SciClone Acquires NovaMed Pharmaceuticals Further Establishing It as a Leading China-Focused Specialty Pharmaceutical

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Tue Apr 19, 2011 7:00am EDT

  FOSTER CITY, CA, Apr 19 (MARKET WIRE) -- 
SciClone Pharmaceuticals, Inc. (NASDAQ: SCLN) ("Company") today announced
that it has acquired NovaMed Pharmaceuticals Inc., ("NovaMed") a
China-based specialty pharmaceutical company. The acquisition brings
additional broad sales and marketing, as well as regulatory and extensive
business capabilities and pharmaceutical assets in the regulatory
approval stage to its growing and profitable China-focused specialty
pharmaceutical business. SciClone believes this acquisition will further
position it as a leader in the rapidly expanding pharmaceutical industry
in China. 

    Under terms of the agreement, NovaMed shareholders are entitled to
receive up-front payments of approximately $24.7 million in cash,
8,298,110 shares of SciClone common stock valued at approximately $37.1
million (based upon the closing price of $4.47 on the NASDAQ stock market
on April 18, 2011) and the right to additional cash consideration of up
to $43.0 million, contingent upon the successful achievement of revenue
and earnings targets for the 2011 and 2012 fiscal years. 

    The Company anticipates that NovaMed and SciClone's combined revenue for
fiscal 2011 on a pro forma basis will be between $140 and $145 million.
SciClone's GAAP revenue for fiscal 2011 will exclude NovaMed's revenue
prior to the closing of the acquisition. SciClone is updating its
guidance to reflect the acquisition and anticipates that its 2011 GAAP
revenue will be between $133 and $138 million, and cash, cash equivalents
and investments at December 31, 2011 to be greater than $45 million. The
Company anticipates updating earnings per share guidance with its first
quarter 2011 earnings announcement expected in early May 2011. 

    NovaMed, a privately-held, China-based pharmaceutical company backed by
foreign venture capital, has a portfolio of 18 drug products spanning
four major therapeutic areas including oncology, cardiovascular disease,
central nervous system (CNS) disorders and urology/infection. To support
this broad product portfolio, NovaMed has built a sales organization of
more than 450 individuals with extensive pharmaceutical industry
experience in penetrating the rapidly expanding pharmaceutical market in
China. Growing revenues more than 25% annually since inception, NovaMed
generated revenues totaling $31.5 million (unaudited) in 2010. 

    SciClone's acquisition of NovaMed was completed on April 18, 2011 through
a share purchase agreement, which contains additional terms. The terms of
the acquisition are described in a form 8-K filed by the Company on April
19, 2011.

    "NovaMed represents an excellent strategic acquisition as it allows
SciClone, in a single transaction, to dramatically expand our presence in
China in five important areas: pharmaceutical products, targeted
therapeutic indications, management depth, sales force size and revenue,"
stated Friedhelm Blobel, Ph.D., President and Chief Executive Officer of
SciClone. "Whereas SciClone had already established itself in China with
our successful ZADAXIN(R) franchise, we have now evolved into a
formidable presence in this fast growing market with a combined sales
force of more than 680 individuals, nearly 20 commercial stage products
spanning several key indications, and an expanded Shanghai based
management team with significant pharmaceutical industry experience." 

    Jon Saxe, Chairman of the Board of SciClone, added: "The combined entity
should be an even more attractive partner for pharmaceutical companies
wishing their products to be developed and represented in the Chinese
market."

    Among NovaMed's most successful, exclusively promoted commercial-stage
products are Depakine(R), the most widely prescribed broad-spectrum
anti-convulsant in China, Tritace(R), an ACE inhibitor for the treatment
of hypertension, and Stilnox(R), a fast-acting hypnotic for the
short-term treatment of insomnia (marketed as Ambien(R) in the US), as
well as Aggrastat(R), a recently-launched intervention cardiology
product. NovaMed's pipeline also includes pharmaceutical assets in the
regulatory approval process from partners such as Bio Alliance, Orexo,
Meda, and EUSA. In building this broad pharmaceutical portfolio, NovaMed
has established exclusive licensing and promotion agreements with a
number of the world's leading pharmaceutical companies, including
Sanofi-aventis, Pfizer Inc., and Baxter International Inc.

    "The opportunity to join forces with SciClone further advances the work
that NovaMed has undertaken to build itself into a leading specialty
pharmaceutical company in China," said Bo Shao, Co-founder of NovaMed.
Mark Lotter, Co-founder and Chief Executive Officer of NovaMed added: "By
combining the important financial resources and strong sales and
marketing capabilities offered by SciClone with NovaMed's proven
experience in in-licensing and marketing novel therapeutics for the China
market, we are in a strong position to participate in and benefit from
the rapidly expanding pharmaceutical market in China."

    Following the close of the acquisition, SciClone's current operations in
China and the newly acquired NovaMed will continue to operate as separate
entities in the China market but under the leadership of Mr. Lotter. The
NovaMed unit will continue to lead sales and marketing efforts for its
current product portfolio. SciClone's sales and marketing team will
continue to sell and market ZADAXIN.

    As part of the transaction, Mr. Lotter and Peter Barrett have been
appointed to SciClone's board of directors. Mr. Barrett served as a
director of NovaMed and is a partner of Atlas Venture, one of NovaMed's
principal investors. Mr. Lotter has also been appointed as an officer of
the Company and will oversee the China-based operations for SciClone as
CEO of the China Business. 

    Cowen Group, Inc. acted as financial advisor and Katten Muchin Rosenman
LLP acted as legal counsel to NovaMed. Piper Jaffray & Co. and Lazard
Capital Markets acted as financial advisors and DLA Piper LLP (US) acted
as legal counsel to SciClone in the transaction. 

    Conference Call Information
 SciClone is hosting a conference call on
Tuesday, April 19 at 8:30 am ET to discuss the NovaMed acquisition. The
call will be hosted by Friedhelm Blobel, Ph.D., President and CEO, Gary
Titus, Senior Vice President and CFO, and Mark Lotter, Chief Executive
Officer and Co-Founder of NovaMed. 

    LIVE CALL:
 800.591.6945 (U.S./Canada)
 617.614.4911 (International)

Passcode: 32871903

REPLAY:
 888.286.8010 (U.S./Canada)
 617.801.6888
(International)
 Passcode: 33113598 
 (Replay available from Tuesday,
April 19, 2011 at 11:30 a.m. ET until 11:59 p.m. ET on Tuesday, April 26,
2011)

    The conference call will contain forward-looking statements. Interested
parties who wish to listen to the webcast should visit the Investor
Relations section of SciClone's website at www.sciclone.com. The
information provided on the teleconference is accurate only at the time
of the conference call, and SciClone will take no responsibility for
providing updated information except as required by law. 

    About SciClone
 SciClone Pharmaceuticals (NASDAQ: SCLN) is a
revenue-generating, China-centric, specialty pharmaceutical company with
a substantial international business and a product portfolio of novel
therapies for cancer and infectious diseases. The Company is focused on
continuing sales growth and executing a clinical development strategy
with prudently managed costs. ZADAXIN(R) (thymalfasin) is approved in
over 30 countries for the treatment of hepatitis B (HBV), as a vaccine
adjuvant, for the treatment of hepatitis C (HCV), and certain cancers.
SciClone is evaluating SCV-07 in a phase 2b trial to modify the course of
oral mucositis in patients with head and neck cancer. The Company also
has exclusive commercialization and distribution rights in China to a
novel treatment for advanced liver cancer, DC Bead(R), which is already
approved in approximately 40 countries worldwide, including the U.S. and
several countries in Europe. DC Bead is currently under review by
regulatory agencies in China. Additionally, SciClone owns exclusive
commercialization and distribution rights to the anti-nausea drug
ondansetron RapidFilm(R) in China, including Hong Kong and Macau, and
Vietnam. The Company intends to seek regulatory approval for the product,
commonly used to treat and prevent nausea and vomiting caused by
chemotherapy, radiotherapy, and surgery, in these markets. For additional
information, please visit www.sciclone.com. 

    About NovaMed
 NovaMed Pharmaceuticals was founded in August 2005 to
provide one-stop service for global pharmaceutical companies and brand
owners looking to leverage cost advantage and achieve optimal market
potential in China. Through a directly managed sales organization of 450
people strong and growing and a network of best-in-class development,
regulatory and distribution partners, NovaMed has built viable
commercialization models for products at different stages of their life
cycle. These include products already commercially available in China,
internationally-approved products not yet registered in China, and
in-licensing late stage development compounds. For more information,
visit www.novamed.com.cn.

    Forward-Looking Statements 
 This press release contains forward-looking
statements regarding expected financial results and expectations. Readers
are urged to consider statements that include the words "may," "will,"
"would," "could," "should," "might," "believes," "estimates," "projects,"
"potential," "expects," "plans," "anticipates," "intends," "continues,"
"forecast," "designed," "goal," "unaudited," "approximately" or the
negative of those words or other comparable words to be uncertain and
forward-looking. These statements are subject to risks and uncertainties
that are difficult to predict and actual outcomes may differ materially.
These include risk and uncertainties relating to: the course, cost and
outcome of regulatory matters, including pricing decisions by authorities
in China; the on-going regulatory investigations and SciClone's
independent investigation; the Company's ability to execute on its goals
for ZADAXIN sales to China and on its objectives for revenue in fiscal
2011; the challenges presented by integrating an acquired business into
existing operations; the variability in earnings on a GAAP basis that may
result from non-cash charges related to the acquisition; the dependence
on third party license or distribution agreements including the need to
renew such agreements; operating an international business; the clinical
trial process, including the regulatory approval and the process of
initiating trials at, and enrolling patients at, clinical sites; the
Company's ability to remediate its identified material weaknesses over
financial control; and changes in its practices and policies which could
adversely affect its ability to generate revenue. SciClone cannot predict
the timing or outcome of its own internal investigation, of the SEC and
DOJ investigations, of the various litigations that have or may be filed
relating to any of those matters, or of its efforts to cooperate with
those investigations, however the Company expects to incur substantial
expenses in connection with the investigations and the results of the
investigations could include fines and further changes in its internal
control or other remediation measures that could adversely affect its
business. Please also refer to other risks and uncertainties described in
SciClone's filings with the SEC. All forward-looking statements are based
on information currently available to SciClone and SciClone assumes no
obligation to update any such forward-looking statements. 

    DC Bead is a registered trademark of Biocompatibles UK Limited.

    RapidFilm is a registered trademark of Labtec Gesellschaft fuer
technologische Forschung und Entwicklung mbH.

    

Corporate Contacts
Gary Titus
Chief Financial Officer
650.358.3456
gtitus@sciclone.com

Ana Kapor
Investors/Media
650.350.4825
akapor@sciclone.com 

Copyright 2011, Market Wire, All rights reserved.

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