SuperGen's total revenues for 2010 first-quarter increased to $14.4M

SuperGen, Inc. (NASDAQ: SUPG) today reported financial results for the first quarter ended March 31, 2010.

“We were profitable in 2009 and for the 2010 first quarter, our financial position remains strong, and we have sufficient operating cash to fund our anticipated development initiatives during 2010 and beyond.”

"SuperGen made significant progress on all critical fronts during the first quarter of 2010, including strengthening our financial position, augmenting our team with new talent, and advancing our portfolio of discovery and development programs and our existing epigenetics partnership with GlaxoSmithKline (GSK). Eisai and Johnson & Johnson continue to expand the worldwide market for Dacogen^® (decitabine) for Injection, as demonstrated by an 11% growth in current quarter royalty revenue compared to the same prior year period," said James S.J. Manuso, Ph.D., President and Chief Executive Officer. "We were profitable in 2009 and for the 2010 first quarter, our financial position remains strong, and we have sufficient operating cash to fund our anticipated development initiatives during 2010 and beyond."

Total revenues for the 2010 first quarter were $14.4 million compared with $12.9 million for the same prior year period. Total revenues for the 2010 first quarter includes royalty revenue of $14.3 million compared with $12.9 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. The Company generally recognizes royalty revenue when it is received. Total revenues for the 2010 first quarter also include $127,000 of development and license revenue for recognition of deferred revenue relating to payments received pursuant to the research and license agreement entered into with GSK during October 2009. There was no similar development and license revenue for the same prior year period.

Excluding gain on sale of products, total costs and operating expenses for the 2010 first quarter were $9.8 million, compared with $9.6 million for the same prior year period. The primary reason for the modest increase in total costs and operating expenses for the 2010 first quarter were higher general corporate expenses offset in part by lower stock-based compensation expense. Stock-based compensation expense, a non-cash expense that is included in operating expenses, was $247,000 for the 2010 first quarter, compared with $600,000 for the same prior year period.

There was no gain on sale of products for the 2010 first quarter whereas the prior year quarter reported $500,000. The gain on sale of products reported for the 2009 first quarter related to the receipt of an additional payment resulting from the sale in a prior year of the worldwide rights for Nipent^® (pentostatin for injection) to Mayne Pharma (acquired by Hospira, Inc. in February 2007). The payment was not contractually due until the second quarter of 2009, although it was paid and recognized a quarter earlier.

The Company reported net income for the 2010 first quarter of $4.7 million, or $0.08 per basic and diluted share, compared with $4.0 million, or $0.07 per basic and diluted share, for the same prior year period.

As of March 31, 2010, the Company had approximately $105.5 million in unrestricted cash, cash equivalents and current and non-current marketable securities compared to $100.8 million at December 31, 2009.

2010 Annual Financial Guidance

The financial guidance for 2010 remains essentially unchanged:

• Royalty revenue for Dacogen is expected to increase up to 10% from the prior year to a range from $41 to $45 million.
• Development and license revenue is 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 to Hospira to be classified as gain on sale of products is expected to be received during 2010.
• Research and development expenses are expected to increase from the prior year to a range from $34 to $37 million. The increase in expenses are influenced by increasing costs related to the Company's clinical trial programs primarily for amuvatinib (MP-470), SGI-1776 and SGI-110, and ongoing product development efforts intended to advance our product pipeline and additional investment in the discovery, pre-clinical, regulatory and clinical areas.
• General and administrative expenses are expected to increase modestly from the prior year and are estimated to be approximately $9.5 million.
• Net loss is currently anticipated to be less than $1 million for the year.
• Included in total operating expenses is non-cash stock-based compensation expense which has been slightly reduced from our prior guidance from an estimated $3 million to $2.5 million.
• Average annual shares outstanding are expected to be approximately 61 million common shares.

Recent Corporate News

April 2010: SuperGen's clinical programs were featured in two posters in the recent American Association for Cancer Research (AACR) 101st Annual Meeting held in Washington, DC. The posters reviewed clinical and non-clinical advances in the Company's compounds, amuvatinib and SGI-1776.

The Stand Up To Cancer™ Scientific Dream Team in Epigenetics announced that SGI-110 has been selected as the Team's only first-in-human compound to be investigated in the clinic. SGI-110 is SuperGen's next generation decitabine drug product candidate.