may not provide a competitive advantage to us or may be invalidated or
circumvented by our competitors. Others may independently develop similar
products or design around patents issued or licensed to us. Patents issued to,
or patent applications filed by, other companies could harm our ability to use,
manufacture or market our products or maintain our competitive position with
respect to our products. Many of our patents relating to ZADAXIN have expired,
and we have rights to other patents and patent applications relating to ZADAXIN
under exclusive licenses. If we breach the terms of any of these licenses, we
could lose our rights to these patents and patent applications.
Our commercial success also depends in part on us not infringing valid,
enforceable patents or proprietary rights of third parties, and not breaching
any licenses that may relate to our technologies and products. We are aware of
third-party patents that may relate to our technology. It is possible that we
may unintentionally infringe these patents or other patents or proprietary
rights of third parties. We may in the future receive notices claiming
infringement from third parties as well as invitations to take licenses under
third-party patents. Any legal action against us or our collaborative partners
claiming damages and seeking to enjoin commercial activities relating to our
products and processes affected by third-party rights may require us or our
collaborative partners to obtain licenses in order to continue to manufacture or
market the affected products and processes. Our efforts to defend against any of
these claims, even if unmeritorious, would require us to devote resources and
attention that could have been directed to our operation and growth plans. In
addition, these actions may subject us to potential liability for damages. We or
our collaborative partners may not prevail in a patent action and any license
required under a patent may not be made available on commercially acceptable
terms, or at all.
Pharmaceuticals are either not patentable or have only recently become
patentable in some of the countries other than the United States, in which we
have exclusive rights to ZADAXIN. Past enforcement of intellectual property
rights in many of these countries has been limited or non-existent. Future
enforcement of patents and proprietary rights in many other countries will
likely be problematic or unpredictable. Moreover, the issuance of a patent in
one country does not assure the issuance of a similar patent in another country.
Claim interpretation and infringement laws vary by nation, so the extent of any
patent protection is uncertain and may vary in different jurisdictions.
IF WE MAKE ANY ACQUISITIONS, WE WILL INCUR A VARIETY OF COSTS AND MAY NEVER
REALIZE THE ANTICIPATED BENEFITS.
If appropriate opportunities become available, we may attempt to acquire
products, product candidates or businesses that we believe fit strategically
with our business. We currently have no commitments or agreements with respect
to material acquisitions. If we do undertake any transaction of this sort, the
process of integrating an acquired product, product candidate or business may
result in operating difficulties and expenditures and may absorb significant
management attention that would otherwise be available for our ongoing business
development plans. Moreover, we may never realize the anticipated benefits of
any acquisition. Future acquisitions could result in potentially dilutive
issuances of equity securities, the incurrence of debt, contingent liabilities
and/or amortization expenses related to goodwill and other intangible assets,
which could adversely affect our business, financial condition and results of
operations.
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WE MAY LOSE MARKET SHARE OR OTHERWISE FAIL TO COMPETE EFFECTIVELY IN THE
INTENSELY COMPETITIVE BIOPHARMACEUTICAL INDUSTRY.
Competition in the biopharmaceutical industry is intense and we expect
that competition to increase. Our success depends on our ability to compete. We
believe that the principal competitive factors in this industry include the
efficacy, safety, price, therapeutic regimen and manufacturing quality assurance
associated with a given drug. Our competitors include bio-pharmaceutical
companies, biotechnology firms, universities and other research institutions,
both in the U.S. and abroad, that are actively engaged in research and
development of chronic and life-threatening diseases such as hepatitis C,
hepatitis B, cancer, immune system disorders and cystic fibrosis.
Most of our competitors, particularly large biopharmaceutical companies,
have substantially greater financial, technical, regulatory, manufacturing,
marketing and human resource capabilities than we do. Most of them also have
extensive experience in undertaking the preclinical and clinical testing and
obtaining the regulatory approvals necessary to market drugs. We currently rely
on sales of ZADAXIN as a treatment for hepatitis C and hepatitis B as our
primary source of revenue. However, several large biopharmaceutical companies
have substantial commitments to alpha interferon, which is an approved drug for
treating hepatitis B and hepatitis C and the primary competitor to ZADAXIN. We
cannot assure you that we will compete successfully against our competitors or
that our competitors, or potential competitors, will not develop drugs or other
treatments for hepatitis C, hepatitis B, cystic fibrosis, cancer and other
diseases that will be superior to ours. Increased competitive pressure could
also lead to intensified price-based competition resulting in lower prices and
margins, which would hurt our operating results.
IF THIRD-PARTY REIMBURSEMENT IS NOT AVAILABLE OR PATIENTS CANNOT OTHERWISE PAY
FOR ZADAXIN, WE MAY NOT BE ABLE TO SUCCESSFULLY MARKET ZADAXIN.
If third-party reimbursement, either from government health
administration authorities, private health insurers and other organizations, is
not available or patients cannot otherwise pay for ZADAXIN, we may not be able
to successfully market ZADAXIN. Third-party reimbursement for new therapeutic
products such as ZADAXIN is highly uncertain and may not be available for our
future products. In most of the emerging markets in which we sell ZADAXIN or
intend to sell ZADAXIN, reimbursement for ZADAXIN under government or private
health insurance programs is not yet widely available. The failure to obtain
third-party reimbursement for our products in the U.S., Europe and Japan will
hurt our business. In the U.S., proposed health care reforms could limit the
amount of third-party reimbursement available for our products. In many emerging
markets where we have marketing rights to ZADAXIN, government resources and per
capita income may be so low that our products will be prohibitively expensive.
In these countries, we may not be able to market our products on economically
favorable terms, if at all.
Efforts by governmental and third-party payors to contain or reduce
health care costs could cause us to reduce the prices at which we market our
drugs, which will reduce our gross margins and may harm our business. Various
governments and third-party payors are trying to contain or reduce the costs of
health care through various means. We expect that there will continue to be a
number of legislative proposals to implement government controls. The
announcement of proposals or reforms could cause us to reduce the prices at
which we market our drugs, which will reduce our gross margins and may harm our
business.
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IF WE LOSE KEY PERSONNEL OR ARE UNABLE TO ATTRACT AND RETAIN ADDITIONAL, HIGHLY
SKILLED PERSONNEL REQUIRED FOR THE EXPANSION OF OUR ACTIVITIES, OUR BUSINESS
WILL SUFFER.
We are highly dependent upon our ability to attract and retain qualified
personnel because of the specialized, scientific and international nature of our
business. There is intense competition for qualified management, scientific and
technical personnel in the pharmaceutical industry, and we may not be able to
attract and retain the qualified personnel we need to grow and develop our
business globally. In addition, numerous key responsibilities at SciClone are
assigned to a small number of individuals. If we are unable to attract and
retain qualified personnel as needed or promptly replace those employees who are
critical to our product development and commercialization, the development and
commercialization of our products would adversely be affected. At this time, we
do not maintain "key person" life insurance on any of our key personnel.
WE MAY BE SUBJECT TO PRODUCT LIABILITY LAWSUITS AND OUR INSURANCE MAY BE
INADEQUATE TO COVER DAMAGES.
Clinical trials or marketing of any of our current and potential
products may expose us to liability claims from the use of these products. We
currently carry product liability insurance. However, we cannot be certain that
we will be able to maintain insurance on acceptable terms for clinical and
commercial activities or that the insurance would be sufficient to cover any
potential product liability claim or recall. If we fail to have sufficient
coverage, our business, results of operation and cash flows could be adversely
affected.
IF WE ARE UNABLE TO COMPLY WITH ENVIRONMENTAL LAWS AND REGULATIONS, OUR BUSINESS
MAY BE HARMED.
We are subject to federal, state and local laws and regulations
governing the use, manufacture, storage, handling and disposal of hazardous
materials and waste products. We currently maintain a supply of hazardous
materials at our facilities. In the event of an accident, we could be liable for
any damages that result, and the liability could exceed our resources. While we
outsource our research and development programs involving the controlled use of
biohazardous materials, if in the future we conduct these programs ourselves, we
might be required to incur significant cost to comply with the environmental
laws and regulations.
THE PRICE OF OUR COMMON STOCK HAS EXPERIENCED SUBSTANTIAL VOLATILITY AND MAY
FLUCTUATE DUE TO FACTORS BEYOND OUR CONTROL.
There has been significant volatility in the market prices for publicly
traded shares of pharmaceutical and biotechnology companies, including ours. The
following factors may have an adverse impact on the market price of our common
stock:
- announcements of technical or product developments by us or our
competitors;
- governmental regulation;
- healthcare legislation;
- public announcements regarding advances in the treatment of the
disease states that we are targeting;
- public announcements from government officials relating to the
biotechnology or pharmaceutical industries;
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- patent or proprietary rights developments;
- changes in third-party reimbursement policies for our products; and
- fluctuations in our operating results.
The price of our common stock may not remain at or exceed current
levels.
SUBSTANTIAL SALES OF OUR STOCK OR CONVERTIBLE SECURITIES MAY IMPACT THE MARKET
PRICE OF OUR COMMON STOCK.
As of October 31, 2000, stock options for 4,796,247 shares of common
stock were outstanding, of which options for 3,262,437 shares were currently
exercisable, and there were warrants exercisable for 1,970,500 shares of common
stock outstanding. Upon exercise and issuance, all of these shares of common
stock will be freely tradable.
Future sales of substantial amounts of our common stock could adversely
affect the market price of our common stock. Similarly, if we raise additional
funds through the issuance of common stock or securities convertible into or
exercisable for common stock, the percentage ownership of our shareholders will
be reduced and the price of our common stock may fall.
ISSUING PREFERRED STOCK WITH RIGHTS SENIOR TO THOSE OF OUR COMMON STOCK COULD
ADVERSELY AFFECT HOLDERS OF COMMON STOCK.
Our charter documents give our board of directors the authority to issue
additional series of preferred stock without a vote or action by our
shareholders. The board also has the authority to determine the terms of
preferred stock, including price, preferences and voting rights. The rights of
holders of our common stock may be adversely affected by the rights granted to
holders of preferred stock. For example, a series of preferred stock may be
granted the right to receive a liquidation preference -- a pre-set distribution
in the event SciClone is liquidated -- that would reduce the amount available
for distribution to holders of common stock. In addition, the issuance of
preferred stock could make it more difficult for a third party to acquire a
majority of our outstanding voting stock. As a result, common shareholders could
be prevented from participating in transactions that would offer an optimal
price for their shares.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The primary objective of our investment activities is to preserve
principal while at the same time maximizing yields without significantly
increasing risk. To achieve this objective, we invest in highly liquid and high
quality debt securities. Our investments in debt securities are subject to
interest rate risk. To minimize the exposure due to adverse shift in the
interest rates we invest in short term securities and maintain an average
maturity of less than 1 year. A hypothetical 60 basis point increase in interest
rates would result in an approximate $67,135 decrease (0.6%) in fair value of
our available-for-sale securities.
The potential change noted above is based on sensitivity analyses
performed on our financial positions at September 30, 2000. Actual results may
differ materially.
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PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(c) Recent Sales of Unregistered Securities
None
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Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3(i).1 Restated Articles of Incorporation (incorporated by reference
from the Company's Registration Statement on Form S-1 (No.
33-45446), declared effective by the Commission on March 17,
1992).
3(i).2 Certificate of Amendment of Restated Articles of Incorporation
(incorporated by reference from the Company's Registration
Statement on Form S-8 (No. 33-66832) filed with the Commission
on August 3, 1993).
3(i).3 Certificate of Determination (incorporated by reference from
the Company's Current Report on Form 8-K filed on October 14,
1997).
3(ii).1 Bylaws (incorporated by reference from the Company's
Registration Statement on Form S-1 (No. 33-45446), declared
effective by the Commission on March 17, 1992).
3(ii).2 Certificate of Amendment of Bylaws (incorporated by reference
from the Company's Registration Statement on Form S-8 (No.
33-66832) filed with the Commission on August 3, 1993).
4.2 Rights Agreement, dated as of July 25, 1997, between SciClone
and ChaseMellon Shareholder Services, LLC. (incorporated by
reference to the Company's Current Report on Form 8-K filed on
October 14, 1997).
27 Financial Data Schedule
(b) Reports on Form 8-K
None.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SCICLONE PHARMACEUTICALS, INC.
(Registrant)
Date: November 14, 2000 /s/ Donald R. Sellers
---------------------------------------------
Donald R. Sellers
President, Chief Executive Officer and
Interim Chief Financial Officer
(Principal Executive Officer and Principal
Financial & Accounting Officer)
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EXHIBIT INDEX
Exhibit
Number Description
------- -----------
3(i).1 Restated Articles of Incorporation (incorporated by reference
from the Company's Registration Statement on Form S-1 (No.
33-45446), declared effective by the Commission on March 17,
1992).
3(i).2 Certificate of Amendment of Restated Articles of Incorporation
(incorporated by reference from the Company's Registration
Statement on Form S-8 (No. 33-66832) filed with the Commission
on August 3, 1993).
3(i).3 Certificate of Determination (incorporated by reference from
the Company's Current Report on Form 8-K filed on October 14,
1997).
3(ii).1 Bylaws (incorporated by reference from the Company's
Registration Statement on Form S-1 (No. 33-45446), declared
effective by the Commission on March 17, 1992).
3(ii).2 Certificate of Amendment of Bylaws (incorporated by reference
from the Company's Registration Statement on Form S-8 (No.
33-66832) filed with the Commission on August 3, 1993).
4.2 Rights Agreement, dated as of July 25, 1997, between SciClone
and ChaseMellon Shareholder Services, LLC. (incorporated by
reference to the Company's Current Report on Form 8-K filed on
October 14, 1997).
27 Financial Data Schedule
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