Sucampo Pharmaceuticals Inc. (SCMP, Financial) filed Quarterly Report for the period ended 2009-03-31.
Sucampo Pharmaceuticals Inc. is an emerging pharmaceutical company focused on the discovery development and commercialization of proprietary drugs based on prostones a class of compounds derived from functional fatty acids that occur naturally in the human body. Sucampo is focused on developing prostones for the treatment of gastrointestinal respiratory vascular and central nervous system diseases and disorders. Sucampo Pharmaceuticals Inc. has a market cap of $284.1 million; its shares were traded at around $6.79 with a P/E ratio of 12.6 and P/S ratio of 2.5.
Total research and development expenses for the three months ended March 31, 2009 were $10.0 million compared to $11.2 million for the three months ended March 31, 2008, a decrease of $1.2 million or 11.2%. During the three months ended March 31, 2008, we incurred filing and data purchase costs of approximately $2.5 million, which were necessary to submit our European regulatory filings. No such expenditure was recorded during the three months ended March 31, 2009. The increase in the SPI-017 costs reflect the costs associated with the ongoing phase 1 trial for SPI-017 for peripheral arterial disease in Japan as well as non-clinical expenses for the exploration of other indications.
Milestone royalties related parties expense was $500,000 for the three months ended March 31, 2009, reflecting the 5% royalty payment we owed to SAG as a result of the $10.0 million upfront payment we received from Abbott. We expensed $1.0 million for the three months ended March 31, 2008, reflecting a payment to SAG in connection with our European regulatory filings. We are required to pay $1.0 million for the first foreign regulatory filing, in each of the three following territories covered by the license agreement with SAG: North, Central and South America (including the Caribbean); Asia; and the rest of the world. Our European filings represented the first such filing for the rest-of-the-world territory.
We recorded a tax provision of $401,000 and a tax benefit of $5.6 million for the three months ended March 31, 2009 and 2008, respectively. The tax provision for the three months ended March 31, 2009 mainly pertained to taxable income generated by our U.S. subsidiary. Our other subsidiaries based in Japan and Europe incurred pre-tax losses for the three months ended March 31, 2009, for which no tax benefit was recognized. The tax benefit recorded for the three months ended March 31, 2008 was primarily due to a reversal of U.S. deferred tax asset valuation allowances of $4.8 million based on a $50.0 million milestone payment from Takeda and expected increase of product royalty income. As of March 31, 2009, we had an outstanding non-current income tax liability of $525,240 for uncertain tax positions which represented the aggregate tax effect of differences between tax return positions and the amounts otherwise recognized in the our condensed consolidated financial statements. The liability for uncertain tax positions as of March 31, 2009 was mainly a result of our interpretation of nexus in certain states related to revenue sourcing for state income tax purposes.
Net cash provided by operating activities was $7.3 million for the three months ended March 31, 2009. This reflected a net loss of $1.8 million, which included a non-cash unrealized loss on settlement rights of $2.4 million, offset in part by a $2.7 million unrealized gain on trading securities, an increase in deferred revenue of $7.2 million, and an increase in accounts payable of $1.4 million and a $1.4 million increase in prepaid and income taxes receivable and payable, net. The increase in deferred revenue primarily related to a $10.0 million upfront payment from Abbott upon execution of the license and commercialization agreement by Sucampo Japan in February 2009.
Net cash used in operating activities was $380,000 for the three months ended March 31, 2008. The net income of $505,000 was offset primarily by a non-cash reversal of deferred tax asset valuation allowances of $5.6 million, an increase in product royalties receivable of $2.6 million related to product royalty revenue for Amitiza, an increase in prepaid and income taxes receivable and payable of $1.8 million, an increase in accounts payable of $1.4 million and a decrease in accrued liabilities of $1.6 million.
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Sucampo Pharmaceuticals Inc. is an emerging pharmaceutical company focused on the discovery development and commercialization of proprietary drugs based on prostones a class of compounds derived from functional fatty acids that occur naturally in the human body. Sucampo is focused on developing prostones for the treatment of gastrointestinal respiratory vascular and central nervous system diseases and disorders. Sucampo Pharmaceuticals Inc. has a market cap of $284.1 million; its shares were traded at around $6.79 with a P/E ratio of 12.6 and P/S ratio of 2.5.
Highlight of Business Operations:
Research and development revenue was $5.5 million for the three months ended March 31, 2009 compared to $6.1 million for the three months ended March 31, 2008, a decrease of $584,000 or 9.6%. This decrease was primarily due to reduced revenue recognized in respect to the pediatric, renal, hepatic and OBD trials for Amitiza funded by Takeda, offset in part by $374,000 in revenue recognized from the initial $10.0 million upfront payment received under the agreement with Abbott in Japan. The revenue from the upfront and development milestone payments from Abbott in Japan are being recognized using a percentage of completion model through the estimated date of approval of CIC by the regulatory authorities of Japan.Total research and development expenses for the three months ended March 31, 2009 were $10.0 million compared to $11.2 million for the three months ended March 31, 2008, a decrease of $1.2 million or 11.2%. During the three months ended March 31, 2008, we incurred filing and data purchase costs of approximately $2.5 million, which were necessary to submit our European regulatory filings. No such expenditure was recorded during the three months ended March 31, 2009. The increase in the SPI-017 costs reflect the costs associated with the ongoing phase 1 trial for SPI-017 for peripheral arterial disease in Japan as well as non-clinical expenses for the exploration of other indications.
Milestone royalties related parties expense was $500,000 for the three months ended March 31, 2009, reflecting the 5% royalty payment we owed to SAG as a result of the $10.0 million upfront payment we received from Abbott. We expensed $1.0 million for the three months ended March 31, 2008, reflecting a payment to SAG in connection with our European regulatory filings. We are required to pay $1.0 million for the first foreign regulatory filing, in each of the three following territories covered by the license agreement with SAG: North, Central and South America (including the Caribbean); Asia; and the rest of the world. Our European filings represented the first such filing for the rest-of-the-world territory.
We recorded a tax provision of $401,000 and a tax benefit of $5.6 million for the three months ended March 31, 2009 and 2008, respectively. The tax provision for the three months ended March 31, 2009 mainly pertained to taxable income generated by our U.S. subsidiary. Our other subsidiaries based in Japan and Europe incurred pre-tax losses for the three months ended March 31, 2009, for which no tax benefit was recognized. The tax benefit recorded for the three months ended March 31, 2008 was primarily due to a reversal of U.S. deferred tax asset valuation allowances of $4.8 million based on a $50.0 million milestone payment from Takeda and expected increase of product royalty income. As of March 31, 2009, we had an outstanding non-current income tax liability of $525,240 for uncertain tax positions which represented the aggregate tax effect of differences between tax return positions and the amounts otherwise recognized in the our condensed consolidated financial statements. The liability for uncertain tax positions as of March 31, 2009 was mainly a result of our interpretation of nexus in certain states related to revenue sourcing for state income tax purposes.
Net cash provided by operating activities was $7.3 million for the three months ended March 31, 2009. This reflected a net loss of $1.8 million, which included a non-cash unrealized loss on settlement rights of $2.4 million, offset in part by a $2.7 million unrealized gain on trading securities, an increase in deferred revenue of $7.2 million, and an increase in accounts payable of $1.4 million and a $1.4 million increase in prepaid and income taxes receivable and payable, net. The increase in deferred revenue primarily related to a $10.0 million upfront payment from Abbott upon execution of the license and commercialization agreement by Sucampo Japan in February 2009.
Net cash used in operating activities was $380,000 for the three months ended March 31, 2008. The net income of $505,000 was offset primarily by a non-cash reversal of deferred tax asset valuation allowances of $5.6 million, an increase in product royalties receivable of $2.6 million related to product royalty revenue for Amitiza, an increase in prepaid and income taxes receivable and payable of $1.8 million, an increase in accounts payable of $1.4 million and a decrease in accrued liabilities of $1.6 million.
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