Sucampo Posts In-Line First-Quarter Earnings, Revenue Miss - Analyst Blog
Sucampo Pharmaceuticals SCMP reported earnings per share of 14 cents in the first quarter of 2015, in line with the Zacks Consensus Estimate and above the year-ago figure of 2 cents.
Sucampo Pharmaceuticals Inc. - Earnings Surprise | FindTheCompany
Revenues came in at $29.5 million, up 33% from the year-ago quarter, marginally missing the Zacks Consensus Estimate of $30 million.
Quarter in Detail
We note that Sucampo has one marketed product – Amitiza, Amitiza is approved in the U.S. for chronic idiopathic constipation in adults, irritable bowel syndrome with constipation among adult women and opioid-induced constipation in patients with chronic non-cancer pain.
Sucampo has a collaboration agreement with partner Takeda Pharmaceuticals Inc. TKPYY with the latter marketing the drug in the U.S.
Product royalty revenues surged 16.6% to $15.7 million, while product sales shot up 76.5% to $11.1 million.
Amitiza sales from the U.S. came in at $87.5 million, up 17% year over year. Total prescriptions for Amitiza increased 9% in the U.S. to 342,849.
Research & development expenses were $6.8 million in the reported quarter, up 32.3% from the year-ago quarter primarily due to higher salary-related expenses along with increased spending on clinical trials on Amitiza for pediatric functional constipation and another candidate in its pipeline, cobiprostone.
General & administrative expenses were $6.3 million, down from $7.3 million in the year-ago quarter mainly due to a reduction in legal, consulting and other professional expenses as a result of the settlement of the patent infringement lawsuit against Par Pharmaceuticals.
We remind investors that Sucampo ceased marketing Rescula in the third quarter of 2014.
Pipeline Update
We also remind investors that Sucampo is evaluating Amitiza in various other indications – pediatric functional constipation with the current formulation and development of an alternate formulation for both pediatric and adult patients who face difficulties in swallowing the current Amitiza capsule formulation. Enrollment is ongoing in the pediatric functional constipation program and the company expects results from this study in 2016. Sucampo also expects to initiate a phase III study in the second half of 2015 in adult patients suffering from CIC with the new formulation of Amitiza.
Meanwhile, the company filed an investigational new drug application for cobiprostone in Mar 2015 to initiate a phase IIa trial for the treatment of oral mucositis in patients suffering from head and neck cancer. The trial is expected to begin toward the end of the first half of 2015. We note that the company is evaluating cobiprostone for oral mucositis and non-erosive reflux disease (NERD). In Feb 2015, Sucampo dosed the first patient in a phase II trial on cobiprostone for NERD in proton pump inhibitor refractory patients. The company expects to announce top-line data from this study in the first half of 2016.
Guidance Reiterated
Management reiterated earnings guidance for 2015. The company projects net income in the range of $25 million to $30 million, or 55 cents to 65 cents per diluted share in 2015.
Our Take
Sucampo currently carries a Zacks Rank #3 (Hold). Although earnings were in-line with the Zacks Consensus Estimate, the revenue miss was disappointing. While we are encouraged by the company’s and its partners’ efforts on expanding into new geographies to further expand Amitiza’s label, Sucampo’s dependence on Amitiza for growth may prove to be a headwind in the long run.
Some better-ranked stocks in the health care sector include Valeant Pharmaceuticals VRX and Actelion ALIOF. Both carry a Zacks Rank #1 (Strong Buy).
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