Buying shares of SUPG today as it has started rebound
from an oversold condition. The stock recently was $3+ and today its at $2.63 just below the 200 day moving average support.
SuperGen Reports 2011 First Quarter Financial Results
Reports First Quarter Net Income of $5.5 Million
Dacogen Royalty Revenue Increases 19% from Prior Year
Ends First Quarter with Nearly $130 Million in Cash & Marketable Securities
DUBLIN, Calif.--(BUSINESS WIRE)-- SuperGen, Inc. (NASDAQ:SUPG - News) 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.
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.