SciClone to Restate Results for Certain Periods on China Accounting Errors
02/22/2013| 05:05pm US/Eastern
By Debbie Cai
SciClone Pharmaceuticals Inc. (>> SciClone Pharmaceuticals, Inc.) said it will restate its financial statements for certain periods in 2012 and 2011 due mainly to accounting errors at a Chinese subsidiary.
Shares slid 6.2% to $4.52 after hours Friday. The stock is up 12% so far this year.
Chinese drugmaker NovaMed Pharmaceuticals Inc., which SciClone acquired in April 2011, made accounting errors pertaining to the timing of Pfizer Inc. (>> Pfizer Inc.) product-revenue recognition and the recognition of product-return reserves as to antiplatelet drug Aggrastat.
The company will restate financial statements for the first, second and third quarters of last year, the second and third quarters of 2011, and for the full 2011.
SciClone Chief Executive Friedhelm Blobel said the decision to restate financials, which is expected to increase the company's 2012 revenue and earnings and decrease that of 2011, was made after careful review of available facts.
The company believes the changes will raise its revenue for the first nine months of last year by about $3 million, and increase its profit before income taxes by about $2 million. The changes for the full 2011 will lower revenue by about $1 million and decrease income by less than $1 million.
SciClone also said the goodwill related to the acquisition of NovaMed will be increased by approximately $2 million. The restatements wouldn't impact previously reported cash or cash equivalents balances, the company said.
The company said it plans to amend its 2011 10-K form and other relevant filings as soon as reasonably practicable.
Last November, SciClone said it swung to a third-quarter loss as the company works to address issues across its China organization, some of which might have affected sales of its lead drug Zadaxin.
Write to Debbie Cai at email@example.com
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