Corixa Announces Third Quarter Financial Results and Restructuring
Thursday November 6, 4:00 pm ET
SEATTLE--(BUSINESS WIRE)--Nov. 6, 2003--Corixa Corp. (Nasdaq:CRXA - News), a
leading provider of immunotherapeutics, today announced financial results for the third
quarter ended September 30, 2003. The company also announced it is restructuring its
operations to focus on priority programs and commercialization efforts.
For the third quarter of 2003, Corixa reported total revenue of $7.4 million compared with
total revenue of $9.9 million for the third quarter of 2002. Net loss applicable to common
stockholders for the third quarter of 2003 was $28.1 million, compared with net loss of
$16.8 million for the third quarter of 2002. Net loss applicable to common stockholders
for the third quarter of 2003 includes a $5.9 million impairment charge associated with
sub-leasing of an additional 17,000 square feet of improved space in South San
Francisco. Diluted net loss per common share for the third quarter of 2003 was $0.51
compared with diluted net loss per common share of $0.37 for the third quarter of 2002.
Excluding acquisition-related charges, such as intangible and deferred compensation
amortization and the lease-related impairment charge, net loss applicable to common
stockholders and diluted net loss per common share for the third quarter of 2003 were
$21.9 million and $0.40, respectively, compared with net loss applicable to common
stockholders and diluted net loss per common share of $16.2 million and $0.36,
respectively for the third quarter of 2002.
Corixa co-promotion revenue or expense under its agreement with GlaxoSmithKline for
the sale of BEXXAR therapeutic regimen in the United States is determined based on the
calculation of joint profit or loss, which is included in sales, general and administrative
expense for the quarter ended September 30, 2003. During the initial period of product
availability, Corixa expects to record losses from this joint business agreement, reflecting
increased expenses for the cost of co-promotion revenue, promotion, education and
training.
For the first nine months of 2003, Corixa's total revenue was $36.5 million compared with
$39.3 million for the first nine months of 2002. For the first nine months of 2003 net loss
applicable to common stockholders was $68.0 million, compared with $188.5 million for
the first nine months of 2002. Net loss applicable to common stockholders for the first
nine months of 2003 includes an $18.5 million impairment charge associated with
sub-leasing of improved space in South San Francisco.
Net loss applicable to common stockholders for the first nine months of 2002 includes a
first quarter goodwill impairment charge of $161.1 million resulting from a delay in the
launch of BEXXAR. Diluted net loss per common share for the first nine months of 2003
was $1.31 compared with diluted net loss per common share of $4.38 for the first nine
months of 2002. Excluding acquisition-related charges, such as intangible and deferred
compensation amortization, lease-related impairment charges and the goodwill
impairment charge, net loss applicable to common stockholders and diluted net loss per
common share for the first nine months of 2003 were $48.2 million and $0.93,
respectively, compared with net loss applicable to common stockholders and diluted net
loss per common share of $22.6 million and $0.53, respectively for the first nine months
of 2002.
A reconciliation of the Generally Accepted Accounting Principles (GAAP) net
income/(loss) and net income/(loss) per share to the respective non-GAAP amounts for
the three months and nine months ended September 30, 2003 and September 30, 2002,
is set forth at the end of this press release.
The decrease in revenue for the third quarter of 2003 compared with the prior year
period was due primarily to the anticipated expiration of the funded research phases of
certain of Corixa's collaborative agreements, including Corixa's vaccine development
collaborative agreement with GlaxoSmithKline, the company's lung cancer vaccine
partnership with Japan Tobacco Inc., and its therapeutic antibody agreement with Purdue
Pharma L.P. Decreases in research collaboration revenue were partially offset by
increased revenue related to Corixa's WT-1 cancer vaccine agreement with Kirin.
As of September 30, 2003, Corixa had $200.9 million in cash, cash equivalents and
investments. Corixa also continues to have access to, subject to certain conditions, a
$75 million equity line of credit from BNY Capital Markets, a subsidiary of the Bank of
New York. As of September 30, 2003, draws under the credit line totaled $2.6 million.
"Corixa continued to make substantial progress during the third quarter," said Steven
Gillis, Ph.D., chairman and chief executive officer of Corixa. "We delivered on our
commitment to make BEXXAR commercially available just 30 days following FDA
approval, began enrolling patients in the third of three new IND studies this year, and
announced the approval of the first infectious disease vaccine containing our RC-529
adjuvant. We continue to make progress with key business initiatives designed to
support increased commercial opportunities for Corixa."
Restructuring
Corixa also announced today that it is restructuring its resources to focus on priority
programs with the greatest opportunity for near term commercial success. The
restructuring plan will reduce the scope and number of priority programs to allow the
company to concentrate more resources on its core areas of expertise -- monoclonal
antibodies, vaccines and adjuvants and TLR4 agonists and antagonists.
This restructuring will result in an approximate 18 percent immediate reduction in Corixa's
workforce, including the elimination of certain unfilled open positions, as well as existing
positions. The workforce reduction is expected to result in annual cost savings of more
than $8 million and the company expects to incur a fourth quarter restructuring charge of
up to $2.5 million. Following the reductions, Corixa will have approximately 344
employees at facilities in Seattle, Washington, South San Francisco, California and
Hamilton, Montana.
"Research activities over the past several years have yielded more opportunities than we
can financially afford to pursue at this time," Gillis added. "Although decisions to
eliminate programs and resources are difficult, focusing the scope of our pursuits on the
greatest opportunities for near term commercial success are critical steps in achieving
our financial and commercial objectives and will allow us to more efficiently allocate
resources to priority programs."
Program Update
As a part of its ongoing portfolio analysis, the company also announced today that it will
discontinue the U.S. development of its MELACINE vaccine for melanoma. Corixa has
discontinued the program based on the requirement to conduct an additional U.S. Phase
III clinical trial that would likely take another five to seven years before an application for
approval in the United States could be considered. The company is currently in
discussions with multiple parties regarding potential out-licensing and product acquisition
opportunities.
Conference Call
Corixa will hold a conference call and webcast to discuss the third quarter earnings
Thursday, November 6, 2003 at 5 p.m. EDT/2 p.m. PDT. To access the live conference
call, dial 800-289-0496 or 913-981-5519. Webcast participants can sign up at the
Investors page of Corixa's Web site (http://www.corixa.com/default.asp?pid=invest). A
recorded replay of the conference call can be accessed through the Web site, or by
dialing 888-203-1112 (domestic) or 719-457-0820 (international), and entering
passcode 655565. The call will be rebroadcast until 12 a.m. ET, November 14, 2003.
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