Sucampo Pharmaceuticals Reports Financial Results for the Second Quarter of 2007
For the three months ended June 30, 2007, product royalty revenue, whichrelates to sales of AMITIZA(R) (lubiprostone, 24 mcg), was $9.6 million, anincrease of 113% over the product royalty revenue in the second quarter of2006, which included initial stocking orders for AMITIZA following its launchin April 2006. The second quarter 2007 product royalty revenue of $9.6 millionalso represents a 314% increase over the product royalty revenue of $2.3million in the quarter ended March 31, 2007, reflecting an increase in productdemand following the recent withdrawal of Zelnorm(R) from the U.S. market byNovartis. AMITIZA was approved by the U.S. Food and Drug Administration (FDA)in January 2006 for the treatment of Chronic Idiopathic Constipation inadults.
Total revenue in the second quarter of 2007 was $48.9 million, as comparedwith $15.4 million in the same period of 2006. Second quarter 2007 revenueincluded research and development revenue of $38.1 million, as compared with$9.7 million in the same period of 2006. In June 2007, Sucampo submitted asupplemental New Drug Application (sNDA) seeking U.S. marketing approval for alower strength of lubiprostone (8 mcg) as a treatment for patients withirritable bowel syndrome with constipation (IBS-C), a disease that affectsnearly one third of the estimated 58 million Americans who suffer from IBS. Asa result of this filing, Sucampo recorded research and development revenue of$30.0 million in the second quarter of 2007 for a milestone payment earnedpursuant to Sucampo's collaboration and license agreement with TakedaPharmaceutical Company Limited, the Japanese parent company of TakedaPharmaceuticals North America, Inc., which is co-marketing AMITIZA for thetreatment of Chronic Idiopathic Constipation in the United States.
Sucampo completed its initial public offering (IPO) of Class A commonstock on August 2, 2007. The IPO generated net proceeds for Sucampo afterexpenses and fees of approximately $28.4 million. In connection with theoffering, all outstanding preferred stock was converted automatically intoClass A common stock.
Operating expenses in the second quarter of 2007 were $28.1 million, ascompared with $12.7 million for the same period of 2006. The increasereflected a one-time $10.2 million expense recorded in the second quarter of2007 related to cash and stock awards to the company's founders. The finalvalue of these awards, which were settled immediately following the IPO, wasadjusted because the per share offering price in the IPO was less than theestimated fair value of the common stock on the grant date of these cash andstock awards. Consequently, Sucampo will record a reduction in operatingexpenses of approximately $1.0 million in the third quarter of 2007 to reflectthis adjustment.
For the six months ended June 30, 2007, net income was $14.4 million, or$0.41 per diluted share, compared with $16.8 million, or $0.49 per dilutedshare, for the same period in 2006. Although income before income taxes in thesix months ended June 30, 2007 increased to $22.2 million compared with $16.8million in the same period of 2006, this increase in net income was more thanoffset by a tax provision of $7.8 million in the first six months of 2007.There was no tax provision in the comparable period of 2006. Total revenuesfor the first six months of 2007 were $61.9 million, compa
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