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SciClone Pharmaceuticals, Inc.(SCLN)
Q4 2007 Earnings Call
March 13, 2008 11:00 am ET
Friedhelm Blobel, Ph.D. - President and Chief Executive Officer
Richard A. Waldron - Executive Vice President and Chief Financial Officer
Israel Rios, M.D. - Chief Medical Officer
Hamed Khorsand-BWS Financial.
Alan Leong-Biotech Stock Research
Rand Patel (sp)-Alpha Investments (sp).
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Thank you, Sean. Good morning and thank you for joining us today on our Fourth Quarter and Year End 2007 Conference Call. Today we have included slides in our conference call. It can be accessed through the IR section of our website at www.SciClone.com. Before I begin, I would like to briefly remind you that we'll be making forward-looking statements during this call. These statements are subject to risk factors which include but are not limited to those detailed in our SEC filings.
Looking back at 2007 we achieved many significant milestones as we continue to execute our strategy, focused on growing our two main assets. The first is our late stage biotech business targeting the US and Europe pharmaceutical markets. The second is our valuable revenue and cash generator, SciClone China. We are executing our strategy with a goal of developing late stage products for viral infectious diseases and head for the US and European pharmaceutical markets and building SciClone China's infrastructure and capabilities to capture the opportunities in this rapidly growing pharmaceutical market. Looking forward we are gaining important momentum as we enter 2008, a year in which we expect to generate essential cash flow from SciClone China, report data from both our large Phase 3 and to prove of concept Phase 2 clinical trials for HDV.
I would like to take a minute to review the most important recent highlights for SciClone. Starting with our top line performance our strong revenue growth continues to generate valuable cash flow to fund the late stage development of all products for the US and European pharmaceutical markets. We increased revenue with 18% for the fourth quarter and 14% for the full year 2007 on strong demand for our lead product Zadaxin. Over 90% of our Zadaxin sales are to China where we continue to expand and leverage SciClone China's capabilities in this rapidly growing pharmaceutical market. Second, we are making great strides in the clinical development of our pipeline products. We recently reported promising interim blinded data from the nearly completed Phase 3 triple therapy hepatitis C trial for thymalfasin and look forward to un-blinding final results in the third quarter of this year.
Third, we began a Phase 2 pancreatic cancer clinical trial for RP101, a nucleoside analog which may act to enhance the therapeutic effect of chemotherapy. We also receive all from drug designation for RP101 from the US FDA. And finally we continue our outreach with investors and analysts by presenting our corporate strategy in New York at the BIO CEO and Investor Conference in February and the Susquehanna International Group Healthcare Conference in March. I will give more detail regarding each of these achievements later in the call but first I'd like to turn the call over to Rick Waldron, our Executive Vice President and Chief Financial Officer for a review of our fourth quarter and full year 2007 financials. Rick?
Thank you, Friedhelm. We are pleased with our solid financial results for the fourth quarter and full year 2007 and look forward to strong revenue growth for 2008. Our consolidated results for the fourth quarter of 2007 which you can see on Slide #5 if you're viewing the slide pack on the website; we're driven by an 18% increase in revenues to $10 million. For the full year revenues grew 14% to $37 million which exceeded our previous guidance of 35 to $36 million. This growth was fueled by strong demand for Zadaxin in China, a growing pharmaceutical market which accounts for over 90% of our Zadaxin sales.
As we continue to invest in the development of our late stage products, our net loss for the fourth quarter 2007 was $3.6 million, or $0.08 per share, compared to $1.5 million or $0.03 per share for the prior year.
For the full year 2007, net loss was $9.9 million, or $0.22 per share, which is less then our previous guidance of $13 million, or $0.28 per share.
For 2006 net income was $727,000, or $0.02 per share, which included an $8 million settlement received in April of 2006.
Our cash position totaled $35.3 million at December 31, 2007 compared with $37.5 million at September 30. This figure is considerably higher then our guidance of $26 million for the year end. Primarily due to lower then planned fourth quarter R&D expenses resulting from our decision to review interim data from the HCV clinical trial before proceeding with extensive clinical trial development work for thymalfasin for the malignant melanoma indication.
The year end cash position was also augmented by strong accounts receivable collection from China in the fourth quarter.
I would like to note that both R&D expenses and net loss for 2007 were lower due to the January 2008 initiation of the RP101 trial and review of the thymalfasin program, which prompted us to review the Phase 3 results.