FOSTER CITY, Calif. (AP) – SciClone Pharmaceuticals Inc. said that its first-quarter profit fell 8% on higher costs related to a government investigation alleging bribery to foreign officials in order to secure business overseas.
Meanwhile, the company said it will reduce cash payments for its CEO and that another executive resigned as part of an internal review related to the bribery allegations.
The company earned $3.8 million, or 8 cents per share, down from $4.2 million, or 9 cents per share, during the same period a year prior. Revenue rose 21 percent to $21.7 million from $18 million, while operating expenses rose 32 percent to $14.3 million.
Analysts polled by FactSet expected profit of 5 cents per share on $22.1 million in revenue.
The company’s key revenue driver is the hepatitis B and hepatitis C drug Zadaxin.
The company is currently facing inquiries by the Securities and Exchange Commission and the U.S. Department of Justice about possible violations of anti-bribery laws overseas. The agencies notified the company in August.
SciClone said a special committee at the company found that “appropriate” controls to assure compliance with laws were lacking. It reported its finding to the government agencies. The government investigation is ongoing.
Meanwhile, President and CEO Friedhelm Blobel will not be paid a cash bonus for 2010 and the company will reduce cash incentives, citing the special committee’s findings. That marks a reduction of about $334,000 in cash compensation.
Hans Schmid, president of SciClone’s subsidiary SciClone International Ltd., resigned on Monday. He has been with the company since 2001.
Looking ahead, the company expects full-year profit between 52 cents and 57 cents per share, excluding charges mainly related to the buyout of NovaMed in April. It expects revenue between $133 million and $138 million.
Date: May 11, 2011
Source: Associated Press