Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares in SciClone Pharmaceuticals (SCLN +0.00%) jumped by nearly 10% today after reporting fourth quarter and full year earnings results after the bell yesterday.
So what: The China-focused drugmaker reported that revenue climbed 26.6% year-over-year to $41.42 million in the fourth quarter, allowing SciClone to report EPS of $0.29, which was $0.14 ahead of analysts' forecasts.
The fourth quarter performance boosted full year sales to $134.8 million, up from $127.1 million in 2013. After adjusting for pesky currency and one-time items, SciClone's adjusted EPS last year improved to $0.75, up from $0.42 in 2013.
The vast majority of SciClone's sales continue to come from Zadaxin, an immune stimulating drug that isn't approved for sale in the U.S., but is sold in other markets including China and India as a treatment for hepatitis B.
In the fourth quarter, Zadaxin sales grew by $8.5 million to $39 million, and for the full year, sales of the drug improved by $29.8 million to $126.1 million.
Now what: After dealing with headwinds tied to material weaknesses in its business in 2012 and 2013, the company needed to deliver a win in 2014, and these numbers suggest that they did just that. In addition to delivering sales growth, SciClone also boosted profitability by spending less money. The company's sales and marketing costs fell to $48.5 million last year from $55.2 million in 2013, and its general and administrative expenses retreated to $22.7 million from $32.5 million in 2013.
That's good news, but given the company's operational struggles in the past, investors might want to approach SciClone a bit cautiously. It appears that there's a growing demand for Zadaxin in its markets, and the company could also see its results improve this year thanks to its in-licensing of two cardiovascular drugs from The Medicines Company. Investors may also be intrigued by the fact that SciClone isn't an overly expensive stock. Shares are trading at about 21 times trailing 12 month EPS and about 15 times Wall Street estimates of $0.57 in EPS for 2015. With no debt, $1.91 in cash on the books, and a huge market in China, SciClone might be worth watching; however, its past stumbles make it suitable only for the most speculative of investors.
