Sucampo Pharmaceuticals SCMP reported earnings of 21 cents per share in the second quarter of 2015, up from 4 cents in the year-ago quarter.
Total revenue was at $34.9 million, up 44.9% from the year-ago quarter.
The Quarter in Detail
Revenues were primarily driven by Amitiza's continued growth in the U.S. and Japan.
Product royalty revenues were up 16.2% to $16.1 million. Product sales were up 92.4% to $14.5 million.
Amitiza U.S. sales, as reported by Takeda Pharmaceutical Company Ltd. TKPYY for royalty calculation purposes, were $88.2 million, up 14.5% year over year. Total prescriptions for Amitiza in the U.S. were 362,976, up 10% year over year.
Research & development expenses were $7.1 million in the reported quarter, up 67.5% from the year-ago quarter primarily due to the development of cobiprostone and higher spending for studies on Amitiza for pediatric functional constipation.
General & administrative expenses were $8.3 million, up 1.6% from the year-ago quarter. Selling and marketing expenses decreased 85.2% to $0.6 million, primarily due to a reduction in direct commercial activities in the fourth quarter of 2014 in the U.S. and Europe. We remind investors that Sucampo had ceased marketing Rescula in the fourth quarter of 2014.
Pipeline Update
Amitiza is currently under review in China for chronic idiopathic constipation (CIC). In May 2015, Sucampo signed an exclusive license, development, commercialization and supply agreement with Harbin Gloria Pharmaceuticals Co., Ltd. for Amitiza in China under which it granted Gloria the rights to develop and commercialize the drug in China (upon approval). Per the agreement, Sucampo received an upfront payment of $1.5 million from Gloria, and is eligible to receive a regulatory or commercial milestone payment from the company.
Currently, Sucampo is enrolling patients in a pediatric functional constipation study on Amitiza in patients (aged between 6 years and 17 years) using the current formulation. Data should be out in the first half of 2016. An alternate formulation of Amitiza is under development both for adult and pediatric patients who cannot swallow or who have difficulty swallowing capsules of the currently approved drug.
The company intends to initiate a phase III study of the alternate formulation of Amitiza for adults suffering from CIC later this year. A single pivotal study on the alternate formulation of Amitiza for children aged between 6 months and 6 years is expected to start in the first half of 2016.
Meanwhile, Sucampo’s plans to initiate a phase IIa study on cobiprostone for the prevention of oral mucositis in patients suffering from head and neck cancer shortly. Cobiprostone enjoys fast track status in the U.S. for the prevention of oral mucositis.
2015 Guidance Upped
Sucampo raised its earnings guidance for 2015 to the range of 65 cents – 75 cents per share from the previously projected range of 55 cents – 65 cents. The Zacks Consensus Estimate stands at 60 cents.
Our Take
Sucampo’s second-quarter 2015 results were impressive. The company’s efforts on expanding into new geographies to expand Amitiza’s label, are encouraging. We are pleased with the company’s raised earnings outlook for 2015.
Investors looking for well-ranked stocks in the health care sector may consider Valeant Pharmaceuticals International, Inc. VRX and Anacor Pharmaceuticals, Inc. ANAC. While Valeant carries a Zacks Rank #1 (Strong Buy), Anacor holds a Zack Rank #2 (Buy).
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