NEW HAVEN, Conn., Feb. 12 /PRNewswire-FirstCall/ -- Genaissance Pharmaceuticals, Inc. (Nasdaq: GNSC - News) today reported its financial results for the fourth quarter and year ended December 31, 2002.
For the quarter ended December 31, 2002, revenue was $2.6 million compared to $2.2 million for the fourth quarter of 2001. Operating expenses for the quarter decreased 59% to $6.1 million, of which $4.3 million was attributable to research and development. This compares to operating expenses of $15.0 million and research and development expenses of $12.0 million in the fourth quarter of 2001. Genaissance reported a net loss for the quarter ended December 31, 2002 of $5.6 million, or $0.24 per share, compared to a net loss of $11.4 million, or $0.50 per share, for the fourth quarter of 2001. In the quarter ended December 31, 2002, the Company recognized, as an expense, $1.8 million of remaining interest calculated in accordance with the agreements that Genaissance has with its two largest lease creditors. This interest expense was recorded as a result of their claims of default, which were previously disclosed by the Company. Excluding this charge, the net loss and loss per share for the fourth quarter of 2002 were $3.8 million and $0.17 per share, respectively.
Revenue for the year ended December 31, 2002 increased 52% to $8.1 million from $5.3 million for the same period of 2001. Operating expenses for the year 2002 totaled $38.7 million. Exclusive of the $6.0 million impairment charge in the second quarter, operating expenses in 2002 decreased 44% to $32.7 million, with $23.8 million attributable to research and development. This compares to operating expenses of $58.3 million and research and development expenses of $46.0 million for the year ended December 31, 2001. Genaissance reported a net loss for the year ended December 31, 2002 of $33.3 million, or $1.46 per share, compared to a net loss of $47.6 million, or $2.09 per share, for the year ended December 31, 2001. The decrease in research and development expenses is primarily due to completing the majority of the STRENGTH clinical trials in 2001 and reduced spending on reagents, payroll and other general expenditures, primarily resulting from the Company's cost savings and restructuring program announced in August 2002.
As of December 31, 2002, Genaissance had cash, cash equivalents and marketable securities totaling $34.2 million.
"2002 was both challenging and productive for Genaissance. We are now a leaner, yet stronger organization, in tune with the needs of the pharmaceutical industry and squarely focused on commercialization," said Kevin Rakin, President and Chief Executive Officer of Genaissance Pharmaceuticals. "Our revised business plan, launched in the second half of the year, has yielded gratifying results with the recent signing of four new collaborations, solidifying our leadership position in drug response pharmacogenomics. We are especially pleased with the substantial reduction in our operating cash burn in the fourth quarter and are entering 2003 with our business clearly on track for near term revenue growth and for building a long term strategic role in the industry."
Recent highlights include:
Existing Collaborations:
* Genaissance achieved a milestone with Johnson & Johnson Pharmaceutical
Research & Development (J&JPRD), the Company's first HAP(TM)
Technology partner, which demonstrates the success of Genaissance's
technology in identifying meaningful associations between genetic
variation and clinical observations. Genaissance continues to work
with J&JPRD on integrating the Company's pharmacogenomics technology
into J&JPRD's product development efforts.
* Genaissance and Pfizer extended their agreement through August 2004 to
allow Pfizer to gain non-exclusive access to selected portions of the
Company's HAP(TM) Database.
Business Development:
* Genaissance announced four new agreements during the past few months,
including a drug-specific collaboration with Pharmacia. Under the
terms of the agreement, Pharmacia is licensing components of
Genaissance's DecoGen(R) Informatics System for use in their drug
development process and Genaissance is applying its HAP(TM)
Technology to clinical trial samples from Pharmacia.
* Genaissance signed a multi-year HAP(TM) Technology Partnership
agreement with Millennium Pharmaceuticals. Millennium
non-exclusively licensed Genaissance's technology for use in internal
and partnered drug discovery and development programs. Under the
terms of the agreement, Millennium will pay Genaissance license fees
and Genaissance will have certain rights to support Millennium's DNA
biomarker and pharmacogenomics efforts.
* Genaissance recently announced its first commercial agreement
resulting from the Company's pharmacogenomics research. Genaissance,
in partnership with the Diagnostics Division of Bayer HealthCare LLC,
a member of the Bayer Group, will develop diagnostic tests that
determine adverse drug response and efficacy response to existing
drug classes as well as to newly developed drug products.
Genaissance will receive royalties and the rights to perform these
diagnostic tests in the Company's CLIA-licensed genotyping
laboratory. This partnership could generate the first products to be
developed using pharmacogenomics, with the potential for an initial
diagnostic product to be available in 2005. Genaissance also intends
to pursue additional collaborations around the Company's
pharmacogenomics research data.
* Genaissance entered into a license agreement with BD (Becton,
Dickinson and Company). Under the terms of the agreement, BD will
provide certain technologies, equipment, reagents and training on the
development of diagnostic tests in exchange for certain royalty
payments. This agreement provides Genaissance with the platform to
offer its pharmaceutical partners validation studies and diagnostic
tests, conducted in the Company's CLIA-licensed genotyping
laboratory, to support the marketing of drugs.
"We are pleased by the positive momentum that has occurred over the past few months. In addition, another encouraging development for the growth of our business is the FDA's recent announcement that the agency will be providing guidance on the use of pharmacogenomics in drug development," said Mr. Rakin. "Our focus remains on completing deals and thereby continuing to reduce our burn rate so as to ensure a fiscally and strategically sound company for the long term."
For the fiscal year 2003, Genaissance issues the following guidance:
* Revenues to be between $10 and $12 million;
* Operating expenses to be between $25 and $26 million, including
approximately $7.5 million of non-cash depreciation expense; and
* Net loss to be between $14 and $16 million.
As previously announced, Genaissance will host a conference call to discuss these financial results today at 10:00 am, Eastern Standard Time. To participate in this call, dial 719-457-2657, confirmation code 661427, shortly before 10:00 am. A replay of the call will be available from 1:00 pm, Eastern Standard Time through midnight Tuesday, February 18, 2003. The replay number is 719-457-0820, confirmation code 661427... |
