THE WOODLANDS, Texas, May 8 /PRNewswire/ -- The following was released today by Lexicon Genetics:
Lexicon Genetics Incorporated (Nasdaq: LEXG - news), a drug discovery company that uses gene knockout technology to define the function of genes, today reported financial results for the three-month period ended March 31, 2001.
Revenues: Lexicon's revenues for the first quarter of 2001 were $3.3 million, unchanged from the same period in 2000. Revenues for the three- month period in 2001 included access fees under our LexVision(TM) collaboration with Bristol-Myers Squibb Company, activity under our functional genomics research collaborations with pharmaceutical and biotechnology companies, and technology license fees from two of the 14 sublicensees of our gene targeting technology. Revenues in the first quarter of 2000 included subscription fees from Millennium Pharmaceuticals, Inc. under a human gene sequence database agreement that expired in April 2000, activity under functional genomics research collaborations with pharmaceutical and biotechnology companies and under an agreement with the Merck Genome Research Institute, and technology license fees.
Research and Development Expenses: Research and development expenses for the three-month period ended March 31, 2001 were $8.5 million, excluding stock-based compensation of $1.4 million. This compares to research and development expenses of $3.6 million, excluding stock-based compensation of $6.7 million, for the same period in 2000. This increase of 137 percent primarily reflects increased investments toward the scale-up of our gene knockout and functional analysis programs to determine the function of 5,000 genes over five years for the discovery of new disease targets. Consistent with this focus, we have accelerated our work to complete OmniBank®, the world's largest library of knockout mouse clones. In addition, we have increased our scientific staff to 261 people from 80 in the first quarter of 2000.
General and Administrative Expenses: General and administrative expenses for the three-month period ended March 31, 2001 increased to $2.9 million, excluding stock-based compensation of $1.3 million. This compares to general and administrative expenses of $1.3 million, excluding stock-based compensation of $5.2 million, for the first three months of 2000. This increase of 126 percent is due primarily to the addition of employees in the finance and accounting, business development and related infrastructure areas necessary to support the growing needs of our business at all levels. Approximately $600,000 of general and administrative expenses is related to our patent infringement litigation against Deltagen, Inc.
Interest Income: Interest income increased to $2.9 million in the three- month period ended March 31, 2001, from $127,842 in the same period of 2000, reflecting interest earned on the increased balances of cash, cash equivalents and marketable securities resulting from our April 2000 initial public offering.
Net Loss: Our net loss per share, including non-cash stock-based compensation related to stock options granted before our initial public offering, was $0.17 in the three-month period ended March 31, 2001, compared to a net loss per share of $0.55 in the same period in 2000. Weighted-average shares outstanding used in calculating net loss per share for the first quarter of 2001 were 48.3 million, up from 24.6 million for the first quarter of 2000 as a result of our April 2000 initial public offering and the accompanying conversion of our outstanding redeemable convertible preferred stock. Excluding the non-cash stock-based compensation charges, net loss for the three-month period ended March 31, 2001, was $5.3 million or $0.11 per share, up from a pro forma net loss of $1.5 million, or $0.04 per share, for the same period in 2000.
Cash, Cash Equivalents and Marketable Securities: As of March 31, 2001, Lexicon Genetics had approximately $192.2 million in cash, cash equivalents and marketable securities, compared to $202.7 million as of December 31, 2000.
``Our continued financial strength and business growth during the first three months of 2001 demonstrates that our infrastructure is well positioned to support the major scale-up of our gene knockout program,'' said Arthur T. Sands, M.D., Ph.D., President and Chief Executive Officer of Lexicon. ``We believe the combination of our patented technologies, world-class drug discovery team, strategically-designed genome pharmaceutical discovery center and cash resources represents significant competitive strengths that are difficult to replicate. With this infrastructure in place, we believe we are well positioned to be the first to discover the medical applications of the largest number of new pharmaceutical targets for drug discovery in the post- genome era.''
First Quarter 2001 Highlights:
Progress under LexVision Collaboration with Bristol-Myers Squibb: We delivered the second installment of gene function information for new protein targets to Bristol-Myers Squibb, triggering a payment under our LexVision collaboration. We believe LexVision will become the world's largest repository of new information on in vivo mammalian gene function for pharmaceutical discovery. Our five-year agreement with Bristol-Myers Squibb provides up to $25 million in cash payments to Lexicon, as well as future milestone and royalty payments based on products discovered using our technology.
New Functional Genomics Collaboration with Abgenix: We established a functional genomics collaboration with Abgenix, Inc., marking our second agreement with Abgenix. Under this latest agreement, we are using our patented technologies and extensive medically relevant mammalian assays to validate potential drug targets for Abgenix's discovery and development of therapeutic human antibodies. This collaboration also gives Abgenix access to our OmniBank library, which now contains more than 130,000 frozen gene knockout embryonic stem cell clones identified by DNA sequence in a relational database. Any one of these clones could unlock a future drug discovery.
Progress under Abgenix Drug Discovery Alliance: We achieved further progress under the drug discovery alliance that was established with Abgenix in July 2000, delivering the first 13 antigens for antibody development to Abgenix in the first quarter of 2001. These novel human antigens were selected from Lexicon's proprietary portfolio of novel, full-length human genes. We are using our proprietary knockout technology to determine the biological function of these genes to determine the medical relevance of the drug targets they encode. Simultaneously, Abgenix is applying its XenoMouse(TM) technology to develop fully human antibodies directed at each of these drug targets.
New Patents and Technology Licenses: We obtained two key patents that further the scope of our broad patent estate in the field of gene trapping. As of March 31, 2001, we own five U.S. patents covering our gene trapping technology and have certain exclusive rights under five U.S. patents covering our gene targeting technology. Also in the first quarter, we granted to Immunex Corporation a multi-year, non-exclusive sublicense for the use of our patented gene targeting technology for Immunex's internal research programs. This agreement provides further industry confirmation of the importance of in vivo mammalian target validation for efficient drug discovery.
Addition to Board of Directors: Robert J. Lefkowitz, M.D., was elected to the Lexicon Board of Directors. Dr. Lefkowitz is the James B. Duke Professor of Medicine, Professor of Biochemistry and a Howard Hughes Medical Institute investigator at Duke University Medical Center. His work with beta adrenergic receptors has led to significant breakthroughs in understanding the role of G protein-coupled receptors (GPCRs) in regulating heart rate, basic endocrine function, the senses of sight, smell and taste and pain tolerances. During his 35-year career, Dr. Lefkowitz has served on a number of scientific advisory boards and has consulted widely in the industry.
Genome Pharmaceutical Discovery Center: We completed the structural support and raised the walls of our Genome Pharmaceutical Discovery Center in The Woodlands, Texas. With the completion of the new facility at year-end, we will triple the size of our physical plant to approximately 300,000 square feet. We believe this facility will provide Lexicon with significant competitive advantages in speed and scale for our program to determine the function of 5,000 genes over five years for the discovery of new disease targets.
Lexicon Genetics Incorporated is a drug discovery company of the post- genome era, using gene knockout technology to define the functions of genes for the discovery of pharmaceutical products. Lexicon is using this technology to fuel drug discovery programs in cancer, cardiovascular disease, immune disorders, neurological disease, diabetes and obesity. Lexicon has established drug discovery alliances and functional genomics collaborations with leading pharmaceutical and biotechnology companies, research institutes and academic institutions throughout the world to commercialize its technology and further develop its discoveries. Additional information about the Company is available through Lexicon's corporate website, www.lexicon-genetics.com.
This press release contains ``forward-looking statements,'' including statements about Lexicon's growth and future operating results, discovery and development of products, strategic alliances, and intellectual property, as well as other matters that are not historical facts or information. These forward-looking statements are based on management's current assumptions and expectations and involve risks, uncertainties and other important factors, specifically including those relating to Lexicon's ability to achieve its operational objectives, obtain patent protection for its discoveries and establish strategic alliances, that may cause Lexicon's actual results to be materially different from any future results expressed or implied by such forward-looking statements. Information identifying such important factors is contained under ``Factors Affecting Forward-Looking Statements'' and ``Business - Risk Factors'' in Lexicon's annual report on Form 10-K for the year ended December 31, 2000, as filed with the Securities and Exchange Commission. Lexicon undertakes no obligation to update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise.
Lexicon Genetics Incorporated
Selected Financial Data
Statements of Operations Data Quarter Ended March 31,
2000 2001
(unaudited)
Revenues:
Subscription and license fees $1,623,478 $1,747,454
Collaborative research 1,644,758 1,523,584
Reagents 70,673 39,919
Total revenues 3,338,909 3,310,957
Operating expenses:
Research and development, including
stock-based compensation of $6,700,392
and $1,396,530, respectively 10,268,328 9,862,342
General and administrative, including
stock-based compensation of $5,207,916
and $1,341,784, respectively 6,506,773 4,271,140
Total operating expenses 16,775,101 14,133,482
Loss from operations (13,436,192) (10,822,525)
Interest income 127,842 2,895,891
Interest expense 109,749 81,015
Net loss (13,418,099) (8,007,649)
Accretion on redeemable convertible
preferred stock (133,854) ---
Net loss attributable to common
stockholders $(13,551,953) $(8,007,649)
Net loss per common share $(0.55) $(0.17)
Pro forma net loss per common share* $(0.36) $(0.17)
Pro forma net loss per common share,
excluding stock-based compensation* $(0.04) $(0.11)
Shares used in computing net loss per
common share 24,613,012 48,343,297
Shares used in computing pro forma net
loss and pro forma net loss,
excluding stock-based compensation,
per common share* 37,347,004 48,343,297
As of As of
Balance Sheet Data December 31, March 31,
2000 2001
(unaudited)
Cash, cash equivalents and
marketable securities $202,680,330 $192,154,055
Total assets 220,692,952 214,892,929
Deferred revenue 4,671,818 4,843,939
Deferred stock compensation (33,636,725) (30,565,636)
Accumulated deficit (54,902,713) (62,910,362)
Total stockholders' equity 207,628,459 202,540,782
* Pro forma net loss per common share excludes the effect of accretion
on redeemable convertible preferred stock and gives effect to the
conversion of outstanding redeemable convertible preferred stock
into common stock upon the closing of the initial public offering as
if such conversion occurred on the date of original issuance. |
