Cygnus Reports Second Quarter Financial Results
REDWOOD CITY, Calif., July 25 /PRNewswire/ -- Cygnus, Inc. (Nasdaq: CYGN)
today reported its financial results for the quarter ended June 30, 2002. The
Company posted a net loss of $11.5 million ($0.30 /share) for the quarter
ended June 30, 2002, compared to a net loss of $13.0 million ($0.46/share) for
the quarter ended June 30, 2001.
"The second quarter has been exciting for Cygnus, during which time we
achieved significant milestones, including marketing approval for our
second-generation GlucoWatch(R) Biographer and the launch of our
first-generation product," said John C Hodgman, Chairman, Chief Executive
Officer and President of Cygnus. "We have been receiving a very positive
reception from health care professionals in the United States from our initial
efforts introducing the first-generation GlucoWatch Biographer. The experience
in the field will further enhance our sales and marketing approach for the
second-generation product, the GlucoWatch(R) G2(TM) Biographer, which we plan
to introduce to the market shortly."
For the quarter ended June 30, 2002, Cygnus had total revenues of
$316 thousand, compared to $71 thousand for the quarter ended June 30, 2001.
Product revenues were $178 thousand and contract revenues from the National
Institutes of Health (NIH) Small Business Innovative Research (SBIR) Phase I
grant amounted to $138 thousand for the quarter ended June 30, 2002. In the
quarter, the Company shipped approximately 3,200 GlucoWatch Biographers and
66,000 AutoSensors. However, as required by Staff Accounting Bulletin No. 101
("SAB 101"), Cygnus deferred revenue and costs of product revenue related to
shipments of approximately 3,000 GlucoWatch Biographers and 40,000
AutoSensors. Based on the terms and conditions of these shipments, most of
the deferred revenue and costs of product revenue associated with these
shipments (reflected below on the Company's balance sheet as "deferred margin
on product shipments") will be recognized in the third quarter of 2002.
The Company had total costs and expenses of $11.1 million for the quarter
ended June 30, 2002, compared to $12.9 million for the quarter ended June 30,
2001. Costs of product revenues for the quarter ended June 30, 2002 were
$1.8 million and consisted of direct and indirect manufacturing costs and the
write-off of $1.1 million of excess inventory. This write-off relates to
excess first-generation Biographer inventory, caused by the
earlier-than-anticipated approval of the second-generation Biographer.
Research and development costs were $3.9 million for the quarter ended June
30, 2002, compared to $8.3 million for the quarter ended June 30, 2001.
Research and development costs decreased significantly as a result of a
reduction in research and development efforts after the receipt of FDA
approval for the GlucoWatch Biographer. Marketing, general and administrative
expenses for the quarter ended June 30, 2002 were $5.3 million, compared to
$4.6 million for the quarter ended June 30, 2001. The increase was primarily
due to the development and implementation of promotion, education and training
programs for health care professionals and patients in the United States.
Cash, cash equivalents and investments totaled $17.3 million as of
June 30, 2002.
"We have made significant advances with our focused sales and marketing
effort for the GlucoWatch Biographer," noted Craig W. Carlson, Chief Operating
Officer and Chief Financial Officer of Cygnus. Mr. Carlson highlighted the
following achievements for the second quarter ending June 30, 2002:
-- In April Cygnus received marketing approval from the FDA for its
second-generation GlucoWatch G2 Biographer;
-- Also in April the Company launched its first-generation GlucoWatch
Biographer in the United States;
-- In May the Company received a $5 million milestone payment from its
partner, Sankyo Pharma Inc.; and
-- In June at the American Diabetes Association conference Cygnus
presented clinical data showing that the GlucoWatch Biographer improves
glucose control and increases detection of hypoglycemia in children and
adolescents with Type 1 Diabetes
Mr. Carlson continued, "Our U.S. launch strategy included a significant
effort to introduce the benefits of the Biographer to health care
professionals through experience and training. The Company has distributed
approximately 5,500 Biographer samples and training units to health care
professionals since we began these programs, which have been an essential part
of our strategy to prepare the market for the launch of our second-generation
product."
Cygnus, Inc. is engaged in the development, manufacture and marketing of
new and improved glucose monitoring devices. Cygnus' products are designed to
provide more data to individuals and their physicians and enable them to make
better-informed decisions on how to manage diabetes. Cygnus' first approved
product, called the GlucoWatch(R) Biographer, and its second-generation
product are the only products approved by the FDA that provide frequent,
automatic and non-invasive measurement of glucose levels. A supplemental
pre-market approval (PMA) submission is currently under expedited review by
the FDA for use of the GlucoWatch Biographer by children and adolescents
(ages 7-17). The GlucoWatch Biographer has also received the CE mark
permitting sales in the European Union, and Cygnus is currently selling the
first-generation product in the United Kingdom and United States. Cygnus
believes its product represents the most significant commercialized
technological advancement in self-monitoring of glucose levels since the
advent, approximately 20 years ago, of finger-stick blood glucose measurement.
More information about Cygnus can be found at the corporate web site:
cygn.com . Additional information about the GlucoWatch Biographer
can be obtained by calling Cygnus' toll-free number, 1-866-GLWATCH, or by
visiting glucowatch.com . |
