SuperGen Reports 2009 Third Quarter Financial Results

http://www.businesswire.com/news/home/20091026006197/en

Achieves net income for quarter & year-to-date periods and guides to profit for
the year

Ends quarter with over $94 million in cash, equivalents & marketable securities

DUBLIN, Calif.--(Business Wire)--
SuperGen, Inc. (NASDAQ:SUPG) today reported financial results for the third
quarter and nine months ended September 30, 2009.

Total revenues for the 2009 third quarter were $10.4 million, compared with
$10.2 million for the same prior year period. Total revenues for the 2009 third
quarter and same prior year period consisted entirely of royalty revenue.
Royalty revenue recovered from the 2009 second quarter where Eisai reported
lower quarterly product sales that resulted from certain third party wholesalers
who had adjusted their near-term inventory purchases. Royalty revenue is earned
pursuant to the license agreement entered into during 2004 with MGI PHARMA
(acquired by Eisai Co., Ltd. in January 2008), which granted MGI PHARMA
exclusive rights to the development, manufacture, commercialization and
distribution of Dacogen (decitabine) for Injection. The Company generally
recognizes royalty revenue when it is received.

Total operating expenses for the 2009 third quarter were $9.7 million, compared
with $11.4 million for the same prior year period. The primary reasons for the
decrease in operating expenses for the 2009 third quarter were lower research
and development costs due to reduced activities or completed studies for product
development and clinical trial programs when compared to the prior year, the
elimination of costs resulting from the cessation of our European operations in
the prior year and a decrease in general corporate expenses offset in part by an
increase in stock-based compensation expense. Stock-based compensation expense,
which is a non-cash item included in operating expenses, was $709,000 for the
2009 third quarter compared with $642,000 for the same prior year period.

Income from operations for the 2009 third quarter was $677,000 compared with a
loss from operations of $1.1 million for the same prior year period. The Company
reported net income for the 2009 third quarter of $833,000, or $0.01 per basic
and diluted share, compared with a net loss of $569,000, or $0.01 per basic and
diluted share, for the same prior year period.

"We are pleased with our year to date financial and operational results, and we
are gratified that the Dacogen partnerships are continuing to provide increasing
revenue," said Dr. James Manuso, SuperGen`s President and Chief Executive
Officer. "We continue to differentiate ourselves from our peer group based on
the strength of our financial position, our pipeline of potential first-in-class
oncology products, our discovery prowess, and our balanced business strategy
anchored in global partnerships with GlaxoSmithKline, Eisai and Johnson &
Johnson."

Total revenues for the nine months ended September 30, 2009 were $29.3 million,
compared with $26.5 million for the same prior year period. Total revenues for
the nine months ended September 30, 2009 and 2008 consisted entirely of royalty
revenue.

Excluding gain on sale of products, total operating expenses for the nine months
ended September 30, 2009 were $28.0 million, compared with $33.4 million for the
same prior year period. The primary reasons for the decrease in operating
expenses for the nine months ended September 30, 2009 were lower research and
development costs due to reduced activities or completed studies for product
development and clinical trial programs when compared to the prior year, the
cessation of our European operations in the prior year, a reduction in
stock-based compensation expense and a decrease in general corporate expenses.
Stock-based compensation expense, which is a non-cash item included in operating
expenses, was $1.8 million for the nine months ended September 30, 2009,
compared with $2.1 million for the same prior year period.

The reported gain on sale of products for the nine months ended September 30,
2009 was $520,000 compared to $1.6 million for the same prior year period. The
gain on sale of products for both periods primarily relate to the receipt of
additional payments resulting from the sale of the worldwide rights for Nipent
to Mayne Pharma (acquired by Hospira, Inc. in February 2007) in a prior year.

Income from operations for the nine months ended September 30, 2009 was $1.8
million compared with a loss from operations of $5.3 million for the same prior
year period. The Company reported net income for the nine months ended September
30, 2009 of $2.4 million, or $0.04 per basic and diluted share, compared with a
net loss of $6.5 million, or $0.11 per basic and diluted share, for the same
prior year period. The net loss for the nine months ended September 30, 2008
included a non-operating charge of $3.1 million that reflected an other than
temporary decline in value in the Company`s equity investments. There was no
similar non-operating charge for the nine months ended September 30, 2009.

As of September 30, 2009, the Company had approximately $94.4 million in
unrestricted cash, cash equivalents and current and non-current marketable
securities compared to $91.1 million at June 30, 2009.

2009 Revised Financial Guidance

The revised annual financial guidance for 2009 is as follows:

* The range of anticipated royalty revenue has been narrowed from our prior
guidance and is now expected to be in a range from $40 million to $42 million.
* Anticipated research and development expenses have been further revised
downward from our prior guidance to a range from $30 million to $32 million.
Research and development expenses continue to be influenced by costs related to
current and anticipated clinical trial programs, including MP-470, SGI-1776 and
SGI-110, in addition to ongoing product development efforts.
* General and administrative expenses remain unchanged from our prior guidance
and are expected to be in a range from $9.0 million to $9.5 million.
* During 2009, no additional gain on sale of products resulting from the
previous sale of our commercial business or other products is anticipated beyond
the $520,000 already recorded through September 30, 2009.
* The revision to our financial guidance results in an improvement to our
anticipated annual results with a forecasted net income in a range from $1.7
million to $2.2 million, compared with prior guidance of a net loss in a range
from $3.0 million to $4.5 million.
* Included in total operating expenses are non-cash stock-based compensation
expenses now estimated at $2.5 million.
* The Company continues to remain debt-free and does not plan to access the
capital markets for operational purposes during 2009.
* Average annual shares outstanding remain unchanged from our prior guidance and
are expected to be approximately 59.2 million common shares.

Recent Corporate Milestones

July 2009: The Company announced the addition of Mohammad Azab, M.D., M Sc, MBA
to the management team as Chief Medical Officer. With more than 20 years of
experience in worldwide drug development, clinical research, and medical
affairs, resulting in eight approved drugs, including six in oncology, Dr. Azab
brings extensive international development and translational medicine expertise
to SuperGen. Dr. Azab will manage SuperGen`s clinical development strategy,
clinical operations, regulatory affairs, quality, and safety departments to
advance the Company`s oncology product portfolio from discovery through clinical
Proof of Concept.

August 2009: The Company announced that preliminary results from Phase Ib data
of MP-470, its multi-targeted, tyrosine kinase inhibitor and RAD51 suppressor,
demonstrated an overall clinical benefit rate of 54 percent when the drug is
given in combination with standard of care carboplatin containing doublet
chemotherapy in patients with small cell lung cancer and neuroendocrine
malignancies. The data were presented on August 2 at the International
Association for the Study of Lung Cancer, 13th World Conference on Lung Cancer,
in San Francisco, CA.

September 2009: The Company announced that effective October 16, 2009, David
Bearss, Ph.D., resigned as SuperGen`s Chief Scientific Officer, and is now
engaged as a long-term biology consultant to the Company. In addition, Dr.
Bearss retains his Scientific Advisory Board membership at SuperGen. Dr. Bearss
has returned to academic cancer research, as Co-director of the Center for
Investigational Therapeutics of Huntsman Cancer Institute at the University of
Utah. Michael McCullar, Ph.D., MBA, Vice President, Strategy and Discovery
Operations, has resumed his position as Head of Discovery Operations, a
responsibility he held from 2006 through 2008.

October 2009: SuperGen and GlaxoSmithKline ("GSK") announced that they entered
into a five-year collaboration to discover and develop cancer therapeutics based
on epigenetic targets. Epigenetics refers to the regulation of genes with
mechanisms other than changes to the underlying DNA sequence, and is widely
believed to play a central role in the development and progression of almost all
cancers. Under the terms of the agreement, SuperGen will discover and develop
candidate compounds through to early clinical proof of concept. GSK will then
have the right to exercise an option to develop and commercialize resulting
products on a global basis. SuperGen will receive $5 million in upfront
payments, including a $3 million equity investment. If SuperGen`s developmental
programs are optioned and developed, total potential development and
commercialization milestone payments to SuperGen under the agreement could
exceed $375 million, in addition to tiered royalties of up to double digits,
payable on net sales of any resulting products.

Conference Call Information

SuperGen will host a conference call to discuss the results of the 2009 third
quarter financial results today at 1:30 p.m. PT / 4:30 p.m. ET. A live webcast
of the conference call is accessible via the investor relations section of the
Company`s web site at http://www.supergen.com. A webcast replay of the
conference call will be available for 90 days.

About SuperGen

SuperGen is a pharmaceutical company dedicated to the discovery and development
of novel cancer therapeutics in epigenetic and cell signaling modulation. The
Company develops products through biochemical and clinical proof of concept to
partner for further development and commercialization. For more information
about SuperGen, please visit http://www.supergen.com.

Forward-Looking Statements

This press release contains "forward-looking" statements within the meaning of
Section 21A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and is subject to the safe harbor
created thereby. The actual results could differ materially from those projected
in the forward-looking statements as a result of a number of risks and
uncertainties. These forward-looking statements include statements regarding
SuperGen`s expectations regarding the various abilities of MP-470, including the
results of the Phase I and multi-arm Phase Ib clinical trials, expectations
regarding the various abilities of SGI-1776 and SGI-110, expectations about
SuperGen`s ability to remain debt-free and to avoid accessing the capital
markets for fund-raising in this fiscal year, expectations about increases in
royalty revenue, gains from sales of non-core assets, decreases in certain
operating expenses, estimates of the 2009 net income, expectations that SuperGen
will receive the balance of the purchase price for Nipent from Mayne Pharma,
expectations about the successful development and recognition of any related
milestones resulting from the multi-year collaboration with GSK to discover,
develop and commercialize cancer therapeutics based on epigenetic targets, as
well as SuperGen`s expectations and successful development of all its pipeline
products either through internal efforts or through existing or future
partnerships. Important factors that could cause actual results to differ
materially from the expectations reflected in the forward-looking statements
include, but are not limited to, the ability of Eisai to generate global sales
of Dacogen, risks and uncertainties related to the achievement of developmental
milestones with respect to the compounds acquired in the Montigen acquisition,
the research and development of MP-470, SGI-1776 and SGI-110, GSK`s decision
whether or not to license and then develop and commercialize the products that
are the subject of that collaboration and whether any of those products will be
commercially successful, and the satisfaction of the contingencies related to
the sale of the worldwide rights to Nipent to Mayne Pharma. In general, our
future success is dependent upon numerous factors, including our ability to
generate pre-clinical development candidates for selection into clinical
testing, obtaining regulatory approval of product development programs,
conducting and completing clinical trials, and obtaining regulatory approval of
our products and product candidates, and creating opportunities for future
commercialization of compounds. Our future revenue and operating and net income
or loss could be worse than anticipated if demand for our products is less than
expected, if our partnerships and collaborations with other parties are not
successful, or if the introduction of new products is delayed, for any reason,
including regulatory delay. References made to the discussion of risk factors
are detailed in the Company`s filings with the Securities and Exchange
Commission including reports on its most recently filed Form 10-K and Form 10-Q.
These forward-looking statements are made only as of the date hereof, and we
disclaim any obligation to update or revise the information contained in any
such forward-looking statements, whether as a result of new information, future
events or otherwise.

Consolidated Statements of Operations and Balance Sheets to follow

SUPERGEN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)

Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008

Revenues:
Royalty revenue $ 10,357 $ 10,209 $ 29,282 $ 26,480
Total revenues 10,357 10,209 29,282 26,480

Operating expenses:
Research and development 7,259 8,841 21,350 24,528
General and administrative 2,441 2,511 6,649 8,860
Gain on sale of products (20 ) - (520 ) (1,560 )
Total operating expenses 9,680 11,352 27,479 31,828

Income (loss) from operations 677 (1,143 ) 1,803 (5,348 )

Interest income 153 491 610 1,794
Other than temporary decline in value of investments - - - (3,055 )
Other income (expense) - 41 - 49
Income (loss) before income tax benefit (provision) 830 (611 ) 2,413 (6,560 )

Income tax benefit (provision) 3 42 (12 ) 42

Net income (loss) $ 833 $ (569 ) $ 2,401 $ (6,518 )
Net income (loss) per common share:
Basic $ 0.01 $ (0.01 ) $ 0.04 $ (0.11 )
Diluted $ 0.01 $ (0.01 ) $ 0.04 $ (0.11 )
Weighted average shares outstanding:
Basic 59,143 57,562 59,111 57,541
Diluted 59,320 57,562 59,124 57,541

SUPERGEN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

September 30, December 31,
2009 2008
(Unaudited)
ASSETS

Current assets:
Cash and cash equivalents $ 12,202 $ 48,908
Marketable securities 77,945 37,787
Prepaid expenses and other current assets 1,246 1,307
Total current assets 91,393 88,002

Marketable securities, non-current 4,204 1,617
Property, plant and equipment, net 4,376 4,437
Goodwill 731 731
Other intangibles, net - 106
Restricted cash 2,246 2,367
Other assets 505 505
Total assets $ 103,455 $ 97,765

LIABILITIES & STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable $ 2,374 $ 2,614
Accrued liabilities 293 422
Payable to AVI BioPharma 565 565
Deferred gain on sale of products to Hospira, Inc. 125 125
Deferred rent 357 287
Accrued payroll and employee benefits 2,546 2,903
Total current liabilities 6,260 6,916

Deferred rent, non-current 82 358
Total liabilities 6,342 7,274

Total stockholders' equity 97,113 90,491
Total liabilities and stockholders' equity $ 103,455 $ 97,765

SuperGen, Inc.
Timothy L. Enns, 925-560-2810
Senior Vice President
Corporate Communications & Business Development
tenns@supergen.com
or
Susanna Chau, 925-560-2845
Manager
Investor Relations
schau@supergen.com

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