EX-99.1 2 a4695219ex991.txt PRESS RELEASE EXHIBIT 99.1 SciClone Reports Second Quarter Results SAN MATEO, Calif.--(BUSINESS WIRE)--Aug. 4, 2004--SciClone Pharmaceuticals, Inc. (Nasdaq:SCLN) today reported results for the second quarter and six months ended June 30, 2004. Revenues from sales of ZADAXIN(R), SciClone's lead product candidate, were $5,613,000 for the second quarter and $11,027,000 for the six months ended June 30, 2004. Net loss for the second quarter 2004 was $2,877,000 or $0.06 loss per share, and for the six months ended June 30, 2004 the net loss was $6,010,000 or $0.13 loss per share. SciClone reported $1,135,000 in contract revenue for the second quarter of 2004 including the $1,000,000 payment SciClone received from its European marketing and development partner, Sigma-Tau, for successfully achieving the 1,000 patient enrollment milestone for SciClone's U.S. phase 3 hepatitis C trials. In comparison, revenues for the second quarter of 2003 were significantly higher at $16,207,000, a 300% increase over the results for the prior quarter and primarily due to the unanticipated increase in sales of ZADAXIN in response to the SARS epidemic in China. Revenues for the six months ended June 30, 2003 were $21,207,000. Net income for the second quarter 2003 was $5,124,000 or $0.13 earnings per share, and net income for the six months ended June 30, 2003 was $2,262,000 or $0.06 earnings per share. Research and development expenses were $5,145,000 for the second quarter 2004, compared to $4,308,000 for the second quarter 2003. The increase in research and development expenses is attributable to the ongoing U.S. phase 3 hepatitis C trials. Research and development expenses for the six months ended June 30, 2004 totaled $9,076,000, compared to the $8,091,000 incurred in the six months ended June 30, 2003. Cash, cash equivalents and short-term investments totaled $54,970,000 at June 30, 2004, compared to $58,253,000 at March 31, 2004 and $26,372,000 at June 30, 2003. Richard A. Waldron, SciClone's Chief Financial Officer and member of the Office of the President commented, "In the first and second quarters of 2004, we made significant progress in executing our operational and financial plans. In addition, following Donald Sellers' resignation as President and Chief Executive Officer, the transition to the Office of President has proceeded smoothly, and we believe the management of all key areas is well in hand. Moving forward, the Board of Directors is undertaking efforts to identify and select the most appropriate candidate for the position of Chief Executive Officer." "During the quarter we achieved the critical corporate objective of completing enrollment of the U.S. phase 3 clinical trials," said Alfred Rudolph, M.D., Chief Operating Officer and member of the Office of the President. "Our U.S. phase 3 clinical trials remain on track to be completed by the end of 2005. Our product development efforts are focused on enhancing the prospects of commercial introduction of ZADAXIN in the pharmaceutical markets of the United States, Europe and Japan, and the broadening of our product pipeline." Financial outlook For the fiscal year 2004, SciClone is refining its previous financial guidance for key financial items. For 2004, net sales of ZADAXIN are now expected to be slightly greater than $22 million, compared to earlier guidance of approximately $21 to $22 million. Research and development expenses for the year are now expected to be between $19 and $21 million, lower than earlier guidance of between $21 and $23 million due to timing and cost-sharing of new initiatives. The company is also revising guidance for net loss for 2004 to be between $15 and $17 million, lower than the earlier guidance of between $18 and $20 million. Similarly, a smaller net loss per share is now expected to be between $0.35 and $0.39, compared to earlier guidance of between $0.40 and $0.45. Guidance on year-end cash, cash equivalents and short-term investments is now between $45 and $47 million, compared to the earlier estimate of between of $43 to $47 million. SciClone management will host a live audio webcast and conference call at 11:30 a.m. EDT (8:30 a.m. PDT) today, Wednesday, August 4, 2004. The conference call will include forward-looking statements. Financial information to be discussed in the conference call will be posted on the investor relations section of SciClone's website at http://www.sciclone.com prior to the commencement of the conference call. To participate in the conference call, please log on at http://www.sciclone.com or call 800-901-5241 (U.S. and Canada) or 617-786-2963 (International) and enter passcode 22051378. A replay of the conference call will be available for two weeks after 2 p.m. today, Wednesday, August 4, 2004. To access the replay, log on to http://www.sciclone.com or call 888-286-8010 (U.S. and Canada) or 617-801-6888 (International) and enter passcode 60322212. About SciClone SciClone Pharmaceuticals is a biopharmaceutical company engaged in the development of therapeutics to treat life-threatening diseases. SciClone's ZADAXIN is currently being evaluated in several clinical trials, including two phase 3 hepatitis C clinical trials in the U.S., a completed phase 3 hepatitis B clinical trial in Japan, a phase 2 malignant melanoma clinical trial in Europe, two phase 2 liver cancer pilot studies in the U.S., a hepatitis C triple therapy open-label clinical trial in Mexico, and a hepatitis B combination therapy trial in Taiwan. SciClone recently announced plans for a ZADAXIN phase 3 hepatitis C triple therapy clinical trial in Europe. The Company's other principal drug development candidate is SCV-07, a potentially orally available therapeutic to treat viral and other infectious diseases. The information in this press release contains forward-looking statements including our expectations and beliefs regarding future sales of our products, future financial results, research and development expense levels, asset levels, timing of filing of our Japanese New Drug Application, timing and completion of both of our phase 3 hepatitis C clinical trials, timing of enrollment of the phase 3 triple therapy hepatitis C trial and the fact that the experimental or clinical data described may imply certain actual results in human clinical trials or in larger patient populations. Words such as "expects," "plans," "believe," "may," "will," "anticipated," "intended" and variations of these words or similar expressions are intended to identify forward-looking statements. In addition, any statements that refer to expectations, goals, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors, including changes in demand for ZADAXIN, the progress or failure of clinical trials, the statistical significance of data obtained from clinical trials, maintenance of the sufficiency and eligibility of the enrolled patient population, unanticipated delays or additional expenses incurred during our clinical trials, our future cash requirements, unexpected delays in preparation of the Japanese New Drug Application, delays in analyzing and synthesizing data obtained from clinical trials, future actions of our strategic partners, unexpected delays in preparation for enrollment, future actions by the U.S. Food and Drug Administration or equivalent regulatory authorities in Europe and Japan and the fact that experimental data and clinical results derived from studies with a limited group of patients may not be predictive of the results of larger studies, as well as other risks and uncertainties described in SciClone's filings with the Securities and Exchange Commission. SCICLONE PHARMACEUTICALS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three months ended Six months ended June 30, June 30, 2004 2003 2004 2003 ------------ ------------ ------------ ------------ Product sales $5,613,000 $16,207,000 $11,027,000 $21,207,000 Contract revenue 1,135,000 224,000 1,363,000 448,000 ------------ ------------ ------------ ------------ Total revenue 6,748,000 16,431,000 12,390,000 21,655,000 Cost of product sales 1,178,000 2,931,000 2,320,000 3,947,000 ------------ ------------ ------------ ------------ Gross margin 5,570,000 13,500,000 10,070,000 17,708,000 Operating expenses: Research and development 5,145,000 4,308,000 9,076,000 8,091,000 Sales and marketing 2,148,000 3,025,000 4,591,000 5,254,000 General and administrative 1,156,000 1,035,000 2,449,000 2,047,000 ------------ ------------ ------------ ------------ Total operating expenses 8,449,000 8,368,000 16,116,000 15,392,000 ------------ ------------ ------------ ------------ Income (loss) from operations (2,879,000) 5,132,000 (6,046,000) 2,316,000 Interest and investment income 112,000 43,000 228,000 96,000 Interest and investment expense (91,000) (90,000) (181,000) (181,000) Other income (expense), net (19,000) 39,000 (11,000) 31,000 ------------ ------------ ------------ ------------ Net income (loss) $(2,877,000) $5,124,000 $(6,010,000) $2,262,000 ============ ============ ============ ============ Earnings (loss) per share: Basic net income (loss) per share ($0.06) $0.14 ($0.13) $0.06 ============ ============ ============ ============ Diluted net income (loss) per share ($0.06) $0.13 ($0.13) $0.06 ============ ============ ============ ============ Weighted average shares used in computing: Basic net income (loss) per share 44,612,260 37,672,876 44,590,674 37,497,477 ============ ============ ============ ============ Diluted net income (loss) per share 44,612,260 40,490,411 44,590,674 39,338,964 ============ ============ ============ ============ SCICLONE PHARMACEUTICALS, INC. CONSOLIDATED BALANCE SHEETS ASSETS June 30, December 31, 2004 2003 ------------- ------------- (unaudited) Current assets: Cash and cash equivalents $44,818,000 $52,899,000 Restricted short-term investments 694,000 695,000 Other short-term investments 9,458,000 9,381,000 Accounts receivable, net of allowance of $638,000 in 2004 and 2003 11,510,000 10,142,000 Inventories 5,115,000 5,778,000 Prepaid expenses and other current assets 1,343,000 2,456,000 ------------- ------------- Total current assets 72,938,000 81,351,000 Property and equipment, net 322,000 325,000 Intangible assets, net 577,000 612,000 Other assets 1,542,000 1,534,000 ------------- ------------- Total assets $75,379,000 $83,822,000 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $2,430,000 $3,423,000 Accrued compensation and employee benefits 1,033,000 1,440,000 Accrued clinical trials expense 1,018,000 1,889,000 Accrued professional fees 423,000 481,000 Deferred revenue 537,000 537,000 Other accrued expenses 612,000 631,000 ------------- ------------- Total current liabilities 6,053,000 8,401,000 Deferred revenue 403,000 671,000 Other long-term liabilities 900,000 900,000 Convertible notes payable 5,600,000 5,600,000 Commitments and contingencies Stockholders' equity: Preferred stock; $0.001 par value; 10,000,000 shares authorized; no shares outstanding in 2004 and 2003, respectively - - - - - - Common stock; $0.001 par value; 75,000,000 shares authorized; 44,625,754 and 44,484,144 shares issued and outstanding 45,000 44,000 Additional paid-in capital 206,479,000 206,320,000 Accumulated other comprehensive income 199,000 176,000 Accumulated deficit (144,300,000) (138,290,000) ------------- ------------- Total stockholders' equity 62,423,000 68,250,000 ------------- ------------- Total liabilities and stockholders' equity $75,379,000 $83,822,000 ============= ============= SCICLONE PHARMACEUTICALS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six months ended June 30, 2004 2003 ------------ ------------ Operating activities: Net income (loss) $(6,010,000) $2,262,000 Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 99,000 90,000 Changes in operating assets and liabilities: Accounts receivable, net (1,368,000) (2,647,000) Inventories 663,000 495,000 Prepaid expenses and other assets 1,093,000 (59,000) Accounts payable and other accrued expenses (1,011,000) 1,027,000 Accrued compensation and employee benefits (408,000) (250,000) Accrued clinical trials expense (871,000) (226,000) Accrued professional fees (57,000) (132,000) Deferred revenue (269,000) (448,000) ------------ ------------ Net cash (used in) provided by operating activities (8,139,000) 112,000 ------------ ------------ Investing activities: Purchase of property and equipment (49,000) (20,000) Payment on purchase of marketable securities (53,000) (4,000) ------------ ------------ Net cash used in investing activities (102,000) (24,000) ------------ ------------ Financing activities: Proceeds from issuance of common stock, net of financing costs 160,000 5,042,000 ------------ ------------ Net cash provided by financing activities 160,000 5,042,000 ------------ ------------ Net (decrease) increase in cash and cash equivalents (8,081,000) 5,130,000 Cash and cash equivalents, beginning of period 52,899,000 20,233,000 ------------ ------------ Cash and cash equivalents, end of period $44,818,000 $25,363,000 ============ ============ CONTACT: SciClone Pharmaceuticals, Inc. Richard A. Waldron, 650-358-3437