Image source: Sciclone Pharmaceuticals.
After reporting encouraging full-year financials earlier in the
month, news that it will be added to the S&P 600 index of
stocks sent shares in
surging by 14.06% at 3:30 p.m. ET.
SciClone's management reported on March 10 that its revenue
climbed 17% year over year to $157.3 million in 2015.
Revenue came predominately from sales of Zadaxin, a
hepatitis B treatment the company markets in China. Zadaxin's
sales totaled $146.1 million, up 16% from the year before.
SciClone also announced that it has fully resolved
investigations by the SEC and Department of Justice. The
company settled with the SEC for $12.8 million, including
disgorgement, prejudgment interest, and a penalty, and the DOJ
opted not to pursue further action.
On Wednesday, the S&P Dow Jones Indices announced that
SciClone will replace recently acquired
in the S&P 600, a small-cap index of stocks.
The SEC and DOJ investigation have been a big overhang on the
company. According to documents filed by the SEC, between 2007
and 2012, employees of SciClone subsidiaries tasked with
selling SciClone's drugs gave money, gifts, and other things of
value to foreign officials, including healthcare professionals
employed by state-owned hospitals. These transactions were
falsely recorded by SciClone as legitimate business
As part of its settlement with the SEC, SciClone has hired
compliance officers for its China operations and doubled down
on policies and procedures to prevent these activities in the
Assuming SciClone's missteps are truly in the rear-view
mirror, the company may be intriguing as an investment. On a
GAAP basis, net income per diluted share was $0.59 (after
deducting $10.8 million in settlement expenses), up from $0.25
in 2014. If SciClone can continue to grow Zadaxin in China,
launch additional products there, and those sales continue to
translate into profit growth, then the size and scope of the
Chinese healthcare market could make this stock worth
considering by risk-tolerant investors seeking exposure to
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Here's Why SciClone Pharmaceuticals' Shares Are
Soaring 14% Today
originally appeared on Fool.com.
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