PRINCETON, N.J., Aug. 14 /PRNewswire-FirstCall/ -- Medarex, Inc. (Nasdaq: MEDX - News) announced today its financial results for the three-month period ended June 30, 2002. During this period, Medarex reported revenues and interest and investment income totaling $12.6 million and a pro forma net loss of $17.9 million, or ($0.24) per share. The pro forma loss of ($0.24) per share excludes unusual charges of $16.3 million for the acquisition of in-process technology related to the previously announced purchase of Corixa Corporation's proprietary Ultra-Potent Toxin(TM) technology and other Corixa assets, a charge of $11.3 million to write off pre-construction costs associated with a manufacturing facility that was being planned at Medarex's Bloomsbury, NJ location and a non-cash impairment charge of $2.5 million related to a decrease in the value of our investments in the securities of certain of our corporate partners. Including these unusual charges, Medarex's actual net loss for the three-month period ended June 30, 2002 was $48.0 million or ($0.65) per share. These results compare with revenues and interest income totaling $13.9 million and net income of $4.3 million, or $0.06 per share, for the three-month period ended June 30, 2001.
During the three-month period ended June 30, 2002, research and development (R&D) expenses increased $13.9 million, from $4.5 million to $18.4 million, as compared to the second quarter of 2001. The increase in R&D is primarily attributable to outside funding of research and additional personnel, as well as other related costs to support clinical development of Medarex's product pipeline. During the three-month period ended June 30, 2002, general and administrative (G&A) expenses increased $2.3 million, from $3.5 million to $5.8 million, as compared to the second quarter of 2001. The increase is primarily attributable to increased personnel costs, consultant expenses and facility costs. During the three-month period ended June 30, 2002, other expenses included a $2.5 million increase in equity in net loss of affiliate from $1.2 million to $3.7 million, as compared to the second quarter of 2001, primarily as a result of the continued increased research and development efforts of Genmab A/S. This latter charge reflects Medarex's share of Genmab's net loss during this period. Medarex expects its expenses to increase as it continues to develop its therapeutic products and anticipates that the Company's equity in net loss of affiliate will also increase due to Genmab's publicly stated intentions to increase its own research and development expenses.
In May 2002, Medarex acquired certain assets of Corixa for $21.4 million, including transaction costs. Based upon an independent third party valuation, $16.3 million of this amount was charged to operations as acquisition of in-process technology in the second quarter of 2002.
In addition, during the second quarter of 2002, Medarex made a determination to delay indefinitely the planned construction of a large-scale manufacturing facility at the Bloomsbury location. As a result of this decision, Medarex recorded a charge of $11.3 million, representing the write-off of design, engineering and other pre-construction costs relating to the Bloomsbury facility. To address its anticipated late-stage clinical and commercial manufacturing requirements, Medarex plans to pursue supply agreements with third party manufacturers with available capacity to meet internal Medarex production timetables. Furthermore, Medarex has expanded its existing clinical manufacturing capacity in its Annandale, NJ facility, which it expects will meet all near-term production demands. During the second quarter of 2002, Medarex also completed renovation of its Bloomsbury development facility which currently accommodates approximately 150 employees for antibody research, development and manufacturing.
Medarex ended the second quarter of 2002 with approximately $402 million in cash, cash equivalents and marketable securities as compared to approximately $428 million in cash, cash equivalents and marketable securities at the end of the first quarter of 2002. This decrease in cash, cash equivalents and marketable securities was primarily attributable to the funding of the Company's operations for the quarter and its capital expenditures for facilities and equipment. In addition, Medarex holds equity investments in corporate partners on both an equity and cost basis. Such holdings as of June 30, 2002 totaled approximately $128.3 million.
Significant Medarex events during the second quarter of 2002 include:
* Presenting at the 2002 American Society of Clinical Oncology meeting
promising Phase I/II clinical trial data for MDX-010 in metastatic
melanoma and hormone refractory prostate cancer where tumor
reductions were observed after a single dose, including decreases in
tumor volume greater than 90% and 60% each lasting over five months
in two of the seventeen melanoma patients;
* Filing an IND to initiate Phase I clinical trials for MDX-060, a
fully human antibody targeting CD30 positive lymphomas, including
Hodgkin's Disease and anaplastic large cell lymphoma;
* Acquiring from Corixa both the Ultra-Potent Toxin technology for
creating antibody-toxin conjugates as well as certain preclinical
product development programs;
* Enhancing our clinical expertise with the appointment of Israel
Lowy, M.D., Ph.D., formerly an Assistant Professor of Medicine and
Microbiology with Mount Sinai School of Medicine, as our Director of
Infectious Disease; and
* Announcing a partnership with IDM S.A. to combine Cell Drugs(TM)
with Medarex's MDX-010 for cell therapy programs.
"We are pleased with the progression of our clinical programs and business strategy and expect the momentum of our product development efforts to continue as we pursue our goal of becoming one of the most successful biopharmaceutical companies in the industry," said Donald L. Drakeman, President and CEO of Medarex.
Medarex will hold a live audio webcast and conference call to discuss earnings and other business matters at 9:00 AM Eastern time on Wednesday, August 14, 2002. To access the call live, please dial 800-915-4836 within the U.S. or 973-317-5319 outside the U.S. The call will also be broadcast live via the Internet through the Events page in the Investor Relations section on Medarex's website at medarex.com. Investors interested in listening to the webcast should log on before the call begins in order to download any software required. An archive version will be available on the Medarex website for 14 days following the webcast. An audio replay will be available until midnight Eastern time, August 28, 2002. To access the archive, please dial 800-428-6051 within the U.S. or 973-709-2089 outside the U.S. and enter passcode 255133.
Medarex is a biopharmaceutical company focused on the discovery and development of therapeutics to treat life-threatening and debilitating diseases. Medarex's UltiMAb Human Antibody Development System(SM) is a unique combination of human antibody technologies that the Company believes enables the rapid creation and development of fully human antibodies to a wide range of potential disease targets for therapeutic antibody products, including products for the treatment of cancer, inflammation, autoimmune and infectious diseases. Medarex's product pipeline is based on a variety of therapeutic antibody products developed through the use of its UltiMAb technology. Medarex creates and develops fully human antibodies for itself and others, offering a full range of antibody related capabilities, including pre-clinical and clinical development supported by cGMP manufacturing services. For more information about Medarex, visit its Web site at medarex.com.
Except for the historical information presented herein, matters discussed herein may constitute forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Statements that are not historical facts, including statements preceded by, followed by, or that include the words "potential"; "believes"; "anticipates"; "intends"; "plans"; "expects"; "estimates"; "could"; or similar statements are forward-looking statements. Medarex disclaims, however, any intent or obligation to update these forward-looking statements. Risks and uncertainties include risks associated with product discovery and development as well as risks detailed from time to time in Medarex's public disclosure filings with the U.S. Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K for the fiscal year ended December 31, 2001 and subsequent Quarterly Reports on Form 10-Q. There can be no assurance that such development efforts will succeed, that such products will receive required regulatory clearance or that, even if such regulatory clearance were received, such products would ultimately achieve commercial success. Copies of Medarex's public disclosure filings are available from its investor relations department.
Medarex®, the Medarex logo, UltiMAb(TM), Ultra-Potent Toxin(TM) and UltiMAb Human Antibody Development System(SM) are trademarks and service marks of Medarex, Inc. All rights are reserved.
Cell Drugs(TM) is a trademark of IDM S.A. All rights are reserved.
MEDAREX, INC.
Consolidated Statements of Operations
(unaudited)
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
Sales $576 $190 $2,984 $256
Contract and license revenues 7,508 8,023 15,871 16,877
Total revenues 8,084 8,213 18,855 17,133
Costs and expenses:
Cost of sales 329 106 1,806 134
Research and development 18,361 4,496 35,615 12,556
General and administrative 5,778 3,509 11,196 7,111
Write-off of facility costs 11,266 -- 11,266 --
Acquisition of in-process
technology 16,312 -- 16,312 --
Operating income (loss) (43,962) 102 (57,340) (2,668)
Equity in net loss of affiliate (3,676) (1,182) (7,265) (1,759)
Interest and investment income 4,470 5,691 9,416 12,462
Impairment loss on investments (2,491) -- (4,091) --
Interest expense (2,309) (126) (4,527) (127)
Income (loss) before provision
for income taxes (47,968) 4,485 (63,807) 7,908
Provision for income taxes -- 150 -- 300
Net income (loss) $(47,968) $4,335 $(63,807) $7,608
Basic net income (loss) per share $(.65) $.06 $(.86) $.10
Diluted net income (loss) per share $(.65) $.06 $(.86) $.10
Weighted average number of common
shares outstanding during the year
- basic 74,269 73,938 74,141 73,898
- diluted 74,269 75,568 74,141 75,540
Condensed Consolidated Balance Sheets
(In thousands)
June 30, December 31,
2002 2001
(unaudited) (1)
Cash, cash equivalents and marketable
securities $402,126 $466,952
Other current assets 15,754 24,860
Property, buildings and equipment, net 84,818 79,860
Investments in, and advances to
affiliate and partners 128,299 128,084
Other assets 24,692 20,671
$655,689 $720,427
Current liabilities $33,834 $44,486
Other liabilities 15,264 18,379
Convertible subordinated notes 175,000 175,000
Shareholders' equity 431,591 482,562
$655,689 $720,427
(1) Derived from the December 31, 2001 audited financial statements. For
further information, refer to the financial statements and footnotes
there to included in Medarex's annual report on Form 10-K for the year
ended December 31, 2001. |
