PCOP painting a rosy future for Accelrys in this report. About the only bioinformatics biz that's doing anything. Too bad it's glued to the rest of PCOP.
>>PRINCETON, N.J., Feb. 14 /PRNewswire-FirstCall/ -- Pharmacopeia, Inc. (Nasdaq: PCOP - news) today announced results for the fourth quarter and year ended December 31, 2001.
Total revenue for the 2001 fourth quarter was $41.0 million compared to $39.6 million reported for the fourth quarter of 2000. Software revenue for the 2001 fourth quarter rose to $34.2 million compared to $31.2 million reported for the 2000 fourth quarter. This software revenue growth was all organic and included a 21% increase in software revenue in the United States and Europe, Pharmacopeia's largest markets. This growth was partially offset by a 22% decline in software revenue in Asia. Drug Discovery revenue for the 2001 fourth quarter declined to $6.9 million compared to $8.3 million reported for last year's fourth quarter.
Total revenue for the year ended December 31, 2001 was $122.3 million compared to $114.4 million reported for the comparable period in 2000. Software revenue for the full year 2001, including the effects of acquisitions, rose 26% to $95.1 million as compared to $75.4 for the full year 2000. Drug Discovery revenue for the full year 2001 declined 30% to $27.2 million compared to $39.0 million reported for the comparable period in 2000. Total revenue for all periods exclude hardware revenue, the net effect of which has been reclassified as a discontinued operation. At December 31, 2001, Pharmacopeia had cash, cash equivalents and marketable securities of approximately $157 million.
Excluding charges related to acquisitions (amortization of identifiable intangibles, amortization of goodwill, write-offs of in-process research and development and discontinued transaction costs) and excluding discontinued operations, pro forma net income for the 2001 fourth quarter was $9.0 million, or $0.37 per diluted share. This compares to pro forma net income of $9.2 million, or $0.37 per share, reported for the fourth quarter of 2000. Pro forma net income for the year ended December 31, 2001 was $2.7 million, or $0.11 per share, compared to pro forma net income of $16.6 million, or $0.68 per share, reported for the comparable period in 2000.
Including charges related to acquisitions and including discontinued operations, net income for the 2001 fourth quarter was $2.8 million, or $0.12 per share. These results include discontinued transaction costs of $2.6 million, or $.10 per share, representing fees and expenses incurred in connection with the terminated merger with Eos Biotechnology. The net loss for the full year 2001, including acquisition related charges and discontinued operations, was $14.3 million, or $0.60 per share.
``While we are disappointed that our financial results fell short of the goals we set at the beginning of the year, we recognize that we were operating in a very challenging economic environment,'' said Joseph A. Mollica, Ph.D., Chairman, President, and CEO. ``However, we are encouraged that in both of our businesses, our science and technology continues to prove its utility in improving the efficiency and results of drug discovery and chemical development.
``At Accelrys,'' continued Dr. Mollica, ``by integrating the technologies, knowledge, and ideas of some of the world's most respected scientific software developers, we released several new software products in 2001. We introduced our Discovery Studio environment, including MedChem Explorer 2.0, which offers researchers easy access to powerful and validated drug design and analysis tools in a client-server environment. These and other products facilitated continuing customer relationships with almost all pharmaceutical and biotechnology companies and with many chemical companies, as well as new strategic alliances with several highly respected computer companies. Among Accelrys' significant transactions for 2001 were deals with IBM, Compaq, GlaxoSmithKline, AstraZeneca, General Motors and the U.S. Department of Energy. Activity in our various Accelrys consortia was also encouraging, with Pfizer joining our High Throughput Crystallography consortium and Genaissance Pharmaceuticals joining our Functional Genomics Consortium. At Accelrys, we will continue to focus on enhancing individual scientific applications and on integrating all of our software-related products and services.
``In our drug discovery business,'' continued Dr. Mollica, ``we grew our sample collection of potential drugs to more than 7.1 million novel small molecules - a collection we believe to be one of the largest in the world. Leveraging this collection along with our medicinal chemistry, assay development and high-throughput screening expertise, we achieved milestones in collaborations with Bristol-Myers Squibb, Progenics, and Otsuka Pharmaceutical Factory. We also expanded existing relationships with Otsuka and Organon. New research programs were initiated with Amgen, Mitsubishi-Tokyo Pharmaceuticals, Boehringer Ingelheim, Ester Neurosciences, Antigenics, Takeda, and Locomogene. By virtue of our drug discovery successes and our new collaborations, we remain confident in our ability to discover potential new drugs. In fact, our recently announced collaboration with Organon is a compelling example of the interest pharmaceutical and biotechnology companies have in accessing our unique collection of drug discovery science, technology and human know-how.''
Dr. Mollica concluded, ``In our view, the financial performance of our drug discovery business belies the power and efficiency of our capabilities. We continue to believe that our drug discovery science and technology would be better optimized by access to a greater number of drug targets, thereby increasing the output of therapeutic candidates. While we are disappointed that our merger with Eos did not work out, we recognize that there are many other ways to enhance the value of our drug discovery business. We are evaluating strategic opportunities related to this business and look forward to sharing updates as appropriate.''
The Company also provided the following financial guidance:
Accelrys' 2002 organic revenue growth is expected to be about 20% compared to organic revenue growth of 10% in 2001 and 8% in 2000. This revenue growth is expected to generate 2002 pro forma operating profits at Accelrys of $9 to $10 million, compared to $3 million in 2001. The company also anticipates that software operating profits and margins will increase further in 2003 and beyond as revenues increase.
While evaluating strategic alternatives for its drug discovery business, Pharmacopeia expects organic revenue growth of 5 to 10% in 2002. This level of growth is anticipated to result in a revenue level that is less than the business's current break-even point. In addition, the Company intends to invest in existing internal programs with the goal of out-licensing these programs in 2003. Including this strategic investment, the Company anticipates a pro forma drug discovery operating loss in 2002 of approximately $5 million, compared to an $8.5 million operating loss in 2001.
The Company expects interest income to decline in 2002 compared to 2001 by 50 to 60% entirely because of reductions that have already occurred in interest rates. On a consolidated basis, including interest and other income, 2002 pro forma net income is expected to be between $6.5 and $7.5 million, or 26 to 30 cents per share.
Details regarding Pharmacopeia's 2001 fourth quarter and full year performance as well as future financial guidance will be publicized in a conference call today. Joseph Mollica, CEO, and Bruce Myers, CFO, will host the call. Forward-looking and material information may be discussed on this conference call.
Date: Thursday, February 14, 2002
Time: 5:00 p.m. EST
Domestic Callers: (800) 360-9865
International Callers: (973) 694-6836
Webcast information can be accessed by visiting www.pharmacopeia.com
A replay of the conference call, which can be accessed by dialing toll- free (800) 428-6051, and outside the U.S. (973) 709-2089, will be available for 2 weeks. The access code for the replay is 227473. There will be a replay of the webcast that is accessible through the Pharmacopeia website as well.
Pharmacopeia (www.pharmacopeia.com) is a leader in enabling science and technology that accelerates and improves the drug discovery and chemical development processes. Pharmacopeia's drug discovery business integrates proprietary small molecule combinatorial and medicinal chemistry, high- throughput screening, in-vitro pharmacology, computational methods and informatics to discover and optimize lead compounds. Pharmacopeia's software subsidiary, Accelrys, develops and commercializes molecular modeling and simulation software for the life sciences and materials research markets, cheminformatics and decision support systems, and bioinformatics tools including gene sequence analysis. Accelrys Consulting Services provides expert assistance in the configuration, implementation and integration of a wide variety of software solutions to enable superior research and discovery. Pharmacopeia employs approximately 750 people and is headquartered in Princeton, NJ.
When used anywhere in this document, the words ``expects,'' ``believes,'' ``anticipates,'' ``estimates'' and similar expressions are intended to identify forward-looking statements. Forward-looking statements herein may include statements addressing future financial and operating results of Pharmacopeia. Pharmacopeia has based these forward-looking statements on its current expectations about future events. Such statements are subject to risks and uncertainties including, but not limited to, the successful implementation of Pharmacopeia's strategic plans, the acceptance of new products, the obsolescence of existing products, the resolution of existing and potential future patent issues, additional competition, changes in economic conditions, and other risks described in documents Pharmacopeia has filed with the Securities and Exchange Commission, including its most recent report on Form 10-K and subsequent reports on Form 10-Q. All forward-looking statements in this document are qualified entirely by the cautionary statements included in this document and such filings. These risks and uncertainties could cause actual results to differ materially from results expressed or implied by forward-looking statements contained in this document. These forward-looking statements speak only as of the date of this document. Pharmacopeia disclaims any undertaking to publicly update or revise any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
PHARMACOPEIA, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except share data)
Statements of Operations
For the Quarters For the Years
Ended December 31, Ended December 31,
2001 2000 2001 2000
Revenue:
Software license, service and
other $34,150 $31,225 $95,107 $75,401
Drug discovery services 6,873 8,335 27,196 39,035
Total revenue 41,023 39,560 122,303 114,436
Cost of revenue:
Software license, service and
other 5,595 4,302 19,046 10,901
Drug discovery services 4,630 5,235 20,411 23,100
Total cost of revenue 10,225 9,537 39,457 34,001
Gross margin 30,798 30,023 82,846 80,435
Operating costs and expenses:
Sales, general and
administrative 17,032 16,419 60,491 48,688
Research and development 8,865 8,022 34,666 26,431
Amortization of goodwill 1,999 1,702 7,639 3,838
Write-off of in-process research
and development - - - 8,740
Total operating costs and
expenses 27,896 26,143 102,796 87,697
Operating income (loss) from
continuing operations 2,902 3,880 (19,950) (7,262)
Discontinued acquisition costs (2,557) - (2,985) -
Interest and other income, net 2,411 2,409 9,082 9,194
Income (loss) from continuing
operations
before provision for income
taxes 2,756 6,289 (13,853) 1,932
Provision for income taxes 59 514 888 1,255
Net income (loss) from continuing
operations 2,697 5,775 (14,741) 677
Discontinued operations:
Income from discontinued
hardware operations 124 74 421 498
Net income (loss) $2,821 $5,849 $(14,320) $1,175
Net income (loss) per share from
continuing operations
Basic $0.11 $0.25 $(0.62) $0.03
Diluted $0.11 $0.24 $(0.62) $0.03
Net income per share from
discontinued operations
Basic $0.01 $0.00 $0.02 $0.02
Diluted $0.01 $0.00 $0.02 $0.02
Net income (loss) per share
Basic $0.12 $0.25 $(0.60) $0.05
Diluted $0.12 $0.24 $(0.60) $0.05
Weighted average shares of common
stock outstanding
Basic 23,794 23,367 23,729 22,659
Diluted 24,415 24,533 23,729 24,453
Reconciliation of Pro Forma Net Income
For the Quarters For the Years
Ended December Ended December
31, 31,
2001 2000 2001 2000
Net income (loss) $2,821 $5,849 $(14,320) $1,175
Income from discontinued hardware
operations (124) (74) (421) (498)
Charges related to acquisitions:
Discontinued acquisition costs 2,557 - 2,985 -
Amortization of identifiable
intangibles*
Included in cost of revenue 1,228 1,228 4,912 2,143
Included in sales, general and
administrative 488 454 1,887 1,165
Amortization of goodwill* 1,999 1,702 7,639 3,838
Write-off of in-process research and
development - - 8,740
Total charges related to
acquisitions 6,272 3,384 17,423 15,886
Pro forma net income $8,969 $9,159 $2,682 $16,563
Pro forma net income per share -
Diluted $0.37 $0.37 $0.11 $0.68
Weighted average shares of common
stock outstanding - Diluted 24,415 24,533 24,490 24,453
* In accordance with FAS 141 and 142, the goodwill amortization and a
portion of the amortization of identifiable intangibles will be
discontinued effective January 1, 2002
PHARMACOPEIA, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands)
Balance Sheets
December 31, December 31,
2001 2000
Cash, cash equivalents and marketable
securities $156,706 $165,178
Trade receivables, net 43,147 39,017
Other assets, net 70,545 80,571
Total assets $270,398 $284,766
Current liabilities $67,854 $70,346
Long-term liabilities 4,555 4,553
Total stockholders' equity 197,989 209,867
Total liabilities and stockholders'
equity $270,398 $284,766<<
Cheers, Tuck |
