HAYWARD, Calif., March 4 /PRNewswire-FirstCall/ -- Kosan Biosciences Incorporated (Nasdaq: KOSN - News) today reported financial results for the quarter and year ended December 31, 2002. For the quarter, Kosan reported a net loss of $3.2 million, or $0.13 per share, compared to $5.8 million, or $0.24 per share, in the same period last year. For the year, Kosan's net loss was $20.9 million, or $0.84 per share, compared to $21.9 million, or $0.91 per share, in 2001. At December 31, 2002, cash, cash equivalents and marketable securities totaled $80.5 million compared to $90.3 million at December 31, 2001.
Kosan reported revenues of $5.5 million and $9.6 million for the quarter and year ended December 31, 2002, respectively, compared to $1.5 million and $5.2 million in the same periods in 2001, an increase of 85% year-to-year. The increase in revenues reflects new funding associated with the Company's agreement with Roche to co-develop and commercialize Kosan's lead product candidate, KOS-862 (Epothilone D), which was signed in September 2002.
Total operating expenses were $9.1 million and $33.3 million for the quarter and year ended December 31, 2002, respectively, compared to $8.1 million and $30.7 million in the same periods last year. These increases, partially offset by lower stock-based compensation, were primarily attributable to the progress of KOS-862 clinical development, currently in three Phase I clinical trials, related licensing expenses and additional staffing in support of the Company's ongoing investment in its internally funded programs.
Kosan's 2002 Milestones
2002 was an extraordinary year for Kosan as the company achieved some of its most important milestones to date:
-- Initiated multiple Phase I clinical trials for the anti-cancer
compound, KOS-862
-- Signed one of the year's most impressive deals with Roche for the co-
development and commercialization of KOS-862
-- Announced encouraging interim Phase I data for KOS-862 at both ASCO and
EORTC
-- Initiated a collaboration with the NCI for the development of a second
anti-cancer compound, 17-AAG, an analog of the polyketide geldanamycin,
currently in Phase I human clinical trials
Kosan's Financial Outlook for 2003
Kosan offers the following guidance for 2003:
-- Revenues: Kosan anticipates 2003 revenues of approximately $25.0
million, a significant portion of which is dependent on the rate of
KOS-862 clinical progress
-- Operating Expenses: Kosan expects 2003 operating expenses, excluding
stock-based compensation, in excess of $45.0 million. Such expenses
reflect the expected advancement of KOS-862 into Phase II clinical
trials in the second half of the year, and continued investment in
cancer and infectious disease-focused internal programs
-- Net Loss: Kosan expects to record a net loss of $20.0 million or less
-- Cash and Investments: Kosan expects to end 2003 with cash and
investments in excess of $65.0 million
Kosan Biosciences Incorporated is a biotechnology company that has proprietary genetic engineering technologies to develop drug candidates from polyketides, a rich source of pharmaceuticals. Kosan is currently focused on the creation of new polyketides and the improvement of existing drugs for the treatment of cancer and infectious disease.
This press release contains "forward-looking" statements, including statements related to future revenue, financial operating results, payments that may be paid to Kosan and the development of KOS-862 (Epothilone D). Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. There are a number of important factors that could cause the results of Kosan to differ materially from those indicated by these forward-looking statements, including, among others, risks detailed from time to time in the Company's SEC reports, including its Annual Report on Form 10-K for the year ended December 31, 2001, its Quarterly Report on Form 10-Q for the quarter ended September 30, 2002 and other periodic filings with the SEC. Kosan does not undertake any obligation to update forward-looking statements.
Selected Financial Information
Condensed Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
2002 2001 2002 2001
(unaudited)
Revenues:
Contract revenue $4,856 $1,079 $7,269 $3,522
Grant revenue 687 390 2,334 1,654
Total revenues 5,543 1,469 9,603 5,176
Operating expenses:
Research and development 7,409 5,407 25,596 20,081
General and administrative 961 1,048 4,276 3,929
Stock-based compensation 704 1,648 3,438 6,725
Total operating expenses 9,074 8,103 33,310 30,735
Loss from operations (3,531) (6,634) (23,707) (25,559)
Net interest income 357 825 1,853 4,676
Realized gain/(loss) on investment -- -- 990 (990)
Net loss $(3,174) $(5,809) $(20,864) $(21,873)
Basic and diluted net loss per
common share $(0.13) $(0.24) $(0.84) $(0.91)
Shares used in computing basic and
diluted net loss per common share 25,140 24,502 24,906 24,164
Condensed Balance Sheets
(in thousands)
December 31,
2002 2001
Cash, cash equivalents and
marketable securities $80,538 $90,342
Total assets $91,590 $95,812
Deferred revenue $11,771 $999
Total liabilities $20,750 $7,221
Total liabilities and stockholders'
equity $91,590 $95,812
Shares issued and outstanding 25,392 25,227
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