HGSI 3Q Results:
hgsi.com
HUMAN GENOME SCIENCES REPORTS FINANCIAL RESULTS FOR THIRD QUARTER OF 2001
ROCKVILLE, Maryland — October 25, 2001 -- Human Genome Sciences, Inc. (Nasdaq: HGSI) today announced financial results for the three and nine months periods ended September 30, 2001.
For the quarter ended September 30, 2001, the Company reported a net loss of $24.9 million, or $0.19 per share. This compares to an actual net loss for the year earlier period of $148.9 million, or $1.35 per share, which includes the one-time write-off of $134.1 million, or $1.21 per share, of purchased in-process research and development resulting from Human Genome Sciences’ acquisition of Principia Pharmaceutical Corporation. Excluding this one-time charge, the pro forma net loss for the year earlier period was $14.9 million, or $0.14 per share. The increase in the net loss over the year earlier pro forma loss is due primarily to expansion of on-going clinical trials, continued development of preclinical drugs and an increase in manufacturing operations. Total revenues for the current quarter were $1.6 million as compared to total revenues of $6.3 million for the year earlier period. The year earlier revenues have been restated in accordance with the implementation of SEC Staff Accounting Bulletin (SAB) No. 101, retroactive to January 1, 2000. The decrease in revenues is due primarily to the expiration of the exclusive aspects of the Company’s Human Gene Consortium on June 30, 2001, which completed the Consortium members’ initial payment obligations and opened the possibility of new partnerships and alliances.
For the nine months ended September 30, 2001, the Company reported an actual net loss of $61.9 million, or $0.49 per share. This compares to the actual net loss for the year earlier period of $237.8 million, or $2.21 per share. The pro forma net loss for the nine months ended September 30, 2001, was $58.0 million, or $0.46 per share, which excludes debt conversion expenses of $3.9 million, or $0.03 per share, associated with the conversion of $28.6 million of convertible notes to equity. This compares to the pro forma net loss of the year-earlier period of $44.7 million, or $0.41 per share, which excludes the one-time acquisition write-off, noted above, of $134.1 million, or $1.25 per share, one-time expenses of $50.8 million, or $0.47 per share, associated with the conversion to equity of $318.3 million convertible notes and the $8.3 million, or $0.08 per share, cumulative effect of a change in accounting principle in accordance with the implementation of SAB No. 101, retroactive to January 1, 2000. Total revenues for the current nine-month period were $12.2 million, as compared to $16.8 million for the year earlier period.
Operating costs increased during the three- and nine-month periods as compared to the year earlier periods primarily due to increased investment in the development of preclinical and clinical drugs. Operating costs also increased due to expanded operations at the Manufacturing and Process Development Facility, increased patent-related activities and costs associated with the relocation and operations of Principia Pharmaceutical Corporation.
At September 30, 2001, cash and short-term investments totaled $1.73 billion, including $69.5 million of restricted investments. This compares to $1.77 billion, including $12.3 million of restricted investments, at December 31, 2000.
At September 30, 2001, there were approximately 127.8 million shares of Human Genome Sciences common stock outstanding.
William A. Haseltine, Ph.D., Chairman and Chief Executive Officer, said, "One year ago, Human Genome Sciences had three drugs in clinical trials for five indications. Today, we have five drugs in clinical trials for multiple indications. These drugs come from our own technology, which continues to be a rich source for new drug discoveries and development. We continue to make excellent progress towards our strategic objective to bring new human protein and antibody drugs to patients to address previously unmet medical needs."
Steven C. Mayer, Senior Vice President and Chief Financial Officer, said, "We are pleased to maintain a strong cash balance that enables Human Genome Sciences to support expanded drug development activities as well as facilities expansion and acquisition to support drug development and commercialization."
HIGHLIGHTS:
PRODUCTS
Human Genome Sciences currently has five drugs in ongoing human clinical trials. They are: repifermin for venous ulcers, mucositis and ulcerative colitis; mirostipen for chemotherapy-induced neutropenia and thrombocytopenia; BLySä for treatment of common variable immunodeficiency and immunoglobulin-A deficiency; Albuferonä for treatment of hepatitis C infection; and Albutropinä for adult growth hormone deficiency. Highlights during the quarter included:
Repifermin: Human Genome Sciences announced that a Phase 2 clinical trial was initiated to examine the safety and preliminary efficacy of repifermin for treatment of mucositis in multiple myeloma patients undergoing chemotherapy prior to autologous hematopoietic stem cell transplantation. The Company also announced that it has completed enrollment of a Phase 2A clinical trial evaluating repifermin as a treatment for mucositis in patients who undergo chemotherapeutic conditioning regimens for autologous hematopoietic stem cell transplantation. Results of this double-blind, placebo-controlled, dose-escalation clinical study will be presented at the American Society of Hematology (ASH) meeting in early December.
Mirostipen: Human Genome Sciences completed patient enrollment in two Phase 2 clinical trials evaluating mirostipen (Myeloid Progenitor Inhibitory Factor, MPIF) as a treatment for chemotherapy-induced neutropenia and thrombocytopenia. These trials are evaluating mirostipen's safety, optimal dosing schedule and preliminary efficacy in patients receiving established chemotherapy regimens as part of their treatment for breast, small cell lung and ovarian cancers. The Company plans to submit the Phase 2 results for presentation at the May 2002 meeting of the American Society of Clinical Oncology (ASCO).
BLyS: Human Genome Sciences announced that the U.S. Food and Drug Administration (FDA) has approved its Investigational New Drug Application to begin clinical trials of BLyS (B lymphocyte stimulator) as a treatment for patients with an immune disorder known as IgA (immunoglobulin-A) deficiency. The Company is now proceeding with a planned Phase 1 human clinical trial for BLyS in this indication. Human Genome Sciences also received approval from the FDA to begin manufacturing BLyS in E. coli, which will allow the Company to increase production scale to support the needs of the clinical program and, ultimately, to supply commercial needs.
Albutropin: Human Genome Sciences began enrollment of a Phase 1 clinical trial for Albutropin in adult growth hormone deficiency.
PARTNERSHIPS
One of Human Genome Sciences’ partners, GlaxoSmithKline, has commenced Phase 1 human clinical trials of a new compound, Lp-PLA2 inhibitor, for cardiovascular disease. Human Genome Sciences is entitled to receive clinical development milestone payments for compounds discovered by GlaxoSmithKline through the use of Human Genome Sciences’ technology. Human Genome Sciences received a milestone payment during the quarter in recognition of these trials and expects to receive additional milestone payments if the Lp-PLA2 inhibitor moves through clinical development into registration and launch. Human Genome Sciences also will receive royalties on sales if the drug is commercialized. In addition, Human Genome Sciences has an option to co-promote an approved drug in the North American and European markets.
PEOPLE
Human Genome Sciences is expanding its employee population, principally in the areas of clinical development and manufacturing. At the start of 2001, the Company had approximately 650 employees. At the end of this year, the Company projects that it will have approximately 1,000 employees. Currently, Human Genome Sciences has approximately 900 employees.
During the quarter, Ellen S. Baron, Ph.D., joined Human Genome Sciences as Senior Vice President, Business Development. She reports directly to William A. Haseltine, Ph.D., Chairman and Chief Executive Officer, and is a member of the Company’s Operating Committee. She is responsible for growing and developing strategic alliances, partnerships and acquisitions needed to build a global, fully integrated biopharmaceutical company. Dr. Baron has more than twenty years of experience in the pharmaceutical industry including expertise in translating basic science into commercial products.
PATENT PORTFOLIO
Human Genome Sciences continues to increase its intellectual property estate. During the quarter, the Company received 12 patents from the U.S. Patent & Trademark Office. The Company has filed patent applications on a large number of human gene-based inventions and patent applications describing a significant number of these inventions have been published, placing their contents into the public domain. Currently, Human Genome Sciences holds 188 U.S. patents on human gene based inventions.
CAPITAL PROJECTS
Shortly after the close of the quarter, Human Genome Sciences broke ground for its first large scale manufacturing facility. The facility, located in Rockville, Maryland, will be capable of producing several different types of drugs, including bacterial and mammalian proteins, fusion proteins and human antibodies, at any one time.
Human Genome Sciences currently occupies approximately 650,000 square feet of manufacturing, laboratory and office space in 11 buildings in Rockville, Maryland.
FINANCIAL
Human Genome Sciences provides the following guidance regarding financial results for the remainder of 2001:
The Company anticipates that research and development expenses will increase approximately 50 to 70 percent from 2000 levels as it continues to expand the number of clinical trials for its drugs now in clinical trials, increase the number of its drugs in clinical trials, expand the operations of its manufacturing facilities and increase investment in fusion protein technology. Human Genome Sciences expects general and administrative expenses to increase by 40 to 50 percent from prior year levels as it continues to expand its patent portfolio, form new partnerships and increase its employee base by approximately 50 percent. HGS expects to earn interest income of approximately $75.0 million on its cash balances during 2001, net of interest expense. Overall, the Company anticipates a net loss of $85.0 to $95.0 million, excluding non-recurring charges, or $0.67 to $0.75 per share, based on 127.0 million shares outstanding.
GENERAL INFORMATION
Individuals interested in repifermin or chronic venous ulcer clinical trials are encouraged to contact Human Genome Sciences' Venous Ulcer Information Line at 888/601-9956. Individuals interested in BLyS, mirostipen, Albuferon, Albutropin or clinical trials for mucositis, ulcerative colitis, common variable immunodeficiency, immunoglobulin A deficiency, chemoprotection of hematopoietic stem cells, hepatitis C infection or growth hormone deficiency are encouraged to contact Human Genome Sciences at 301/610-5790, extension 3550, or via the Internet at www.hgsi.com.
Human Genome Sciences is a company with the mission to treat and cure disease by bringing new gene-based drugs to patients.
HGS, Human Genome Sciences, BLyS, Albuferon and Albutropin are registered trademarks of Human Genome Sciences, Inc. For additional information on Human Genome Sciences, Inc., visit the Company’s web site at www.hgsi.com. Copies of HGS press releases are also available by fax 24 hours a day at no charge by calling 800/758-5804, ext. 121115.
This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements are based on Human Genome Sciences’ current intent, belief and expectations. These statements are not guarantees of future performance and are subject to certain risks and uncertainties that are difficult to predict. Actual results may differ materially from these forward-looking statements because of the Company’s unproven business model, dependence on new technologies, uncertainty and timing of clinical trials, ability to develop and commercialize products, dependence on collaborators for services and revenue, substantial indebtedness, intense competition, uncertainty of patent and intellectual property protection, dependence on key management, uncertainty of regulation of products, dependence on key suppliers, the impact of future alliances or transactions and other risks that may be described in the Company’s filings with the Securities and Exchange Commission. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today’s date. Human Genome Sciences undertakes no obligation to update or revise the information contained in this announcement whether as a result of new information, future events or circumstances or otherwise. |
