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Sucampo Gains On Better-Than-Expected Q4 Earnings

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Shares of Sucampo Pharmaceuticals (SCMP - Free Report) gained 11.9% following the release of fourth quarter results on Feb 26, 2014.

Sucampo reported earnings per share of 6 cents in the fourth quarter of 2013. The Zacks Consensus Estimate for the quarter was a loss of a penny. However, reported earnings were much below the year-ago figure of 32 cents.

Revenues came in at $24.5 million, down 29.8% from the year-ago quarter but above the Zacks Consensus Estimate of $23 million.

Quarter in Detail

The decrease in fourth quarter revenues was due to the receipt of a $15.0 million milestone payment in the fourth quarter of 2012 related to the launch of Amitiza in Japan.

We note that Sucampo has two marketed products – Amitiza and Rescula.

We remind investors that Amitiza was approved by the U.S. Food and Drug Administration (FDA) in 2006 for chronic idiopathic constipation (CIC) in adults. Then, it gained FDA approval in 2008 for irritable bowel syndrome with constipation (IBS-C) in women aged above 18 years. Furthermore, it gained FDA approval for opioid-induced constipation (OIC) in Apr 2013. Amitiza is approved for CIC in Switzerland as well as the UK and for chronic constipation (CC) in Japan where it is marketed in collaboration with Abbott Laboratories (ABT - Free Report) .

Sucampo is developing Amitiza in collaboration with its partner Takeda Pharmaceuticals Inc. , which markets the drug in the U.S. Amitiza sales from the U.S., came in at $78.0 million, up 4.6% year over year. Total prescriptions for Amitiza increased 5% in 2013 and 6% in the fourth quarter in the U.S.

Research & development expenses were $7.0 million in the fourth quarter of 2013, down from $7.1 million in the year-ago quarter. General & administrative expenses were $6.8 million compared with $7.6 million in the year-ago quarter.

2013 Results

Revenues came in at $89.6 million, up 9.9% from 2012 and ahead of the Zacks Consensus Estimate of $88.0 million. Earnings per share in 2013 were 22 cents, beating the Zacks Consensus Estimate of 10 cents and were above the 2012 figure of 12 cents.

2014 Guidance

Sucampo expects to remain profitable in 2014.   

Pipeline Update

In Dec 2013, Sucampo commenced a global pivotal phase III study for Amitiza in pediatric functional constipation. In Oct 2013, Sucampo commenced a pivotal study of a liquid formulation of Amitiza 24 mcg in adults with CIC. Results from the study will be out at the end of 2014. Sucampo will file a New Drug Application (NDA) after the review of the results (an expected launch in 2015 pending a favorable review of the NDA by the FDA).

Our Take

We are encouraged by the fourth quarter results. Sucampo’s efforts to develop Amitiza for additional indications and penetrate further in new geographies should drive growth in the coming quarters.

Sucampo carries a Zacks Rank #3 (Hold). Currently, Shire (SHPG - Free Report) looks more attractive with a Zacks Rank #1 (Strong Buy).

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