PARIS, April 24 /PRNewswire Interactive News Release/ -- Genset, S.A. (Nasdaq: GENXY; Nouveau Marche: GENSET), reported a consolidated net loss excluding non-recurring items for the quarter ended March 31, 2001 of euro 10.0 million ($8.8 million), or euro 1.23 per share ($0.36 per American Depositary Share), as compared to a net loss of euro 7.7 million ($6.8 million), or euro 1.02 per share ($0.30 per American Depositary Share), for the quarter ended March 31, 2000. The Company's net loss including non-recurring items for the quarter ended March 31, 2001 was euro 17.6 million ($15.5 million), or euro 2.17 per share ($0.64 per American Depositary Share).
Total revenues for the quarter decreased from euro 8.2 million ($7.2 million) for the quarter ended March 31, 2000 to euro 5.2 million ($4.5 million) for the quarter ended March 31, 2001. The change in total revenues for the first quarter of 2001 reflects the Company's shift in strategy away from entering into limited gene target discovery deals on behalf of pharmaceutical companies to a focus on discovering and developing drug targets and products for its own account. As a result, research and development (``R&D'') revenues decreased from euro 5.6 million ($4.9 million) to euro 0.8 million ($0.7 million), accounting for 16% of total revenues, while oligonucleotide sales increased 62.6% from euro 2.7 million ($2.3 million) to euro 4.3 million ($3.8 million), reaching its highest level ever.
Cash decreased during the quarter by euro 10.0 million ($8.8 million). As of March 31, 2001, Genset had cash, cash equivalents and short-term investments of euro 57.8 million ($50.8 million), compared to euro 67.8 million ($59.6 million) as of December 31, 2000 and to euro 39.2 million ($34.5 million) as of March 31, 2000.
Andre Pernet CEO of Genset stated, ``The most visible event which occurred in the first quarter of 2001 was the publication of our preclinical Famoxin results in the Proceedings of the National Academy of Sciences. But just as important to the future of Genset is that we took several of the most important steps critical to accomplishing our goal of beginning to build a drug pipeline. Importantly, we are restructuring our business by finishing our existing alliances and have renegotiated our gene discovery agreement with Abbott to make it more consistent with our new strategy.'' Under the new agreement, Genset was released from performing any further research for Abbott, recovered the intellectual property generated in its bipolar program and agreed to make a one-time payment to Abbott and to license to Abbott at a future date a protein in the area of CNS for target screening. Dr. Pernet added, ``We also successfully achieved the negotiation of our social plan at Evry. This occurred with the full agreement of the personnel representatives and of the public authorities. All measures have been taken to help the employees who are leaving Genset. The first results are promising and we will, according to our commitments, do our best to help all employees to find a new job in a near future.''
Genset's first quarter results include certain non-recurring items related to its transitory steps. First, the Company recorded approximately euro 1.4 million in employee costs related to the recently completed social plan as well as fees of euro 0.6 million to effect the plan. A non-cash charge of euro 3.5 million was recorded to write-off certain equipment, primarily for sequencing, no longer required due to the restructuring. Secondly, the Company recorded euro 1.7 million due to Abbott to regain the intellectual property generated in the bipolar program and release it from further research efforts. This was strategically important for Genset since bipolar disorders are a key target in its internal development plans. Lastly, euro 0.4 million was paid to explore the potential sale of the Company's oligonucleotide division which is ongoing. The Company will make a decision in the near future as to whether it is in its best interest to sell the division.
R&D expenses for the quarter were euro 8.5 million ($7.4 million), compared to euro 12.0 million ($10.5 million) for the same quarter in 2000. This decrease in R&D expenses is the result of the Company's previously announced efforts to control overall spending. For the quarter, general & administrative expenses increased 6% to euro 3.4 million ($3.0 million) from euro 3.2 million ($2.9 million) in the first quarter 2000. Fourth quarter 2000 general and administrative expenses totaled euro 4.0 million ($3.5 million).
In the area of non-operating expenses, the Company reported a net foreign exchange gain for the quarter of euro 0.6 million ($0.5 million), as compared to a foreign exchange loss in the first quarter of 2000 of euro 0.1 million ($0.1 million). Net interest expense for the quarter was euro 0.5 million ($0.4 million), compared to a net result equal to zero during the first quarter of 2000. The decrease primarily results from the convertible bond issuance in June 2000.
Genset did not record any income tax benefit for the quarter as a consequence of its efforts to decrease its R&D expenses during the quarter. The Company recorded an income tax benefit of euro 1.2 million ($1.1 million) for the first quarter of 2000.
The Company anticipates that it will continue to incur losses for the foreseeable future; the amount and duration of such losses will depend largely on the level of its continued investment in research and development activities and the timing of future licensing deals on the results of these activities.
Genset is a genomics company focused on generating a pipeline of drug candidates in the areas of CNS and metabolic disorders. Genset has successfully used its integrated technology platform and association studies approach to identify and characterize drug targets and drug response markers in the fields of CNS, metabolic and other diseases. Building upon the expertise accumulated in various alliances with pharmaceutical partners and its portfolio of genomic patents, Genset now intends to pursue and validate novel drug targets and candidates for its own account, starting with a lead protein candidate in its obesity program.
Genset's news releases are available on the Company's web site at genxy.com.
All figures are adjusted to the current exchange rate.
Genset, S.A.
CONDENSED CONSOLIDATED FINANCIAL DATA
(Unaudited - U.S. GAAP)
(Amounts in thousands except per share data)
STATEMENTS OF OPERATIONS
Three months ended March 31,
2001 2001 2000
US$ euros euros
Research and development revenues 725 825 5,557
Oligonucleotide sales 3,809 4,332 2,664
Total revenues 4,534 5,157 8,221
Research and development expenses (7,447) (8,468) (11,965)
Cost of goods sold (2,367) (2,691) (1,376)
Selling and marketing expenses (477) (543) (558)
General and Administrative expenses (3,020) (3,434) (3,243)
Total operating expenses
- recurring (13,311) (15,136) (17,142)
Loss from operations before
non recurring items (8,777) (9,979) (8,921)
Non recurring items (6,668) (7,583) --
Loss from operations including
non recurring items (15,445) (17,562) (8,921)
Interest income 348 396 260
Interest expense (761) (866) (131)
Foreign exchange gain (loss) 529 602 (144)
Other income (Expenses) 23 26 28
Equity in income (loss)
of affiliated companies (6) (7) (0)
Loss before income tax,
minority interests and
cumulative effect of change
in accounting principle (15,312) (17,411) (8,908)
Income tax benefit (83) (94) l,212
Minority interest (56) (63) (21)
Net loss (15,451) (17,568) (7,717)
Loss per ordinary share (1.91) (2.17) (1.02)
Weighted average number of
ordinary shares outstanding (*) 8,105 8,105 7,588
Loss per ADS
(American Depositary Share) (0.64) (0.72) (0.34)
Weighted average number of
equivalent ADSs outstanding (*) 24,315 24,315 22,764
(*) As of March 31, 2001 there were outstanding 8,104,850 ordinary shares,
or 24,315,550 equivalent ADSs
BALANCE SHEET
March 31, December 31,
2001 2001 2000 (A)
US$ euros euros
ASSETS
Cash and cash equivalents and
short-term investments 50,802 57,769 67,752
Other current assets 19,447 22,113 21,257
Total current assets 70,249 79,882 89,009
Property and equipment, net 17,358 19,740 23,716
Other assets, net 16,545 18,813 18,806
Total assets 104,152 118,435 131,531
LIABILITIES AND SHAREHOLDERS' EQUITY
Total current liabilities 21,457 24,400 20,049
Total debt and capital leases,
less current portion 53,427 60,753 60,518
Minority interest 589 670 594
Total shareholders' equity 28,679 32,612 50,370
Total liabilities and
shareholders' equity 104,152 118,435 131,531
(A) Derived from audited figures.
The financial information expressed in U.S.$ is presented solely for
the convenience of the reader and is translated from euros at the noon
buying rate in New York on March 30, 2001 which was U.S.$ 0.8794 for
each euro. |
