NEW HAVEN, Conn., April 26 /PRNewswire-FirstCall/ -- Genaissance Pharmaceuticals, Inc. (Nasdaq: GNSC - news) today reported its financial results for the first quarter ended March 31, 2002.
For the three months ended March 31, 2002, revenues were $1.9 million, compared to $1.0 million for the first quarter last year. Operating expenses for the quarter were $10.7 million, of which $8.2 million were attributable to research and development. This compares to operating expenses of $13.0 million and research and development expenses of $9.9 million for the first quarter of 2001. The Company reported a net loss for the quarter of $9.1 million or $0.40 per share, compared to a net loss of $11.2 million or $0.49 per share for the same period last year.
Operating expenses decreased significantly from $15.0 million in the fourth quarter of 2001 to $10.7 million in the first quarter of 2002, a decrease of nearly 30 percent. This decrease reflects the completion of patient recruitment and associated costs from the STRENGTH trials as well as a continuance of reduced spending levels now that the Company's infrastructure is fully in place. The Company believes that its business model is scalable and its current cost structure will support its planned revenue increases for 2002.
As of March 31, 2002, the Company had cash, cash equivalents and marketable securities totaling $50.1 million.
"Our first quarter results reflect our heightened efforts toward commercializing our technology, while prudently managing our financial resources," said Gualberto Ruano, M.D., Ph.D., Chief Executive Officer of Genaissance. "We gained momentum in the commercial arena with a breakthrough agreement with Biogen and, with our ongoing analysis of the STRENGTH data, we are discovering HAP(TM) Markers which we believe will have important commercial value to the growing cholesterol management market."
Highlights of the quarter include:
-- Genaissance signed an agreement with Biogen, one of the world's
premiere biotechnology companies, in which Genaissance's HAP(TM)
Technology will be applied to drugs currently in Biogen's product
pipeline and to drug targets under investigation. This is the first
time Genaissance's technology will be used on a product already in
clinical development and is the first time that the technology will be
used to pair a pharmaco-genomics test with a drug for use in marketing.
The Company believes this collaboration represents a new marketing
paradigm and sets the tone for further drug specific collaborations.
-- Ongoing analyses of the STRENGTH I Study further demonstrated the
ability of HAP(TM) Technology to identify genetic markers that are
associated with the effects of statin therapy. Of the HAP(TM) Markers
examined so far, 25 were linked to drug-specific clinical responses for
simvastatin (Zocor(R)(1)), atorvastatin (Lipitor(R)(2)) or pravastatin
(Pravachol(R)(3)). The Company believes these important findings
strengthen the commercial value of its HAP(TM) Markers for the
development of pharmaceutical and diagnostic products.
-- Genaissance launched the CARING (Clozapine and Agranulocytosis
Relationships Investigated by Genetics (HAP(TM) Markers)) Study during
the quarter, which is designed to discover genomic markers for
identifying patients at risk of clozapine-induced agranulocytosis, a
potentially life-threatening depletion of white blood cells. Clozapine
is a highly effective treatment for schizophrenia but its use is
limited, in part, because of the risk of agranulocytosis and the
requirement for those on the drug to undergo repeated blood monitoring.
By discovering HAP(TM) Markers that predict which individuals will be
at risk of developing agranulocytosis, Genaissance hopes to reduce or
eliminate the need for blood monitoring so that its HAP(TM)-Clozapine
will be of benefit to more patients and, therefore, more widely
prescribed.
-- Realizing the importance and breadth of the Japanese market,
Genaissance signed an agreement with INTEC W&G Corporation, a leading
Japanese bioinformatics and advanced research business, to market
Genaissance's proprietary pharmacogenomics applications and products to
pharmaceutical, biotechnology and diagnostic companies located in
Japan. Japan is the second largest pharmaceutical market in the world
and is home to nearly 600 biopharmaceutical companies.
With respect to the full year 2002, the Company reiterates its prior revenue guidance and issues the following reduced operating expense and cash usage projections:
* Revenues for the year to be between $10 and $15 million
* R&D spending for the year to be between $30 and $32 million
* SG&A spending for the year to be between $10 and $11 million
* Projected net loss for the year to be between $30 and $33 million
* Cash usage for the year to be between $30 and $33 million
"We are pleased by the variety of deals that we have completed utilizing Genaissance's pharmacogenomics content and continue to see an increase in our business development activities," said Kevin Rakin, President and Chief Financial Officer of Genaissance. "With an established infrastructure and a growing acceptance of the value of pharmacogenomics, Genaissance is able to aggressively pursue high value business opportunities. Therefore, we anticipate our burn rate decreasing to a target of $20 million for the remaining three quarters of the year."
Genaissance will host a conference call and web cast to discuss results for the quarter as well as results from the STRENGTH I study. The call will feature Dr. Antonio Gotto, Dean, Weill Cornell Medical College and Chair of the STRENGTH Study Steering Committee. The call is scheduled for today at 11:00 a.m., Eastern Time. To participate in this call, dial 913-981-5522, confirmation code 252014, shortly before 11:00 a.m. A replay of the call will be available from 2:00 p.m., Eastern Time through midnight Wednesday, May 1st. The replay number is 719-457-0820, confirmation code 252014. The web cast can be accessed at genaissance.com .
Genaissance Pharmaceuticals, Inc. is the world leader in the discovery and use of human gene variation for the development of personalized medicines. The Company markets its technology and clinical development skills to the pharmaceutical industry as a complete solution for improving the development, marketing and prescribing of drugs. The Company also has identified candidates for development in its own pipeline of products utilizing its proprietary genetic markers. Genaissance has agreements with three of the top five pharmaceutical companies as well as one of the premier biopharmaceutical companies: AstraZeneca, Biogen, Johnson & Johnson and Pfizer. Genaissance is located in Science Park in New Haven, Connecticut. Please visit genaissance.com for additional information.
This press release contains forward-looking statements, including statements about the ability of Genaissance to apply its technologies to the development, marketing and prescribing of drugs, and the expectations as to clinical trials data. Such statements are subject to certain factors, risks and uncertainties that may cause actual results, events and performance to differ materially from those referred to in such statements, including, but not limited to, the extent to which genetic markers (haplotypes) are predictive of drug efficacy and safety, the adoption of our technologies by the pharmaceutical industry, the timing and success of clinical trials, competition from pharmaceutical, biotechnology and diagnostics companies, the strength of our intellectual property rights and those risks identified in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 7, 2002. The forward-looking statements contained herein represent the judgment of Genaissance as of the date of this release. Genaissance disclaims any obligation to update any forward-looking statement.
(1) Registered trademark of Merck & Company
(2) Registered trademark of Pfizer Inc.
(3) Registered trademark of Bristol-Myers Squibb Company
GENAISSANCE PHARMACEUTICALS, INC.
Statements of Operations
(unaudited)
(In thousands, except per share data)
Three Months Ended
March 31, March 31, December 31,
2002 2001 2001
Revenue $1,851 $997 $2,196
Operating Expenses:
Research and development 8,188 9,877 11,964
Selling, general and
administrative 2,434 2,946 2,885
Sublicense royalty obligations 7 10 26
Stock based and other
non-cash compensation 110 125 117
Total operating expenses 10,739 12,958 14,992
Loss from Operations (8,888) (11,961) (12,796)
Interest Income (Expense) (172) 769 (84)
Income Tax Benefit -- -- 1,500
Net loss attributable
to common shareholders (9,060) (11,192) (11,380)
Net loss per common shareholder,
basic and diluted $(0.40) $(.49) $(.50)
Weighted average shares
used in computing net loss per
common share, basic and
diluted 22,786 22,707 22,774
Balance Sheet Data
(in thousands)
(unaudited)
Mar. 31, 2002 Dec. 31, 2001
Cash, cash equivalents and marketable
securities $50,081 $59,673
Working capital 39,160 47,775
Total Assets 79,865 92,277
Long-term liabilities 16,314 18,150
Stockholders' equity 49,947 58,979
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