SuperGen, Inc. (NASDAQ: SUPG) today reported financial results
for the first quarter ended March 31, 2011. The Company reported
net income for the 2011 first quarter of $5.5 million, or $0.09 per
basic and diluted share, compared with $4.7 million, or $0.08 per
basic and diluted share, for the same prior year period.
“SuperGen’s strong start to 2011 reflects continued progress on
many fronts,” said James S.J. Manuso, Ph.D., president and chief
executive officer of SuperGen. “We strengthened further our
financial position as the clinical development of SGI-110 proceeds
and as we prepare our most advanced clinical-stage drug,
amuvatinib, to enter a Phase II clinical trial by midyear.”
Manuso also commented on the potential to expand significantly
the Company’s pipeline through the proposed acquisition of Astex
Therapeutics Limited, a U.K. based biotechnology company. “We are
extremely excited about the recently announced proposed acquisition
of Astex Therapeutics. If approved by shareholders of Astex and
SuperGen, we believe this acquisition will play a key role in
establishing a powerful new entity capable of delivering the next
generation of targeted cancer therapies to address critical unmet
medical needs. We expect this addition to generate significant
shareholder value in the years ahead.”
Total revenues for the 2011 first quarter were $17.1 million
compared with $14.4 million for the same prior year period. Total
revenues for the 2011 first quarter includes royalty revenue of
$17.0 million compared with $14.3 million for the same prior year
period. Royalty revenue is earned pursuant to the license agreement
entered into with MGI PHARMA (acquired by Eisai Corporation of
North America in January 2008) during 2004, which granted MGI
PHARMA exclusive rights to the development, manufacture,
commercialization and distribution of Dacogen® (decitabine) for
Injection. The Company generally recognizes royalty revenue when it
is received. Total revenues for the 2011 first quarter also include
development and license revenue of $127,000 compared to a similar
amount for the same prior year period. Development and license
revenue represents the amortization of deferred revenue relating to
payments received pursuant to the collaborative research and
license arrangement entered into with GlaxoSmithKline (GSK) during
October 2009.
Total operating expenses for the 2011 first quarter were $11.6
million, compared with $9.8 million for the same prior year period.
The primary reasons for the increase in total operating expenses
for the 2011 first quarter were higher research and development
expenses due to increased activities during the period for product
development and clinical trial programs associated primarily with
SGI-110, incremental transaction costs associated with the recent
announcement of the proposed acquisition of Astex Therapeutics, and
an increase in stock-based compensation expense. Approximately $1.3
million of additional expenses associated with the proposed
acquisition were charged to general and administrative expenses
during the 2011 first quarter. Stock-based compensation expense, a
non-cash expense that is included in operating expenses, was
$712,000 for the 2011 first quarter, compared with $247,000 for the
same prior year period.
As of March 31, 2011, the Company had approximately $129.5
million in unrestricted cash, cash equivalents and current and
non-current marketable securities compared to $120.4 million at
December 31, 2010.
2011 Annual Financial Guidance (Revised)
Based on the anticipated transaction costs associated with the
proposed acquisition of Astex Therapeutics Limited, the Company has
updated its 2011 financial guidance. The revised financial guidance
is prepared on a pre-deal close basis as follows:
- Royalty revenue for Dacogen remains
unchanged from our prior guidance and is expected to increase up to
5% from the prior year to a range from $52 million to $55
million.
- Development and license revenue
continues to be estimated at $500,000 and represents the
recognition of deferred revenue relating to prior payments received
pursuant to the research and license agreement with GSK.
- An additional payment of $700,000
related to the sale of Nipent® (pentostatin for injection) to
Hospira, Inc. to be classified as gain on sale of products
continues to be expected during 2011.
- Research and development expenses also
remain unchanged from our prior guidance and are expected to be in
a range from $29 to $32 million. The growth in expenses, compared
to the prior year, is influenced by increasing costs related to the
Company’s clinical trial programs primarily for amuvatinib and
SGI-110, and ongoing product development efforts intended to
advance our product pipeline.
- General and administrative expenses
have been revised upward to reflect the anticipated transaction
costs associated with the proposed acquisition to a range from
$12.5 to $13 million for 2011 compared to our previous guidance of
$10 million.
- The forecasted net income has been
modified to be less than $12 million for 2011 compared to our prior
guidance of net income less than $14 million.
- Included in total operating expenses
are non-cash stock-based compensation expenses estimated at $2
million.
- Average annual shares outstanding on a
pre-deal close basis are expected to be approximately 61 million
common shares.
Conference Call Information
SuperGen will host a conference call to discuss the 2011 first
quarter financial results today at 1:30 p.m. PT / 4:30 p.m. ET. A
live webcast of the conference call is accessible via the investor
relations section of the Company’s website at http://www.supergen.com. A webcast replay of the
conference call will be available for 30 days.
About SuperGen
SuperGen is a pharmaceutical company dedicated to discovery and
development of novel cancer therapeutics in epigenetic and cell
signaling modulation. The Company develops products through
biochemical and clinical proof of concept to partner for further
development and commercialization. On April 6, 2011, SuperGen
entered into a definitive merger agreement to acquire Astex
Therapeutics Limited, a UK based biotechnology company. The
transaction is subject to customary regulatory, legal and
shareholder approvals. For more information about SuperGen, please
visit http://www.supergen.com.
Forward-Looking Statements
This press release contains “forward-looking” statements within
the meaning of Section 21A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, and is subject to the safe harbor created thereby. Actual
results could differ materially from those projected in the
forward-looking statements as a result of a number of risks and
uncertainties. These forward-looking statements include, but are
not limited to, statements regarding the expectations regarding the
anticipated generation of shareholder value as a result of the
proposed acquisition of Astex Therapeutics Limited; the expected
expansion of the Company’s pipeline of products as a result of the
proposed acquisition; the expectations regarding our clinical
trials; progress of our collaboration with GSK; the sufficiency of
our operating cash to fund our development initiatives this year
and thereafter; expectations about increases in royalty revenue;
expectations regarding research and development expenses and
general and administrative expenses; expectations regarding
development and license revenue, and gains from sales of products
from the previous sale of commercial business; estimates of 2011
net income; estimates of non-cash stock-based compensation; and
expectations regarding Eisai’s and Johnson & Johnson’s plans
for Dacogen. Important factors that could cause actual results to
differ materially from the expectations reflected in the
forward-looking statements include, but are not limited to: the
ability of Eisai and Johnson & Johnson to generate global sales
of Dacogen; risks and uncertainties related to the achievement of
developmental milestones with respect to the compounds in
development; the research and development of amuvatinib and
SGI-110; GSK’s decision whether or not to license and then develop
and commercialize the products that are the subject of our
collaboration with them and whether any of those products will be
commercially successful; the outcome of Eisai’s and Johnson &
Johnson’s examination of Dacogen clinical trial data and the
submission of U.S. and E.U. regulatory filings; and the risks and
uncertainties regarding the satisfaction of closing conditions
precedent to the consummation of the proposed acquisition with
Astex Therapeutics (including without limitation stockholder
approval by each company, U.S. and U.K. regulatory review and
clearance and other customary closing conditions), and, if the
proposed acquisition does close, the risks and uncertainties
associated with the post-transaction company. In general, our
future success is dependent upon numerous factors, including our
ability to generate pre-clinical development candidates for
selection into clinical testing, obtaining regulatory approval of
product development programs, conducting and completing clinical
trials, and obtaining regulatory approval of our products and
product candidates, and creating opportunities for future
commercialization of compounds. Our future revenue and operating
and net income or loss could be worse than anticipated if demand
for our products is less than expected, if our partnerships and
collaborations with other parties are not successful, or if the
introduction of new products is delayed, for any reason, including
regulatory delay. References made to the discussion of risk factors
are detailed in the Company’s filings with the Securities and
Exchange Commission (the “SEC”) including reports on its most
recently filed Form 10-K, Form 10-Q and preliminary proxy
statement, which has not been declared effective by the SEC. These
forward-looking statements are made only as of the date hereof, and
we disclaim any obligation to update or revise the information
contained in any such forward-looking statements, whether as a
result of new information, future events or otherwise.
Important Additional Information
SuperGen is not asking for your vote or soliciting a proxy in
connection with the proposed acquisition of Astex Therapeutics at
this time. This press release is for informational purposes only
and does not constitute an offer to sell, or the solicitation of an
offer to purchase, shares of common stock of SuperGen. This press
release is not a substitute for the preliminary proxy statement,
which has not been declared effective by the SEC, that SuperGen
filed with the SEC on April 22, 2011 in connection with the
transaction or the definitive proxy statement, when and if it is
available. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH
RESPECT TO THE TRANSACTION, INVESTORS AND STOCKHOLDERS OF SUPERGEN
ARE URGED TO READ THE PRELIMINARY PROXY STATEMENT, WHICH HAS NOT
BEEN DECLARED EFFECTIVE BY THE SEC, THE DEFINITIVE PROXY STATEMENT,
WHEN AND IF IT IS AVAILABLE, AND THE OTHER RELEVANT MATERIALS AS
THEY BECOME AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION
ABOUT THE TRANSACTION. The definitive proxy statement will be
mailed to SuperGen stockholders, when and if it is available. The
preliminary proxy statement, which has not been declared effective
by the SEC, the definitive proxy statement, when and if it is
available, other relevant materials (as they become available), and
any other documents filed by SuperGen with the SEC, may be obtained
free of charge at the SEC’s website at www.sec.gov; by contacting
SuperGen’s Investor Relations Department by phone at (925) 560-0100
or by mail at 4140 Dublin Blvd., Suite 200, Dublin, CA 94568
USA.
Participants in the Solicitation
SuperGen and its directors and executive officers and other
persons may be deemed to be participants in the solicitation of
proxies with respect to the proposed acquisition of Astex
Therapeutics. Information regarding SuperGen’s directors and
executive officers is available in SuperGen’s preliminary proxy
statement for its 2011 annual meeting of stockholders, which has
not been declared effective by the SEC, its Annual Report on Form
10-K for the year ended December 31, 2010, which were filed with
the SEC on April 22, 2011 and March 9, 2011, respectively, and the
definitive proxy statement, when and if it is available. Other
information regarding the participants in the proxy solicitation
and a description of their direct and indirect interests, by
security holdings or otherwise, is contained in the preliminary
proxy statement, which has not been declared effective by the SEC,
and will be contained in the definitive proxy statement, when and
if it is available, and other relevant materials filed with the SEC
as they become available.
SUPERGEN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands,
except per share amounts) (Unaudited) Three
months ended March 31, 2011
2010 Revenues: Royalty revenue $ 16,971 $ 14,293
Development and license revenue 127 127 Total
revenues 17,098 14,420 Operating expenses: Research and
development 7,992 7,436 General and administrative 3,621
2,361 Total operating expenses 11,613
9,797 Income from operations 5,485 4,623
Interest income 49 51 Income before income tax
provision 5,534 4,674 Income tax provision (44 ) -
Net income $ 5,490 $ 4,674 Net income per common
share: Basic $ 0.09 $ 0.08 Diluted $ 0.09 $ 0.08
Weighted average shares outstanding: Basic 60,364
60,210 Diluted 61,026 60,747
SUPERGEN, INC.
CONSOLIDATED BALANCE SHEETS (In thousands)
(Unaudited) March 31, December 31,
2011 2010 ASSETS
Current assets: Cash and cash equivalents $ 24,817 $ 25,554
Marketable securities 100,159 89,699 Income tax receivable - 40
Prepaid expenses and other current assets 1,428 1,330
Total current assets 126,404 116,623 Marketable securities,
non-current 4,505 5,124 Property, plant and equipment, net 4,044
3,932 Goodwill 731 731 Restricted cash - 2,134 Other assets
555 554 Total assets $ 136,239 $ 129,098
LIABILITIES & STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable $ 2,828 $ 1,198 Accrued compensation
3,523 3,556 Other accrued liabilities 782 773 Deferred revenue 509
509 Deferred rent 14 12 Total current liabilities
7,656 6,048 Deferred rent, non-current 15 9 Deferred
revenue, non-current 1,302 1,429 Total liabilities
8,973 7,486 Total stockholders' equity 127,266
121,612 Total liabilities and stockholders' equity $ 136,239 $
129,098
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