release from last week.....
Wednesday April 26, 7:31 am Eastern Time
Company Press Release
SOURCE: Connetics Corporation
Connetics Reports Revenue Growth and Profitable
First Quarter
PALO ALTO, Calif., April 26 /PRNewswire/ -- Connetics Corporation (Nasdaq: CNCT - news) today announced financial
results for the first quarter ended March 31, 2000. Total revenues for the quarter were $13.4 million, representing an 87%
increase over revenues of $7.2 million in the first quarter of 1999. Net income for the quarter was $0.6 million or $0.02 per
diluted share. This compares to a net loss of $5.9 million or ($0.28) per diluted share in the first quarter 1999.
Product revenues for the first quarter were $5.7 million, representing a 162% increase over revenues of $2.2 million in the first
quarter of 1999, and a 15% increase over the prior quarter. This increase was driven by sales growth of all products. Contract
revenues for the first quarter were $7.8 million, including a one-time $5 million development payment Connetics received from
its partner Celltech Group in Europe for completing the manufacturing scale-up of recombinant human relaxin. Total operating
costs and expenses for the quarter were $13.5 million, compared to $13.1 million in the first quarter of 1999.
As of March 31, 2000, cash and short-term investments totaled $24.9 million. In addition, Connetics owns over 1 million
shares of common stock of InterMune Pharmaceuticals, Inc. (Nasdaq: ITMN - news). InterMune was spun out from
Connetics in April 1999 and completed its initial public offering in March 2000.
``Connetics continues to make excellent progress in revenue growth as evidenced by this quarter's strong operating
performance,'' said Thomas G. Wiggans, President and CEO of Connetics. ``Product sales tracked in-line with or higher than
expectations and our commercial operations and relaxin development activities continued to expand. Most exciting is the
progress we are making to move important new relaxin indications into clinical trials. Recent studies by independent researchers
have shown relaxin's potential in treating peripheral arterial disease, kidney disease and pulmonary disease. These are extremely
large markets where patients have poor treatment options. We anticipate beginning clinical studies in these indications during
2000.''
Connetics' lead drug candidate is relaxin, a recombinant human hormone with known antifibrotic, angiogenic and vasodilatory
properties. The Company will announce results of a pivotal study in diffuse scleroderma in the fourth quarter of this year.
Diffuse scleroderma, characterized by fibrosis of the skin and internal organs, is a life threatening disease for which there is no
effective treatment. With positive trial results, Connetics expects to file a BLA in 2001.
Other relaxin events in the quarter included the submission of an IND application to begin clinical trials with relaxin for the
treatment of peripheral arterial disease (PAD). Recent data suggests that relaxin may promote new blood vessel growth and
blood flow to the extremities and vital organs, such as the heart and kidneys, through the induction of VEGF, bFGF and nitric
oxide. Connetics expects to initiate a Phase II trial with relaxin for PAD within the next several months.
In April, Connetics entered a license agreement with F.H. Faulding & Co., Ltd. for the rights to develop and commercialize
relaxin in Australia. Faulding is the fourth international partner to license rights to relaxin, adding to a growing worldwide
development and commercialization network for relaxin for the treatment of scleroderma and other serious diseases.
During the quarter, Leon E. Panetta, former White House Chief of Staff, eight-term member of the U.S. Congress and strong
advocate for scleroderma patients, was appointed to the Board of Directors. Mr. Panetta's awareness and support for
scleroderma research was a driver in his decision to join Connetics. His 25 years of experience as a political leader and policy
maker in Washington will be valuable to the Company.
About Connetics
Connetics Corporation, headquartered in Palo Alto, California, is a biopharmaceutical company focused on the development of
recombinant human relaxin for multiple indications and on the development and commercialization of novel therapeutics for
dermatology and other specialty medical markets. For more information about Connetics and its products, please visit
Connetics' Web Site at www.connetics.com, or send e-mail to ir@connetics.com.
This news release contains forward-looking statements and predictions. These statements represent the company's judgement
as of this date and are subject to risks and uncertainties that could cause actual results or events to differ materially from those
expressed in such forward-looking statements. Potential risks and uncertainties include, without limitation, those associated with
product development, clinical trials, future revenues and profitability, and obtaining marketing approval. In particular, revenue
results in the first quarter are not indicative of results to be expected in subsequent quarters. These and other factors are
discussed in more depth in Connetics' Form 10-K dated March 2, 2000 and in the Company's other filings with the SEC.
These documents contain and identify important factors that could cause the actual results to differ materially from those
contained in the projections or forward-looking statements.
Condensed Statements of Operations
(in thousands, except per share amounts, unaudited)
Three Months Ended March 31,
2000 1999
Revenues:
Product revenue $5,666 $2,161
Contract revenue 7,750 5,000
Total revenues 13,416 7,161
Operating costs and expenses:
Cost of product revenues 1,799 1,171
License amortization -- 1,680
Research and development 6,145 4,681
Selling, general and administrative 5,519 5,594
Total operating costs and expenses 13,463 13,126
Other income and expense (net) 646 42
Net income (loss) $ 599 $(5,923)
Net income (loss) per share:
Basic $0.02 $(0.28)
Diluted $0.02 $(0.28)
Shares used to calculate net income (loss)
per share:
Basic 26,627 21,088
Diluted 28,412 21,088
Condensed Balance Sheets
(in thousands)
March 31, December 31,
2000 1999 (A)
(Unaudited)
Assets:
Cash and short-term investments $24,870 $26,299
Accounts receivable and other current assets 2,038 2,425
Property and equipment, net 1,414 1,505
Other non-current assets (B) 21,374 181
Total assets $49,696 $30,410
Liabilities and stockholders' equity:
Current liabilities $11,425 $15,323
Other liabilities 525 799
Stockholders' equity 37,746 14,288
Total liabilities and stockholders' equity $49,696 $30,410
(A) The balance sheet at December 31, 1999 has been derived from the audited financial statements at that date but
does not include all of the information and footnotes required by generally accepted accounting principles for complete
financial statements.
(B) Other non-current assets include $20.9 million in InterMune common stock.
SOURCE: Connetics Corporation |
