(Mark
One)
|
|
þ
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the quarterly period ended September 30, 2010
|
|
OR
|
|
o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the transition period
from to
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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
|
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,
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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.
|
Condensed
Consolidated Financial Statements (Unaudited)
|
1
|
Condensed
Consolidated Balance Sheets as of September 30, 2010 and December 31,
2009
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1
|
|
Condensed
Consolidated Statements of Operations and Comprehensive Income (Loss) for
the Three and Nine Months Ended September 30, 2010 and
2009
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2
|
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Condensed
Consolidated Statement of Changes in Stockholders’ Equity for the Nine
Months Ended September 30, 2010
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3
|
|
Condensed
Consolidated Statements of Cash Flows for the Nine Months Ended September
30, 2010 and 2009
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4
|
|
Notes
to Condensed Consolidated Financial Statements
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5
|
|
Item
2.
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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21
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Item
3.
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Quantitative
and Qualitative Disclosures about Market Risk
|
32
|
Item
4.
|
Controls
and Procedures
|
32
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Part
II. OTHER INFORMATION
|
|
|
Item
1.
|
Legal
Proceedings
|
32
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Item
1A.
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Risk
Factors
|
32
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Item
2.
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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
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Item
4.
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(Removed
and Reserved)
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32
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Item
5.
|
Other
Information
|
32
|
Item
6.
|
Exhibits
|
34
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SIGNATURES
|
35
|
|
INDEX
TO EXHIBITS
|
36
|
September
30,
|
December
31,
|
|||||||
2010
|
2009
|
|||||||
ASSETS:
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 39,290 | $ | 26,714 | ||||
Investments,
current
|
59,789 | 72,434 | ||||||
Product
royalties receivable
|
10,400 | 11,023 | ||||||
Unbilled
accounts receivable
|
716 | 644 | ||||||
Accounts
receivable, net
|
6,348 | 512 | ||||||
Deferred
tax assets, net
|
151 | 315 | ||||||
Prepaid
expenses and other current assets
|
2,677 | 3,137 | ||||||
Total
current assets
|
119,371 | 114,779 | ||||||
Investments,
non-current
|
11,646 | 19,167 | ||||||
Property
and equipment, net
|
2,067 | 2,242 | ||||||
Deferred
tax assets, non-current
|
4,476 | 3,995 | ||||||
Other
assets
|
3,535 | 4,788 | ||||||
Total
assets
|
$ | 141,095 | $ | 144,971 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY:
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 5,070 | $ | 3,195 | ||||
Accrued
expenses
|
9,101 | 6,545 | ||||||
Deferred
revenue, current
|
1,410 | 10,565 | ||||||
Income
taxes payable
|
496 | 349 | ||||||
Total
current liabilities
|
16,077 | 20,654 | ||||||
Deferred
revenue, non-current
|
8,109 | 8,643 | ||||||
Other
liabilities
|
2,084 | 2,121 | ||||||
Total
liabilities
|
26,270 | 31,418 | ||||||
Commitments
(Note 7)
|
||||||||
Stockholders'
equity:
|
||||||||
Preferred
stock, $0.01 par value; 5,000,000 shares authorized at September 30, 2010
and December 31, 2009; no shares issued and outstanding at September 30,
2010 and December 31, 2009
|
- | - | ||||||
Class
A common stock, $0.01 par value; 270,000,000 shares authorized at
September 30, 2010 and December 31, 2009; 15,658,938 and 15,655,730
shares issued and outstanding at September 30, 2010 and December 31, 2009,
respectively
|
156 | 156 | ||||||
Class
B common stock, $0.01 par value; 75,000,000 shares authorized at September
30, 2010 and December 31, 2009; 26,191,050 shares issued and
outstanding at September 30, 2010 and December 31, 2009
|
262 | 262 | ||||||
Additional
paid-in capital
|
99,531 | 98,636 | ||||||
Accumulated
other comprehensive income
|
730 | 484 | ||||||
Retained
earnings
|
14,146 | 14,015 | ||||||
Total
stockholders' equity
|
114,825 | 113,553 | ||||||
Total
liabilities and stockholders' equity
|
$ | 141,095 | $ | 144,971 |
Three Months Ended September
30,
|
Nine Months Ended September
30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Revenues:
|
||||||||||||||||
Research
and development revenue
|
$ | 9,072 | $ | 7,045 | $ | 15,918 | $ | 19,966 | ||||||||
Product
royalty revenue
|
10,400 | 9,367 | 29,785 | 27,227 | ||||||||||||
Co-promotion
revenue
|
1,282 | 1,266 | 3,357 | 3,406 | ||||||||||||
Contract
and collaboration revenue
|
154 | 153 | 459 | 451 | ||||||||||||
Total
revenues
|
20,908 | 17,831 | 49,519 | 51,050 | ||||||||||||
Operating
expenses:
|
||||||||||||||||
Research
and development
|
6,261 | 7,383 | 16,481 | 26,969 | ||||||||||||
General
and administrative
|
6,138 | 4,317 | 18,501 | 10,696 | ||||||||||||
Selling
and marketing
|
2,602 | 3,047 | 7,102 | 7,747 | ||||||||||||
Milestone
royalties - related parties
|
1,251 | - | 1,251 | 875 | ||||||||||||
Product
royalties - related parties
|
1,823 | 1,664 | 5,269 | 4,837 | ||||||||||||
Total
operating expenses
|
18,075 | 16,411 | 48,604 | 51,124 | ||||||||||||
Income
(loss) from operations
|
2,833 | 1,420 | 915 | (74 | ) | |||||||||||
Non-operating
income (expense):
|
||||||||||||||||
Interest
income
|
113 | 211 | 501 | 742 | ||||||||||||
Other
expense, net
|
(115 | ) | (250 | ) | (342 | ) | (36 | ) | ||||||||
Total
non-operating income (expense), net
|
(2 | ) | (39 | ) | 159 | 706 | ||||||||||
Income
before income taxes
|
2,831 | 1,381 | 1,074 | 632 | ||||||||||||
Income
tax provision
|
(423 | ) | (1,469 | ) | (943 | ) | (2,733 | ) | ||||||||
Net
income (loss)
|
$ | 2,408 | $ | (88 | ) | $ | 131 | $ | (2,101 | ) | ||||||
Net
income (loss) per share:
|
||||||||||||||||
Basic
net income (loss) per share
|
$ | 0.06 | $ | - | $ | - | $ | (0.05 | ) | |||||||
Diluted
net income (loss) per share
|
$ | 0.06 | $ | - | $ | - | $ | (0.05 | ) | |||||||
Weighted
average common shares outstanding - basic
|
41,849 | 41,844 | 41,848 | 41,844 | ||||||||||||
Weighted
average common shares outstanding - diluted
|
41,849 | 41,844 | 41,851 | 41,844 | ||||||||||||
Comprehensive
income (loss):
|
||||||||||||||||
Net
income (loss)
|
$ | 2,408 | $ | (88 | ) | $ | 131 | $ | (2,101 | ) | ||||||
Other
comprehensive income (loss):
|
||||||||||||||||
Unrealized
gain (loss) on investments, net of tax effect
|
12 | 20 | 5 | (52 | ) | |||||||||||
Foreign
currency translation
|
441 | 15 | 241 | 152 | ||||||||||||
Comprehensive
income (loss)
|
$ | 2,861 | $ | (53 | ) | $ | 377 | $ | (2,001 | ) |
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
|
- | - | - | - | 884 | - | - | 884 | ||||||||||||||||||||||||
Stock
issued under employee stock purchase plan
|
3,208 | - | - | - | 11 | - | - | 11 | ||||||||||||||||||||||||
Foreign
currency translation
|
- | - | - | - | - | 241 | - | 241 | ||||||||||||||||||||||||
Unrealized
gain on investments, net of tax effect
|
- | - | - | - | - | 5 | - | 5 | ||||||||||||||||||||||||
Net
income
|
- | - | - | - | - | - | 131 | 131 | ||||||||||||||||||||||||
Balance
at September 30, 2010
|
15,658,938 | $ | 156 | 26,191,050 | $ | 262 | $ | 99,531 | $ | 730 | $ | 14,146 | $ | 114,825 |
Nine Months Ended September
30,
|
||||||||
2010
|
2009
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
income (loss)
|
$ | 131 | $ | (2,101 | ) | |||
Adjustments
to reconcile net income (loss) to net cash provided by (used in) operating
activities:
|
||||||||
Depreciation
and amortization
|
698 | 532 | ||||||
Deferred
tax provision
|
(317 | ) | 616 | |||||
Stock-based
compensation
|
884 | 259 | ||||||
Amortization
of premiums on investments
|
1,254 | 898 | ||||||
Unrealized
gain on trading securities
|
- | (2,601 | ) | |||||
Unrealized
loss on settlement rights of auction rate securities
|
- | 2,352 | ||||||
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
|
(5,496 | ) | (472 | ) | ||||
Unbilled
accounts receivable
|
(72 | ) | 3,545 | |||||
Product
royalties receivable
|
623 | 357 | ||||||
Income
taxes payable
|
147 | 441 | ||||||
Accounts
payable
|
1,643 | 643 | ||||||
Accrued
expenses
|
2,476 | (520 | ) | |||||
Deferred
revenue
|
(10,050 | ) | (483 | ) | ||||
Other
assets and liabilities, net
|
442 | (501 | ) | |||||
Net
cash provided by (used in) operating activities
|
(7,637 | ) | 2,965 | |||||
Cash
flows from investing activities:
|
||||||||
Purchases
of investments
|
(58,440 | ) | (129,094 | ) | ||||
Proceeds
from sales of investments
|
13,200 | 9,504 | ||||||
Maturities
of investments
|
65,247 | 88,856 | ||||||
Purchases
of property and equipment
|
(247 | ) | (463 | ) | ||||
Purchase
of intangible assets
|
- | (2,915 | ) | |||||
Net
cash provided by (used in) investing activities
|
19,760 | (34,112 | ) | |||||
Cash
flows from financing activities:
|
||||||||
Proceeds
from employee stock purchase plan
|
11 | 14 | ||||||
Net
cash provided by financing activities
|
11 | 14 | ||||||
Effect
of exchange rates on cash and cash equivalents
|
442 | 889 | ||||||
Net
increase (decrease) in cash and cash equivalents
|
12,576 | (30,244 | ) | |||||
Cash
and cash equivalents at beginning of period
|
26,714 | 62,562 | ||||||
Cash
and cash equivalents at end of period
|
$ | 39,290 | $ | 32,318 | ||||
Supplemental
disclosure of non-cash investing and financing activities:
|
||||||||
Purchase
of intangible assets included in accrued expenses
|
$ | - | $ | 500 |
Three Months Ended September
30,
|
Nine Months Ended September
30,
|
|||||||||||||||
(in
thousands, except per share data)
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Basic
net loss per share:
|
||||||||||||||||
Net
income (loss)
|
$ | 2,408 | $ | (88 | ) | $ | 131 | $ | (2,101 | ) | ||||||
Weighted
average class A and B common shares outstanding
|
41,849 | 41,844 | 41,848 | 41,844 | ||||||||||||
Basic
net income (loss) per share
|
$ | 0.06 | $ | - | $ | - | $ | (0.05 | ) | |||||||
Diluted
net loss per share:
|
||||||||||||||||
Net
income (loss)
|
$ | 2,408 | $ | (88 | ) | $ | 131 | $ | (2,101 | ) | ||||||
Weighted
average class A and B common shares outstanding for diluted net
income per share
|
41,849 | 41,844 | 41,848 | 41,844 | ||||||||||||
Assumed
exercise of stock options under the treasury stock
method
|
- | - | 3 | - | ||||||||||||
|
41,849 | 41,844 | 41,851 | 41,844 | ||||||||||||
Diluted
net income (loss) per share
|
$ | 0.06 | $ | - | $ | - | $ | (0.05 | ) |
September
30,
|
||||||||
(In
thousands)
|
2010
|
2009
|
||||||
Employee
stock options
|
130 | - | ||||||
Non-employee
stock options
|
- | - |
September
30,
|
||||||||
(In
thousands)
|
2010
|
2009
|
||||||
Employee
stock options
|
1,261 | 778 | ||||||
Non-employee
stock options
|
450 | 450 |
September 30, 2010
|
||||||||||||||||
Unrealized
|
Unrealized
|
|||||||||||||||
(In
thousands)
|
Cost
|
Gains
|
Losses
|
Fair Value
|
||||||||||||
Current:
|
||||||||||||||||
U.S.
Treasury bills and notes
|
$ | 1,003 | $ | 1 | $ | - | $ | 1,004 | ||||||||
U.S.
commercial paper
|
5,186 | 1 | - | 5,187 | ||||||||||||
U.S.
government securities
|
12,808 | 10 | (3 | ) | 12,815 | |||||||||||
Municipal
securities
|
18,177 | 10 | (9 | ) | 18,178 | |||||||||||
Certificates
of deposits
|
1,250 | 1 | (1 | ) | 1,250 | |||||||||||
Corporate
bonds
|
21,332 | 23 | - | 21,355 | ||||||||||||
Total
|
$ | 59,756 | $ | 46 | $ | (13 | ) | $ | 59,789 | |||||||
Non-current:
|
||||||||||||||||
U.S.
government securities
|
$ | 6,808 | $ | 2 | $ | (2 | ) | $ | 6,808 | |||||||
Corporate
bonds
|
4,824 | 14 | - | 4,838 | ||||||||||||
Total
|
$ | 11,632 | $ | 16 | $ | (2 | ) | $ | 11,646 |
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
|
||||||||||||||||
September
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
|
19,623 | - | - | 19,623 | ||||||||||||
U.S.
commercial paper
|
- | 5,187 | - | 5,187 | ||||||||||||
Corporate
bonds
|
26,193 | - | - | 26,193 | ||||||||||||
Municipal
securities
|
37,228 | - | - | 37,228 | ||||||||||||
Certificates
of deposits
|
- | 1,250 | - | 1,250 | ||||||||||||
Money
market funds
|
10,732 | - | - | 10,732 | ||||||||||||
Total
assets measured at fair value
|
$ | 94,780 | $ | 6,437 | $ | - | $ | 101,217 |
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
|
34,090 | - | - | 34,090 | ||||||||||||
U.S.
commercial paper
|
- | 3,000 | - | 3,000 | ||||||||||||
Corporate
bonds
|
17,709 | - | - | 17,709 | ||||||||||||
Municipal
securities
|
28,287 | - | - | 28,287 | ||||||||||||
Auction
rate securities
|
- | - | 8,914 | 8,914 | ||||||||||||
Settlement
rights for auction rate securities*
|
- | - | 1,086 | 1,086 | ||||||||||||
Certificates
of deposits
|
- | 1,747 | - | 1,747 | ||||||||||||
Money
market funds
|
8,759 | 8,759 | ||||||||||||||
Total
assets measured at fair value
|
$ | 91,844 | $ | 4,747 | $ | 10,000 | $ | 106,591 |
September
30,
|
December
31,
|
|||||||
(In
thousands)
|
2010
|
2009
|
||||||
Research
and development costs
|
$ | 3,151 | $ | 3,624 | ||||
Employee
compensation
|
1,566 | 879 | ||||||
Selling
and marketing costs
|
242 | 731 | ||||||
Milestone
and product royalty expenses
|
1,823 | 48 | ||||||
Other
accrued expenses
|
2,319 | 1,263 | ||||||
Total
|
$ | 9,101 | $ | 6,545 |
(In
thousands)
|
||||
2010
(October - December)
|
$ | 366 | ||
2011
|
1,181 | |||
2012
|
966 | |||
2013
|
995 | |||
2014
|
1,024 | |||
2015
and thereafter
|
2,275 | |||
Total
minimum lease payments
|
$ | 6,807 |
Amount
Deferred
at
December
31,
|
Revenue
Recognized for
the
Nine Months
Ended
September
30,
|
Foreign
Currency
Effects
for the Nine
Months
Ended
September
30,
|
Change
in
Accounts
Receivable
for
the
Nine Months
Ended
September
30,
|
Amount
Deferred
at
September
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 | $ | 35 | $ | 82 | $ | - | $ | 859 | ||||||||||
Research
and development revenue:
|
||||||||||||||||||||
Up-front
payment
|
$ | 3,991 | $ | 3,879 | $ | 168 | $ | - | $ | 280 | ||||||||||
Development
milestone payments
|
3,366 | 8,133 | 143 | 5,000 | 376 | |||||||||||||||
Total
|
$ | 7,357 | $ | 12,012 | $ | 311 | $ | 5,000 | $ | 656 |
Amount
Deferred at
December 31,
|
Cash Received
for the Nine
Months Ended
September 30,
|
Revenue
Recognized for
the Nine Months
Ended
September 30,
|
Change in Accounts
Receivable for the
Nine Months Ended
September 30,
|
Amount
Deferred at
September 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 | $ | - | $ | 110 | $ | - | $ | 1,507 | ||||||||||
Research
and development revenue:
|
||||||||||||||||||||
Reimbursement
of research and development expenses
|
$ | 2,734 | $ | 1,215 | $ | 3,898 | $ | 73 | $ | 124 | ||||||||||
Product
royalty revenue
|
$ | - | $ | 30,408 | $ | 29,785 | $ | (623 | ) | $ | - | |||||||||
Co-promotion
revenue
|
$ | - | $ | 2,846 | $ | 3,357 | $ | 511 | $ | - |
Three Months Ended September
30,
|
Nine Months Ended September
30,
|
|||||||||||||||
(In
thousands)
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Clinical
supplies
|
$ | 145 | $ | 720 | $ | 348 | $ | 2,341 | ||||||||
Other
research and development services
|
61 | 7 | 207 | 3,046 | ||||||||||||
$ | 206 | $ | 727 | $ | 555 | $ | 5,387 |
September
30,
|
December
31,
|
|||||||
(In
thousands)
|
2010
|
2009
|
||||||
Deferred
revenue, current
|
$ | 433 | $ | 431 | ||||
Deferred
revenue, non-current
|
5,940 | 6,256 | ||||||
$ | 6,373 | $ | 6,687 |
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, September 30, 2010
|
345,100 | 10.44 | 3.37 | $ | - | |||||||||||
Options
exercisable, September 30, 2010
|
345,100 | 10.44 | 3.37 | $ | - |
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
|
548,000 | 3.77 | ||||||||||||||
Options
forfeited
|
(3,000 | ) | 14.12 | |||||||||||||
Options
expired
|
(9,000 | ) | 14.12 | |||||||||||||
Options
outstanding, September 30, 2010
|
1,045,800 | 5.99 | 8.65 | $ | - | |||||||||||
Options
exercisable, September 30, 2010
|
444,242 | 6.98 | 8.32 | $ | - |
(In
thousands)
|
Americas
|
Europe
|
Asia
|
Intercompany
Eliminations
|
Consolidated
|
|||||||||||||||
Three
Months Ended September 30, 2010
|
||||||||||||||||||||
Research
and development revenue
|
$ | 1,325 | $ | - | $ | 7,747 | $ | - | $ | 9,072 | ||||||||||
Product
royalty revenue
|
10,400 | - | - | - | 10,400 | |||||||||||||||
Co-promotion
revenue
|
1,282 | - | - | - | 1,282 | |||||||||||||||
Contract
and collaboration revenue
|
142 | - | 290 | (278 | ) | 154 | ||||||||||||||
Total
revenues
|
13,149 | - | 8,037 | (278 | ) | 20,908 | ||||||||||||||
Research
and development expenses
|
3,304 | 338 | 2,903 | (284 | ) | 6,261 | ||||||||||||||
Depreciation
and amortization
|
228 | 3 | 8 | - | 239 | |||||||||||||||
Other
operating expenses
|
9,680 | 368 | 1,521 | 6 | 11,575 | |||||||||||||||
Income
(loss) from operations
|
(63 | ) | (709 | ) | 3,605 | - | 2,833 | |||||||||||||
Interest
income
|
196 | 1 | - | (84 | ) | 113 | ||||||||||||||
Other
non-operating income (expense), net
|
(9 | ) | (36 | ) | (154 | ) | 84 | (115 | ) | |||||||||||
Income
(loss) before income taxes
|
$ | 124 | $ | (744 | ) | $ | 3,451 | $ | - | $ | 2,831 | |||||||||
Capital
expenditures
|
$ | 74 | $ | 1 | $ | 15 | $ | - | $ | 90 | ||||||||||
Three
Months Ended September 30, 2009
|
||||||||||||||||||||
Research
and development revenue
|
$ | 3,562 | $ | - | $ | 3,483 | $ | - | $ | 7,045 | ||||||||||
Product
royalty revenue
|
9,367 | - | - | - | 9,367 | |||||||||||||||
Co-promotion
revenue
|
1,266 | - | - | - | 1,266 | |||||||||||||||
Contract
and collaboration revenue
|
141 | - | 282 | (270 | ) | 153 | ||||||||||||||
Total
revenues
|
14,336 | - | 3,765 | (270 | ) | 17,831 | ||||||||||||||
Research
and development expenses
|
3,310 | 459 | 3,884 | (270 | ) | 7,383 | ||||||||||||||
Depreciation
and amortization
|
213 | 3 | 7 | - | 223 | |||||||||||||||
Other
operating expenses
|
7,520 | 1,029 | 256 | - | 8,805 | |||||||||||||||
Income
(loss) from operations
|
3,293 | (1,491 | ) | (382 | ) | - | 1,420 | |||||||||||||
Interest
income
|
277 | - | 2 | (68 | ) | 211 | ||||||||||||||
Other
non-operating income (expense), net
|
(17 | ) | (22 | ) | (279 | ) | 68 | (250 | ) | |||||||||||
Income
(loss) before income taxes
|
$ | 3,553 | $ | (1,513 | ) | $ | (659 | ) | $ | - | $ | 1,381 | ||||||||
Capital
expenditures
|
$ | 64 | $ | - | $ | 87 | $ | - | $ | 151 |
(In
thousands)
|
Americas
|
Europe
|
Asia
|
Intercompany
Eliminations |
Consolidated
|
|||||||||||||||
Nine
Months Ended September 30, 2010
|
||||||||||||||||||||
Research
and development revenue
|
$ | 3,898 | $ | - | $ | 12,020 | $ | - | $ | 15,918 | ||||||||||
Product
royalty revenue
|
29,785 | - | - | - | 29,785 | |||||||||||||||
Co-promotion
revenue
|
3,357 | - | - | - | 3,357 | |||||||||||||||
Contract
and collaboration revenue
|
424 | - | 860 | (825 | ) | 459 | ||||||||||||||
Total
revenues
|
37,464 | - | 12,880 | (825 | ) | 49,519 | ||||||||||||||
Research
and development expenses
|
7,673 | 699 | 8,940 | (831 | ) | 16,481 | ||||||||||||||
Depreciation
and amortization
|
668 | 9 | 21 | - | 698 | |||||||||||||||
Other
operating expenses
|
28,392 | 1,088 | 1,939 | 6 | 31,425 | |||||||||||||||
Income
(loss) from operations
|
731 | (1,796 | ) | 1,980 | - | 915 | ||||||||||||||
Interest
income
|
723 | 1 | 2 | (225 | ) | 501 | ||||||||||||||
Other
non-operating income (expense), net
|
(42 | ) | (184 | ) | (341 | ) | 225 | (342 | ) | |||||||||||
Income
(loss) before income taxes
|
$ | 1,412 | $ | (1,979 | ) | $ | 1,641 | $ | - | $ | 1,074 | |||||||||
Capital
expenditures
|
$ | 228 | $ | 2 | $ | 17 | $ | - | $ | 247 | ||||||||||
Nine
Months Ended September 30, 2009
|
||||||||||||||||||||
Research
and development revenue
|
$ | 12,539 | $ | - | $ | 7,427 | $ | - | $ | 19,966 | ||||||||||
Product
royalty revenue
|
27,227 | - | - | - | 27,227 | |||||||||||||||
Co-promotion
revenue
|
3,406 | - | - | - | 3,406 | |||||||||||||||
Contract
and collaboration revenue
|
424 | - | 717 | (690 | ) | 451 | ||||||||||||||
Total
revenues
|
43,596 | - | 8,144 | (690 | ) | 51,050 | ||||||||||||||
Research
and development expenses
|
17,088 | 788 | 9,783 | (690 | ) | 26,969 | ||||||||||||||
Depreciation
and amortization
|
512 | 9 | 11 | - | 532 | |||||||||||||||
Other
operating expenses
|
20,161 | 1,659 | 1,803 | - | 23,623 | |||||||||||||||
Income
(loss) from operations
|
5,835 | (2,456 | ) | (3,453 | ) | - | (74 | ) | ||||||||||||
Interest
income
|
928 | - | 4 | (190 | ) | 742 | ||||||||||||||
Other
non-operating income (expense), net
|
191 | (392 | ) | (25 | ) | 190 | (36 | ) | ||||||||||||
Income
(loss) before income taxes
|
$ | 6,954 | $ | (2,848 | ) | $ | (3,474 | ) | $ | - | $ | 632 | ||||||||
Capital
expenditures
|
$ | 3,259 | $ | 3 | $ | 116 | $ | - | $ | 3,378 | ||||||||||
As
of September 30, 2010
|
||||||||||||||||||||
Property
and equipment, net
|
$ | 1,825 | $ | 27 | $ | 215 | $ | - | $ | 2,067 | ||||||||||
Identifiable
assets, net of intercompany
|
||||||||||||||||||||
loans
and investments
|
$ | 131,874 | $ | 6,277 | $ | 7,165 | $ | (4,221 | ) | $ | 141,095 | |||||||||
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
|
||||||||
September 30,
|
||||||||
(In
thousands)
|
2010
|
2009
|
||||||
Research
and development revenue
|
$ | 9,072 | $ | 7,045 | ||||
Product
royalty revenue
|
10,400 | 9,367 | ||||||
Co-promotion
revenue
|
1,282 | 1,266 | ||||||
Contract
and collaboration revenue
|
154 | 153 | ||||||
Total
|
$ | 20,908 | $ | 17,831 |
Three Months Ended
|
||||||||
September 30,
|
||||||||
(In
thousands)
|
2010
|
2009
|
||||||
Direct
costs:
|
||||||||
Amitiza
|
$ | 4,991 | $ | 5,721 | ||||
Cobiprostone
|
162 | 568 | ||||||
SPI-017
|
348 | 309 | ||||||
Rescula
|
235 | 90 | ||||||
Other
|
27 | 184 | ||||||
Total
|
5,763 | 6,872 | ||||||
Indirect
costs
|
498 | 511 | ||||||
Total
|
$ | 6,261 | $ | 7,383 |
Three Months Ended
|
||||||||
September 30,
|
||||||||
(In
thousands)
|
2010
|
2009
|
||||||
Salaries,
benefits and related costs
|
$ | 1,227 | $ | 963 | ||||
Legal,
consulting and other professional expenses
|
3,342 | 2,009 | ||||||
Other
expenses
|
1,569 | 1,345 | ||||||
Total
|
$ | 6,138 | $ | 4,317 |
Three Months Ended
|
||||||||
September 30,
|
||||||||
(In
thousands)
|
2010
|
2009
|
||||||
Interest
income
|
$ | 113 | $ | 211 | ||||
Other
expense, net
|
(115 | ) | (250 | ) | ||||
Total
|
$ | (2 | ) | $ | (39 | ) |
Nine Months Ended
|
||||||||
September 30,
|
||||||||
(In
thousands)
|
2010
|
2009
|
||||||
Research
and development revenue
|
$ | 15,918 | $ | 19,966 | ||||
Product
royalty revenue
|
29,785 | 27,227 | ||||||
Co-promotion
revenue
|
3,357 | 3,406 | ||||||
Contract
and collaboration revenue
|
459 | 451 | ||||||
Total
|
$ | 49,519 | $ | 51,050 |
Nine Months Ended
|
||||||||
September 30,
|
||||||||
(In
thousands)
|
2010
|
2009
|
||||||
Direct
costs:
|
||||||||
Amitiza
|
$ | 11,988 | $ | 20,071 | ||||
Cobiprostone
|
469 | 2,145 | ||||||
SPI-017
|
1,891 | 2,625 | ||||||
Rescula
|
526 | 148 | ||||||
Other
|
109 | 438 | ||||||
Total
|
14,983 | 25,427 | ||||||
Indirect
costs
|
1,498 | 1,542 | ||||||
Total
|
$ | 16,481 | $ | 26,969 |
Nine Months Ended
|
||||||||
September 30,
|
||||||||
(In
thousands)
|
2010
|
2009
|
||||||
Salaries,
benefits and related costs
|
$ | 3,895 | $ | 2,873 | ||||
Legal,
consulting and other professional expenses
|
10,079 | 3,998 | ||||||
Other
expenses
|
4,527 | 3,825 | ||||||
Total
|
$ | 18,501 | $ | 10,696 |
Nine Months Ended
|
||||||||
September 30,
|
||||||||
(In
thousands)
|
2010
|
2009
|
||||||
Interest
income
|
$ | 501 | $ | 742 | ||||
Other
expense, net
|
(342 | ) | (36 | ) | ||||
Total
|
$ | 159 | $ | 706 |
(In
thousands)
|
Americas
|
Europe
|
Asia
|
Intercompany
Eliminations |
Consolidated
|
|||||||||||||||
Three
Months Ended September 30, 2010
|
||||||||||||||||||||
Total
revenues
|
$ | 13,149 | $ | 43 | $ | 8,037 | $ | (321 | ) | $ | 20,908 | |||||||||
Income
(loss) before taxes
|
124 | (744 | ) | 3,451 | - | 2,831 | ||||||||||||||
Three
Months Ended September 30, 2009
|
||||||||||||||||||||
Total
revenues
|
$ | 14,336 | $ | - | $ | 3,765 | $ | (270 | ) | $ | 17,831 | |||||||||
Income
(loss) before taxes
|
3,553 | (1,513 | ) | (659 | ) | - | 1,381 | |||||||||||||
Nine
Months Ended September 30, 2010
|
||||||||||||||||||||
Total
revenues
|
$ | 37,464 | $ | 43 | $ | 12,880 | $ | (868 | ) | $ | 49,519 | |||||||||
Income
(loss) before taxes
|
1,412 | (1,979 | ) | 1,641 | - | 1,074 | ||||||||||||||
Nine
Months Ended September 30, 2009
|
||||||||||||||||||||
Total
revenues
|
$ | 43,596 | $ | - | $ | 8,144 | $ | (690 | ) | $ | 51,050 | |||||||||
Income
(loss) before taxes
|
6,954 | (2,848 | ) | (3,474 | ) | - | 632 | |||||||||||||
Identifiable
Assets
|
||||||||||||||||||||
As
of September 30, 2010
|
$ | 131,874 | $ | 6,277 | $ | 7,165 | $ | (4,221 | ) | $ | 141,095 | |||||||||
As
of December 31, 2009
|
134,714 | 864 | 11,294 | (1,901 | ) | 144,971 |
September 30,
|
December 31,
|
|||||||
(In
thousands)
|
2010
|
2009
|
||||||
Cash
and cash equivalents
|
$ | 39,290 | $ | 26,714 | ||||
Investments,
current
|
59,789 | 72,434 | ||||||
Investments,
non-current
|
11,646 | 19,167 | ||||||
Total
|
$ | 110,725 | $ | 118,315 |
Nine Months Ended September 30,
|
||||||||
(In
thousands)
|
2010
|
2009
|
||||||
Cash
provided by (used in):
|
||||||||
Operating
activities
|
$ | (7,637 | ) | $ | 2,965 | |||
Investing
activities
|
19,760 | (34,112 | ) | |||||
Financing
activities
|
11 | 14 | ||||||
Effect
of exchange rates
|
442 | 889 | ||||||
Net
increase in cash and cash equivalents
|
$ | 12,576 | $ | (30,244 | ) |
·
|
our
share of the ongoing development program of Amitiza in the
U.S.;
|
·
|
development
and regulatory efforts in Europe and Asia for
lubiprostone;
|
·
|
development
and regulatory activities for Rescula in the U.S. and
Canada;
|
·
|
activities
to resolve our ongoing legal
matters;
|
·
|
research
and development activities for other prostone compounds, including
cobiprostone and SPI-017;
|
·
|
other
business development activities, including investments in or acquisitions
of other businesses, products and
technologies;
|
·
|
the
expansion of our commercialization activities in the U.S. and the
initiation of commercialization efforts in non-U.S.
markets;
|
·
|
capital
expenditures to support the growth of our business;
and
|
·
|
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 dispute 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.
|
||
November
3, 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)
|
||
November
3, 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
|