##### 



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-Q
   (Mark One)þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    June 30, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File Number: 001-33609
  SUCAMPO PHARMACEUTICALS,
    INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware

13-3929237(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. employer
    identification no.)   4520 East-West Highway,
    Suite 300
    Bethesda, MD 20814

(301) 961-3400(Address of principal executive
    offices, including zip code)

(Registrants telephone
    number, including area code)    o þ
  Rule 12b-2
 o o þ
  Rule 12b-2 o þ




---



##### 



Sucampo
    Pharmaceuticals, Inc.
  Form 10-Q
    Index
  
  PagePart I.  FINANCIAL
    INFORMATIONItem 1.


Condensed
    Consolidated Financial Statements (unaudited)


1Condensed
    Consolidated Balance Sheets as of June 30, 2007 (unaudited)
    and
      December 31, 2006


1Condensed
    Consolidated Statements of Operations and Comprehensive Income
    for the Three
      and Six Months Ended June 30, 2007 and 2006
    (unaudited)


2Condensed
    Consolidated Statements of Changes in Stockholders Equity
    for the Six Months
      Ended June 30, 2007 (unaudited)


3Condensed
    Consolidated Statements of Cash Flows for the Six Months Ended
    June 30, 2007
      and 2006 (unaudited)


4Notes to Condensed
    Consolidated Financial Statements (unaudited)


5Item 2.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


24Item 3.


Quantitative and
    Qualitative Disclosures About Market Risk


44Item 4T.


Controls and
    Procedures


45Part II.  OTHER
    INFORMATIONItem 1.


Legal
    Proceedings


46Item 1A.


Risk
    Factors


46Item 2.


Unregistered Sales of Equity
    Securities and Use of Proceeds


66Item 4.


Submission of Matters to a Vote of
    Security Holders


67Item 6.


Exhibits


67SIGNATURESINDEX TO
    EXHIBITS




---



##### 



PART I 
    FINANCIAL INFORMATION  Item 1.
    Condensed
    Consolidated Financial Statements (Unaudited)  SUCAMPO
    PHARMACEUTICALS, INC.
  Condensed Consolidated Balance Sheets
 (In
    thousands, except share data)
  June 30,


December 31,2007


2006(Unaudited)ASSETS:Current assets:Cash and cash equivalents

$
7,635


$
22,481Short-term investments


29,375



29,399Accounts receivable


42,477



3,566Income taxes receivable


2,362



2,355Deferred tax assets, net


14



1,612Prepaid expenses and other current
    assets


4,702



536Total current assets


86,565



59,949Restricted cash


218



213Property and equipment, net


1,621



343Deferred tax assets 
    noncurrent, net


520



3,289Deposits and other assets


167



3,290Total assets

$
89,091


$
67,084LIABILITIES AND
    STOCKHOLDERS EQUITY:Current liabilities:Accounts payable

$
3,089


$
2,391Accrued expenses


9,884



5,410Deferred revenue  current


578



11,517Income taxes payable


3,463



Other liabilities 
    related parties


4,075



Other current liabilities






8Total current liabilities


21,089



19,326Deferred revenue, net of current
    portion


8,909



9,192Other liabilities


170



33Total liabilities


30,168



28,551Commitments (Note 7)Stockholders equity:Series A Convertible Preferred
    Stock, $0.01 par value; 10,000 shares authorized;
    3,780 shares issued and outstanding at June 30, 2007
    (unaudited) and December 31, 2006


20,288



20,288Class A Common Stock,
    $0.01 par value; 75,000,000 shares authorized;
    8,799,385 shares issued and outstanding at June 30,
    2007 (unaudited) and December 31, 2006


88



88Class B Common Stock,
    $0.01 par value; 75,000,000 shares authorized;
    26,191,050 shares issued and outstanding at June 30,
    2007 (unaudited) and December 31, 2006


262



262Additional paid-in capital


47,626



41,555Accumulated other comprehensive loss


(375
)


(294
)Accumulated deficit


(8,966
)


(23,366
)Total stockholders equity


58,923



38,533Total liabilities and
    stockholders equity

$
89,091


$
67,084    1




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Condensed Consolidated Statements of Operations and
    Comprehensive Income (Unaudited)
 (In
    thousands, except per share data)
  Three Months Ended June 30,


Six Months Ended June 30,2007


2006


2007


2006(Restated)Revenues:Research and development revenue

$
38,087


$
9,700


$
47,453


$
32,141Contract revenue














1,500Collaboration revenues


37



37



74



74Contract revenue 
    related parties


114



104



230



133Product royalty revenue


9,562



4,485



11,871



4,485Co-promotion revenue


1,134



1,106



2,267



1,267Total revenues


48,934



15,432



61,895



39,600Operating expenses:Research and development


7,348



3,424



13,294



9,545General and administrative


13,802



5,233



16,635



8,200Selling and marketing


3,725



3,057



6,957



4,005Milestone royalties 
    related parties


1,500







1,500



1,250Product royalties 
    related parties


1,700



967



2,111



967Total operating expenses


28,075



12,681



40,497



23,967Income from operations


20,859



2,751



21,398



15,633Non-operating income (expense):Interest income


471



661



795



967Interest expense






(60
)


(4
)


(80
)Other income, net


42



123



40



262Total non-operating income, net


513



724



831



1,149Income before income taxes


21,372



3,475



22,229



16,782Income tax provision


(7,489
)






(7,829
)


Net income

$
13,883


$
3,475


$
14,400


$
16,782Net income per share (Note 4):Basic net income per share

$
0.40


$
0.10


$
0.41


$
0.50Diluted net income per share

$
0.39


$
0.10


$
0.41


$
0.49Weighted average common shares
    outstanding  basic


34,990



34,939



34,990



33,761Weighted average common shares
    outstanding  diluted


35,505



35,256



35,505



34,078Comprehensive income:Net income

$
13,883


$
3,475


$
14,400


$
16,782Other comprehensive loss:Foreign currency translation


(101
)


(183
)


(81
)


(188
)Comprehensive income

$
13,782


$
3,292


$
14,319


$
16,594    2




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Condensed Consolidated Statements of Changes in
    Stockholders Equity
 (In
    thousands, except share data)
  AccumulatedSeries A Convertible


Class A


Class B


Additional


OtherPreferred Stock


Common Stock


Common Stock


Paid-In


Comprehensive


Accumulated


StockholdersShares


Amount


Shares


Amount


Shares


Amount


Capital


Loss


Deficit


EquityBalance at December 31, 2006


3,780


$
20,288



8,799,385


$
88



26,191,050


$
262


$
41,555


$
(294
)

$
(23,366
)

$
38,533Stock-based compensation
    (unaudited)


























6,071











6,071Foreign currency translation
    (unaudited)






























(81
)






(81
)Net income (unaudited)


































14,400



14,400Balance at June 30, 2007
    (unaudited)


3,780


$
20,288



8,799,385


$
88



26,191,050


$
262


$
47,626


$
(375
)

$
(8,966
)

$
58,923     3




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Condensed Consolidated Statements of Cash Flows (Unaudited)
 (In
    thousands)
  Six Months Ended June 30,2007


2006(Restated)Cash flows from operating
    activities:Net income

$
14,400


$
16,782Adjustments to reconcile net
    income to net cash used in operating activities:Depreciation and amortization


60



34Deferred tax provision


4,367



Stock-based compensation


6,071



2,654Changes in operating assets and
    liabilities:Accounts receivable


(38,911
)


(6,167
)Deposits and other assets






(85
)Prepaid expenses and other current
    assets


(224
)


(921
)Accounts payable


659



1,216Accrued expenses


4,321



3,015Income taxes payable and
    receivable, net


3,454



(3,146
)Deferred revenue


(11,234
)


(12,458
)Other liabilities 
    related parties


4,075



Other liabilities


138



(1,472
)Net cash used in operating
    activities


(12,824
)


(548
)Cash flows from investing
    activities:Investments in restricted cash


(5
)


Purchases of short-term investments






(108
)Proceeds from the sale and
    maturities of short-term investments


24



25Purchases of property and equipment


(1,340
)


(106
)Net cash used in investing
    activities


(1,321
)


(189
)Cash flows from financing
    activities:Issuance of common stock, net of
    offering costs






23,896Payments of capitalized IPO costs


(632
)


(1,324
)Issuance of notes
    payable  related parties






1,200Payments on notes
    payable  related parties






(4,754
)Net cash (used in) provided by
    financing activities


(632
)


19,018Effect of exchange rates on cash
    and cash equivalents


(69
)


(43
)Net (decrease) increase in cash
    and cash equivalents


(14,846
)


18,238Cash and cash equivalents at
    beginning of period


22,481



17,436Cash and cash equivalents at end
    of period

$
7,635


$
35,674Supplemental cash flow disclosures:Cash paid for interest

$
4


$
90Income tax payments made

$



$
3,145Supplemental disclosure of
    non-cash financing activities:Capitalized IPO costs included in
    accounts payable and accrued expenses

$
195


$
837    4




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Notes to Condensed Consolidated Financial Statements
    (Unaudited)
  1.
    Business
    Organization and Basis of Presentation  Description
    of the Business
      ®
  Basis
    of Presentation
  Form S-1, No. 333-135133),
    Initial
    Public Offering
   5




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Notes to Condensed Consolidated Financial Statements
    (Unaudited)  (Continued)
    Capital
    Resources
    2.
    Restatement
    of Previously Issued Condensed Consolidated Financial
    Statements    Description
    of Errors
  No. 00-21, Revenue Arrangements with Multiple
    Deliverables (EITF 00-21),
  16-year
 6




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Notes to Condensed Consolidated Financial Statements
    (Unaudited)  (Continued)
    Impact on
    Condensed Consolidated Statement of Operations and Comprehensive
    Income Items
  Six Months Ended June 30, 2006As Reported


Adjustment


Restatement(In thousands, except per share data)Collaboration revenue

$



$
74


$
74Milestone revenue


20,000



(20,000
)


Research and development revenue


6,850



25,291



32,141Contract revenue


2,119



(619
)


1,500Co-promotion revenue


1,106



161



1,267Total revenues


34,693



4,907



39,600General and administrative expenses


8,268



(68
)


8,200Selling and marketing expenses


3,808



197



4,005Income from operations


10,856



4,777



15,633Income before income taxes


12,005



4,777



16,782Net income


12,005



4,777



16,782Basic net income per share


0.36



0.14



0.50Diluted net income per share


0.35



0.14



0.49Comprehensive income


11,817



4,777



16,594   3.
    Summary
    of Significant Accounting Policies  Cash
    and Cash Equivalents
    Restricted
    Cash
    Short-term
    Investments
  Accounting
    for Certain Investments in Debt and Equity Securities
 7




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Notes to Condensed Consolidated Financial Statements
    (Unaudited)  (Continued)
    Fair
    Value of Financial Instruments
    Accounts
    Receivable
    Property
    and Equipment
    Prepaid
    Expenses and Other Current Assets
      Revenue
    Recognition
  Collaboration
    and License Agreements
  Revenue
    Recognition No. 99-19, Reporting Revenue Gross as a Principal Versus Net as an
    Agent (EITF 99-19), No. 00-21. EITF 00-21
 8




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Notes to Condensed Consolidated Financial Statements
    (Unaudited)  (Continued)
        EITF 99-19,
    EITF 99-19,
  Deferred
    Revenue
      June 30,


December 31,2007


2006(In thousands)Deferred revenue-current

$
578


$
11,517Deferred revenue, net of current
    portion


8,909



9,192$
9,487


$
20,709   Research
    and Development Expenses
   9




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Notes to Condensed Consolidated Financial Statements
    (Unaudited)  (Continued)
    General
    and Administrative Expenses
    EITF 99-19,
  Selling
    and Marketing Expenses
    Milestone
    Royalties  Related Parties
    Product
    Royalties  Related Parties
    Employee
    Stock-Based Compensation
  Share-Based
    Payment
   10




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Notes to Condensed Consolidated Financial Statements
    (Unaudited)  (Continued)
      Three Months


Six MonthsEnded June 30,


Ended June 30,2007


2006


2007


2006(Restated)(In thousands)Selling and marketing expense

$
50


$
385


$
100


$
385General and administrative expense


63



2,269



217



2,269Founders stock-based awards
    (Note 8)


6,112







6,112



Cumulative out-of-period adjustment










(358
)


Employee stock-based compensation
    expense included in operating expenses

$
6,225


$
2,654


$
6,071


$
2,654     Income
    Taxes
  Accounting for Income Taxes
  Interim Financial Reporting
  Accounting
    for the Uncertainty of Income Taxes
  Accounting for Uncertainty in Income
    Taxes
 11




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Notes to Condensed Consolidated Financial Statements
    (Unaudited)  (Continued)
      Certain
    Risks, Concentrations and Uncertainties
        Segment
    Information
    Use of
    Estimates
    Recent
    Accounting Pronouncements
  The Fair Value Option for Financial
    Assets and Financial Liabilities
 12




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Notes to Condensed Consolidated Financial Statements
    (Unaudited)  (Continued)
  No. 07-3, Accounting for Nonrefundable Advance Payments for Goods
    or Services to Be Used in Future Research and Development
    Activities (EITF 07-3), EITF 07-3 EITF 07-3
  4.
    Earnings
    per Share  Historical
    Computation
    of Earnings per Share
    Three Months Ended June 30,


Six Months Ended June 30,2007


2006


2007


2006(Restated)(In thousands, except per share data)Basic net income per share:Net income

$
13,883


$
3,475


$
14,400


$
16,782Weighted average class A and
    B common shares outstanding


34,990



34,939



34,990



33,761Basic net income per share

$
0.40


$
0.10


$
0.41


$
0.50Diluted net income per share:Net income

$
13,883


$
3,475


$
14,400


$
16,782Weighted average class A and
    B common shares outstanding for diluted net income per share


34,990



34,939



34,990



33,761Assumed exercise of stock options
    under the treasury stock method


515



317



515



31735,505



35,256



35,505



34,078Diluted net income per share

$
0.39


$
0.10


$
0.41


$
0.49     Three Months Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


2006Series A preferred stock


3,780



3,780



3,780



3,780Employee stock options


640,900



1,067,660



640,900



1,067,660Non-employee stock options


510,000



510,000



510,000



510,000  13




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Notes to Condensed Consolidated Financial Statements
    (Unaudited)  (Continued)
  5.
    Property
    and Equipment    June 30,


December 31,2007


2006(In thousands)Computer and office machines

$
868


$
587Furniture and fixtures


431



290Leasehold improvements


987



69Total cost


2,286



946Less: accumulated depreciation and
    amortization


(665
)


(603
)$
1,621


$
343     6.
    Accrued
    Expenses    June 30,


December 31,2007


2006(In thousands)Research and development costs

$
3,789


$
2,460Selling and marketing costs


1,124



986Employee compensation


1,120



1,238Legal service fees


222



213Royalty liability 
    related party


3,200



361Other expenses


429



152$
9,884


$
5,410   7.
    Commitments  Operating
    Leases
      Research
    and Development Costs
   14




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Notes to Condensed Consolidated Financial Statements
    (Unaudited)  (Continued)
  8.
    Other
    Liabilities  Related Parties            9.
    Related
    Party Transactions   15




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Notes to Condensed Consolidated Financial Statements
    (Unaudited)  (Continued)
    RUG-015. RUG-015,
  RUG-015
  20-year
 16




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Notes to Condensed Consolidated Financial Statements
    (Unaudited)  (Continued)
  10.
    Collaboration
    and License Agreements    RevenueCash Received


Recognizedfor the


for theAmount


Six Months


Six Months


AmountDeferred at


Ended


Ended


Deferred atDecember 31,


June 30,


June 30,


June 30,2006


2007


2007


2007(In thousands)Collaboration
    revenue:Up-front payment associated with
    our obligation to participate in joint committees with Takeda

$
2,058


$



$
74


$
1,984Research and development
    revenue:Up-front payment 
    remainder

$
1,977


$



$
1,977


$
Development milestones


5,609







35,609



Reimbursement of research and
    development expenses


3,365



4,388



9,867



Total

$
10,951


$
4,388


$
47,453


$
 Accounts








AccountsReceivable at








Receivable atDecember 31,








June 30,2006








2007Product royalty
    revenue

$
2,029


$
4,339


$
11,871


$
9,561Co-promotion revenue

$
708


$
2,229


$
2,267


$
746Research and development
    revenue:Development milestone

$



$



$
30,000
*

$
30,000Reimbursement of research and
    development expenses

$



$
4,387


$
6,367


$
1,980     *
    
    On June 29, 2007, the Company
    submitted a supplement to its existing NDA for AMITIZA to the
    FDA seeking marketing approval for AMITIZA for the treatment of
    irritable bowel syndrome with constipation. As a result of this
    filing, Takeda is required by the terms of the collaboration
    agreement to make a $30.0 million milestone payment. The
    Company recognized the entire amount of this payment as research
    and development revenue in the quarter ended June 30, 2007
    in accordance with its revenue policy discussed under the
    caption Revenue Recognition (see Note 3).    
    The Company granted Takeda an exclusive license of lubiprostone
    to co-develop, commercialize, and sell products for
    gastroenterology indications in the United States and Canada.
    There are no defined contractual cash flows within the Takeda
    Agreement for the grant of this license, but the Company did
    receive a non-refundable up-front payment of $20.0 million
    upon executing the Takeda Agreement. The license was granted to
    Takeda on October 29, 2004 and will expire when the Takeda
    Agreement expires or is terminated. Upon commercial launch,
    Takeda shall, for the products sold by Takeda during the term of
    the Takeda 17




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Notes to Condensed Consolidated Financial Statements
    (Unaudited)  (Continued)
  Agreement, pay the Company pre-determined royalties on net
    revenues on a quarterly basis. The level of royalties is tiered
    based on the net sales recognized by Takeda. Royalty payments,
    which the Company began to earn in April 2006 and receive in
    July 2006, will cease when the Takeda Agreement is terminated
    and all cash payments due to the Company are paid. The Company
    has recorded product royalty revenue of approximately
    $9.6 million and $4.5 million for the three months
    ended June 30, 2007 and 2006, respectively, and
    $11.9 million and $4.5 million for the six months
    ended June 30, 2007 and 2006, respectively. This revenue is
    recorded as product royalty revenue in the condensed
    consolidated statements of operations and comprehensive income.  
    The Company shall participate in the following committees, along
    with Takeda: Joint Steering Committee, Joint Development
    Committee, Joint Commercialization Committee and Joint
    Manufacturing Committee. There are no separate cash flows
    identified within the Takeda Agreement associated with the
    participation by the Company in these committees. There is no
    defined performance period for this obligation, but the
    performance period will not exceed the term of the Takeda
    Agreement. The Company expects its participation on all
    committees to continue throughout the term of the Takeda
    Agreement, except for the Joint Development Committee, which
    will continue until development work is complete.
    The Company shall provide development work necessary for an NDA
    submission to the FDA for the treatment of Constipation and
    irritable bowel syndrome with constipation, or IBS-C,
    indications. Takeda shall fund the initial $30.0 million of
    development costs and the two parties shall equally share any
    required development costs in excess of $50.0 million.
    Although there is no defined performance period for this
    development work, the period to perform the work will not exceed
    the term of the Takeda Agreement. In January 2006, the Company
    received approval for its NDA for AMITIZA to treat Constipation
    and completed and submitted the NDA for IBS-C to the FDA in June
    2007.  EITF 00-21
     18




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Notes to Condensed Consolidated Financial Statements
    (Unaudited)  (Continued)
          
    The Company shall co-promote AMITIZA with Takeda by employing a
    sales force of approximately 38 representatives to supplement
    Takedas sales activities. Takeda shall reimburse the
    Company a specified amount per day per sales force
    representative, but such reimbursements shall not exceed certain
    pre-defined amounts. The term of this reimbursement arrangement
    ceases five years following the first date that the Company
    deployed sales representatives, which was in April 2006. The
    Company has recognized approximately $1.1 million of
    revenues for the three months ended June 30, 2007 and 2006
    and approximately $2.1 million and $1.1 million of
    revenues for the six months ended June 30, 2007 and 2006,
    respectively, reflecting these co-promotion reimbursements,
    which is recorded as co-promotion revenue in the condensed
    consolidated statements of operations and comprehensive income.
    The Company shall perform miscellaneous marketing activities for
    AMITIZA, the majority of which would be reimbursed by Takeda.
    There is no defined performance period, but the performance
    period would not extend beyond January 31, 2007. The
    Company has recorded no reimbursements of miscellaneous costs
    for the three months ended June 30, 2007 but has recorded
    $161,000, $158,000 and $162,000, of reimbursements of
    miscellaneous costs for the three months ended June 30,
    2006 and for the six months ended June 30, 2007 and 2006,
    respectively. These amounts are recorded as co-promotion revenue
    in the condensed consolidated statements of operations and
    comprehensive income.   19




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Notes to Condensed Consolidated Financial Statements
    (Unaudited)  (Continued)
    EITF 00-21 per-day
    
    The Company shall perform studies in connection with changes to
    labeling for Constipation. Takeda shall fund 70% of the
    labeling studies and Sucampo shall fund the remaining 30%. There
    is no defined performance period, but the performance period
    will not exceed the term of the Takeda Agreement. The Company
    initiated the first labeling study for Constipation in August
    2006, which is expected to be completed in January 2008.
    The Company shall perform studies in work for the development of
    an additional indication for opioid-induced bowel dysfunction.
    Takeda shall fund all development work up to a maximum aggregate
    of $50.0 million for each additional indication and
    $20.0 million for each new formulation. If development
    costs exceed these amounts, Takeda and the Company shall equally
    share such excess costs. There is no defined performance period,
    but the performance period will not exceed the term of the
    Takeda Agreement. The Company initiated work on the first
    additional indication for AMITIZA in July 2006, which is
    estimated to be completed in June 2009 and is expected to exceed
    $50.0 million in development costs.
    The Company shall perform all development work necessary for
    Phase IV studies, for which Takeda shall fund all
    development work. There is no defined performance period, but
    the performance period will not exceed the term of the
    Supplemental Agreement. The Company began work on a
    Phase IV study for Constipation in August 2006, which is
    estimated to be completed in June 2008. 20




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Notes to Condensed Consolidated Financial Statements
    (Unaudited)  (Continued)
   EITF 00-21
  11.
    Stock
    Option Plan    Weighted


AggregateAverage


IntrinsicShares


Exercise Price


Value(In thousands, except share and per-share data)Options outstanding,
    December 31, 2006


826,200


$
9.02


$
958Options forfeited


(25,925
)


10.00Options expired


(159,375
)


3.98Options outstanding, June 30,
    2007


640,900



10.24


$
3,052Options exercisable at
    December 31, 2006


518,075



8.37


$
958Options exercisable at
    June 30, 2007


532,525



10.29


$
2,510     12.
    Income
    Taxes   21




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Notes to Condensed Consolidated Financial Statements
    (Unaudited)  (Continued)
  13.
    Segment
    Reporting    IntercompanyUnited States


Europe


Japan


Eliminations


Consolidated(In thousands)Three Months Ended June 30,
    2007Research and development revenue

$
38,087


$



$



$



$
38,087Contract revenue 
    related parties


104







220



(210
)


114Collaboration revenue


37















37Product royalty revenue


9,562















9,562Co-promotion revenue


1,134















1,134Total revenues


48,924







220



(210
)


48,934Depreciation and amortization


37







(1
)






36Other operating expenses


27,409



144



696



(210
)


28,039Income (loss) from operations


21,478



(144
)


(475
)






20,859Interest income


471















471Other non-operating income
    (expense), net


8



(5
)


39







42Income (loss) before income taxes

$
21,957


$
(149
)

$
(436
)

$



$
21,372Capital expenditures

$
1,244


$



$



$



$
1,244Three Months Ended June 30,
    2006Research and development revenue

$
9,700


$



$



$



$
9,700Contract revenue 
    related parties


104















104Collaboration revenue


37















37Product royalty revenue


4,485















4,485Co-promotion revenue


1,106















1,106Total revenues


15,432















15,432Depreciation and amortization


16







2







18Other operating expenses


12,511



103



49







12,663Income (loss) from operations


2,905



(103
)


(51
)






2,751Interest income


662



(1
)










661Interest expense


(4
)


(43
)


(13
)






(60
)Other non-operating income, net


16



44



63







123Income (loss) before income taxes

$
3,579


$
(103
)

$
(1
)

$



$
3,475Capital expenditures

$
100


$



$



$



$
100 22




---



##### 



SUCAMPO
    PHARMACEUTICALS, INC.
  Notes to Condensed Consolidated Financial Statements
    (Unaudited)  (Continued)
  IntercompanyUnited States


Europe


Japan


Eliminations


Consolidated(In thousands)Six Months Ended June 30,
    2007Research and development revenue

$
47,453


$



$



$



$
47,453Contract revenue 
    related parties


209







441



(420
)


230Collaboration revenue


74















74Product royalty revenue


11,871















11,871Co-promotion revenue


2,267















2,267Total revenues


61,874







441



(420
)


61,895Depreciation and amortization


58







2







60Other operating expenses


39,614



309



934



(420
)


40,437Income (loss) from operations


22,202



(309
)


(495
)






21,398Interest income


791







4







795Interest expense


(4
)














(4
)Other non-operating income
    (expense), net


9



(8
)


39







40Income (loss) before income taxes

$
22,998


$
(317
)

$
(452
)

$



$
22,229Capital expenditures

$
1,340


$



$



$



$
1,340Six Months Ended June 30,
    2006Research and development revenue
    (restated)

$
32,141


$



$



$



$
32,141Contract revenue (restated)






1,500











1,500Contract revenue 
    related parties


104







29







133Collaboration revenue (restated)


74















74Product royalty revenue


4,485















4,485Co-promotion revenue (restated)


1,267















1,267Total revenues (restated)


38,071



1,500



29







39,600Depreciation and amortization


30







4







34Other operating expenses (restated)


23,578



258



97







23,933Income (loss) from operations
    (restated)


14,463



1,242



(72
)






15,633Interest income


966







1







967Interest expense


(8
)


(43
)


(29
)






(80
)Other non-operating income, net
    (restated)


34



35



177



16



262Income before income taxes
    (restated)

$
15,455


$
1,234


$
77


$
16


$
16,782Capital expenditures

$
106


$



$



$



$
106As of June 30,
    2007Property and equipment, net

$
1,540


$
1


$
80


$



$
1,621Identifiable assets

$
91,613


$
209


$
2,168


$
(4,898
)

$
89,091As of December 31,
    2006Property and equipment, net

$
253


$
2


$
88


$



$
343Identifiable assets

$
68,943


$
496


$
2,544


$
(4,899
)

$
67,084  23




---



##### 



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  This Report on
    Form 10-Q
    contains forward-looking statements regarding us and our
    business, financial condition, results of operations and
    prospects within the meaning of the Private Securities
    Litigation Reform Act of 1995. Such forward-looking statements
    include those that express plans, anticipation, intent,
    contingency, goals, targets or future development
    and/or
    otherwise are not statements of historical fact. These
    forward-looking statements are based on our current expectations
    and projections about future events and they are subject to
    risks and uncertainties known and unknown that could cause
    actual results and developments to differ materially from those
    expressed or implied in such statements.
  Restatement
    of Previously Issued Condensed Consolidated Financial
    Statements
    No. 00-21, Revenue Arrangements with Multiple
    Deliverables EITF 00-21,
      Overview
       24




---



##### 



15-month
  Our
    Clinical Development Programs
    
    AMITIZA.  In connection with our marketing
    approval for AMITIZA for the treatment of chronic idiopathic
    constipation in adults, we committed to the FDA to conduct
    post-marketing studies to evaluate the safety of the product in
    pediatric patients, in patients with renal impairment and in
    patients with hepatic impairment. We initiated these studies in
    January 2007. In addition, we are developing AMITIZA to treat
    irritable bowel syndrome with constipation and opioid-induced
    bowel dysfunction. We recently completed two pivotal
    Phase III clinical trials of AMITIZA for the treatment of
    irritable bowel syndrome with constipation and a follow-on
    safety study to assess the long-term use of AMITIZA as a
    treatment for this indication. Based on the results of these
    trials, we are seeking marketing approval for AMITIZA for the
    treatment of this indication and submitted a supplement to our
    existing new drug application, or NDA, for AMITIZA in June 2007.
    In addition, we plan to commence Phase III pivotal clinical
    trials of AMITIZA for the treatment of opioid-induced bowel
    dysfunction by the third quarter of 2007. Our collaboration and
    co-promotion arrangement with Takeda also covers these
    additional indications for AMITIZA.
    SPI-8811.  We are developing orally
    administered SPI-8811 to treat various gastrointestinal and
    liver disorders, including non-steroidal anti-inflammatory drug,
    or NSAID, induced ulcers, portal hypertension, non-alcoholic
    fatty liver disease and gastrointestinal disorders associated
    with cystic fibrosis. We also are planning to develop an inhaled
    formulation of SPI-8811 for the treatment of respiratory
    symptoms of cystic fibrosis and chronic obstructive pulmonary
    disease. Our near term focus is on the development of SPI-8811
    as a treatment for NSAID-induced ulcers. We have completed Phase
    I clinical trials of SPI-8811 in healthy volunteers and plan to
    commence a Phase II clinical trial of this product
    candidate for the treatment of NSAID-induced ulcers by the third
    quarter of 2007. We also plan to commence a Phase II
    proof-of-concept study of SPI-8811 in patients with portal
    hypertension in 2007.
    SPI-017.  We are developing SPI-017 to treat
    vascular disease and central nervous system disorders. We are
    initially focused on developing an intravenous formulation of
    this product candidate for the treatment of peripheral arterial
    disease. We also are developing an oral formulation of SPI-017
    for the treatment of Alzheimers disease. We plan to
    commence Phase I clinical trials of the intravenous formulation
    of SPI-017 and Phase I clinical trials of the oral formulation
    in 2008. 25




---



##### 



Financial
    Terms of our Collaboration with Takeda
  16-year
  Up-front
    Payment
  16-year
  Product
    Development Milestone Payments
    
    $10.0 million upon the filing of the NDA for AMITIZA to
    treat chronic idiopathic constipation in March 2005;
    $20.0 million upon the initiation of our Phase III
    clinical trial related to AMITIZA for the treatment of irritable
    bowel syndrome with constipation in May 2005;
    $20.0 million upon the receipt of approval from the FDA for
    AMITIZA for the treatment of chronic idiopathic constipation in
    adults in January 2006; and
    $30.0 million upon the filing of the supplemental NDA for
    AMITIZA to treat irritable bowel syndrome in June 2007.      Research
    and Development Cost-Sharing for AMITIZA
    
    Takeda was responsible for the first $30.0 million in
    research and development expenses we incurred after October 2004
    related to AMITIZA for the treatment of chronic idiopathic
    constipation and irritable bowel syndrome with constipation. We
    received reimbursement payments from Takeda of $1.5 million
    in 2004 and $28.5 million in 2005. We recognized each of
    these payments as research and development revenue ratably over
    the estimated development period associated with the chronic
    idiopathic constipation and irritable bowel syndrome with
    constipation indications, which was completed by June 2007.   26




---



##### 




    For research and development expenses relating to changing or
    expanding the labeling of AMITIZA to treat chronic idiopathic
    constipation and irritable bowel syndrome with constipation,
    Takeda is responsible for 70% of these expenses and we are
    responsible for 30%. We have not incurred any expenses of this
    nature to date. However, in connection with our marketing
    approval for AMITIZA for the treatment of chronic idiopathic
    constipation in adults, we committed to the FDA to conduct
    post-marketing studies to evaluate the safety of the product in
    patients with renal impairment and patients with hepatic
    impairment. We initiated these studies in January 2007. The
    expenses of these studies, which we began to incur in the
    quarter ended September 30, 2006, are being shared 70% by
    Takeda and 30% by us. Through June 30, 2007, we had
    incurred $1.1 million of these expenses, of which we will
    be reimbursed $738,000.
    The expense of Phase IV clinical trials of AMITIZA for the
    treatment of chronic idiopathic constipation in pediatric
    patients that we initiated in January 2007 will be borne by
    Takeda in full. As of June 30, 2007, we had incurred
    $3.0 million of these expenses, all of which will be
    reimbursed by Takeda.
    For expenses in connection with additional clinical trials
    required by regulatory authorities relating to AMITIZA to treat
    chronic idiopathic constipation or irritable bowel syndrome with
    constipation, Takeda and we are responsible to share these
    expenses equally. We have not incurred any expenses of this
    nature to date.
    Takeda is responsible for the first $50.0 million in
    expenses we incur related to the development of AMITIZA for each
    additional indication other than chronic idiopathic constipation
    and irritable bowel syndrome with constipation, and any expenses
    in excess of $50.0 million are shared equally between
    Takeda and us. We plan to initiate clinical trials of AMITIZA
    for the treatment of opioid-induced bowel dysfunction by the
    third quarter of 2007. We began incurring expenses for these
    trials in the third quarter of 2006. Currently, we do not
    anticipate the aggregate expenses necessary to complete our
    development of AMITIZA for this indication will exceed
    $54.0 million, of which Takeda will be responsible for
    $52.0 million and we will be responsible for
    $2.0 million. As of June 30, 2007, we had incurred
    $3.7 million of these expenses.
    Takeda is responsible for the first $20.0 million in
    expenses we incur related to the development of each new
    formulation of AMITIZA, and any expenses in excess of
    $20.0 million are shared equally between Takeda and us. We
    have not initiated any development of new formulation nor
    incurred any expenses of this nature.  Co-Promotion
    Expense Reimbursements
     27




---



##### 



Product
    Royalty Revenue
    Commercialization
    Milestone Payments
    Takeda
    Cash Flows and Revenue
    RevenueCash Received


RecognizedAmount


for the Six


for the Six


AmountDeferred at


Months Ended


Months Ended


Deferred atDecember 31,


June 30,


June 30,


June 30,2006


2007


2007


2007(In thousands)Collaboration revenue:Up-front payment associated with
    our obligation to participate in joint committees with Takeda

$
2,058


$



$
74


$
1,984Research and development
    revenue:Up-front payment 
    remainder

$
1,977


$



$
1,977


$
Development milestones


5,609







35,609



Reimbursement of research and
    development expenses


3,365



4,388



9,867



Total

$
10,951


$
4,388


$
47,453


$
 Accounts








AccountsReceivable at








Receivable atDecember 31,








June 30,2006








2007Product royalty
    revenue

$
2,029


$
4,339


$
11,871


$
9,561Co-promotion revenue

$
708


$
2,229


$
2,267


$
746Research and development
    revenue:Development milestone

$



$



$
30,000


$
30,000Reimbursement of research and
    development expenses

$



$
4,387


$
6,367


$
1,980  28




---



##### 



Financial
    Terms of our License from Sucampo AG
    
    $500,000 upon initiation of the first Phase II clinical
    trial for each compound in each of three territories covered by
    the license: North, Central and South America, including the
    Caribbean; Asia; and the rest of the world; and
    $1.0 million for the first NDA filing or comparable foreign
    regulatory filing for each compound in each of these three
    territories.  country-by-country
      Critical
    Accounting Policies and Estimates
      
    the nature of the estimate or assumption is material due to the
    level of subjectivity and judgment necessary to account for
    highly uncertain matters or the susceptibility of such matters
    to change; and
    the impact of the estimates and assumptions on financial
    condition or operating performance is material.    Revenue
    Recognition  Collaboration and License
    Agreements
  Revenue
    Recognition No. 99-19, Reporting Revenue Gross as a Principal Versus Net as an
    Agent No. 00-21, Revenue Arrangements with Multiple
    Deliverables EITF 00-21
 29




---



##### 



EITF 00-21
  EITF 00-21, 16-year
        Accrued
    Expenses
   30




---



##### 



Stock-Based
    Compensation
  Share-Based Payment Accounting for Stock-Based Compensation Accounting for
    Stock Issued to Employees.
      
    the straight-line method of allocating compensation cost;
    the Black-Scholes model as our chosen option-pricing model;
    the simplified method to calculate the expected term for options
    as discussed under SAB No. 7, Share-Based
    Payment; and
    an estimate of expected volatility based on the historical
    volatility of similar entities whose share prices are publicly
    available.       31




---



##### 



Valuation of Privately-Held-Company Equity Securities
    Issued as Compensation
    Income
    Taxes
  Accounting for Income Taxes
   32




---



##### 



Related
    Party Transactions
    Results
    of Operations
  Comparison
    of three months ended June 30, 2007 and June 30,
    2006
  Revenues
    Three Months EndedJune 30,2007


2006(In thousands)Research and development revenue

$
38,087


$
9,700Collaboration revenue


37



37Contract revenue 
    related parties


114



104Product royalty revenue


9,562



4,485Co-promotion revenue


1,134



1,106Total

$
48,934


$
15,432      33




---



##### 




    In March and May 2005, we received development milestone
    payments from Takeda totaling $30.0 million related to our
    efforts to develop AMITIZA. We recognized these payments as
    research and development revenue ratably over the performance
    period, resulting in $1.5 million of research and
    development revenue for the three months ended June 30,
    2007 and $2.9 million for the three months ended
    June 30, 2006. The smaller amount of revenue recognized for
    the three months ended June 30, 2007 is a result of our
    determinations to extend the estimated completion of the
    development period from May 2007 to June 2007.
    In January 2006, we received a $20.0 million development
    milestone payment from Takeda related to our efforts to develop
    AMITIZA, which we recognized as research and development revenue
    ratably over the performance period, resulting in
    $1.0 million of research and development revenue for the
    three months ended June 30, 2007 and $2.0 million for
    the three months ended June 30, 2006. We recognized a
    significant portion of this milestone payment in the three
    months ended June 30, 2006, the quarter in which it was
    received, reflecting the fact that we were then well into the
    estimated development period. The smaller amount of revenue for
    the three months ended June 30, 2007 also reflects our
    determinations, subsequent to our receipt of this payment, to
    extend the estimated completion of the development period.
    We have received a total of $30.0 million of reimbursement
    payments for research and development costs from Takeda related
    to our efforts to develop AMITIZA, which we recognized as
    research and development revenue ratably over the performance
    period, resulting in $1.5 million of research and
    development revenue for the three months ended June 30,
    2007 and $3.0 million for the three months ended
    June 30, 2006. The smaller amount of revenue recognized for
    the three months ended June 30, 2007 is a result of our
    determinations to extend the estimated completion of the
    development period.
    In October 2004, we received an up-front payment of
    $20.0 million from Takeda, of which $17.6 million was
    associated with the development of AMITIZA. This amount was
    recognized ratably over the estimated performance period,
    resulting in $0.9 million of research and development
    revenue for the three months ended June 30, 2007 and
    $1.8 million for the three months ended June 30, 2006.
    The smaller amount of revenue recognized for the three months
    ended June 30, 2007 is a result of our determination in
    June 2006 to extend the estimated completion of the development
    period.
    We also began to perform services and receive payments from
    Takeda during the third quarter of 2006 for the following three
    deliverables: post-marketing studies to evaluate the safety of
    AMITIZA in patients with renal impairment and patients with
    hepatic impairment, Phase IV clinical trials of AMITIZA for
    the treatment of chronic idiopathic constipation in pediatric
    patients and clinical trials of AMITIZA for the treatment of
    opioid-induced bowel dysfunction. Total research and development
    revenue associated with these three deliverables for the three
    months ended June 30, 2007 was $3.0 million.
    We recognized $30.0 million in revenue from Takeda for the
    three months ended June 30, 2007 upon the filing of the
    supplemental NDA for AMITIZA to treat irritable bowel syndrome
    with constipation. This was recognized as revenue upon achieving
    the milestone because it was the culmination of the earnings
    process to file the NDA and supplemental NDA for chronic
    idiopathic constipation and irritable bowel syndrome with
    constipation.     34




---



##### 



Research
    and Development Expenses
    IBS-C
    General
    and Administrative Expenses
      Three Months EndedJune 30,2007


2006(In thousands)Salaries, benefits and related
    costs

$
1,696


$
1,410Legal and consulting expenses


647



938Stock-based compensation


63



2,268Founders stock-based award


10,187



Other operating expenses


1,209



617Total

$
13,802


$
5,233     Selling
    and Marketing Expenses
   35




---



##### 



Milestone
    Royalties to Related Parties
    Product
    Royalties to Related Parties
    Income
    Taxes
  Interim Financial Reporting
  Comparison
    of six months ended June 30, 2007 and June 30,
    2006
  Revenues
    Six Months EndedJune 30,2007


2006(restated)(In thousands)Research and development revenue

$
47,453


$
32,141Contract revenue






1,500Collaboration revenue


74



74Contract revenue 
    related parties


230



133Product royalty revenue


11,871



4,485Co-promotion revenue


2,267



1,267Total

$
61,895


$
39,600  36




---



##### 




    In March and May 2005, we received development milestone
    payments from Takeda totaling $30.0 million related to our
    efforts to develop AMITIZA. We recognized these payments as
    research and development revenue ratably over the performance
    period, resulting in $3.4 million of research and
    development revenue for the six months ended June 30, 2007
    and $6.4 million for the six months ended June 30,
    2006. The smaller amount of revenue recognized for the six
    months ended June 30, 2007 is a result of our
    determinations to extend the estimated completion of the
    development period.
    In January 2006, we received a $20.0 million development
    milestone payment from Takeda related to our efforts to develop
    AMITIZA, which we recognized as research and development revenue
    ratably over the performance period, resulting in
    $2.2 million of research and development revenue for the
    six months ended June 30, 2007 and $15.1 million for
    the six months ended June 30, 2006. We recognized a
    significant portion of this milestone payment in the three
    months ended March 31, 2006, the quarter in which it was
    received, reflecting the fact that we were then well into the
    estimated development period. The smaller amount of revenue for
    the six months ended June 30, 2007 also reflects our
    determinations, subsequent to our receipt of this payment, to
    extend the estimated completion of the development period.
    We have received a total of $30.0 million of reimbursement
    payments for research and development costs from Takeda related
    to our efforts to develop AMITIZA, which we recognized as
    research and development revenue ratably over the performance
    period, resulting in $3.4 million of research and
    development revenue for the six months ended June 30, 2007
    and $6.4 million for the six months ended June 30,
    2006. The smaller amount of revenue recognized for the six
    months ended June 30, 2007 is a result of our
    determinations to extend the estimated completion of the
    development period.
    In October 2004, we received an up-front payment of
    $20.0 million from Takeda, of which $17.6 million was
    associated with the development of AMITIZA. This amount was
    recognized ratably over the estimated performance period,
    resulting in $2.0 million and $3.8 million of research
    and development revenue for the six months ended June 30,
    2007 and 2006, respectively. The smaller amount of revenue
    recognized for the six months ended June 30, 2007 is a
    result of our determination in June 2006 to extend the estimated
    completion of the development period.
    We also began to perform services and receive payments from
    Takeda during the third quarter of 2006 for the following three
    deliverables: post-marketing studies to evaluate the safety of
    AMITIZA in patients with renal impairment and patients with
    hepatic impairment, Phase IV clinical trials of AMITIZA for
    the treatment of chronic idiopathic constipation in pediatric
    patients and clinical trials of AMITIZA for the treatment of
    opioid-induced bowel dysfunction. Total research and development
    revenue associated with these three deliverables for the six
    months ended June 30, 2007 was $5.3 million.
    We recognized $30.0 million in revenue from Takeda for the
    six months ended June 30, 2007 upon the filing of the
    supplemental NDA for AMITIZA to treat irritable bowel syndrome
    with constipation. This was recognized as revenue upon achieving
    the milestone because it was the culmination of the earnings
    process 37




---



##### 



to file the NDA and supplemental NDA for chronic idiopathic
    constipation and irritable bowel syndrome with constipation.        Research
    and Development Expenses
    General
    and Administrative Expenses
    Six Months EndedJune 30,2007


2006(restated)(In thousands)Salaries, benefits and related
    costs

$
3,243


$
2,799Legal and consulting expenses


1,367



1,831Stock-based compensation


(142
)


2,268Founders stock-based awards


10,187



Other operating expenses


1,980



1,302Total

$
16,635


$
8,200    38




---



##### 



Selling
    and Marketing Expenses
    Milestone
    Royalties to Related Parties
    Product
    Royalties to Related Parties
    Income
    Taxes
   39




---



##### 



Reportable
    Geographic Segments
    IntercompanyUnited States


Europe


Japan


Eliminations


Combined(In thousands)Three Months Ended June 30,
    2007Total revenues

$
48,924


$



$
220


$
(210
)

$
48,934Income (loss) from operations


21,478



(144
)


(475
)






20,859Income (loss) before income taxes


21,957



(149
)


(436
)






21,372Identifiable assets (end of period)


91,613



209



2,168



(4,898
)


89,091Three Months Ended June 30,
    2006Total revenues

$
15,432


$



$



$



$
15,432Income (loss) from operations


2,905



(103
)


(51
)






2,751Income (loss) before income taxes


3,579



(103
)


(1
)






3,475Six Months Ended June 30,
    2007Total revenues

$
61,874


$



$
441


$
(420
)

$
61,895Income (loss) from operations


22,202



(309
)


(495
)






21,398Income (loss) before income taxes


22,998



(317
)


(452
)






22,229Identifiable assets (end of period)


91,613



209



2,168



(4,898
)


89,091Six Months Ended June 30,
    2006Total revenues (restated)

$
38,071


$
1,500


$
29


$



$
39,600Income (loss) from operations
    (restated)


14,463



1,242



(72
)






15,633Income (loss) before income taxes
    (restated)


15,455



1,234



77



16



16,782   Liquidity
    and Capital Resources
  Sources
    of Liquidity
   40




---



##### 



Cash
    Flows
    Six Months EndedJune 30,2007


2006(In thousands)Cash (used in) provided by:Operating activities

$
(12,824
)

$
(548
)Investing activities


(1,321
)


(189
)Financing activities


(632
)


19,018Effect of exchange rates


(69
)


(43
)Net (decrease) increase in cash
    and cash equivalents

$
(14,846
)

$
18,238   Six
    months ended June 30, 2007
        Six
    months ended June 30, 2006
       41




---



##### 



Commitments
    and Contingencies
    July 1, 2007toDecember 31,


December 31,


December 31,


December 31,


December 31,2007


2008


2009


2010


2011


Thereafter


Total(In thousands)Contractual
    obligations:Operating leases

$
479


$
1,429


$
1,321


$
969


$
938


$
5,159


$
10,295     
    Contingent milestone and royalty obligations under our license
    agreement with Sucampo AG. These obligations are described in
    more detail above, and include obligations to pay Sucampo AG:  
    5% of every milestone payment we receive from a sublicensee;
    $500,000 upon initiation of the first Phase II clinical
    trial for each compound in each of the three territories covered
    by the license;
    $1.0 million for the first NDA filing or comparable foreign
    regulatory filing for each compound in each of these three
    territories; and
    royalty payments ranging from 2.1% to 6.5% of net sales of
    products covered by patents licensed to us by Sucampo AG.  
    Expenses under agreements with contract research organizations
    for clinical trials of our product candidates. The timing and
    amount of these disbursements are based on a variety of factors,
    such as the achievement of specified milestones, patient
    enrollment, services rendered or the incurrence of expenses by
    the contract research organization. As a result, we must
    reasonably estimate the potential timing and amount of these
    payments. We estimate our current commitments to contract
    research organizations at June 30, 2007 to be
    $2.7 million for the six months ending December 31,
    2007 and $1.2 million for the year ending December 31,
    2008.    Funding
    Requirements
    
    Up to $1.0 million to fund our 30% share of the two
    post-marketing studies of AMITIZA to evaluate its safety in
    patients with renal impairment and patients with hepatic
    impairment. We initiated these studies in January 2007.
    Approximately $18.0 million to fund development and
    regulatory activities for SPI-8811 and SPI-017, which we expect
    will enable us to substantially complete at least the following
    development efforts:  
    a Phase II clinical trial of SPI-8811 for the prevention
    and treatment of NSAID-induced ulcers, which we plan to commence
    by the third quarter of 2007;
    a Phase II proof-of-concept study of SPI-8811 in patients
    with portal hypertension, which we plan to commence in the
    fourth quarter of 2007; 42




---



##### 




    a Phase II clinical trial of SPI-8811 in patients with
    cystic fibrosis, which we plan to commence by the second quarter
    of 2008; and
    Phase I clinical trials of an intravenous formulation of SPI-017
    for peripheral arterial and vascular disease and stroke, which
    we plan to commence in 2008;  
    Up to $12.0 million to fund the expansion of our
    commercialization activities in the United States and the
    initiation of commercialization efforts in
    non-U.S. markets;
    Up to $1.0 million to fund regulatory efforts by Sucampo
    Europe and Sucampo Japan for AMITIZA and SPI-8811;
    Up to $6.0 million for research and development activities
    for prostone compounds other than AMITIZA, SPI-8811 and SPI-017;
    and
    Up to $1.0 million to fund costs in connection with
    computers, software and information technology to support growth
    in our business.      
    the level of AMITIZA product sales;
    the scope, progress, results and costs of preclinical
    development and laboratory testing and clinical trials for our
    product candidates;
    the costs, timing and outcome of regulatory review of our
    product candidates;
    the number and development requirements of other product
    candidates that we pursue;
    the costs of commercialization activities, including product
    marketing, sales and distribution;
    the costs of preparing, filing and prosecuting patent
    applications and maintaining, enforcing and defending
    intellectual property-related claims;
    the extent to which we acquire or invest in businesses, products
    and technologies;
    our ability to establish and maintain collaborations, such as
    our collaboration with Takeda; and
    changes in our business plan as a result of changes in the
    market conditions resulting from withdrawal or approval of
    competing products, such as recently occurred when Novartis
    withdrew Zelnorm from the U.S. market.       43




---



##### 



Effects
    of Inflation
    Effects
    of Foreign Currency
    Off
    Balance Sheet Arrangements
    Accounting
    Pronouncements
  The Fair Value Option for Financial
    Assets and Financial Liabilities
  No. 07-3, Accounting for Nonrefundable Advance Payments for Goods
    or Services to Be Used in Future Research and Development
    Activities EITF 07-3, EITF 07-3 EITF 07-3
  Item 3.
    Quantitative
    and Qualitative Disclosures about Market Risk       44




---



##### 



Item 4T.
    Controls
    and Procedures  a)
    Evaluation of Disclosure Controls and Procedures
  Rules 13a-15(e) 15d-15(e) Form 10-Q.
  Form 10-Q,
        
    We did not maintain effective controls over the preparation,
    review and presentation of the financial information prepared in
    accordance with U.S. generally accepted accounting
    principles reflecting Sucampo Europe and Sucampo Japan
    operations. Specifically, effective controls were not designed
    and in place to adequately review, analyze and monitor these
    affiliates financial information, nor did we have a
    standard reporting format for these affiliates, accounting
    procedures and policies manuals, formally documented controls
    and procedures or a formal process to review and analyze
    financial information of these affiliates. This control
    deficiency resulted in adjustments to revenue, deferred revenue,
    accounts payable, accrued expenses, other liabilities and notes
    payable accounts, as well as the statement of cash flows.
    Additionally, this control deficiency could result in a
    misstatement in a number of our financial statement accounts,
    including the statement of cash flows, resulting in a material
    misstatement to our interim or annual financial statements that
    would not be prevented or detected.       45




---



##### 



b)  Changes
    in Internal Controls
   Part II 
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings    Item 1A.
    Risk
    Factors    Risks
    Related to Our Limited Commercial Operations
  We
    have historically incurred significant losses and we might not
    achieve or maintain operating profitability.
   46




---



##### 



If we
    are unable to successfully commercialize our first product,
    AMITIZA, for the treatment of chronic idiopathic constipation in
    adults or other indications for which we are developing this
    drug, including irritable bowel syndrome with constipation, or
    experience significant delays in doing so, our ability to
    generate product-based revenues and achieve profitability will
    be jeopardized.
    
    the effectiveness of Takedas sales force, as supplemented
    by our internal specialty sales force, in marketing and selling
    AMITIZA in the United States for the treatment of chronic
    idiopathic constipation in adults;
    the ability of R-Tech, which has the exclusive right to
    manufacture and supply AMITIZA, or any substitute manufacturer
    to supply quantities sufficient to meet market demand and at
    acceptable levels of quality and price;
    acceptance of the product within the medical community and by
    third-party payors;
    successful completion of clinical trials of AMITIZA for the
    treatment of other constipation-related gastrointestinal
    indications beyond chronic idiopathic constipation and irritable
    bowel syndrome with constipation, and acceptance of the results
    of these trials by regulatory authorities; and
    receipt of marketing approvals from the FDA and similar foreign
    regulatory authorities for the treatment of other indications,
    including marketing approval in the United States for AMITIZA to
    treat irritable bowel syndrome with constipation.    We
    have limited experience commercializing drug products. If we are
    not successful in making the transition from a pre-commercial
    stage company to a commercial company, our ability to become
    profitable will be compromised.
   47




---



##### 



Risks
    Related to Employees and Managing Growth
  If we
    are unable to retain our chief executive and chief scientific
    officer and other key executives, we may not be able to
    successfully develop and commercialize our products,
    particularly in light of the recent resignation of our president
    and chair of our board of directors.
      If we
    fail to attract, retain and motivate qualified personnel, we may
    not be able to pursue our product development and
    commercialization programs.
    We
    expect to expand our development, regulatory, sales and
    marketing, and finance and accounting capabilities, and as a
    result, we may encounter difficulties in managing our growth,
    which could disrupt our operations.
    The
    requirements of being a public company may strain our resources
    and distract management.
   48




---



##### 



Risks
    Related to Product Development and Commercialization
  Commercial
    rights to some prostone compounds will revert back to Sucampo AG
    in the future unless we devote sufficient development resources
    to those compounds during the next several years; if any of the
    compounds that revert back to Sucampo AG subsequently become
    valuable compounds, we will have lost the commercial rights to
    those compounds and will not be able to develop or market them,
    and the reverted compounds could ultimately compete with
    compounds we are developing or marketing.
  15-month
    If our
    preclinical studies do not produce successful results or if our
    clinical trials do not demonstrate safety and efficacy in
    humans, our ability to develop additional indications for
    AMITIZA and to develop and commercialize other product
    candidates will be impaired.
   49




---



##### 




    regulators or institutional review boards may not authorize us
    to commence a clinical trial or conduct a clinical trial at a
    prospective trial site;
    our preclinical tests or clinical trials may produce negative or
    inconclusive results, and as a result we may decide, or
    regulators may require us, to conduct additional preclinical
    testing or clinical trials or we may abandon projects that we
    consider to be promising. For example, the efficacy results in
    two of our Phase II trials of SPI-8811, specifically the
    trials for the treatment of non-alcoholic fatty liver disease
    and for the treatment of symptoms associated with cystic
    fibrosis, were inconclusive. Therefore, further clinical testing
    will be required in connection with the development of this
    compound for these indications;
    design of or enrollment in our clinical trials may be slower
    than we currently anticipate, resulting in significant delays,
    or participants may drop out of our clinical trials at rates
    that are higher than we currently anticipate;
    we might have to suspend or terminate our clinical trials, or
    perform additional trials, if we discover that the participating
    patients are being exposed to unacceptable health risks;
    regulators or institutional review boards may require that we
    hold, suspend or terminate clinical research for various
    reasons, including noncompliance with regulatory requirements;
    the cost of our clinical trials may be greater than we currently
    anticipate;
    we might have difficulty obtaining sufficient quantities of the
    product candidate being tested to complete our clinical trials;
    any regulatory approval we ultimately obtain may be limited or
    subject to restrictions or post-approval commitments that render
    the product not commercially viable; and
    the effects of our product candidates may not be the desired or
    anticipated effects or may include undesirable side effects, or
    the product candidates may have other unexpected
    characteristics. For example, in preclinical tests of AMITIZA,
    the drug demonstrated a potential to cause fetal loss in guinea
    pigs and, as a result, its label includes cautionary language as
    to its use by pregnant women.    
    be delayed in obtaining marketing approval for our product
    candidates;
    not be able to obtain marketing approval; or
    obtain approval for indications that are not as broad as those
    for which we apply.   50




---



##### 



We are
    required to conduct supplemental post-marketing clinical trials
    of AMITIZA and we may elect to perform additional clinical
    trials for other indications or in support of applications for
    regulatory marketing approval in jurisdictions outside the
    United States. These supplemental trials could be costly and
    could result in findings inconsistent with or contrary to our
    historic U.S. clinical trials.
    If we
    are unable to establish sales and marketing capabilities or
    successfully use third parties to market and sell our products,
    we may be unable to generate sufficient product revenues to
    become profitable.
        We
    face substantial competition which may result in others
    discovering, developing or commercializing products earlier or
    more successfully than we do.
   51




---



##### 



® tm
    
    Drugs targeting serotonin receptors for the treatment of
    irritable bowel syndrome with constipation, such as Renzapride,
    being developed by Alizyme plc and currently in Phase III
    clinical trials, and DDP733, being developed by Dynogen
    Pharmaceuticals, Inc. and currently in Phase II clinical
    trials;
    Opioid antagonists such as methylnaltrexone, being developed by
    Progenics Pharmaceuticals, Inc., for the treatment of
    opioid-induced bowel dysfunction. Progenics and its partner
    Wyeth Pharmaceuticals recently filed an NDA with the FDA for a
    subcutaneous formulation of this drug for the treatment of
    opioid-induced bowel dysfunction in patients receiving
    palliative care; and
    TD-5108, being developed by Theravance, Inc. for the treatment
    of chronic constipation, and linaclotide, being developed by
    Microbia, Inc. for the treatment of irritable bowel syndrome
    with constipation, both of which have recently completed
    phase II clinical trials.       52




---



##### 



The
    commercial success of AMITIZA and any other products that we may
    develop will depend upon the degree of market acceptance by
    physicians, patients, healthcare payors and others in the
    medical community.
    
    the prevalence and severity of any side effects. For example,
    the most common side effects reported by participants in our
    clinical trials of AMITIZA for the treatment of chronic
    idiopathic constipation were nausea, which was reported by 31%
    of trial participants, and diarrhea and headache, both of which
    were reported by 13% of trial participants;
    the efficacy and potential advantages over alternative
    treatments;
    the competitiveness of the pricing of our products;
    the relative convenience and ease of administration of our
    products compared with other alternatives;
    the timing of the release of our products to the public compared
    to alternative products or treatments;
    the willingness of the target patient population to try new
    therapies and of physicians to prescribe these therapies; the strength of marketing and distribution support; and
    the level of third-party coverage or reimbursement.    ®
  If we
    are unable to obtain adequate reimbursement from third-party
    payors for AMITIZA and any other products that we may develop,
    or acceptable prices for those products, our revenues and
    prospects for profitability will suffer.
    
    a covered benefit under its health plan;
    safe, effective and medically necessary;
    appropriate for the specific patient; 53




---



##### 




    cost effective; and
    neither experimental nor investigational.    Recent
    federal legislation will increase the pressure to reduce prices
    of prescription drugs paid for by Medicare, which could limit
    our ability to generate revenues.
    Legislation
    has been proposed from time to time that would permit
    re-importation of drugs from foreign countries into the United
    States, including foreign countries where the drugs are sold at
    lower prices than in the United States, which could force us to
    lower the prices at which we sell our products and impair our
    ability to derive revenues from these products.
    Foreign
    governments tend to impose strict price controls, which may
    limit our ability to generate revenues.
    If
    product liability lawsuits are brought against us, we may incur
    substantial liabilities and may be required to limit
    commercialization of any products that we may
    develop.
   54




---



##### 




    decreased demand for AMITIZA or any other product that we may
    develop;
    injury to our reputation;
    withdrawal of clinical trial participants;
    costs to defend the related litigation;
    substantial monetary awards to trial participants or patients;
    loss of revenue; and
    the inability to continue to commercialize AMITIZA or to
    commercialize any other product that we may develop.    Our
    strategy of generating growth through acquisitions and
    in-licenses may not be successful if we are not able to identify
    suitable acquisition or licensing candidates, to negotiate the
    terms of any such transaction or to successfully manage the
    integration of any acquisition.
      We may
    need substantial additional funding and be unable to raise
    capital when needed, which could force us to delay, reduce or
    abandon our commercialization efforts or product development
    programs.
   55




---



##### 




    actual levels of AMITIZA product sales;
    the cost of commercialization activities, including product
    marketing, sales and distribution;
    the scope and results of our research, preclinical and clinical
    development activities;
    the timing of, and the costs involved in, obtaining regulatory
    approvals;
    the costs involved in obtaining and maintaining proprietary
    protection for our products, technology and know-how, including
    litigation costs and the results of such litigation;
    our ability to recruit and retain internal staff resources to
    conduct these activities;
    the extent to which we acquire or invest in businesses, products
    and technologies;
    the success of our collaboration with Takeda; and
    our ability to establish and maintain additional collaborations.    Risks
    Related to Our Dependence on Third Parties, Including Related
    Parties
  We
    have no manufacturing capabilities and are dependent upon R-Tech
    to manufacture and supply us with our product and product
    candidates. If R-Tech does not manufacture AMITIZA or our other
    product candidates in sufficient quantities, at acceptable
    quality levels and at acceptable cost and if we are unable to
    identify a suitable replacement manufacturer, our sales of
    AMITIZA and our further clinical development and
    commercialization of other products could be delayed, prevented
    or impaired.
   56




---



##### 




    we rely solely on R-Tech for quality assurance and their
    continued compliance with regulations relating to the
    manufacture of pharmaceuticals;
    R-Techs manufacturing capacity may not be sufficient to
    produce commercial quantities of our product, or to keep up with
    subsequent increases in the quantities necessary to meet
    potentially growing demand;
    R-Tech may not have access to the capital necessary to expand
    its manufacturing facilities in response to our needs;
    in light of the complexity of the manufacturing process for
    prostones, if R-Tech were to cease conducting business, or if
    its operations were to be interrupted, it would be difficult and
    time consuming for us to find a replacement supplier and the
    change would need to be submitted to and approved by the FDA;
    R-Tech has substantial proprietary know-how relating to the
    manufacture of prostones and, in the event we must find a
    replacement or supplemental manufacturer or we elect to contract
    with another manufacturer to supply us with products other than
    AMITIZA, we would need to transfer this know-how to the new
    manufacturer, a process that could be both time consuming and
    expensive to complete;
    R-Tech may experience events, such as a fire or natural
    disaster, that force it to stop or curtail production for an
    extended period; and
    R-Tech could encounter significant increases in labor, capital
    or other costs that would make it difficult for R-Tech to
    produce our products cost-effectively.      We and
    R-Tech are dependent upon a single contract manufacturer to
    complete the final stage of manufacture of
    AMITIZA.
    R-Tech
    and any other third-party manufacturer of our products and
    product candidates are subject to significant regulations
    governing manufacturing facilities and procedures.
   57




---



##### 



We
    depend significantly on our collaboration with Takeda, and may
    depend in the future on collaborations with other third parties,
    to develop and commercialize our product
    candidates.
  16-year
      
    our joint collaboration agreement with Takeda is, and any future
    collaboration agreements that we may enter into are likely to
    be, subject to termination under various circumstances;
    Takeda and other future collaborators may develop and
    commercialize, either alone or with others, products and
    services that are similar to or competitive with the products
    that are the subject of the collaboration with us;
    Takeda and other future collaborators may underfund or not
    commit sufficient resources to the testing, marketing,
    distribution or other development of our products or may use
    committed resources inefficiently;
    Takeda and other future collaborators may not properly maintain
    or defend our intellectual property rights or may utilize our
    proprietary information in such a way as to invite litigation
    that could jeopardize or invalidate our proprietary information
    or expose us to potential liability; and
    Takeda and other future collaborators may change the focus of
    their development and commercialization efforts. Pharmaceutical
    and biotechnology companies historically have re-evaluated their
    priorities from time to time, including following mergers and
    consolidations, which have been common in recent years in these
    industries. 58




---



##### 



Because
    we rely upon third parties to provide the sales representatives
    marketing AMITIZA, we may face increased risks arising from
    their misconduct or improper activities, which would harm our
    business.
    We may
    not be successful in establishing additional collaborations,
    which could compromise our ability to develop and commercialize
    products.
    We
    rely on third parties to conduct our clinical trials and those
    third parties may not perform satisfactorily or may fail to meet
    established deadlines for the completion of these
    trials.
      Conflicts
    of interest may arise between us and Sucampo AG or R-Tech, and
    these conflicts might ultimately be resolved in a manner
    unfavorable to us.
   59




---



##### 




    disputes over the cost or quality of the manufacturing services
    provided to us by R-Tech with respect to AMITIZA, SPI-8811 and
    SPI-017;
    a decision whether to engage R-Tech in the future to manufacture
    and supply compounds other than AMITIZA, SPI-8811 and SPI-017;
    decisions as to which particular prostone compounds, other than
    AMITIZA, SPI-8811 or SPI-017, we will commit sufficient
    development efforts to so that commercial rights to those
    compounds will not revert back to Sucampo AG at the end of the
    specified period; or
    business opportunities unrelated to prostones that may be
    attractive both to us and to the other company.  If
    United States or foreign tax authorities disagree with our
    transfer pricing policies, we could become subject to
    significant tax liabilities.
    Risks
    Related to Our Intellectual Property
  If we
    are unable to obtain and maintain proprietary protection for the
    intellectual property relating to our technology and products,
    the value of our technology and products will be adversely
    affected and our ability to derive revenue from our products
    would be impaired.
   60




---



##### 



Confidentiality
    agreements with our employees and other precautions may not be
    adequate to prevent disclosure of our proprietary information
    and know-how.
    If we
    infringe or are alleged to infringe intellectual property rights
    of third parties, our business could be harmed.
      We may
    be subject to other patent related litigation or proceedings
    that could be costly to defend and uncertain in their
    outcome.
   61




---



##### 



Risks
    Related to Regulatory Approval and Oversight
  If we
    are not able to obtain required regulatory approvals, we will
    not be able to commercialize our product candidates and our
    ability to generate revenue will be materially
    impaired.
        Even
    if we receive regulatory approval for a product, the product
    could be subject to regulatory restrictions or withdrawal from
    the market, and we may be subject to penalties if we fail to
    comply with ongoing regulatory requirements.
    We may
    experience unanticipated safety issues with our products after
    they are approved for marketing, which could harm our business
    and our reputation.
   62




---



##### 




    restrictions on such products, manufacturers or manufacturing
    processes;
    warning letters;
    withdrawal of the products from the market;
    refusal to approve pending applications or supplements to
    approved applications that we submit; and
    voluntary or mandatory product recalls.    Failure
    to obtain regulatory approval in international jurisdictions
    would prevent us from marketing our products outside the United
    States and could adversely affect our reputation and our product
    marketing activities within the United States.
    We may
    not be able to obtain orphan drug exclusivity for our product
    candidates. If our competitors are able to obtain orphan drug
    exclusivity for a product that is competitive with one or more
    of our product candidates and we cannot show that our product
    candidate is clinically superior, we may not be able to have
    competing products approved by the applicable regulatory
    authority for a significant period of time.
   63




---



##### 



We
    must comply with federal, state and foreign laws, regulations,
    and other rules relating to the health care business, and, if we
    are unable to fully comply with such laws, regulations and other
    rules, we could face substantial penalties.
    
    the federal Medicare and Medicaid Anti-Kickback law, which
    prohibits persons from knowingly and willfully soliciting,
    offering, receiving or providing remuneration, directly or
    indirectly, in cash or in kind, to induce either the referral of
    an individual, or furnishing or arranging for a good or service,
    for which payment may be made under federal healthcare programs
    such as the Medicare and Medicaid Programs;
    other Medicare laws, regulations, rules, manual provisions and
    policies that prescribe the requirements for coverage and
    payment for services performed by our customers, including the
    amount of such payment;
    the federal False Claims Act, which imposes civil and criminal
    liability on individuals and entities who submit, or cause to be
    submitted, false or fraudulent claims for payment to the
    government;
    the federal False Statements Act, which prohibits knowingly and
    willfully falsifying, concealing or covering up a material fact
    or making any materially false statement in connection with the
    delivery of or payment for healthcare benefits, items or
    services; and
    state and foreign law equivalents of the foregoing and state
    laws regarding pharmaceutical company marketing compliance,
    reporting and disclosure obligations.    Other
    Risks
  Our
    founders maintain the ability to control all matters submitted
    to stockholders for approval, which could result in actions of
    which you or other stockholders do not approve.
   64




---



##### 



Provisions
    in our corporate charter documents and under Delaware law may
    prevent or frustrate attempts by our stockholders to change our
    management and hinder efforts to acquire a controlling interest
    in us, and the market price of our class A common stock may
    be lower as a result.
      
    the high-vote nature of our class B common stock;
    following the conversion of all shares of class B common
    stock into class A common stock, only one of our three
    classes of directors will be elected each year;
    following the conversion of all shares of class B common
    stock into class A common stock, stockholders will not be
    entitled to remove directors other than by a 75% vote and for
    cause;
    following the conversion of all shares of class B common
    stock into class A common stock, stockholders will not be
    permitted to take actions by written consent;
    stockholders cannot call a special meeting of
    stockholders; and
    stockholders must give advance notice to nominate directors or
    submit proposals for consideration at stockholder meetings.    Our
    stock price may be volatile and purchasers of our class A
    common stock could incur substantial losses.
    
    failure of AMITIZA or other approved products, if any, to
    achieve commercial success;
    results of clinical trials of our product candidates or those of
    our competitors;
    the regulatory status of our product candidates;
    the success of competitive products or technologies;
    regulatory developments in the United States and foreign
    countries;
    developments or disputes concerning patents or other proprietary
    rights;
    the ability of R-Tech to manufacture our products to commercial
    standards in sufficient quantities;
    actual or anticipated fluctuations in our quarterly financial
    results; 65




---



##### 




    variations in the financial results of companies that are
    perceived to be similar to us;
    changes in the structure of healthcare payment systems;
    market conditions in the pharmaceutical and biotechnology
    sectors and issuance of new or changed securities analysts
    reports or recommendations; and
    general economic, industry and market conditions.  We
    have never paid cash dividends on our capital stock, and we do
    not anticipate paying any cash dividends in the foreseeable
    future.
    A
    significant portion of our total outstanding shares are eligible
    to be sold into the market in the near future. This could cause
    the market price of our class A common stock to drop
    significantly, even if our business is doing well.
  lock-up 180-day lock-up 180-day lock-up
  Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds  Use of
    Proceeds from Initial Public Offering of Class A Common
    Stock
  Form S-1 No. 333-135133)
   66




---



##### 



Item 4.
    Submission
    of Matters to a Vote of Security Holders    Matter 1:
    To elect five directors to serve until the 2008 annual meeting
    of stockholders and until their successors are duly elected and
    qualified.Matter 2:
    To ratify the selection by the Audit Committee of
    PricewaterhouseCoopers LLP as our independent registered public
    accounting firm for the year ending December 31, 2007.    Nominee/Matter

For


Against or Withheld


AbstainRyuji
    Ueno, M.D., Ph.D., Ph.D.


32,188,372







Michael J. Jeffries


32,188,372







Timothy I. Maudlin


32,188,372







Hidetoshi Mine


32,188,372







V. Sue Molina


32,188,372







Matter 2


32,188,372







   Item 6.
    Exhibits  31
.1

Certification of the Principal
    Executive Officer, as required by Section 302 of the
    Sarbanes-Oxley Act of 200231
.2

Certification of the Principal
    Financial Officer, as required by Section 302 of the
    Sarbanes-Oxley Act of 200232
.1

Certification of the Principal
    Executive Officer pursuant to 18 U.S.C. Section 1350,
    as adopted pursuant to Section 906 of the Sarbanes-Oxley
    Act of 200232
.1

Certification of the Principal
    Financial Officer pursuant to 18 U.S.C. Section 1350,
    as adopted pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002  67




---



##### 



SIGNATURES
    Sucampo Pharmaceuticals, Inc.August 21, 2007

By: /s/ Ryuji UenoRyuji
    Ueno, M.D., Ph.D., Ph.D. 
    Chief Executive Officer, Chief Scientific Officer and
    Chair of the Board of Directors
    (Principal Executive Officer)August 21, 2007

By: /s/ Ronald W. KaiserRonald
    W. Kaiser
    Chief Financial Officer
    (Principal Financial Officer)August 21, 2007

By: /s/ Mariam E. MorrisMariam
    E. Morris
    Chief Accounting Officer
    (Principal Accounting Officer)  68




---



##### 



Sucampo
    Pharmaceuticals, Inc.
    Exhibit Index
  ExhibitNumber

Description31
.1

Certification of the Principal
    Executive Officer, as required by Section 302 of the
    Sarbanes-Oxley Act of 200231
.2

Certification of the Principal
    Financial Officer, as required by Section 302 of the
    Sarbanes-Oxley Act of 200232
.1

Certification of the Principal
    Executive Officer pursuant to 18 U.S.C. Section 1350,
    as adopted pursuant to Section 906 of the Sarbanes-Oxley
    Act of 200232
.1

Certification of the Principal
    Financial Officer pursuant to 18 U.S.C. Section 1350,
    as adopted pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002  69