SciClone Pharmaceuticals Inc. (SCLN, Financial) filed Quarterly Report for the period ended 2009-06-30.
Sciclone Pharmaceuticals Inc. develops and commercializes novel medicines for treating a broad range of the world\'s most serious diseases. They have focused their current product development and commercial activities on the following diseases: hepatitis C hepatocellular carcinoma malignant melanoma hepatitis B HIV drug-resistant tuberculosis cystic fibrosis and others. SciClone Pharmaceuticals Inc. has a market cap of $189.1 million; its shares were traded at around $4.09 with and P/S ratio of 3.5.
Research and development expenses were $3,683,000 for the three-month period ended June 30, 2009, as compared to $4,535,000 for the corresponding period in 2008. The decrease in research and development expense was mainly due to a $190,000 and $64,000 decrease in clinical trial and travel and entertainment expense, respectively, as a result of an investigator meeting for the Companys RP101 clinical trial that occurred in the three month period ended June 30, 2008 that did not recur in the corresponding 2009 period, a $212,000 decrease in preclinical pharmacology costs, a $149,000 decrease in scale up costs to manufacture RP101, a decrease of $123,000 in drug process development costs and a decrease of approximately $57,000 in employee recruitment fees.
Research and development expenses were $8,677,000 for the six-month period ended June 30, 2009, as compared to $12,084,000 for the corresponding period in 2008. During the six-months ended June 30, 2008, research and development expenses included $1,320,000 related to a milestone payment upon first patient dosing in the RP101 phase 2 clinical trial and we incurred drug development and manufacturing costs of approximately $1,906,000 mainly related to the scale up and manufacture of RP101 and purchase of Gemcitabine, the current standard of care and a companion drug for RP101 in our RP101 clinical trial. There were no similar expenses for the corresponding period of 2009. Research and development expenses also decreased during the six months ended June 30, 2009 as a result of a decrease of $274,000 in recruitment fees, a decrease of $430,000 in preclinical pharmacology costs, a decrease of $123,000 in drug process development costs, and a decrease of $196,000 in travel and entertainment expenses. These decreases were partially offset by increased clinical trial expenses of approximately $757,000 related to our RP101 and SCV-07 mucositis clinical trials as a result of increased enrollment in these trials during the 2009 period.
Net cash used in operating activities totaled $5,789,000 and $11,705,000 for the six months ended June 30, 2009 and 2008, respectively. Net cash used in operating activities of $5,789,000 for the six months ended June 30, 2009 was comprised primarily of net income of $7,435,000 which was adjusted for non-cash items such as stock-based compensation expense of $877,000, depreciation and amortization of $265,000, and $14,347,000 of net cash outflow related to changes in operating assets and liabilities. Such changes included an increase of $12,424,000 in accounts receivable due to an increase in sales and normal fluctuations in the timing of payments received from customers, an increase of $1,220,000 in inventory due to increased sales demand, and a net decrease of $1,090,000 in accrued compensation and benefits primarily as a result of the payment of our fiscal year 2008 incentive bonus payments to employees occurring during the six months ended June 30, 2009.
The $11,705,000 of net cash used in operating activities for the six-month period ended June 30, 2008 was comprised primarily of net loss of $5,978,000 which was adjusted for non-cash items such as stock-based compensation expense of $992,000 and depreciation and amortization of $157,000, and $6,876,000 of net cash outflow related to changes in operating assets and liabilities. Such changes included a $1,842,000 decrease in accounts payable and other accrued expenses and a $1,144,000 decrease in our accrued clinical trials expense, both decreases related primarily to payments made to vendors during the six months ended June 30, 2008 related to the phase 2 RP101 and SCV-07 clinical trials, and to the development planning for a phase 3 melanoma clinical trial. Further change resulted from an increase of $5,004,000 in our accounts receivable due to an increase in sales and fluctuations in the timing of customer payments received. In addition, prepaid expenses and other assets decreased $762,000 mainly due to receipt of gemcitabine for the phase 2 RP101 clinical trial during the six months ended June 30, 2008.
During the six-month period ended June 30, 2009, we renewed our operating lease agreements for our Shanghai and Beijing office facilities to extend the term of the leases and we entered into an operating lease agreement for our Vietnam office. Minimum future rental payments under facility and equipment operating lease agreements, net of sublease income, at June 30, 2009 amount to a total of $819,000 remaining in 2009, $1,672,000 in 2010, $1,784,000 in 2011, $1,490,000 in 2012, $1,432,000 in 2013, and $744,000 in 2014.
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Sciclone Pharmaceuticals Inc. develops and commercializes novel medicines for treating a broad range of the world\'s most serious diseases. They have focused their current product development and commercial activities on the following diseases: hepatitis C hepatocellular carcinoma malignant melanoma hepatitis B HIV drug-resistant tuberculosis cystic fibrosis and others. SciClone Pharmaceuticals Inc. has a market cap of $189.1 million; its shares were traded at around $4.09 with and P/S ratio of 3.5.
Highlight of Business Operations:
Product sales were $21,971,000 and $37,040,000 for the three and six-month periods ended June 30, 2009, respectively, as compared to $13,834,000 and $24,468,000 for the corresponding period in 2008. Our revenue growth was attributable to higher volume of ZADAXIN which we believe was primarily due to increased demand as a result of the H1N1 flu virus, further market penetration in China, and a modest increase in prices from the 2008 to 2009 periods. For the three and six-month periods ended June 30, 2009, product sales to China were $21,227,000 and $35,816,000, or 97% of sales, respectively, as compared to $13,068,000 and $23,058,000, respectively, or 94% of sales, for the corresponding period in 2008. All product sales in each period were derived from sales of ZADAXIN. Although revenues were higher than expected in the second quarter of 2009, largely due to higher demand for ZADAXIN related to the H1N1 flu virus, for the remainder of 2009, we expect our quarterly sales growth to return to levels more consistent with our established business.Research and development expenses were $3,683,000 for the three-month period ended June 30, 2009, as compared to $4,535,000 for the corresponding period in 2008. The decrease in research and development expense was mainly due to a $190,000 and $64,000 decrease in clinical trial and travel and entertainment expense, respectively, as a result of an investigator meeting for the Companys RP101 clinical trial that occurred in the three month period ended June 30, 2008 that did not recur in the corresponding 2009 period, a $212,000 decrease in preclinical pharmacology costs, a $149,000 decrease in scale up costs to manufacture RP101, a decrease of $123,000 in drug process development costs and a decrease of approximately $57,000 in employee recruitment fees.
Research and development expenses were $8,677,000 for the six-month period ended June 30, 2009, as compared to $12,084,000 for the corresponding period in 2008. During the six-months ended June 30, 2008, research and development expenses included $1,320,000 related to a milestone payment upon first patient dosing in the RP101 phase 2 clinical trial and we incurred drug development and manufacturing costs of approximately $1,906,000 mainly related to the scale up and manufacture of RP101 and purchase of Gemcitabine, the current standard of care and a companion drug for RP101 in our RP101 clinical trial. There were no similar expenses for the corresponding period of 2009. Research and development expenses also decreased during the six months ended June 30, 2009 as a result of a decrease of $274,000 in recruitment fees, a decrease of $430,000 in preclinical pharmacology costs, a decrease of $123,000 in drug process development costs, and a decrease of $196,000 in travel and entertainment expenses. These decreases were partially offset by increased clinical trial expenses of approximately $757,000 related to our RP101 and SCV-07 mucositis clinical trials as a result of increased enrollment in these trials during the 2009 period.
Net cash used in operating activities totaled $5,789,000 and $11,705,000 for the six months ended June 30, 2009 and 2008, respectively. Net cash used in operating activities of $5,789,000 for the six months ended June 30, 2009 was comprised primarily of net income of $7,435,000 which was adjusted for non-cash items such as stock-based compensation expense of $877,000, depreciation and amortization of $265,000, and $14,347,000 of net cash outflow related to changes in operating assets and liabilities. Such changes included an increase of $12,424,000 in accounts receivable due to an increase in sales and normal fluctuations in the timing of payments received from customers, an increase of $1,220,000 in inventory due to increased sales demand, and a net decrease of $1,090,000 in accrued compensation and benefits primarily as a result of the payment of our fiscal year 2008 incentive bonus payments to employees occurring during the six months ended June 30, 2009.
The $11,705,000 of net cash used in operating activities for the six-month period ended June 30, 2008 was comprised primarily of net loss of $5,978,000 which was adjusted for non-cash items such as stock-based compensation expense of $992,000 and depreciation and amortization of $157,000, and $6,876,000 of net cash outflow related to changes in operating assets and liabilities. Such changes included a $1,842,000 decrease in accounts payable and other accrued expenses and a $1,144,000 decrease in our accrued clinical trials expense, both decreases related primarily to payments made to vendors during the six months ended June 30, 2008 related to the phase 2 RP101 and SCV-07 clinical trials, and to the development planning for a phase 3 melanoma clinical trial. Further change resulted from an increase of $5,004,000 in our accounts receivable due to an increase in sales and fluctuations in the timing of customer payments received. In addition, prepaid expenses and other assets decreased $762,000 mainly due to receipt of gemcitabine for the phase 2 RP101 clinical trial during the six months ended June 30, 2008.
During the six-month period ended June 30, 2009, we renewed our operating lease agreements for our Shanghai and Beijing office facilities to extend the term of the leases and we entered into an operating lease agreement for our Vietnam office. Minimum future rental payments under facility and equipment operating lease agreements, net of sublease income, at June 30, 2009 amount to a total of $819,000 remaining in 2009, $1,672,000 in 2010, $1,784,000 in 2011, $1,490,000 in 2012, $1,432,000 in 2013, and $744,000 in 2014.
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