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Sucampo Pharmaceuticals, Inc. Reports Second Quarter And Six Months 2012 Financial And Operating Results

This earnings release may include discussion of certain clinical studies relating to various in-line products and/or product candidates. These studies typically are part of a larger body of clinical data relating to such products or product candidates, and the discussion herein should be considered in the context of the larger body of data.

Sucampo Pharmaceuticals, Inc.        
Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited)
(in thousands, except per share data)
 
Three Months Ended June 30, Six Months Ended June 30,
  2012     2011     2012     2011  
 
Revenues:
Research and development revenue $ 3,096 $ 1,742 $ 5,681 $ 3,706
Product royalty revenue 11,703 11,043 22,631 20,161
Co-promotion revenue 1,757 1,061 2,523 1,999
Contract and collaboration revenue   127     154     294     308  
Total revenues   16,683     14,000     31,129     26,174  
 
Operating expenses:
Research and development 5,235 7,893 8,587 17,113
General and administrative 8,015 11,694 15,342 21,391
Selling and marketing   6,107     2,028     10,196     4,446  
Total operating expenses   19,357     21,615     34,125     42,950  
 
Loss from operations (2,674 ) (7,615 ) (2,996 ) (16,776 )
Non-operating income (expense):
Interest income 30 55 50 125
Interest expense (592 ) (614 ) (1,184 ) (1,225 )
Other income (expense), net   (555 )   (3,122 )   719     (3,257 )
Total non-operating income (expense), net   (1,117 )   (3,681 )   (415 )   (4,357 )
 
Loss before income taxes (3,791 ) (11,296 ) (3,411 ) (21,133 )
Income tax benefit (provision)   2,972     2,277     664     5,205  
Net loss $ (819 ) $ (9,019 ) $ (2,747 ) $ (15,928 )
 
Net loss per share:
Basic net loss per share $ (0.02 ) $ (0.22 ) $ (0.07 ) $ (0.38 )
Diluted net loss per share $ (0.02 ) $ (0.22 ) $ (0.07 ) $ (0.38 )
Weighted average common shares outstanding - basic   41,710     41,864     41,706     41,858  
Weighted average common shares outstanding - diluted   41,710     41,864     41,706     41,858  
 
Comprehensive loss:
Net loss $ (819 ) $ (9,019 ) $ (2,747 ) $ (15,928 )
Other comprehensive income (loss):
Unrealized gain (loss) on investments, net of tax effect (2 ) (3 ) (5 ) 8
Foreign currency translation   -     2,845     (1,592 )   3,282  
Comprehensive income (loss) $ (821 ) $ (6,177 ) $ (4,344 ) $ (12,638 )
 

Sucampo Pharmaceuticals, Inc.    
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except share data)
 
June 30, December 31,
  2012     2011  
ASSETS:
Current assets:
Cash and cash equivalents $ 61,691 $ 50,662
Investments, current 9,685 24,452
Product royalties receivable 11,703 10,795
Unbilled accounts receivable 751 2,036
Accounts receivable, net 606 4,616
Prepaid and income taxes receivable 3,292 2,845
Deferred tax assets, current 34 163
Deferred charge, current 673 3,057
Restricted cash, current 15,113 15,113
Prepaid expenses and other current assets   1,563     1,177  
Total current assets 105,111 114,916
 
Investments, non-current - 998
Property and equipment, net 1,653 1,669
Intangibles assets, net 7,903 8,364
Deferred tax assets, non-current 1,653 2,089
Deferred charge, non-current 5,549 26,751
Restricted cash, non-current 2,096 2,129
Other assets   973     653  
Total assets $ 124,938   $ 157,569  
 
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 5,345 $ 6,978
Accrued expenses 9,228 13,648
Deferred revenue, current 3,793 3,888
Deferred tax liability, current 18 2,167
Notes payable, current   20,100     20,400  
Total current liabilities 38,484 47,081
 
Notes payable, non-current 40,328 39,227
Deferred revenue, non-current 6,722 7,045
Deferred tax liability, non-current 1,768 23,019
Other liabilities   2,007     2,603  
Total liabilities   89,309     118,975  
 
 
 
Stockholders' equity:

Preferred stock, $0.01 par value; 5,000,000 shares authorized at June 30, 2012 and December 31, 2011; no shares issued and outstanding at June 30, 2012 and December 31, 2011

- -

Class A common stock, $0.01 par value; 270,000,000 shares authorized at June 30, 2012 and December 31, 2011; 15,709,887 and 15,690,780 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively December 31, 2011, respectively

157 157

Class B common stock, $0.01 par value; 75,000,000 shares authorized at June 30, 2012 and December 31, 2011; 26,191,050 shares issued and outstanding at June 30, 2012 and December 31, 2011

262 262
Additional paid-in capital 61,336 59,957
Accumulated other comprehensive income 16,257 17,854
Treasury stock, at cost; 186,987 shares (700 ) (700 )
Accumulated deficit   (41,683 )   (38,936 )
Total stockholders' equity   35,629     38,594  
Total liabilities and stockholders' equity $ 124,938   $ 157,569  
 

Sucampo Pharmaceuticals, Inc.        
Key Segment Information (unaudited)
(in thousands)
 
(In thousands) Americas Europe Asia Consolidated
Three Months Ended June 30, 2012
Research and development revenue $ 2,734 $ (1 ) $ 363 $ 3,096
Product royalty revenue 11,703 - - 11,703
Co-promotion revenue 1,757 - - 1,757
Contract and collaboration revenue   142     (28 )   13     127  
Total revenues 16,336 (29 ) 376 16,683
Research and development expenses 3,189 1,345 701 5,235
Depreciation and amortization 124 247 10 381
Other operating expenses   12,745     699     297     13,741  
Income (loss) from operations 278 (2,320 ) (632 ) (2,674 )
Interest income 22 7 1 30
Interest expense - (550 ) (42 ) (592 )
Other non-operating income (expense), net   (42 )   (273 )   (240 )   (555 )
Income (loss) before income taxes $ 258   $ (3,136 ) $ (913 ) $ (3,791 )
Capital expenditures $ 212   $ 11   $ -   $ 223  
 
Three Months Ended June 30, 2011
Research and development revenue $ 1,449 $ - $ 293 $ 1,742
Product royalty revenue 11,043 - - 11,043
Co-promotion revenue 1,061 - - 1,061
Contract and collaboration revenue   142     -     12     154  
Total revenues 13,695 - 305 14,000
Research and development expenses 5,587 860 1,446 7,893
Depreciation and amortization 55 1 22 78
Other operating expenses   13,114     252     278     13,644  
Loss from operations (5,061 ) (1,113 ) (1,441 ) (7,615 )
Interest income 54 - 1 55
Interest expense - (573 ) (41 ) (614 )
Other non-operating income (expense), net   (7 )   (3,043 )   (72 )   (3,122 )
Loss before income taxes $ (5,014 ) $ (4,729 ) $ (1,553 ) $ (11,296 )
Capital expenditures $ 36   $ -   $ 11   $ 47  
 
Six Months Ended June 30, 2012
Research and development revenue $ 5,213 $ 2 $ 466 $ 5,681
Product royalty revenue 22,631 - - 22,631
Co-promotion revenue 2,523 - - 2,523
Contract and collaboration revenue   283     (15 )   26     294  
Total revenues 30,650 (13 ) 492 31,129
Research and development expenses 4,011 2,862 1,714 8,587
Depreciation and amortization 244 467 20 731
Other operating expenses   22,798     1,415     594     24,807  
Income (loss) from operations 3,597 (4,757 ) (1,836 ) (2,996 )
Interest income 40 9 1 50
Interest expense - (1,100 ) (84 ) (1,184 )
Other non-operating income (expense), net   33     (83 )   769     719  
Income (loss) before income taxes $ 3,670   $ (5,931 ) $ (1,150 ) $ (3,411 )
Capital expenditures $ 252   $ 3,445   $ -   $ 3,697  
 
Six Months Ended June 30, 2011
Research and development revenue $ 2,897 $ - $ 809 $ 3,706
Product royalty revenue 20,161 - - 20,161
Co-promotion revenue 1,999 - - 1,999
Contract and collaboration revenue   283     -     25     308  
Total revenues 25,340 - 834 26,174
Research and development expenses 12,913 1,387 2,813 17,113
Depreciation and amortization 453 158 39 650
Other operating expenses   24,218     404     565     25,187  
Loss from operations (12,244 ) (1,949 ) (2,583 ) (16,776 )
Interest income 123 1 1 125
Interest expense - (1,143 ) (82 ) (1,225 )
Other non-operating income (expense), net   (11 )   (3,242 )   (4 )   (3,257 )
Loss before income taxes $ (12,132 ) $ (6,333 ) $ (2,668 ) $ (21,133 )
Capital expenditures $ 78   $ 6,000   $ 102   $ 6,180  
 




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