The FINANCIAL -- Pharmacyclics reported financial results and recent developments for its fiscal second quarter ended December 31, 2011. According to Pharmacyclics the non-GAAP net income reported for the fiscal quarter ended December 31, 2011 was $58.6 million, or $0.82 diluted earnings per share.

This compares with a non-GAAP net loss of $6.1 million, or $0.10 loss per share, for the fiscal quarter ended December 31, 2010. See "Use of Non-GAAP Financial Measures" below for a description of our Non-GAAP measures. Reconciliation between certain GAAP and non-GAAP measures is provided at the end of this press release.

The GAAP net income for the fiscal quarter ended December 31, 2011 was $56.3 million, or $0.78 diluted earnings per share. This compares with a GAAP net loss of $7.5 million, or $0.13 loss per share for the fiscal quarter ended December 31, 2010.

At December 31, 2011, the company had cash, cash equivalents and marketable securities of $240.3 million, which compares with $112.3 million at June 30, 2011.

As previously announced on December 8, 2011, the Company entered into a worldwide collaboration with Janssen Biotech, Inc. (Janssen), one of the Janssen Pharmaceutical Companies of Johnson & Johnson, to develop and commercialize PCI-32765, a novel, oral, first-in-class Bruton's Tyrosine Kinase (BTK) inhibitor being developed for the treatment of Non Hodgkin's Lymphoma, Chronic Lymphocytic Leukemia and Multiple Myeloma, all of which are considered hematological malignancies.

Pharmacyclics received from Janssen upfront payments totaling $150 million on signing the contract. In addition, Pharmacyclics will receive up to an additional $825 million in development and regulatory milestone payments, based upon continued development progress ($250 million), regulatory progress ($225 million) and approval of the product ($350 million), for total potential upfront and milestone payments of $975 million.

Pharmacyclics and Janssen will collaborate on the development of PCI-32765 for oncology and other indications, excluding inflammation and immune mediated conditions. Each company will lead development for specific indications as stipulated in a global development plan, with development costs shared on a 40/60 basis (Pharmacyclics 40% and Janssen 60%). The agreement includes plans to launch multiple Phase III trials of PCI-32765 over the next several years.

Following regulatory approval, both Pharmacyclics and Janssen will book revenue and co-commercialize PCI-32765. In the US, Pharmacyclics will book sales and take a lead role in US commercial strategy development.

Both Pharmacyclics and Janssen will share in commercialization activities. Outside the United States, Janssen will book sales and lead and perform commercialization activities. Profits and losses from the commercialization activities will be split 50/50 on a worldwide basis. Development and commercialization activities under the collaboration will be managed through a shared governance structure.

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