Valentis Announces Third Quarter Fiscal 2002 Financial Results
BURLINGAME, Calif., May 10 /PRNewswire-FirstCall/ -- Valentis, Inc. (Nasdaq: VLTS - News) today reported a net loss applicable to common stockholders for the three months ended March 31, 2002 of $11.0 million, or $0.30 per basic and diluted share, on revenue of $833,000, compared to a net loss of $10.2 million, or $0.34 per basic and diluted share on revenue of $1.0 million for the corresponding period of the prior year. The net loss applicable to common stockholders for the nine months ended March 31, 2002 was $29.6 million, or $0.92 per basic and diluted share, on revenue of $3.8 million, compared to a net loss of $29.1 million, or $0.99 per basic and diluted share, on revenue of $3.2 million for the corresponding period of the prior year.
On March 31, 2002, Valentis had $25.2 million in cash, cash equivalents and investments, compared to $33.3 million on December 31, 2001 and $37.3 million on June 30, 2001. The decrease of $8.1 million and $12.1 million in cash and investments as compared to December 31, 2001 and June 30, 2001, respectively, were attributed primarily to funding the Company's operations. This was partially offset by $12.6 million raised in an underwritten public offering in December 2001.
Research and development expenses for the quarter and nine months ended March 31, 2002 decreased to $5.6 and $18.8 million, respectively, from $6.9 and $21.6 million for the corresponding periods in fiscal 2001. The decreases were attributable primarily to savings resulting from the closure of the Company's London operations, a reduction of pre-clinical product development efforts and suspension of clinical programs in oncology.
General and administrative expenses for the quarter ended March 31, 2002, decreased by $141,000 to $1.9 million when compared to the same period in fiscal 2001. General and administrative expenses for the nine months ended March 31, 2002 increased $168,000 from the corresponding period of the prior year to $6.1 million primarily due to the addition of staff in the first half of the year to support the Company's business development efforts that was partially offset by savings resulting from the closure of our London operations and the reduction of general and administrative staff associated with our reductions in pre-clinical product development and our suspended clinical programs in oncology.
In March 2002, Valentis made a required dividend payment to holders of the Company's Series A convertible redeemable preferred stock. The dividend obligation was met through the issuance of 191,968 shares of common stock.
During the quarter, Valentis implemented a restructuring plan to better align the Company's cost structure with current market conditions. This plan significantly reduced its pre-clinical product development efforts and suspended its clinical programs in oncology. The Company's cash burn rate is projected to be approximately $6.0 million per quarter beginning in July 2002.
Valentis focuses its clinical efforts on the development of its Del-1 GeneMedicine(TM) product for peripheral arterial disease and ischemic heart disease. The Company's remaining pre-clinical efforts will be focused on the development of its proprietary GeneSwitch® system and OptiPEG(TM) technologies. Together, these programs provide Valentis three broad technology platforms from which it can develop novel products.
Benjamin F. McGraw, III, President and CEO of Valentis commented, "During the quarter, we reduced our burn rate through a significant reduction in the size of our pre-clinical group. We still believe this was a very good decision not only because it helped us reduce our burn rate during this difficult financial market but also because we believe it was fundamentally justified. We have all the products we can afford to develop for quite some time already in the clinic or on a path to the clinic."
Valentis is Converting Genomic Discoveries into Medicines(TM). The Company has three product platforms for the development of novel therapeutics: the GeneMedicine(TM), GeneSwitch® and OptiPEG(TM) platforms. The Del-1 GeneMedicine(TM) therapeutic is the lead product for the GeneMedicine(TM) platform of non-viral gene delivery technologies. Del-1 is an angiogenesis gene that is being developed for peripheral arterial disease and ischemic heart disease. The EpoSwitch(TM) therapeutic for anemia is the lead product for the GeneSwitch® platform. The EpoSwitch(TM) platform, consisting of proprietary PEGylation technologies, potentially allows for improved dosing of biopharmaceuticals. OptiPEG(TM) is being developed through licensing to partners. Additional information is available at www.valentis.com.
Statements in this press release that are not strictly historical are "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. The words "believes," "expects," "intends," "anticipates," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Factors that could affect Valentis' actual results include the need for additional capital, the early stage of product development, uncertainties related to clinical trials, and uncertainties related to patent position. There can be no assurance that Valentis will be able to develop commercially viable gene-based therapeutics or PEGylated biopharmaceuticals, that any of the Company's programs will be partnered with pharmaceutical partners, that necessary regulatory approvals will be obtained, or that any clinical trial will be successful. Actual results may differ from those projected in forward-looking statements due to risks and uncertainties that exist in the Company's operations and business environments. These are described more fully in the Valentis Annual Report on Form 10-K for the period ended June 30, 2001 and Quarterly Report on Form 10-Q for the period ended March 31, 2002, each as filed with the Securities and Exchange Commission.
Valentis, Inc.
Selected Consolidated Financial Data
Statements of Operations
(in thousands, except per share amounts)
Three months ended Nine months ended
March 31, March 31,
2002 2001 2002 2001
(unaudited) (unaudited)
Collaborative research
and development revenue $833 $940 $3,745 $2,846
Grant and other revenue -- 61 17 323
Total revenue 833 1,001 3,762 3,169
Operating expenses:
Research and
development 5,588 6,854 18,775 21,602
General and
administrative 1,946 2,087 6,089 5,921
Restructuring charge 1,725 -- 1,725 --
Amortization of
goodwill and other
intangible assets 1,433 1,433 4,300 4,300
Total operating
expenses 10,692 10,374 30,889 31,823
Loss from operations (9,859) (9,373) (27,127) (28,654)
Interest income 159 677 859 1,761
Interest expense
and other, net (182) (417) (101) (891)
Net loss (9,882) (9,113) (26,369) (27,784)
Deemed dividend (775) (649) (2,072) (830)
Dividends on
convertible
preferred stock (384) (394) (1,171) (504)
Net loss applicable
to common
stockholders $ (11,041) $ (10,156) $ (29,612) $ (29,118)
Basic and diluted
net loss per share $(0.30) $(0.34) $(0.92) $(0.99)
Shares used in
computing basic
and diluted net loss
per common share 36,370 29,545 32,137 29,459
Condensed Balance Sheets
(in thousands)
March 31, 2002 June 30, 2001
Assets (unaudited)
Cash, cash equivalents and
short-term investments $ 25,223 $ 35,833
Other current assets 959 1,062
Total current assets 26,182 36,895
Property and equipment, net 4,420 6,537
Long-term investments -- 1,439
Goodwill and other assets, net 1,078 5,378
$ 31,680 $ 50,249
Liabilities and stockholders' equity
Accounts payable, accruals and
current portion of long-term debt 6,333 $8,371
Deferred revenue -- 3,333
Long-term obligations 25,330 24,033
Common stock 185,506 173,632
Accumulated deficit (185,489) (159,120)
$ 31,680 $ 50,249
SOURCE: Valentis, Inc. |
