Nov. 14 /PRNewswire/ -- ACLARA BioSciences, Inc. (Nasdaq: ACLA - news) today reported financial results for its third quarter ended September 30, 2000. Adjusted net loss for the third quarter was $3.8 million or $0.11 per share, excluding non-cash stock-based compensation expense and one-time charges outlined below, compared with an adjusted net loss of $1.6 million or $0.08 per share in the third quarter of 1999. Including non-cash stock-based compensation expense and one-time charges, net loss for the quarter was $9.6 million or $0.28 per share, compared with a net loss of $1.9 million or $0.09 per share in the third quarter of 1999.
Revenues for the quarter from grants and collaborations were $946,000, compared to $935,000 in the third quarter of 1999.
The growth in operating expenses in the third quarter of 2000 compared to the third quarter of 1999 is primarily due to increased intellectual property litigation expenses of $3.6 million, increased amortization of non-cash stock-based compensation of $2.6 million, expanded product development activities, and a one-time charge of $1.75 million recorded in connection with the settlement of a dispute with 2C Optics/Rodenstock. The increase in operating expenses was partially offset by increased net interest income of $3.3 million due to higher cash and investment balances. A one-time extraordinary loss of $1.1 million related to early payoff of capital leases and equipment financing loans was also recorded in the third quarter of 2000.
Cash, cash equivalents and marketable securities totaled $198.6 million on September 30, 2000. On September 1, 2000 all capital lease agreements and equipment financing loan agreements were paid off with a cash payment totaling $4.1 million.
``Our third quarter performance was in line with our expectations for both the quarter and the year,'' said Joseph M. Limber, President and Chief Executive Officer.
Oasis LabCard for Drug Screening
``ACLARA's Oasis LabCard chip for homogeneous drug screening is currently in beta testing and is on track for commercial introduction by the end of this calendar year. This is a significant milestone representing ACLARA's initial commercial entry into the large and rapidly growing drug-screening market. The Oasis LabCard chips are designed to be compatible with existing detectors and automation equipment being marketed by multiple companies, including our strategic partner, Packard Bioscience Company.
eTag(TM) for gene expression and SNPs
``The development of ACLARA's proprietary eTag(TM) chemistry has exceeded our expectations. The eTag chemistry is a mobility tag technology that enables multiplexing of 5 prime nuclease enzyme chemistries for gene expression and SNP genotyping. We have developed a multiplex set of over 25 eTag reporters and have set an aggressive target of 50 multiplexed eTag reporters by year's end.
Expansion
``We are continuing to buildout our Mountain View facility with additions to our pilot manufacturing area for eTags and construction of expanded research laboratories.
Three New Patents and Zeptosens License
``Our patent portfolio was enhanced by the issuance of three patents this quarter. The patents relate to technology for increasing resolution and sensitivity in assays (No. 6,103,537), fluid handling approaches used with microvolume arrays (No. 6,103,199) and methods for conducting chemical operations in a microfluidic device (No. 6,093,296).
``As announced in our November 2, 2000 press release, we have obtained an exclusive, royalty-bearing license to pioneering microfluidics intellectual property from Zeptosens AG. We consider that this is a strategic addition to our intellectual property estate because we believe that the innovations described in this pending patent have become standard aspects of lab-on-a-chip design and operation by numerous groups.
Three Legal Developments
``There were three significant developments concerning legal matters this quarter. First, in order to avoid the expense and disruption of potential litigation, we signed a settlement agreement with 2C Optics (now named Rodenstock, N.A.) on August 17, 2000, in which Rodenstock has agreed to drop all its potential claims against us regarding the repurchase of our Series A preferred stock. Rodenstock will receive two payments totaling $1.75 million. We are pleased to have this matter concluded.
``Second, as announced in our October 29, 2000 press release, a jury has awarded Caliper Technologies $52.5 million in the trade secret lawsuit brought against ACLARA by Caliper. We expect the Court to reduce this amount by between $12 and $17 million to eliminate redundancies, leaving ACLARA's potential monetary liability at between $35.5 and $40.5 million.
``At the beginning of the trade secret trial, the Court indicated that it would consider equitable remedies following the jury's verdict. On November 2, Caliper filed a brief requesting that the Court require ACLARA to assign the '015 patent, as the corpus of a constructive trust, to Caliper, with a non-exclusive, royalty-free license back to ACLARA. The license back to ACLARA would include the right to grant sublicenses to ACLARA's partners, contractors and customers.
``The Court is expected to hold a hearing on November 22 regarding this issue, and to issue a ruling sometime after the hearing. No judgment has been entered on the verdict, and it is not certain when a judgment will be entered. Once a judgment has been entered, ACLARA intends to appeal the judgment to the California Court of Appeal and we believe that any judgment will be stayed until the appeal is resolved. We are currently unable to predict at this time the final outcome of this case, therefore we have not accrued for any liability for this matter as of our September 30, 2000 financial statements.
``Third, as announced in our October 31, 2000 press release, the U.S. District Court denied a summary judgment motion by Caliper Technologies to dismiss ACLARA's patent infringement suit against Caliper. This ruling relates to the alleged infringement by Caliper of ACLARA's '015 patent. Caliper had filed a summary judgment motion requesting that this lawsuit be dismissed, based on arguments of non-infringement and invalidity. Based on the claim interpretation made by the Court in July, the Court ruled that Caliper does not literally infringe ACLARA's '015 patent. However, the Court denied Caliper's motion for summary judgment as to ACLARA's claim of infringement under the doctrine of equivalents and 'denied in its entirety' Caliper's motion for summary judgment that ACLARA's patent is invalid. As a result of this ruling, a trial in this action is scheduled to begin on December 4, 2000.
``In conclusion, I am proud of the progress our employees and strategic partners have achieved in the development of this very powerful technology. We are looking forward to bringing our first commercial product, ACLARA's Oasis LabCard chips, into the market in the fourth quarter of 2000, followed by continued product development and commercialization into 2001.'' |
