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þ
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QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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o
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TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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Delaware
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30-0520478
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(State
or other jurisdiction of
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(I.R.S.
employer
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|
incorporation
or organization)
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identification
no.)
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4520
East-West Highway, Suite 300
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(301)
961-3400
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Bethesda,
MD 20814
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(Registrant’s
telephone number,
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(Address
of principal executive offices,
|
including
area code)
|
|
including
zip code)
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|
Large
accelerated filer o
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Accelerated
filer þ
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Non
accelerated filer o
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Smaller
reporting company o
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|||
(Do
not check if a smaller reporting
company)
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Page
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Part
I. FINANCIAL INFORMATION
|
|||
Item
1.
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Condensed
Consolidated Financial Statements (unaudited)
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1
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|
Condensed
Consolidated Balance Sheets as of June 30, 2010 and December 31,
2009
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1
|
||
Condensed
Consolidated Statements of Operations and Comprehensive Income (Loss) for
the Three and Six Months Ended June 30, 2010 and 2009
|
2
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||
Condensed
Consolidated Statement of Changes in Stockholders’ Equity for the Six
Months Ended June
30, 2010
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3
|
||
Condensed
Consolidated Statements of Cash Flows for the Six Months Ended June 30,
2010 and 2009
|
4
|
||
Notes
to Condensed Consolidated Financial Statements
|
5
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||
Item
2.
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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20
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|
Item
3.
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Quantitative
and Qualitative Disclosures about Market Risk
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30
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|
Item
4.
|
Controls
and Procedures
|
30
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Part
II. OTHER INFORMATION
|
|||
Item
1.
|
Legal
Proceedings
|
32
|
|
Item
1A.
|
Risk
Factors
|
32
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|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
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32
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|
Item
3.
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Defaults
Upon Senior Securities
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32
|
|
Item
4.
|
Reserved
|
32
|
|
Item
6.
|
Exhibits
|
33
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|
SIGNATURES
|
34
|
||
INDEX
TO EXHIBITS
|
June
30,
|
December
31,
|
|||||||
2010
|
2009
|
|||||||
ASSETS:
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 42,293 | $ | 26,714 | ||||
Investments,
current
|
56,163 | 72,434 | ||||||
Product
royalties receivable
|
9,612 | 11,023 | ||||||
Unbilled
accounts receivable
|
16 | 644 | ||||||
Accounts
receivable, net
|
889 | 512 | ||||||
Deferred
tax assets, net
|
135 | 315 | ||||||
Prepaid
expenses and other current assets
|
2,209 | 3,137 | ||||||
Total
current assets
|
111,317 | 114,779 | ||||||
Investments,
non-current
|
15,935 | 19,167 | ||||||
Property
and equipment, net
|
2,117 | 2,242 | ||||||
Deferred
tax assets, non-current
|
4,255 | 3,995 | ||||||
Other
assets
|
3,551 | 4,788 | ||||||
Total
assets
|
$ | 137,175 | $ | 144,971 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY:
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 2,335 | $ | 3,195 | ||||
Accrued
expenses
|
7,941 | 6,545 | ||||||
Deferred
revenue, current
|
4,298 | 10,565 | ||||||
Income
taxes payable
|
428 | 349 | ||||||
Total
current liabilities
|
15,002 | 20,654 | ||||||
Deferred
revenue, non-current
|
8,296 | 8,643 | ||||||
Other
liabilities
|
2,098 | 2,121 | ||||||
Total
liabilities
|
25,396 | 31,418 | ||||||
Commitments
(Note 7)
|
||||||||
Stockholders'
equity:
|
||||||||
Preferred
stock, $0.01 par value; 5,000,000 shares authorized at June 30, 2010 and
December 31, 2009; no shares issued and outstanding at June 30,
2010 and December 31, 2009
|
- | - | ||||||
Class
A common stock, $0.01 par value; 270,000,000 shares authorized at June 30,
2010 and December 31, 2009; 15,657,937 and 15,655,730 shares issued
and outstanding at June 30, 2010 and December 31, 2009,
respectively
|
156 | 156 | ||||||
Class
B common stock, $0.01 par value; 75,000,000 shares authorized at June 30,
2010 and December 31, 2009; 26,191,050 shares issued and
outstanding at June 30, 2010 and December 31, 2009
|
262 | 262 | ||||||
Additional
paid-in capital
|
99,346 | 98,636 | ||||||
Accumulated
other comprehensive income
|
277 | 484 | ||||||
Retained
earnings
|
11,738 | 14,015 | ||||||
Total
stockholders' equity
|
111,779 | 113,553 | ||||||
Total
liabilities and stockholders' equity
|
$ | 137,175 | $ | 144,971 |
Three
Months Ended June 30,
|
Six
Months Ended June 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Revenues:
|
||||||||||||||||
Research
and development revenue
|
$ | 2,789 | $ | 7,395 | $ | 6,846 | $ | 12,921 | ||||||||
Product
royalty revenue
|
9,612 | 8,914 | 19,385 | 17,860 | ||||||||||||
Co-promotion
revenue
|
1,220 | 1,244 | 2,075 | 2,140 | ||||||||||||
Contract
and collaboration revenue
|
154 | 152 | 305 | 298 | ||||||||||||
Total
revenues
|
13,775 | 17,705 | 28,611 | 33,219 | ||||||||||||
Operating
expenses:
|
||||||||||||||||
Research
and development
|
4,854 | 9,621 | 10,220 | 19,586 | ||||||||||||
General
and administrative
|
6,604 | 2,924 | 12,363 | 6,379 | ||||||||||||
Selling
and marketing
|
2,313 | 2,188 | 4,500 | 4,700 | ||||||||||||
Milestone
royalties - related parties
|
- | 375 | - | 875 | ||||||||||||
Product
royalties - related parties
|
1,709 | 1,583 | 3,446 | 3,173 | ||||||||||||
Total
operating expenses
|
15,480 | 16,691 | 30,529 | 34,713 | ||||||||||||
Income
(loss) from operations
|
(1,705 | ) | 1,014 | (1,918 | ) | (1,494 | ) | |||||||||
Non-operating
income (expense):
|
||||||||||||||||
Interest
income
|
177 | 219 | 388 | 531 | ||||||||||||
Other
income (expense), net
|
(135 | ) | (608 | ) | (227 | ) | 214 | |||||||||
Total
non-operating income (expense), net
|
42 | (389 | ) | 161 | 745 | |||||||||||
Income
(loss) before income taxes
|
(1,663 | ) | 625 | (1,757 | ) | (749 | ) | |||||||||
Income
tax provision
|
(315 | ) | (863 | ) | (520 | ) | (1,264 | ) | ||||||||
Net
loss
|
$ | (1,978 | ) | $ | (238 | ) | $ | (2,277 | ) | $ | (2,013 | ) | ||||
Net
loss per share:
|
||||||||||||||||
Basic
net loss per share
|
$ | (0.05 | ) | $ | (0.01 | ) | $ | (0.05 | ) | $ | (0.05 | ) | ||||
Diluted
net loss per share
|
$ | (0.05 | ) | $ | (0.01 | ) | $ | (0.05 | ) | $ | (0.05 | ) | ||||
Weighted
average common shares outstanding - basic
|
41,848 | 41,844 | 41,847 | 41,844 | ||||||||||||
Weighted
average common shares outstanding - diluted
|
41,848 | 41,844 | 41,847 | 41,844 | ||||||||||||
Comprehensive
income (loss):
|
||||||||||||||||
Net
loss
|
$ | (1,978 | ) | $ | (238 | ) | $ | (2,277 | ) | $ | (2,013 | ) | ||||
Other
comprehensive income (loss):
|
||||||||||||||||
Unrealized
gain (loss) on investments, net of tax effect
|
10 | (7 | ) | (7 | ) | (72 | ) | |||||||||
Foreign
currency translation
|
(220 | ) | 340 | (200 | ) | 137 | ||||||||||
Comprehensive
income (loss)
|
$ | (2,188 | ) | $ | 95 | $ | (2,484 | ) | $ | (1,948 | ) |
Accumulated
|
||||||||||||||||||||||||||||||||
Class
A
|
Class
B
|
Additional
|
Other
|
Total
|
||||||||||||||||||||||||||||
Common
Stock
|
Common
Stock
|
Paid-In
|
Comprehensive
|
Retained
|
Stockholders'
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Income
|
Earnings
|
Equity
|
|||||||||||||||||||||||||
Balance
at December 31, 2009
|
15,655,730 | $ | 156 | 26,191,050 | $ | 262 | $ | 98,636 | $ | 484 | $ | 14,015 | $ | 113,553 | ||||||||||||||||||
Employee
stock option expense
|
- | - | - | - | 702 | - | - | 702 | ||||||||||||||||||||||||
Stock
issued under employee stock purchase plan
|
2,207 | - | - | - | 8 | - | - | 8 | ||||||||||||||||||||||||
Foreign
currency translation
|
- | - | - | - | - | (200 | ) | - | (200 | ) | ||||||||||||||||||||||
Unrealized
loss on investments, net of tax effect
|
- | - | - | - | - | (7 | ) | - | (7 | ) | ||||||||||||||||||||||
Net
loss
|
- | - | - | - | - | - | (2,277 | ) | (2,277 | ) | ||||||||||||||||||||||
Balance
at June 30, 2010
|
15,657,937 | $ | 156 | 26,191,050 | $ | 262 | $ | 99,346 | $ | 277 | $ | 11,738 | $ | 111,779 |
Six
Months Ended June 30,
|
||||||||
2010
|
2009
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
loss
|
$ | (2,277 | ) | $ | (2,013 | ) | ||
Adjustments
to reconcile net loss to net cash provided by (used in) operating
activities:
|
||||||||
Depreciation
and amortization
|
459 | 309 | ||||||
Deferred
tax provision
|
(76 | ) | 738 | |||||
Stock-based
compensation
|
702 | 188 | ||||||
Amortization
of premiums on investments
|
869 | 508 | ||||||
Unrealized
gain on trading securities
|
- | (2,611 | ) | |||||
Unrealized
loss on settlement rights of auction rate securities
|
- | 2,362 | ||||||
Realized
gain on trading securities
|
(1,086 | ) | - | |||||
Realized
loss on settlement rights of auction rate securities
|
1,086 | - | ||||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
(377 | ) | (26 | ) | ||||
Unbilled
accounts receivable
|
628 | 750 | ||||||
Product
royalties receivable
|
1,411 | 812 | ||||||
Income
taxes payable
|
79 | (936 | ) | |||||
Accounts
payable
|
(887 | ) | 601 | |||||
Accrued
expenses
|
1,376 | 1,009 | ||||||
Deferred
revenue
|
(6,806 | ) | 9,445 | |||||
Other
assets and liabilities, net
|
927 | (123 | ) | |||||
Net
cash provided by (used in) operating activities
|
(3,972 | ) | 11,013 | |||||
Cash
flows from investing activities:
|
||||||||
Purchases
of investments
|
(40,534 | ) | (90,882 | ) | ||||
Proceeds
from sales of investments
|
12,000 | 9,504 | ||||||
Maturities
of investments
|
48,242 | 52,760 | ||||||
Purchases
of property and equipment
|
(157 | ) | (308 | ) | ||||
Purchase
of intangible assets
|
- | (2,919 | ) | |||||
Net
cash provided by (used in) investing activities
|
19,551 | (31,845 | ) | |||||
Cash
flows from financing activities:
|
||||||||
Proceeds
from employee stock purchase plan
|
8 | 9 | ||||||
Net
cash provided by financing activities
|
8 | 9 | ||||||
Effect
of exchange rates on cash and cash equivalents
|
(8 | ) | 184 | |||||
Net
increase (decrease) in cash and cash equivalents
|
15,579 | (20,639 | ) | |||||
Cash
and cash equivalents at beginning of period
|
26,714 | 62,562 | ||||||
Cash
and cash equivalents at end of period
|
$ | 42,293 | $ | 41,923 |
Three
Months Ended June 30,
|
Six
Months Ended June 30,
|
|||||||||||||||
(in
thousands, except per share data)
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Basic
net loss per share:
|
||||||||||||||||
Net
loss
|
$ | (1,978 | ) | $ | (238 | ) | $ | (2,277 | ) | $ | (2,013 | ) | ||||
Weighted
average class A and B common shares
|
||||||||||||||||
outstanding
|
41,848 | 41,844 | 41,847 | 41,844 | ||||||||||||
Basic
net loss per share
|
$ | (0.05 | ) | $ | (0.01 | ) | $ | (0.05 | ) | $ | (0.05 | ) | ||||
Diluted
net loss per share:
|
||||||||||||||||
Net
loss
|
$ | (1,978 | ) | $ | (238 | ) | $ | (2,277 | ) | $ | (2,013 | ) | ||||
Weighted
average class A and B common shares
|
||||||||||||||||
outstanding
for diluted net income per share
|
41,848 | 41,844 | 41,847 | 41,844 | ||||||||||||
Diluted
net loss per share
|
$ | (0.05 | ) | $ | (0.01 | ) | $ | (0.05 | ) | $ | (0.05 | ) |
June
30,
|
||||||||
(In
thousands)
|
2010
|
2009
|
||||||
Employee
stock options
|
1,400 | 670 | ||||||
Non-employee
stock options
|
450 | 450 |
June
30, 2010
|
||||||||||||||||
Unrealized
|
Unrealized
|
|||||||||||||||
(In
thousands)
|
Cost
|
Gains
|
Losses
|
Fair
Value
|
||||||||||||
Current:
|
||||||||||||||||
U.S.
Treasury bills and notes
|
$ | 1,004 | $ | - | $ | - | $ | 1,004 | ||||||||
U.S.
commercial paper
|
5,181 | 2 | - | 5,183 | ||||||||||||
U.S.
government securities
|
13,016 | 12 | (5 | ) | 13,023 | |||||||||||
Municipal
securities
|
16,600 | 6 | (9 | ) | 16,597 | |||||||||||
Certificates
of deposits
|
1,750 | 1 | - | 1,751 | ||||||||||||
Corporate
bonds
|
18,585 | 27 | (7 | ) | 18,605 | |||||||||||
Total
|
$ | 56,136 | $ | 48 | $ | (21 | ) | $ | 56,163 | |||||||
Non-current:
|
||||||||||||||||
U.S.
government securities
|
$ | 6,703 | $ | 5 | $ | (7 | ) | $ | 6,701 | |||||||
Municipal
securities
|
3,358 | 8 | - | 3,366 | ||||||||||||
Certificates
of deposits
|
250 | - | (1 | ) | 249 | |||||||||||
Corporate
bonds
|
5,625 | - | (6 | ) | 5,619 | |||||||||||
Total
|
$ | 15,936 | $ | 13 | $ | (14 | ) | $ | 15,935 |
December
31, 2009
|
||||||||||||||||
Unrealized
|
Unrealized
|
|||||||||||||||
(In
thousands)
|
Cost
|
Gains
|
Losses
|
Fair
Value
|
||||||||||||
Current:
|
||||||||||||||||
U.S.
Treasury bills and notes
|
$ | 2,999 | $ | - | $ | - | $ | 2,999 | ||||||||
U.S.
commercial paper
|
1,000 | - | - | 1,000 | ||||||||||||
U.S.
government securities
|
26,020 | 16 | (6 | ) | 26,030 | |||||||||||
Municipal
securities
|
25,339 | 4 | (7 | ) | 25,336 | |||||||||||
Certificates
of deposits
|
1,250 | - | (1 | ) | 1,249 | |||||||||||
Corporate
bonds
|
15,782 | 38 | - | 15,820 | ||||||||||||
Total
|
$ | 72,390 | $ | 58 | $ | (14 | ) | $ | 72,434 | |||||||
Non-current:
|
||||||||||||||||
U.S.
government securities
|
$ | 6,065 | $ | 7 | $ | (12 | ) | $ | 6,060 | |||||||
Municipal
securities
|
1,802 | 4 | - | 1,806 | ||||||||||||
Certificates
of deposits
|
500 | - | (2 | ) | 498 | |||||||||||
Corporate
bonds
|
1,891 | 1 | (3 | ) | 1,889 | |||||||||||
Auction
rate securities
|
10,000 | - | (1,086 | ) | 8,914 | |||||||||||
Total
|
$ | 20,258 | $ | 12 | $ | (1,103 | ) | $ | 19,167 |
Fair Value Measurements at Reporting Date Using
|
||||||||||||||||
June 30, 2010
|
Quoted Prices in
Active Markets
for identical
Assets
|
Significant
Other
Observable
Inputs
|
Significant
Unobservable
Inputs
|
|||||||||||||
(In
thousands)
|
(Level
1)
|
(Level
2)
|
(Level
3)
|
Total
|
||||||||||||
U.S.
Treasury bills and notes
|
$ | 1,004 | $ | - | $ | - | $ | 1,004 | ||||||||
U.S.
government securities
|
19,723 | - | - | 19,723 | ||||||||||||
U.S.
commercial paper
|
- | 5,183 | - | 5,183 | ||||||||||||
Corporate
bonds
|
24,225 | - | - | 24,225 | ||||||||||||
Municipal
securities
|
19,963 | - | - | 19,963 | ||||||||||||
Certificates
of deposits
|
- | 2,000 | - | 2,000 | ||||||||||||
Total
assets measured at fair value
|
$ | 64,915 | $ | 7,183 | $ | - | $ | 72,098 |
Fair Value Measurements at Reporting Date Using
|
||||||||||||||||
December 31, 2009
|
Quoted Prices in
Active Markets
for identical
Assets
|
Significant
Other
Observable
Inputs
|
Significant
Unobservable
Inputs
|
|||||||||||||
(In
thousands)
|
(Level
1)
|
(Level
2)
|
(Level
3)
|
Total
|
||||||||||||
U.S.
Treasury bills and notes
|
$ | 2,999 | $ | - | $ | - | $ | 2,999 | ||||||||
U.S.
government securities
|
32,090 | - | - | 32,090 | ||||||||||||
U.S.
commercial paper
|
- | 1,000 | - | 1,000 | ||||||||||||
Corporate
bonds
|
17,709 | - | - | 17,709 | ||||||||||||
Municipal
securities
|
27,142 | - | - | 27,142 | ||||||||||||
Auction
rate securities
|
- | - | 8,914 | 8,914 | ||||||||||||
Settlement
rights for auction rate securities*
|
- | - | 1,086 | 1,086 | ||||||||||||
Certificates
of deposits
|
- | 1,747 | - | 1,747 | ||||||||||||
Total
assets measured at fair value
|
$ | 79,940 | $ | 2,747 | $ | 10,000 | $ | 92,687 |
June
30,
|
December
31,
|
|||||||
(In
thousands)
|
2010
|
2009
|
||||||
Research
and development costs
|
$ | 2,500 | $ | 3,624 | ||||
Employee
compensation
|
1,473 | 879 | ||||||
Selling
and marketing costs
|
129 | 731 | ||||||
Other
accrued expenses
|
3,839 | 1,311 | ||||||
Total
|
$ | 7,941 | $ | 6,545 |
(In
thousands)
|
||||
2010
(July - December)
|
$ | 715 | ||
2011
|
1,169 | |||
2012
|
966 | |||
2013
|
994 | |||
2014
|
1,024 | |||
2015
and thereafter
|
2,275 | |||
Total
minimum lease payments
|
$ | 7,143 |
Three
Months Ended June 30,
|
Six
Months Ended June 30,
|
|||||||||||||||
(In
thousands)
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Clinical
supplies
|
$ | 91 | $ | 577 | $ | 203 | $ | 1,620 | ||||||||
Other
research and development services
|
83 | 3,034 | 147 | 3,039 | ||||||||||||
$ | 174 | $ | 3,611 | $ | 350 | $ | 4,659 |
June
30,
|
December
31,
|
|||||||
(In
thousands)
|
2010
|
2009
|
||||||
Deferred
revenue, current
|
$ | 432 | $ | 431 | ||||
Deferred
revenue, non-current
|
6,035 | 6,256 | ||||||
$ | 6,467 | $ | 6,687 |
Amount
Deferred at
December 31,
|
Cash Received
for the Six
Months Ended
June 30,
|
Revenue
Recognized for
the Six Months
Ended June 30,
|
Foreign Currency
Effects for the Six
Months Ended June
30,
|
Amount
Deferred at
June 30,
|
||||||||||||||||
(In
thousands)
|
2009
|
2010
|
2010
|
2010
|
2010
|
|||||||||||||||
Collaboration
revenue:
|
||||||||||||||||||||
Up-front
payment associated with the Company's
|
||||||||||||||||||||
obligation
to participate in joint committees
|
$ | 812 | $ | - | $ | 23 | $ | 33 | $ | 822 | ||||||||||
Research
and development revenue:
|
||||||||||||||||||||
Up-front
payment
|
$ | 3,991 | $ | - | $ | 2,313 | $ | 93 | $ | 1,771 | ||||||||||
Development
milestone payment
|
$ | 3,366 | - | 1,951 | 78 | $ | 1,493 | |||||||||||||
Total
|
$ | 7,357 | $ | - | $ | 4,264 | $ | 171 | $ | 3,264 |
Amount
Deferred at
December 31,
|
Cash Received
for the Six
Months Ended
June 30,
|
Revenue
Recognized for
the Six Months
Ended June 30,
|
Change in Accounts
Receivable for the
Six Months Ended
June 30,
|
Amount
Deferred at
June 30,
|
||||||||||||||||
(In
thousands)
|
2009
|
2010
|
2010
|
2010*
|
2010
|
|||||||||||||||
Collaboration
revenue:
|
||||||||||||||||||||
Up-front
payment associated with the Company's
|
||||||||||||||||||||
obligation
to participate in joint committees
|
$ | 1,617 | $ | - | $ | 73 | $ | - | $ | 1,544 | ||||||||||
Research
and development revenue:
|
||||||||||||||||||||
Reimbursement
of research and development expenses
|
$ | 2,734 | $ | 965 | $ | 2,573 | $ | (628 | ) | $ | 498 | |||||||||
Product
royalty revenue
|
$ | - | $ | 20,796 | $ | 19,385 | $ | (1,411 | ) | $ | - | |||||||||
Co-promotion
revenue
|
$ | - | $ | 2,028 | $ | 2,075 | $ | 47 | $ | - |
Shares
|
Weighted Average
Exercise Price Per
Share
|
Weighted Average
Remaining
Contractual Term
(Years)
|
Aggregate
Intrinsic Value
|
|||||||||||||
Options
outstanding, December 31, 2009
|
358,700 | $ | 10.43 | |||||||||||||
Options
expired
|
(13,600 | ) | 10.00 | |||||||||||||
Options
outstanding, June 30, 2010
|
345,100 | 10.44 | 3.62 | $ | - | |||||||||||
Options
exercisable, June 30, 2010
|
345,100 | 10.44 | 3.62 | $ | - |
Shares
|
Weighted Average
Exercise Price Per
Share
|
Weighted Average
Remaining
Contractual Term
(Years)
|
Aggregate
Intrinsic Value
|
|||||||||||||
Options
outstanding, December 31, 2009
|
509,800 | $ | 8.58 | |||||||||||||
Options
granted
|
546,000 | 3.77 | ||||||||||||||
Options
forfeited
|
(3,000 | ) | 14.12 | |||||||||||||
Options
outstanding, June 30, 2010
|
1,052,800 | 6.07 | 8.89 | $ | - | |||||||||||
Options
exercisable, June 30, 2010
|
405,617 | 7.42 | 8.44 | $ | - |
(In thousands)
|
Americas
|
Europe
|
Asia
|
Intercompany
Eliminations
|
Consolidated
|
|||||||||||||||
Three
Months Ended June 30, 2010
|
||||||||||||||||||||
Research
and development revenue
|
$ | 1,269 | $ | - | $ | 1,520 | $ | - | $ | 2,789 | ||||||||||
Product
royalty revenue
|
9,612 | - | - | - | 9,612 | |||||||||||||||
Co-promotion
revenue
|
1,220 | - | - | - | 1,220 | |||||||||||||||
Contract
and collaboration revenue
|
141 | - | 285 | (272 | ) | 154 | ||||||||||||||
Total
revenues
|
12,242 | - | 1,805 | (272 | ) | 13,775 | ||||||||||||||
Research
and development expenses
|
1,996 | 142 | 2,988 | (272 | ) | 4,854 | ||||||||||||||
Depreciation
and amortization
|
222 | 3 | 6 | - | 231 | |||||||||||||||
Other
operating expenses
|
9,707 | 468 | 220 | - | 10,395 | |||||||||||||||
Income
(loss) from operations
|
317 | (613 | ) | (1,409 | ) | - | (1,705 | ) | ||||||||||||
Interest
income
|
254 | - | 1 | (78 | ) | 177 | ||||||||||||||
Other
non-operating income (expense), net
|
3 | (49 | ) | (167 | ) | 78 | (135 | ) | ||||||||||||
Income
(loss) before income taxes
|
$ | 574 | $ | (662 | ) | $ | (1,575 | ) | $ | - | $ | (1,663 | ) | |||||||
Capital
expenditures
|
$ | 63 | $ | 1 | $ | (1 | ) | $ | - | $ | 63 | |||||||||
Three
Months Ended June 30, 2009
|
||||||||||||||||||||
Research
and development revenue
|
$ | 3,825 | $ | - | $ | 3,570 | $ | - | $ | 7,395 | ||||||||||
Product
royalty revenue
|
8,914 | - | - | - | 8,914 | |||||||||||||||
Co-promotion
revenue
|
1,244 | - | - | - | 1,244 | |||||||||||||||
Contract
and collaboration revenue
|
142 | - | 220 | (210 | ) | 152 | ||||||||||||||
Total
revenues
|
14,125 | - | 3,790 | (210 | ) | 17,705 | ||||||||||||||
Research
and development expenses
|
5,807 | 177 | 3,847 | (210 | ) | 9,621 | ||||||||||||||
Depreciation
and amortization
|
182 | 3 | 2 | - | 187 | |||||||||||||||
Other
operating expenses
|
6,154 | 302 | 427 | - | 6,883 | |||||||||||||||
Income
(loss) from operations
|
1,982 | (482 | ) | (486 | ) | - | 1,014 | |||||||||||||
Interest
income
|
292 | - | (1 | ) | (72 | ) | 219 | |||||||||||||
Other
non-operating income (expense), net
|
(36 | ) | (334 | ) | (310 | ) | 72 | (608 | ) | |||||||||||
Income
(loss) before income taxes
|
$ | 2,238 | $ | (816 | ) | $ | (797 | ) | $ | - | $ | 625 | ||||||||
Capital
expenditures
|
$ | 3,068 | $ | 3 | $ | 29 | $ | - | $ | 3,100 |
(In thousands)
|
Americas
|
Europe
|
Asia
|
Intercompany
Eliminations
|
Consolidated
|
|||||||||||||||
Six
Months Ended June 30, 2010
|
||||||||||||||||||||
Research
and development revenue
|
$ | 2,573 | $ | - | $ | 4,273 | $ | - | $ | 6,846 | ||||||||||
Product
royalty revenue
|
19,385 | - | - | - | 19,385 | |||||||||||||||
Co-promotion
revenue
|
2,075 | - | - | - | 2,075 | |||||||||||||||
Contract
and collaboration revenue
|
282 | - | 570 | (547 | ) | 305 | ||||||||||||||
Total
revenues
|
24,315 | - | 4,843 | (547 | ) | 28,611 | ||||||||||||||
Research
and development expenses
|
4,369 | 361 | 6,037 | (547 | ) | 10,220 | ||||||||||||||
Depreciation
and amortization
|
440 | 6 | 13 | - | 459 | |||||||||||||||
Other
operating expenses
|
18,712 | 720 | 418 | - | 19,850 | |||||||||||||||
Income
(loss) from operations
|
794 | (1,087 | ) | (1,625 | ) | - | (1,918 | ) | ||||||||||||
Interest
income
|
527 | - | 2 | (141 | ) | 388 | ||||||||||||||
Other
non-operating income (expense), net
|
(33 | ) | (148 | ) | (187 | ) | 141 | (227 | ) | |||||||||||
Income
(loss) before income taxes
|
$ | 1,288 | $ | (1,235 | ) | $ | (1,810 | ) | $ | - | $ | (1,757 | ) | |||||||
Capital
expenditures
|
$ | 154 | $ | 1 | $ | 2 | $ | - | $ | 157 | ||||||||||
Six
Months Ended June 30, 2009
|
||||||||||||||||||||
Research
and development revenue
|
$ | 8,977 | $ | - | $ | 3,944 | $ | - | $ | 12,921 | ||||||||||
Product
royalty revenue
|
17,860 | - | - | - | 17,860 | |||||||||||||||
Co-promotion
revenue
|
2,140 | - | - | - | 2,140 | |||||||||||||||
Contract
and collaboration revenue
|
283 | - | 435 | (420 | ) | 298 | ||||||||||||||
Total
revenues
|
29,260 | - | 4,379 | (420 | ) | 33,219 | ||||||||||||||
Research
and development expenses
|
13,778 | 329 | 5,899 | (420 | ) | 19,586 | ||||||||||||||
Depreciation
and amortization
|
299 | 6 | 4 | - | 309 | |||||||||||||||
Other
operating expenses
|
12,641 | 630 | 1,547 | - | 14,818 | |||||||||||||||
Income
(loss) from operations
|
2,542 | (965 | ) | (3,071 | ) | - | (1,494 | ) | ||||||||||||
Interest
income
|
651 | - | 2 | (122 | ) | 531 | ||||||||||||||
Other
non-operating income (expense), net
|
208 | (370 | ) | 254 | 122 | 214 | ||||||||||||||
Income
(loss) before income taxes
|
$ | 3,401 | $ | (1,335 | ) | $ | (2,815 | ) | $ | - | $ | (749 | ) | |||||||
Capital
expenditures
|
$ | 3,195 | $ | 3 | $ | 29 | $ | - | $ | 3,227 | ||||||||||
As
of June 30, 2010
|
||||||||||||||||||||
Property
and equipment, net
|
$ | 1,892 | $ | 28 | $ | 197 | $ | - | $ | 2,117 | ||||||||||
Identifiable
assets, net of intercompany loans and investments
|
$ | 129,759 | $ | 6,316 | $ | 3,900 | $ | (2,800 | ) | $ | 137,175 | |||||||||
As
of December 31, 2009
|
||||||||||||||||||||
Property
and equipment, net
|
$ | 2,008 | $ | 34 | $ | 200 | $ | - | $ | 2,242 | ||||||||||
Identifiable
assets, net of intercompany loans and investments
|
$ | 134,714 | $ | 864 | $ | 11,294 | $ | (1,901 | ) | $ | 144,971 |
Three Months Ended
|
||||||||
June 30,
|
||||||||
(In thousands)
|
2010
|
2009
|
||||||
Research
and development revenue
|
$ | 2,789 | $ | 7,395 | ||||
Product
royalty revenue
|
9,612 | 8,914 | ||||||
Co-promotion
revenue
|
1,220 | 1,244 | ||||||
Contract
and collaboration revenue
|
154 | 152 | ||||||
Total
|
$ | 13,775 | $ | 17,705 |
Three Months Ended
|
||||||||
June 30,
|
||||||||
(In thousands)
|
2010
|
2009
|
||||||
Direct
costs:
|
||||||||
Amitiza
|
$ | 3,223 | $ | 7,579 | ||||
Cobiprostone
|
162 | 687 | ||||||
SPI-017
|
733 | 679 | ||||||
Rescula
|
174 | 58 | ||||||
Other
|
21 | 110 | ||||||
Total
|
4,313 | 9,113 | ||||||
Indirect
costs
|
541 | 508 | ||||||
Total
|
$ | 4,854 | $ | 9,621 |
Three Months Ended
|
||||||||
June 30,
|
||||||||
(In thousands)
|
2010
|
2009
|
||||||
Salaries,
benefits and related costs
|
$ | 1,423 | $ | 751 | ||||
Legal,
consulting and other professional expenses
|
3,503 | 911 | ||||||
Other
expenses
|
1,678 | 1,262 | ||||||
Total
|
$ | 6,604 | $ | 2,924 |
Three Months Ended
|
||||||||
June 30,
|
||||||||
(In thousands)
|
2010
|
2009
|
||||||
Interest
income
|
$ | 177 | $ | 219 | ||||
Other
income (expense), net
|
(135 | ) | (608 | ) | ||||
Total
|
$ | 42 | $ | (389 | ) |
Six Months Ended
|
||||||||
June 30,
|
||||||||
(In thousands)
|
2010
|
2009
|
||||||
Research
and development revenue
|
$ | 6,846 | $ | 12,921 | ||||
Product
royalty revenue
|
19,385 | 17,860 | ||||||
Co-promotion
revenue
|
2,075 | 2,140 | ||||||
Contract
and collaboration revenue
|
305 | 298 | ||||||
Total
|
$ | 28,611 | $ | 33,219 |
Six Months Ended
|
||||||||
June 30,
|
||||||||
(In thousands)
|
2010
|
2009
|
||||||
Direct
costs:
|
||||||||
Amitiza
|
$ | 6,997 | $ | 14,350 | ||||
Cobiprostone
|
307 | 1,577 | ||||||
SPI-017
|
1,542 | 2,316 | ||||||
Rescula
|
292 | 58 | ||||||
Other
|
82 | 254 | ||||||
Total
|
9,220 | 18,555 | ||||||
Indirect
costs
|
1,000 | 1,031 | ||||||
Total
|
$ | 10,220 | $ | 19,586 |
Six Months Ended
|
||||||||
June 30,
|
||||||||
(In thousands)
|
2010
|
2009
|
||||||
Salaries,
benefits and related costs
|
$ | 2,668 | $ | 1,909 | ||||
Legal,
consulting and other professional expenses
|
6,738 | 1,989 | ||||||
Other
expenses
|
2,957 | 2,481 | ||||||
Total
|
$ | 12,363 | $ | 6,379 |
Six Months Ended
|
||||||||
June 30,
|
||||||||
(In thousands)
|
2010
|
2009
|
||||||
Interest
income
|
$ | 388 | $ | 531 | ||||
Other
income (expense), net
|
(227 | ) | 214 | |||||
Total
|
$ | 161 | $ | 745 |
(In thousands)
|
Americas
|
Europe
|
Asia
|
Intercompany
Eliminations
|
Consolidated
|
|||||||||||||||
Three
Months Ended June 30, 2010
|
||||||||||||||||||||
Total
revenues
|
$ | 12,242 | $ | - | $ | 1,805 | $ | (272 | ) | $ | 13,775 | |||||||||
Income
(loss) before taxes
|
574 | (662 | ) | (1,575 | ) | - | (1,663 | ) | ||||||||||||
Three
Months Ended June 30, 2009
|
||||||||||||||||||||
Total
revenues
|
$ | 14,125 | $ | - | $ | 3,790 | $ | (210 | ) | $ | 17,705 | |||||||||
Income
(loss) before taxes
|
2,238 | (816 | ) | (797 | ) | - | 625 | |||||||||||||
Six
Months Ended June 30, 2010
|
||||||||||||||||||||
Total
revenues
|
$ | 24,315 | $ | - | $ | 4,843 | $ | (547 | ) | $ | 28,611 | |||||||||
Income
(loss) before taxes
|
1,288 | (1,235 | ) | (1,810 | ) | - | (1,757 | ) | ||||||||||||
Six
Months Ended June 30, 2009
|
||||||||||||||||||||
Total
revenues
|
$ | 29,260 | $ | - | $ | 4,379 | $ | (420 | ) | $ | 33,219 | |||||||||
Income
(loss) before taxes
|
3,401 | (1,335 | ) | (2,815 | ) | - | (749 | ) | ||||||||||||
Identifiable
Assets
|
||||||||||||||||||||
As
of June 30, 2010
|
$ | 129,759 | $ | 6,316 | $ | 3,900 | $ | (2,800 | ) | $ | 137,175 | |||||||||
As
of December 31, 2009
|
134,714 | 864 | 11,294 | (1,901 | ) | 144,971 |
June 30,
|
December 31,
|
|||||||
(In thousands)
|
2010
|
2009
|
||||||
Cash
and cash equivalents
|
$ | 42,293 | $ | 26,714 | ||||
Investments,
current
|
56,163 | 72,434 | ||||||
Investments,
non-current
|
15,935 | 19,167 | ||||||
Total
|
$ | 114,391 | $ | 118,315 |
Six Months Ended June 30,
|
||||||||
(In thousands)
|
2010
|
2009
|
||||||
Cash
provided by (used in):
|
||||||||
Operating
activities
|
$ | (3,972 | ) | $ | 11,013 | |||
Investing
activities
|
19,551 | (31,845 | ) | |||||
Financing
activities
|
8 | 9 | ||||||
Effect
of exchange rates
|
(8 | ) | 184 | |||||
Net
increase in cash and cash equivalents
|
$ | 15,579 | $ | (20,639 | ) |
|
·
|
fund
our share of the ongoing development program of Amitiza in the
U.S.;
|
|
·
|
fund
development and regulatory efforts in Europe and Asia for
lubiprostone;
|
|
·
|
fund
development and regulatory activities for Rescula in the U.S. and
Canada;
|
|
·
|
fund
research and development activities for other prostone compounds,
including cobiprostone and SPI-017;
|
|
·
|
fund
the expansion of our commercialization activities in the U.S. and the
initiation of commercialization efforts in non-U.S.
markets;
|
|
·
|
fund
capital expenditures to support the growth of our
business;
|
|
·
|
fund
activities to resolve our ongoing legal matters;
and
|
|
·
|
fund
the purchase of shares of our class A common stock up to $10.0 million, if
we elect to do so, pursuant to our board-approved stock repurchase
program.
|
|
·
|
the
revenue from Amitiza and Rescula;
|
|
·
|
the
future expenditures we may incur to increase revenue from Amitiza or in
our disputes with Takeda;
|
|
·
|
the
cost and time involved to pursue our research and development
programs;
|
|
·
|
our
ability to establish collaborative arrangements and to enter into
licensing agreements and contractual arrangements with others;
and
|
|
·
|
any
future change in our business
strategy.
|
Exhibit
|
||||
Number
|
Description
|
Reference
|
||
3.1
|
Certificate
of Incorporation
|
Exhibit
3.1 to the Company's Current Report on Form 8-K (filed December 29,
2008)
|
||
3.2
|
Certificate
of Amendment
|
Exhibit
3.2 to the Company's Current Report on Form 8-K (filed December 29,
2008)
|
||
3.3
|
Restated
Bylaws
|
Exhibit
3.3 to the Company's Current Report on Form 8-K (filed December 29,
2008)
|
||
4.1
|
Specimen
Stock Certificate evidencing the shares of class A common
stock
|
Exhibit
4.1 to Registration Statement No. 333-135133, Amendment No. 5 (filed
February 1, 2007)
|
||
31.1
|
Certification
of the Principal Executive Officer, as required by Section 302 of the
Sarbanes-Oxley Act of 2002
|
Included
herewith
|
||
31.2
|
Certification
of the Principal Financial Officer, as required by Section 302 of the
Sarbanes-Oxley Act of 2002
|
Included
herewith
|
||
32.1
|
Certification
of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
Included
herewith
|
||
32.2
|
Certification
of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
Included
herewith
|
Sucampo
Pharmaceuticals, Inc.
|
||
August
5, 2010
|
By:
|
/s/ RYUJI
UENO
|
Ryuji
Ueno, M.D., Ph.D., Ph.D.
|
||
Chief
Executive Officer, Chief Scientific Officer and
Chairman
of the Board of Directors
|
||
(Principal
Executive Officer)
|
||
August
5, 2010
|
By:
|
/s/ JAN
SMILEK
|
Jan
Smilek
|
||
Chief
Financial Officer
|
||
(Principal
Financial and Accounting
Officer)
|
Exhibit
|
||||
Number
|
Description
|
Reference
|
||
3.1
|
Certificate
of Incorporation
|
Exhibit
3.1 to the Company's Current Report on Form 8-K (filed December 29,
2008)
|
||
3.2
|
Certificate
of Amendment
|
Exhibit
3.2 to the Company's Current Report on Form 8-K (filed December 29,
2008)
|
||
3.3
|
Restated
Bylaws
|
Exhibit
3.3 to the Company's Current Report on Form 8-K (filed December 29,
2008)
|
||
4.1
|
Specimen
Stock Certificate evidencing the shares of class A common
stock
|
Exhibit
4.1 to Registration Statement No. 333-135133, Amendment No. 5 (filed
February 1, 2007)
|
||
31.1
|
Certification
of the Principal Executive Officer, as required by Section 302 of the
Sarbanes-Oxley Act of 2002
|
Included
herewith
|
||
31.2
|
Certification
of the Principal Financial Officer, as required by Section 302 of the
Sarbanes-Oxley Act of 2002
|
Included
herewith
|
||
32.1
|
Certification
of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
Included
herewith
|
||
32.2
|
Certification
of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
Included
herewith
|