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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2012	May 04, 2012
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
Trading Symbol	SCMP
Entity Registrant Name	SUCAMPO PHARMACEUTICALS, INC.
Entity Central Index Key	0001365216
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Class A common stock
Entity Common Stock, Shares Outstanding		15,704,314
Class B common stock
Entity Common Stock, Shares Outstanding		26,191,050

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 55,504	$ 50,662
Investments, current	19,666	24,452
Product royalties receivable	10,928	10,795
Unbilled accounts receivable	497	2,036
Accounts receivable, net	1,097	4,616
Prepaid and income taxes receivable	1,582	2,845
Deferred tax assets, current	118	163
Deferred charge, current	3,057	3,057
Restricted cash, current	15,113	15,113
Prepaid expenses and other current assets	1,799	1,177
Total current assets	109,361	114,916
Investments, non-current		998
Property and equipment, net	1,561	1,669
Intangibles assets, net	8,146	8,364
Deferred tax assets, non-current	1,698	2,089
Deferred charge, non-current	25,986	26,751
Restricted cash, non-current	2,216	2,129
Other assets	1,148	653
Total assets	150,116	157,569
Current liabilities:
Accounts payable	5,638	6,978
Accrued expenses	7,167	13,648
Deferred revenue, current	6,558	3,888
Deferred tax liability, current	2,811	2,167
Notes payable, current	19,700	20,400
Total current liabilities	41,874	47,081
Notes payable, non-current	39,777	39,227
Deferred revenue, non-current	6,887	7,045
Deferred tax liability, non-current	23,012	23,019
Other liabilities	2,649	2,603
Total liabilities	114,199	118,975
Commitments and contengencies (Notes 7 and 10)
Stockholders' equity:
Preferred stock, $0.01 par value; 5,000,000 shares authorized at March 31, 2012 and December 31, 2011; no shares issued and outstanding at March 31, 2012 and December 31, 2011
Additional paid-in capital	60,803	59,957
Accumulated other comprehensive income	16,259	17,854
Treasury stock, at cost; 186,987 shares	(700)	(700)
Accumulated deficit	(40,864)	(38,936)
Total stockholders' equity	35,917	38,594
Total liabilities and stockholders' equity	150,116	157,569
Class A common stock
Stockholders' equity:
Common stock	157	157
Class B common stock
Stockholders' equity:
Common stock	$ 262	$ 262

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2012	Dec. 31, 2011
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Treasury stock, shares	186,987	186,987
Class A common stock
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	270,000,000	270,000,000
Common stock, shares issued	15,703,218	15,690,780
Common stock, shares outstanding	15,703,218	15,690,780
Class B common stock
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	75,000,000	75,000,000
Common stock, shares issued	26,191,050	26,191,050
Common stock, shares outstanding	26,191,050	26,191,050

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Revenues:
Research and development revenue	$ 2,585	$ 1,964
Product royalty revenue	10,928	9,118
Co-promotion revenue	766	938
Contract and collaboration revenue	167	154
Total revenues	14,446	12,174
Operating expenses:
Research and development	3,352	9,220
General and administrative	7,327	9,697
Selling and marketing	4,089	2,418
Total operating expenses	14,768	21,335
Loss from operations	(322)	(9,161)
Non-operating income (expense):
Interest income	20	70
Interest expense	(592)	(611)
Other income (expense), net	1,274	(135)
Total non-operating income (expense), net	702	(676)
Income (loss) before income taxes	380	(9,837)
Income tax benefit (provision)	(2,308)	2,928
Net loss	$ (1,928)	$ (6,909)
Net loss per share:
Basic net loss per share	$ (0.05)	$ (0.17)
Diluted net loss per share	$ (0.05)	$ (0.17)
Weighted average common shares outstanding - basic	41,702	41,851
Weighted average common shares outstanding - diluted	41,702	41,851
Comprehensive loss:
Net loss	$ (1,928)	$ (6,909)
Other comprehensive income (loss), net of tax effect:
Unrealized gain (loss) on investments	(3)	11
Foreign currency translation	(1,592)	437
Comprehensive loss	$ (3,523)	$ (6,461)

Condensed Consolidated Statement of Changes in Stockholders' Equity - 3 months ended Mar. 31, 2012 - USD ($) $ in Thousands	Total	Class A common stock	Class B common stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Accumulated Deficit
Beginning Balance (in shares) at Dec. 31, 2011		15,690,780	26,191,050			186,987
Beginning Balance at Dec. 31, 2011	$ 38,594	$ 157	$ 262	$ 59,957	$ 17,854	$ (700)	$ (38,936)
Employee stock option expense	795			795
Stock issued upon exercise of stock options (in shares)		11,500
Stock issued upon exercise of stock options	44			44
Stock issued under employee stock purchase plan (in shares)		938
Stock issued under employee stock purchase plan	7			7
Foreign currency translation	(1,592)				(1,592)
Unrealized gain on investments, net of tax effect	(3)				(3)
Net loss	(1,928)						(1,928)
Ending Balance (in shares) at Mar. 31, 2012		15,703,218	26,191,050			186,987
Ending Balance at Mar. 31, 2012	$ 35,917	$ 157	$ 262	$ 60,803	$ 16,259	$ (700)	$ (40,864)

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Cash flows from operating activities:
Net loss	$ (1,928)	$ (6,909)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	350	249
Deferred tax provision	950	(12)
Deferred charge	764
Stock-based compensation	795	145
Amortization of premiums on investments	31	292
Notes payable paid-in-kind interest	550	570
Changes in operating assets and liabilities:
Accounts receivable	3,518	108
Unbilled accounts receivable	1,539	(1,482)
Product royalties receivable	(133)	1,398
Inventory	2
Prepaid and income taxes receivable and payable, net	1,267	(2,893)
Accounts payable	(1,322)	(1,065)
Accrued expenses	(3,468)	3,902
Deferred revenue	2,538	(640)
Other assets and liabilities, net	(646)	290
Net cash provided by (used in) operating activities	4,807	(6,047)
Cash flows from investing activities:
Purchases of investments		(8,790)
Proceeds from sales of investments	750	1,248
Maturities of investments	5,000	15,335
Purchases of property and equipment	(40)	(133)
Purchases of intangible assets	(3,000)	(3,000)
Purchase of other investing activities	(432)
Net cash provided by investing activities	2,278	4,660
Cash flows from financing activities:
Issuance of notes receivable
Proceeds from exercise of stock options	44
Proceeds from employee stock purchase plan	7	3
Net cash provided by financing activities	51	3
Effect of exchange rates on cash and cash equivalents	(2,294)	499
Net increase (decrease) in cash and cash equivalents	4,842	(885)
Cash and cash equivalents at beginning of period	50,662	49,243
Cash and cash equivalents at end of period	55,504	48,358
Supplemental disclosure of non-cash investing and financing activities:
Purchase of intangible assets included in accrued expenses		$ 3,000
Purchase of other investing activities	$ 2

Business Organization and Basis of Presentation

3 Months Ended

Mar. 31, 2012

Business Organization and Basis of Presentation

Business Organization and Basis of Presentation

Description of the Business

Sucampo Pharmaceuticals, Inc., or the Company, is a global pharmaceutical company focused on the discovery, development and commercialization of proprietary drugs based on prostones and other novel drug technologies. Prostones are a class of fatty acid compounds that occur naturally in the human body as a result of the enzymatic catalysis by 15-Prostaglandin Dehydrogenase (15-PGDH) of eicosanoids, like prostaglandins, and other docosanoid molecules specifically synthesized with 15 position keto groups.

The therapeutic potential of prostones was first identified by one of the Company’s founders, Dr. Ryuji Ueno. The Company’s lead compounds primarily act on ClC-2 chloride and BK potassium ion channels. ClC-2 channel activators restore and repair tight junctions, maintain chloride homeostasis and increase fluid transmission across membranes and tissue barriers. BK channel activators are neuroprotective via hyperpolarization of excitable membranes, counteract endothelin-1 induced vasoconstriction, relax vascular smooth muscle cells, increase microvascular circulation, stabilize the mitochondrial membrane and decrease stress induced cell death. Both ClC-2 and BK channel activators have anti-inflammatory properties. Prostones offer a wide-ranging therapeutic potential, particularly for age-related diseases. The Company is focused on developing prostones to treat gastrointestinal, ophthalmologic, central nervous system or CNS, vascular and respiratory diseases as well as other potential therapeutic applications.

The Company generates revenue mainly from product royalties, development milestone payments, and clinical development activities. The Company expects to continue to incur significant expenses for the next several years as the Company continues its research and development activities and as the Company seeks regulatory approvals for additional indications for AMITIZA^® (lubiprostone), RESCULA^® (unoprostone isopropyl) and other compounds on an international basis.

To date, two prostone products have received marketing approval, AMITIZA and RESCULA. A third prostone, cobiprostone, has been studied in phase II trials in humans. The Company filed an orphan drug application for cobiprostone for oral mucositis and expects a response from the U.S. Food and Drug Administration, or FDA, in the second quarter of 2012. Two additional prostones, SPI 017 and SPI 3608, have also been developed for human testing.

AMITIZA is being marketed and developed in the U.S. for gastrointestinal indications under the October 2004 collaboration and license agreement with Takeda Pharmaceutical Company Limited, or Takeda Agreement. The Company is primarily responsible for clinical development activities under the Takeda Agreement while Takeda is responsible for commercialization of AMITIZA. The Company and Takeda initiated commercial sales of AMITIZA in the U.S. for the treatment of chronic idiopathic constipation, or CIC, in April 2006 and for the treatment of irritable bowel syndrome with constipation in May 2008. AMITIZA is currently being developed for the treatment of opioid bowel dysfunction, or OBD or opioid-induced constipation, or OIC. Takeda also holds marketing rights to AMITIZA in Canada, but has not yet commercialized it there.

The Company initiated arbitration proceedings with the International Court of Arbitration, International Chamber of Commerce, or ICC, against Takeda in 2010 claiming that, among other things, Takeda was not using its best efforts to market, promote and sell as well as maximize net sales revenue of AMITIZA. The Company is seeking damages including the termination of the Takeda Agreement and Supplemental Takeda Agreement. The ICC hasnotified the Company that the date on which it renders its decision has been extended from April 30, 2012 to May 31, 2012 though the decision may not be issued on that date.

In Japan, lubiprostone is being developed and marketed under a license, commercialization and supply agreement with Abbott Japan Co. Ltd., or Abbott, for lubiprostone in Japan, or the Abbott Agreement. The Company has filed a new drug application, or a NDA, for AMITIZA for the treatment of CIC in Japan with the Pharmaceuticals and Medical Devices Agency, or PMDA. The Company has had final labeling discussions with the PMDA and anticipates a decision by the end of the second quarter of 2012. Thereafter, the Company would engage in pricing negotiations with the Ministry of Health, Labor and Welfare, or MHLW and expect those negotiations to conclude in the third quarter of 2012. In that event, the Company anticipates a launch by Abbott in the fourth quarter of 2012. The Company continues to negotiate with third parties for the OBD indication, and Abbott will have 45 days to meet the terms and conditions of any third party bona fide offer.

In Europe, the Company started to market AMITIZA, on a limited basis, in Switzerland in February 2012 while the Company continues discussions with the Swiss Federal Office of Public Health for pricing approval. In the UK, the Company expects a decision in the third quarter of 2012 by the Medicines and Healthcare products Regulatory Agency, or MHRA, for approval of AMITIZA to treat CIC. In the meantime AMITIZA is being made available through a Named Patient Program throughout the E.U., Iceland and Norway. The Company continues to evaluate the opportunities in the E.U.

The Company holds license agreements for RESCULA in the United States and Canada and the rest of the world, with the exception of Japan, Korea, Taiwan and the People’s Republic of China.In the U.S., the Company’s discussions with the FDA under the sNDA have resulted in a FDA complete response letter that made improvements to the label. These improvements include removal of second line therapy language to enable first line use, removal of the prostaglandin description, and additions to the mechanism of action section. However the Company will continue to seek further revisions to the label to more accurately reflect current scientific understanding through the FDA’s administrative appeal process. The Company anticipates agreement on the final RESCULA label during the third quarter of this year. The Company plans to re-launch RESCULA in the U.S. for its approved indication after the resolution of the appeal. The Company is also evaluating the opportunities to obtain an appropriate label in the E.U. and other European countries as well as obtaining reauthorization in those countries to commercialize unoprostone isopropyl. The Company is evaluating conducting a phase 2a clinical trial possibly to commence in 2012 of unoprostone isopropyl for the indication of dry age-related macular degeneration, or dry AMD. If this study is successful, there would be a need to complete further studies that may take several years before commercialization.

In other areas of development, the Company entered into agreements in 2011 with CuroNZ of New Zealand, which will augment the Company’s ophthalmic development opportunities, and Numab AG, or Numab of Switzerland, to obtain access to their proprietary technology for the discovery of high-affinity antibodies against certain selected targets.

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP, and the rules and regulations of the Securities and Exchange Commission, or SEC, for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s Consolidated Financial Statements as of and for the year ended December 31, 2011 included in the Company’s Annual Report on Form 10-K, which was filed with the SEC on March 15, 2012. The financial information as of March 31, 2012 and for the three months ended March 31, 2012 and 2011 is unaudited. In the opinion of the Company’s management, all adjustments, consisting only of normal recurring adjustments or accruals, considered necessary for a fair statement of the results of these interim periods have been included. The results of the Company’s operations for any interim period are not necessarily indicative of the results that may be expected for any other interim period or for a full fiscal year.

The Condensed Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All significant inter-company balances and transactions have been eliminated.

The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

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+ Details

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2012

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Cash and Cash Equivalents

For the purpose of the Condensed Consolidated Balance Sheets and Statements of Cash Flows, cash equivalents include all highly liquid investments with a maturity of 90 days or less at the time of purchase.

Restricted Cash

Restricted cash consists of approximately $17.3 million and $17.2 million at March 31, 2012 and December 31, 2011, respectively. Restricted cash represents cash required to be deposited with certain financial institutions in connection with the Sucampo Pharma, Ltd., or SPL, loan agreement with The Bank of Tokyo-Mitsubishi UFJ, Ltd., Numab’s loan agreement with Zurcher Kantonalbank and operating leases.

Current and Non-current Investments

Current and non-current investments consist primarily of U.S. government agencies securities, corporate bonds, mutual funds and variable rate demand notes. The Company classifies its investments into current and non-current based on their maturities and management’s reasonable expectation to realize these investments in cash. The Company classifies all of its investments as available for sale securities and reports unrealized gains or losses, net of related tax effects, in other comprehensive income.

Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments, which include cash and cash equivalents, restricted cash, current and non-current investments, receivables, accounts payable and accrued expenses, approximate their fair values based on their short maturities, independent valuations or internal assessments. The carrying amount of the short and long-term debt at March 31, 2012 and December 31, 2011 approximated its fair value due to the fact that the interest rates are determined based by reference to interbank rates. The Company’s debt measured at fair value on a recurring basis, which are subject to the fair value disclosure requirements as discussed in Note 4 below, as of March 31, 2012 are Level 2.

Accounts Receivable and Unbilled Accounts Receivable

Accounts receivable represent mainly amounts due under the Takeda and the Abbott Agreements. Unbilled accounts receivable represent the research and development expenses that are reimbursable by Takeda but have not been billed to Takeda as of the balance sheet date. No allowance for uncollectible accounts was recorded in 2012 or 2011.

Product Royalties Receivable

Product royalties receivable represent amounts due from Takeda for the Company’s royalties on sales of AMITIZA, which are based on reports obtained directly from Takeda.

Revenue Recognition

The Company’s revenues are derived primarily from collaboration and license agreements and include upfront payments, development milestone payments, reimbursements of development and co-promotion costs and product royalties.

The Company evaluated the multiple deliverables within the collaboration and license agreements in accordance with the guidance of multiple deliverables to determine whether the delivered elements that are the obligation of the Company have value to other parties to the agreement on a stand-alone basis and whether objective reliable evidence of fair value of the undelivered items exists. Deliverables that meet these criteria are considered a separate unit of accounting. Deliverables that do not meet these criteria are combined and accounted for as a single unit of accounting. The appropriate recognition of revenue is then applied to each separate unit of accounting.

Royalty revenues are based on net sales of licensed products and are recorded on the accrual basis when earned in accordance with contractual terms when third-party results are reliably measurable, collectability is reasonably assured and all other revenue recognition criteria are met.

Collaboration revenues relate to reimbursements of co-promotion costs based upon a rate per detail and reimbursements of the costs of miscellaneous marketing activities.

The Company considers its participation in the joint committees under the collaboration and license agreements as separate deliverables under the contracts and recognizes the fair value of such participation as collaboration revenue over the period of the participation per the terms of the contracts.

The Company has determined that it is acting as a principal under both the Takeda Agreement and Abbott Agreement and, as such, records revenue on a gross basis in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Contract Revenue

Contract revenue relates to development and consulting activities and is accounted for under the time-based model.

Certain Risks, Concentrations and Uncertainties

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist of cash and cash equivalents, restricted cash, investments and receivables. The Company places its cash, cash equivalents and restricted cash with highly rated financial institutions and invests its excess cash in highly rated investments. As of March 31, 2012 and December 31, 2011, approximately $12.8 million, or 13.8%, and $15.6 million, or 16.7%, respectively, of the Company’s cash, cash equivalents, restricted cash and investments were issued or insured by the federal government or government agencies.The Company has not experienced any losses on these accounts related to amounts in excess of insured limits.

The Company’s products and product candidates under development require approval from the FDA or other international regulatory agencies prior to commercial sales. For those product candidates or indications that have not yet been approved by the FDA or international regulatory agencies, there can be no assurance the products will receive the necessary approval. If the Company is denied approval or approval is delayed, it may have a material adverse impact on the Company.

The Company’s products, AMITIZA and RESCULA, compete in a rapidly changing, highly competitive market, which is characterized by advances in scientific discovery, changes in customer requirements, evolving regulatory requirements and developing industry standards. Any failure by the Company to anticipate or to respond adequately or timely to scientific developments in its industry, changes in customer requirements or changes in regulatory requirements or industry standards, or any significant delays in the development or introduction of products could have a material adverse effect on the Company’s business, operating results and future cash flows.

The Company’s expected activities may necessitate significant uses of working capital. The Company’s working capital requirements will depend on many factors, including the successful sales of AMITIZA and RESCULA, research and development efforts to develop new products or indications, payments received under contractual agreements with other parties, the status of competitive products and market acceptance of the Company’s new products by physicians and patients. The Company plans to continue financing operations with its existing cash and investments as well as with product royalty revenue and cash received from milestones and other revenue related to its joint collaboration, license and supply agreements.

Revenues from one unrelated party, Takeda, accounted for 98.3% and 94.8%, of the Company’s total revenues for the three months ended March 31, 2012 and 2011, respectively. Accounts receivable, unbilled accounts receivable and product royalties receivable from Takeda accounted for 99.8% and 100.0% of the Company’s total accounts receivable, unbilled accounts receivable and product royalties receivable at March 31, 2012 and December 31, 2011, respectively. Revenues from another unrelated party, Abbott, accounted for 1.0% and 4.3% of the Company’s total revenues for the three months ended March 31, 2012 and 2011, respectively. The Company depends significantly upon the collaborations with Takeda and Abbott and its activities may be impacted if these relationships are disrupted.

The Company has an exclusive supply arrangement with R-Tech Ueno Ltd, or R-Tech, to provide it with commercial and clinical supplies of its product and product candidates. R-Tech also provides certain preclinical and other research and development services. Any difficulties or delays in performing the services under these arrangements may cause the Company to lose revenues, delay research and development activities or otherwise disrupt the Company’s operations.

Recent Accounting Pronouncements

In June 2011, the Finance Accounting Standards Board, or FASB, issued a standards update on Comprehensive Income Topic 220 to improve the comparability, consistency, and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. To increase the prominence of items reported in other comprehensive income and to facilitate convergence GAAP and International Financial Reporting Standards, the FASB decided to eliminate the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity, among other amendments in this update. The amendments require that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The Company has opted to present a single continuous statement of comprehensive income.

Earnings per Share

3 Months Ended

Mar. 31, 2012

Earnings per Share

3. Earnings per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the sum of the weighted average class A and B common shares outstanding. Diluted net income per share is computed by dividing net income by the weighted average common shares and potential dilutive common shares outstanding. Diluted net loss per share, when applicable, is computed by dividing net loss by the weighted average common shares outstanding without the impact of potential dilutive common shares outstanding because they would have an anti-dilutive impact on diluted net loss per share.

The computation of net income (loss) per share for the three months ended March 31, 2012 and 2011 is shown below:

	Three Months Ended March 31,
(In thousands of U.S. dollars, except per share data)	2012			2011
Basic net income (loss) per share:
Net income (loss)	$	(1,928	)	$	(6,909	)

Weighted average class A and B common shares outstanding		41,702			41,851

Basic net income (loss) per share	$	(0.05	)	$	(0.17	)

Diluted net income (loss) per share:
Net income (loss)	$	(1,928	)	$	(6,909	)

Weighted average class A and B common shares outstanding for diluted net income per share		41,702			41,851

Diluted net income (loss) per share	$	(0.05	)	$	(0.17	)

For the periods listed above, there were no potentially diluted securities to be used in the calculations of diluted historical net loss per share as of March 31, 2012 and 2011.

For the periods listed above, the following securities were excluded from the computation of diluted net loss per share as their effect would be anti-dilutive as of March 31, 2012 and 2011 are shown below:

	March 31,
(In thousands of U.S. dollars)	2012		2011
Employee stock options		3,654		1,528
Non-employee stock options		450		450

Current and Non-Current Investments

3 Months Ended

Mar. 31, 2012

Current and Non-Current Investments

4. Current and Non-Current Investments

At March 31, 2012 and December 31, 2011, current and non-current available-for-sale investments consisted of the following securities:

	March 31, 2012
			Unrealized		Unrealized
(In thousands of U.S. dollars)	Cost		Gains		Losses		Fair Value
Current:
U.S. commercial paper	$	1,999	$	1	$	-	$	2,000
U.S. government securities		3,250		-		-		3,250
Corporate bonds		4,219		2		-		4,221
Municipal Securities		10,195		-		-		10,195
Total	$	19,663	$	3	$	-	$	19,666

Non-current:
U.S. government securities	$	-	$	-	$	-	$	-
Total	$	-	$	-	$	-	$	-

	December 31, 2011
			Unrealized		Unrealized
(In thousands of U.S. dollars)	Cost		Gains		Losses			Fair Value
Current:
U.S. commercial paper	$	1,997	$	3	$	-		$	2,000
U.S. government securities		3,250		-		-			3,250
Corporate bonds		7,002		8		(3	)		7,007
Variable rate demand notes		12,195		-		-			12,195
Total	$	24,444	$	11	$	(3	)	$	24,452

Non-current:
U.S. government securities	$	1,000	$	-	$	(2	)	$	998
Total	$	1,000	$	-	$	(2	)	$	998

The Company performs fair value measurements in accordance with the FASB’s guidance for fair value measurements and disclosures, which defines fair value as the exchange price that would be received for selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value hierarchy is established which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company classifies its investments into the following categories based on the three levels of inputs used to measure fair value:

Level 1: quoted prices in active markets for identical assets or liabilities;

Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or

Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company’s assets measured at fair value on a recurring basis, which are subject to the fair value disclosure requirements, as of March 31, 2012 and December 31, 2011 are as follows:

	Fair Value Measurements at Reporting Date Using
March 31, 2012	Quoted Prices in Active Markets for identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In thousands of U.S. dollars)	(Level 1)		(Level 2)		(Level 3)		Total
U.S. government securities	$	-	$	3,250	$	-	$	3,250
U.S. commercial paper		-		3,500		-		3,500
Corporate bonds		-		4,221		-		4,221
Money market funds		10,152		-		-		10,152
Municipal Securities		-		10,195		-		10,195
Total assets measured at fair value	$	10,152	$	21,166	$	-	$	31,318

	Fair Value Measurements at Reporting Date Using
December 31, 2011	Quoted Prices in Active Markets for identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In thousands of U.S. dollars)	(Level 1)		(Level 2)		(Level 3)		Total
U.S. government securities	$	-	$	4,248	$	-	$	4,248
U.S. commercial paper		-		2,000		-		2,000
Corporate bonds		-		7,007		-		7,007
Money market funds		12,885		-		-		12,885
Variable rate demand notes		-		12,195		-		12,195
Total assets measured at fair value	$	12,885	$	25,450	$	-	$	38,335

If quoted prices in active markets for identical assets and liabilities are not available to determine fair value, then the Company uses quoted prices for similar assets and liabilities or inputs other than the quoted prices that are observable, either directly or indirectly. This pricing methodology applies to the Company’s Level 2 investments.

Intangible Assets

3 Months Ended

Mar. 31, 2012

Intangible Assets

5. Intangible Assets

In April 2009, the Company entered into an agreement with R-Tech, or the 2009 R-Tech Agreement, to acquire all patents and other intellectual property rights related to RESCULA for its FDA approved indication and any new indications for unoprostone isopropyl in the U.S. and Canada. Although RESCULA eye drops have been approved by the FDA since 2000, RESCULA is not currently marketed in the U.S. or Canada. In October 2012, the Company plans to re-launch RESCULA in the U.S. for its approved indication after the resolution of appeal within the FDA regarding revisions to the mechanism of action section of the label.

Under the terms of the 2009 R-Tech Agreement, the Company made an upfront payment of $3.0 million and may be required to pay up to $5.5 million in additional milestone payments to R-Tech based on the achievement of specified development and commercialization goals. The first milestone payment of $500,000 is payable upon the re-launch of RESCULA for the treatment of glaucoma which is considered as being probable; therefore, this amount is recorded as part of the initial cost of the acquired assets. The Company allocated the acquisition cost between an intangible asset of $3.4 million and a non-current prepaid inventory of $85,000 as of December 31, 2011, both of which are reflected in other non-current assets in the accompanying Condensed Consolidated Balance Sheets. The cost is amortized over the 10-year life of the 2009 R-Tech Agreement, which the Company believes approximates the useful life of the underlying rights and data. Amortization expense was $85,000 for the three months ended March 31, 2012 and 2011. The annual amortization expense will be approximately $341,000 through April 2019.

On March 22, 2011, the Company entered into a license agreement with R-Tech for unoprostone isopropyl, or the 2011 R-Tech Agreement, expanding the Company’s development and commercialization rights as well as its territories beyond their previously agreed territory of the United States and Canada to the rest of the world, with the exception of Japan, Korea, Taiwan and the People’s Republic of China. We are now evaluating the opportunities to obtain an appropriate label in the E.U. and other European countries as well as obtaining reauthorization in those countries to commercialize unoprostone isopropyl. The Company plans to re-launch unoprostone isopropyl in these territories subsequent to these events.

The Company has made payments to R-Tech of $6.0 million, including $3.0 million in the quarter ending March 2012, which is reflected in other non-current assets in the accompanying Condensed Consolidated Balance Sheets, and may be required to pay up to $100.0 million in additional milestone payments to R-Tech based on the achievement of specified development and commercialization goals. Sucampo AG, or SAG, will be responsible for all development, regulatory, and commercialization activities. The Company is amortizing the $6.0 million over the 10-year life of the license agreement, which the Company believes approximates the useful life of the underlying rights and data. Amortization expense was $126,000 for the three months ended March 31, 2012. The annual amortization expense will be approximately $613,000 through March 2021.

Accrued Expenses

3 Months Ended

Mar. 31, 2012

Accrued Expenses

6. Accrued Expenses

Accrued expenses consist of the following as of:

	March 31,		December 31,
(In thousands of U.S. dollars)	2012		2011
Research and development costs	$	2,544	$	5,622
Employee compensation		1,458		1,607
Selling and marketing costs		354		76
Legal service fees		917		1,955
RESCULA milestones		500		3,500
Other accrued expenses		1,394		888
Total	$	7,167	$	13,648

Commitments

3 Months Ended

Mar. 31, 2012

Commitments

7. Commitments

Operating Leases

The Company leases office space in the U.S., Switzerland, Japan and U.K., under operating leases through 2017. Total future minimum, non-cancelable lease payments under operating leases, are as follows as of March 31, 2012:

(In thousands of U.S. dollars)
2012	$	1,231
2013		1,102
2014		1,024
2015		1,052
2016		1,084
2017 and thereafter		139
Total	$	5,632

Rent expense for all operating leases was approximately $400,000 and $366,000 for the three months ended March 31, 2012 and 2011, respectively.

Research and Development Costs

The Company routinely enters into agreements with third-party contract research organization to oversee clinical research and development studies provided on an outsourced basis and assist in other research and development activities. The Company generally is not contractually obligated to pay the third party if the service or reports are not provided. Total future estimated costs through 2013 under these agreements as of March 31, 2012 were approximately $6.1 million.

Related Party Transactions

3 Months Ended

Mar. 31, 2012

Related Party Transactions

8. Related Party Transactions

R-Tech Ueno, Ltd.

In addition to the unoprostone isopropyl agreements described in Note 5 above, the Company is a party to other development and exclusive supply agreements with R-Tech covering various compounds and territories. The Company’s founders, Drs. Ryuji Ueno and Sachiko Kuno, directly or indirectly, own a majority of the stock of R-Tech.

The Company recorded the following expenses under its agreements with R-Tech for the three months ended March 31, 2012 and 2011:

	Three Months Ended March 31,
(In thousands of U.S. dollars)	2012		2011
Clinical supplies	$	16	$	-
Other research and development services		304		3
Commercial supplies		135		123
	$	455	$	126

The following table summarizes the amounts included in deferred revenue resulting from the deferral of upfront payments relating to the exclusive supply agreements with R-Tech as of March 31, 2012 and December 31, 2011:

	March 31,		December 31,
(In thousands of U.S. dollars)	2012		2011
Deferred revenue, current	$	433	$	433
Deferred revenue, non-current		4,998		5,063
	$	5,431	$	5,496

The Company recognized approximately $105,000 of revenue relating to its agreements with R-Tech for each of the three months ended March 31, 2012 and 2011, which was recorded as contract and collaboration revenue in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Numab AG

In September 2011, the Company entered into a Loan Guarantee and Development Agreement, or Numab Agreement, with Numab. Numab is considered a related party as a result of an ownership interest by one of the Company’s executive officers. Under the terms of the Numab Agreement, the Company will provide Numab with up to CHF 5.0 million as collateral and will serve as guarantor for a loan to Numab from a third party. The Company may name up to four targets against which Numab will use their proprietary technology to discover high-affinity antibodies and to develop these to an investigational new drug ready stage. Numab is eligible for full time equivalent based payments and discovery success dependent fees. Any success dependent fees will result in a corresponding reduction in the amount of the available guarantee. Should Numab default its loan obligations, the collateral may be called upon to meet Numab’s obligation under its loan agreement. If a biologic is successfully developed, Numab and the Company may enter into a license arrangement in which Numab will be entitled to clinical development milestone payments and increasing tiered royalties on net sales. The Company will be responsible for clinical development and will retain all commercial rights to any resulting biologic product.

In February 2012, the Company entered into a Master Lease Agreement, or Lease Agreement, with Numab whereby the maximum collateral of CHF 5.0 million is reduced by the purchase cost of any equipment leased to Numab. As at March 31, 2012, equipment with a purchase cost of CHF 394,000 was leased to Numab thus reducing the maximum collateral and loan guarantee to CHF 4.6 million. Monthly rental payments are received under the terms of the lease.

- Definition

The entire disclosure for related party transactions, including the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
-Paragraph k

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 3A
-Section 04
-Paragraph b

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 57
-Paragraph 1-4
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39622-107864

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39603-107864

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(k))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39691-107864

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39678-107864

+ Details

Notes Payable

3 Months Ended

Mar. 31, 2012

Notes Payable

9. Notes Payable

In November 2010, SPL entered into a ¥1,000,000,000, approximating $12.0 million as of the closing date, secured term loan agreement with The Bank of Tokyo-Mitsubishi UFJ, Ltd, or the Bank. The loan agreement provides for the extension of credit for the period of one year that can be renewed annually upon the agreement of the Company, SPL and the Bank. Borrowings may be used to finance research and development activities, for working capital needs and for the general corporate purposes of SPL. The loan bears annual interest based on the three-month Tokyo Interbank Offer Rate, plus 1% and is reset quarterly. The interest rate for the first three months of 2012 was 1.33%. The outstanding loan balances included in the accompanying Condensed Consolidated Balance Sheets were $12.2 million and $12.9 million as of March 31, 2012 and December 31, 2011. In connection with the loan agreement, the Company and the Bank executed a guarantee agreement which provides a full guarantee by the Company on behalf of SPL’s obligation to the Bank. The loan agreement includes representations, covenants, and events of default customary for financing transactions of this type. Additionally, the Company agreed to maintain an amount of collateral that would not fall below 90.0% of the initial balance throughout the term of the loan. The Company deposited $14.9 million with the Bank and the deposit bears annual interest of 0.4%, which is recorded as restricted cash, current in the accompanying Condensed Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011.

Subordinated Unsecured Promissory Notes

In connection with the acquisition of SAG and its wholly owned subsidiary SAG-J in December 2010, Ambrent Investments S.à r.l., or Ambrent, issued a subordinated unsecured promissory note, or notes, to each of the Ueno Trust and Kuno Trust, each a related party. Each of the notes was issued with an initial principal balance of approximately $25.9 million, or approximately $51.9 million in the aggregate. The interest rate for the notes is equal to the per annum rate of interest determined on the basis of the sum of London Interbank Offered Rate, plus 4.0%, and is reset every six months on December 1st and June 1st of each year. The interest rate beginning December 1, 2011 is 4.7%.

The notes provide for a semi-annual payment schedule of interest and principal over a seven-year period on each June 1st and December 1st, provided that, until December 1, 2012 all accrued and unpaid interest will not be paid in cash but instead added to the principal balance of the notes. Ambrent made one principal payment on December 1, 2011 and is scheduled to make the next principal payment on December 1, 2012. For the three months ended March 31, 2012, approximately $550,000 of interest expense was added to the principal balance of the notes as paid-in-kind.

The notes can be prepaid at any time without penalty. In addition, the notes provide for a mandatory prepayment (i) in full in the event of an acquisition by an unaffiliated third party in an all-cash acquisition of all of the issued and outstanding shares of capital stock of the Company or (ii) either in full or in part in certain change of control transactions involving the Company where an unaffiliated third party acquires a majority of the Company’s voting stock.

Notes payable consist of the following as of March 31, 2012 and December 30, 2011:

	March 31,		December 31,
(In thousands of U.S. dollars)	2012		2011
Loan agreement, The Bank of Tokyo-Mitsubishi UFJ, Ltd	$	12,200	$	12,900
Promissory notes, Sellers of SAG		47,277		46,727
	$	59,477	$	59,627

Notes payable, current	$	19,700	$	20,400
Notes payable, non-current		39,777		39,227
	$	59,477	$	59,627

The aggregated scheduled maturities of notes payable were as follows as of March 31, 2012:

	March 31,
(In thousands of U.S. dollars)	2012
Due in one year	$	19,700
Due in two years		8,466
Due in three years		8,639
Due in four years		8,820
Due in five years		9,010
Thereafter		4,842
Total	$	59,477

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References + Details

Collaboration and License Agreements

3 Months Ended

Mar. 31, 2012

Collaboration and License Agreements

10. Collaboration and License Agreements

Abbott Agreement

In February 2009, the Company entered into the Abbott Agreement to develop and commercialize lubiprostone for the treatment of CIC in Japan. Additionally, the Abbott Agreement grants Abbott the right to a limited period of time of exclusive negotiation to any additional indications for which lubiprostone is developed in Japan under all relevant patents, know-how and trademarks. Under the terms of the Abbott Agreement, payments to the Company include a non-refundable upfront payment and non-refundable development and commercial milestone payments based on achieving specified development, regulatory and sales goals.

To date, the Company has received a total of $22.5 million in upfront and development milestone payments under this agreement, including a $5.0 million development milestone payment, received in October 2010, for the submission of a marketing application to the PMDAfor lubiprostone at a dosage strength of 24 micrograms for the indication of CIC in Japanese adults, as well as $10.0 million and $7.5 million in upfront and development milestone payments, respectively, in 2009. Under the Abbott Agreement the Company could receive additional milestone payments based on achieving other specified development and commercialization goals, including $15.0 million due on the first commercial sale in Japan, although there can be no assurance that the Company will receive any such payments.

The following table summarizes the cash streams and related revenue recognized or deferred under the Abbott Agreement for the three months ended March 31, 2012:

	Amount Deferred at December 31,		Cash Received for the Three Months Ended March 31,		Revenue Recognized for the Three Months Ended March 31,		Foreign Currency Effects for the Three Months Ended March 31,			Amount Deferred at March 31,
(In thousands of U.S. dollars)	2011		2012		2012		2012			2012
Collaboration revenue:
Up-front payment associated with the Company's obligation to participate in joint committees	$	860	$	-	$	13	$	(46	)	$	801

Research and development revenue:
Up-front payment	$	203	$	-	$	44	$	(9	)	$	150
Development milestone payment		273		-		59		(12	)	$	202
Total	$	476	$	-	$	103	$	(21	)	$	352

Takeda commercialization and license agreement

The Company has received a total of $150.0 million in upfront and development milestone payments through March 31, 2012 under the Takeda Agreement. Subject to future development and commercial milestones, the Company is potentially entitled to receive additional development milestone and commercial milestone payments under the Takeda Agreement, although there can be no assurance that the Company will receive any such payments.

The following table summarizes the cash streams and related revenue recognized or deferred under the Takeda Agreements for the three months ended March 31, 2012:

	Amount Deferred at December 31,		Cash Received for the Three Months Ended March 31,		Revenue Recognized for the Three Months Ended March 31,		Change in Accounts Receivable for the Three Months Ended March 31,			Amount Deferred at March 31,
(In thousands of U.S. dollars)	2011		2012		2012		2012*			2012
Collaboration revenue:
Up-front payment associated with the Company's obligation to participate in joint committees	$	1,323	$	-	$	37	$	-		$	1,286

Research and development revenue:
Reimbursement of research and development expenses	$	2,778	$	8,347	$	2,479	$	(3,071	)	$	5,575

Product royalty revenue	$	-	$	10,796	$	10,928	$	132		$	-

Co-promotion revenue	$	-	$	427	$	766	$	339		$	-

Includes billed and unbilled accounts receivable.

Stock Option Plans

3 Months Ended

Mar. 31, 2012

Stock Option Plans

11. Stock Option Plans

The following table summarizes the employee stock option activity for the three months ended March 31, 2012 under the Company’s 2001 Incentive Plan:

	Shares			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Options outstanding, December 31, 2011		190,400		$	10.00
Options expired		(34,000	)		10.00
Options outstanding, March 31, 2012		156,400			10.00		4.08	$	-
Options exercisable, March 31, 2012		156,400			10.00		4.08	$	-

The following table summarizes the employee stock option activity for the three months ended March 31, 2012 under the Company’s Amended and Restated 2006 Stock Incentive Plan:

	Shares			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Options outstanding, December 31, 2011		3,405,380		$	4.75
Options granted		119,960			6.69
Options expired		(16,280	)		9.11
Options exercised		(11,500	)		3.83
Options outstanding, March 31, 2012		3,497,560			4.80		8.67	$	9,256
Options exercisable, March 31, 2012		625,117			6.52		7.02	$	625

The weighted average grant date fair value of options awarded during the three months ended March 31, 2012 and the year ended December 31, 2011 was $3.87 and $1.81, respectively. As of March 31, 2012, approximately $4.5 million of total unrecognized compensation costs, net of estimated forfeitures, related to non-vested awards are expected to be recognized over a weighted average period of 2.46 years.

The Company granted 510,000 stock options with an exercise price of $5.85 per share to non-employees in August 2005 under the Company’s 2001 Incentive Plan. As of March 31, 2012 and December 31, 2011, 450,000 of these options were outstanding and exercisable. These non-employee stock options vested immediately and have a weighted average exercise price per share of $5.85 and $5.85, respectively, and remaining contractual life of 3.08 and 3.33 years, respectively, as of March 31, 2012 and December 31, 2011. As of March 31, 2012, these non-employee stock options have an aggregate intrinsic value of $720 and $720 for options outstanding and exercisable, respectively.

The Company recorded an of out-of-period adjustment amounting to $213,000 of stock-based compensation expense during the period. The Company concluded that this adjustment is immaterial to the March 31, 2012 financial statements.

Employee Stock Purchase Plan

Under the Company’s 2006 Employee Stock Purchase Plan, or ESPP, a total of 938 and 765 shares of class A common stock were purchased during the three months ended March 31, 2012 and 2011, respectively. The ESPP is non-compensatory and is intended to qualify as an Employee Stock Purchase Plan as defined in Section 423 of the Internal Revenue Code of 1986, as amended, and in accordance with GAAP guidance that requires estimates in the fair value of share-based payment awards on the date of the grant using an option-pricing model and recognizing the expense over the required service periods in the accompanying Condensed Consolidated Statement of Operations and Comprehensive Income (Loss). The Company received $6,639 and $3,052 upon purchase of shares under the ESPP for the three months ended March 31, 2012 and 2011, respectively.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 50
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901

Reference 6: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Income Taxes

3 Months Ended

Mar. 31, 2012

Income Taxes

12. Income Taxes

For the three months ended March 31, 2012 and 2011, the Company recorded a tax provision of $2.3 million and a tax benefit of $2.9 million, respectively. The tax provision for the three months ended March 31, 2012 primarily pertained to taxable income generated by the Company’s U.S. and Japanese subsidiaries. The tax benefit for the three months ended March 31, 2011 primarily pertained to the taxable loss generated by the Company’s U.S. subsidiary.

The Company has estimated its annual effective tax rate for the full fiscal year 2012 and 2011 and applied that rate to its income before income taxes in determining its income tax provision for the interim periods.

Uncertain Tax Positions

The Company applies the FASB’s guidance for uncertainty in income taxes that requires the application of a more likely than not threshold to the recognition and derecognition of uncertain tax positions.

The Company had an outstanding non-current income tax liability of approximately $1.6 million, including interest, for uncertain tax positions as of March 31, 2012. The amount represented the aggregate tax effect of differences between tax return positions and the amounts otherwise recognized in the Company’s Condensed Consolidated Financial Statements, and is reflected in other liabilities in the accompanying Condensed Consolidated Balance Sheets. The liability for uncertain tax positions as of March 31, 2012 mainly pertained to the Company’s interpretation of nexus in certain states related to revenue sourcing for state income tax purposes, as well as uncertain tax positions related to related party interest in foreign jurisdictions.

The Company recognizes accrued interest and penalties related to uncertain tax positions as a component of the income tax provision. The Company has identified no uncertain tax position for which it is reasonably possible that the total amount of liability for unrecognized tax benefits will significantly increase or decrease within 12 months, except for recurring accruals on existing uncertain tax positions.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Paragraph 43, 44, 45, 46, 47, 48, 49
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-Paragraph 1
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+ Details

Segment Reporting

3 Months Ended

Mar. 31, 2012

Segment Reporting

13. Segment Reporting

The Company has determined that it has three reportable segments based on the Company’s method of internal reporting, which disaggregates business by geographic location. These segments are the Americas, Europe and Asia. The Company evaluates the performance of these segments based on income (loss) from operations, as well as other factors, that depend on the development status of these geographies. Such measures include the progress of its research and development activities, collaboration and licensing efforts, commercialization activities and other factors. The reportable segments have historically derived their revenue from joint collaboration and strategic alliance agreements. Transactions between the segments consist primarily of loans and the provision of research and development services. Following is a summary of financial information by reportable geographic segment:

(In thousands of U.S. dollars)	Americas			Europe			Asia			Consolidated
Three Months Ended March 31, 2012
Research and development revenue	$	2,479		$	3		$	103		$	2,585
Product royalty revenue		10,928			-			-			10,928
Co-promotion revenue		766			-			-			766
Contract and collaboration revenue		141			13			13			167
Total revenues		14,314			16			116			14,446
Research and development expenses		822			1,517			1,013			3,352
Depreciation and amortization		120			220			10			350
Other operating expenses		10,053			716			297			11,066
Loss from operations		3,319			(2,437	)		(1,204	)		(322	)
Interest income		18			2			-			20
Interest expense		-			(550	)		(42	)		(592	)
Other non-operating income (expense), net		75			190			1,009			1,274
Loss before income taxes	$	3,412		$	(2,795	)	$	(237	)	$	380
Capital expenditures	$	40		$	-		$	-		$	40

Three Months Ended March 31, 2011
Research and development revenue	$	1,448		$	-		$	516		$	1,964
Product royalty revenue		9,118			-			-			9,118
Co-promotion revenue		938			-			-			938
Contract and collaboration revenue		141			-			13			154
Total revenues		11,645			-			529			12,174
Research and development expenses		7,326			527			1,367			9,220
Depreciation and amortization		227			5			17			249
Other operating expenses		11,275			304			287			11,866
Income (loss) from operations		(7,183	)		(836	)		(1,142	)		(9,161	)
Interest income		69			1			-			70
Interest expense		-			(570	)		(41	)		(611	)
Other non-operating income (expense), net		(4	)		(199	)		68			(135	)
Income (loss) before income taxes	$	(7,118	)	$	(1,604	)	$	(1,115	)	$	(9,837	)
Capital expenditures	$	42		$	6,000		$	91		$	6,133

As of March 31, 2012
Property and equipment, net	$	1,279		$	13		$	269		$	1,561
Identifiable assets, net of intercompany loans and investments	$	118,011		$	19,168		$	12,937		$	150,116

As of December 31, 2011
Property and equipment, net	$	1,359		$	16		$	294		$	1,669
Identifiable assets, net of intercompany loans and investments	$	96,490		$	47,925		$	13,154		$	157,569

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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+ Details