Cell Genesys Reports Second Quarter Financial Results
Monday July 28, 3:59 pm ET
SOUTH SAN FRANCISCO, Calif., July 28 /PRNewswire-FirstCall/ -- Cell Genesys, Inc. (Nasdaq: CEGE - News) reported a net loss of $19.1 million, or $0.51 per share, for the quarter ended June 30, 2003. This compares with a net income of $6.5 million, or $0.17 per share, in the same quarter of 2002, which resulted from a one-time licensing payment. Cell Genesys ended the quarter with approximately $134.8 million in cash, cash equivalents and short-term investments, including restricted cash and investments, and in addition, held approximately 7.9 million shares of its former subsidiary, Abgenix, Inc.
Following the close of the second quarter, Cell Genesys received a $28.5 million signature payment relating to a newly announced strategic alliance with Novartis AG for oncolytic virus therapies. Minimal revenue was recognized in the second quarter of 2003, compared with $31.1 million in revenue for the comparable period in 2002, which resulted primarily from a one-time payment for a gene activation licensing agreement with Transkaryotic Therapies. The company's research and development costs for the quarter were $22.6 million, compared with $17.8 million for the second quarter of 2002, an increase that can be attributed principally to the company's expanding clinical trials in both its GVAX® cancer vaccine and oncolytic virus therapy programs.
"During the quarter, we continued to make progress in advancing our lead product program -- GVAX® prostate cancer vaccine -- toward Phase 3 development and reported positive interim results from a second Phase 2 trial of the vaccine at the recent American Society of Clinical Oncology (ASCO) meeting," stated Stephen A. Sherwin, M.D., chairman and chief executive officer of Cell Genesys. "We were also pleased to announce last week the signing of a global strategic alliance with Novartis AG for our earlier stage product program for oncolytic virus therapies."
Second Quarter 2003 and Other Recent Highlights:
-- Reported interim data at the American Society of Clinical Oncology
(ASCO) Annual Meeting from the company's second Phase 2 trial of
GVAX(R) prostate cancer vaccine in patients with hormone-refractory
metastatic prostate cancer. The study, which was designed to evaluate
potential treatment regimens for Phase 3, demonstrated the safety and
clinical activity of the vaccine as shown by three independent
measurements of antitumor activity including ICTP (carboxy-terminal
telopeptide of type I collagen), a measure of the bone destruction that
occurs when prostate cancer spreads to the bone, PSA (prostate-specific
antigen), and prostate cancer-associated antibodies.
-- Reported initial data at the American Society of Clinical Oncology
(ASCO) Annual Meeting from the company's Phase 1/2 trial for GVAX(R)
cancer vaccine for multiple myeloma, a type of bone marrow cancer.
Combination therapy with transplantation and GVAX(R) myeloma vaccine
resulted in two complete responses, six partial responses, two patients
with stable disease and one patient with progressive disease, and the
three remaining patients were not yet evaluable. Two of the
responders, who had progressed after transplantation, demonstrated
antitumor activity following GVAX(R) vaccination as measured by
reductions in the myeloma-associated circulating protein. Treatment
with GVAX(R) myeloma vaccine to date has been safe and well tolerated.
-- Announced a global alliance with Novartis AG (NYSE: NVS - News) for the
development and commercialization of oncolytic virus therapies. Under
the agreement, Cell Genesys acquired exclusive worldwide rights to the
oncolytic virus therapy products and related intellectual property of
Genetic Therapy, Inc. (GTI), an affiliate of Novartis, and received a
signature payment of $28.5 million from Novartis. In exchange, Cell
Genesys has issued to Novartis 1,999,840 shares of common stock with
the result that Novartis has become the holder of approximately five
percent of Cell Genesys' currently outstanding common stock.
-- Elected Carol C. Grundfest to the position of vice president,
regulatory affairs and project management. Prior to joining Cell
Genesys, Ms. Grundfest served as executive director of project
management and strategic planning at Systemix, Inc. and GTI, Inc.
(affiliates of Novartis AG). Ms. Grundfest also held senior regulatory
positions with Roche Global Development and Syntex, as well as served
as assistant vice president, R&D at the Pharmaceutical Research and
Manufacturers of America. Ms. Grundfest brings over 20 years of
regulatory affairs and project management experience in the
pharmaceutical industry. Ms. Grundfest received an M.H.S. in
environmental health sciences from The Johns Hopkins University, School
of Public Health and a B.S. in Biology from Stanford University.
Cell Genesys is focused on the development and commercialization of novel biological therapies for patients with cancer. The company is pursuing three cancer product platforms-GVAX® cancer vaccines, oncolytic virus therapies and cancer gene therapies. Clinical trials of GVAX® vaccines are under way in prostate cancer, lung cancer, pancreatic cancer, leukemia and myeloma. Clinical programs of oncolytic virus therapies include CG7870 for prostate cancer. Preclinical studies are in progress for additional GVAX® cancer vaccines, oncolytic virus therapies and cancer gene therapies for multiple types of cancer. Cell Genesys' majority-owned subsidiary, Ceregene, Inc., is focused on gene therapies for neurologic disorders. Cell Genesys also continues to hold an equity interest in its former subsidiary, Abgenix, Inc., an antibody products company. Cell Genesys is headquartered in South San Francisco, CA and has manufacturing operations in San Diego, CA, Hayward, CA and Memphis, TN. For additional information, please visit the company's website at www.cellgenesys.com.
Cell Genesys will host its quarterly conference call to discuss events that occurred during the second quarter of 2003 at 8:30 a.m. PDT on Tuesday, July 29, 2003. Investors may listen to the webcast of the conference call live on Cell Genesys' website. A replay of the webcast will be available for at least 48 hours following the call. Alternatively, investors may listen to a replay of the call by dialing 800-475-6701 from locations in the U.S. and 320-365-3844 from outside the U.S. The call-in replay will be available for 48 hours following the call. Please refer to access number 691047.
Statements made herein about the company and its subsidiaries, other than statements of historical fact, including statements about the company's progress, results and timing of clinical trials and preclinical programs and the nature of product pipelines are forward-looking statements and are subject to a number of uncertainties that could cause actual results to differ materially from the statements made, including risks associated with the success of clinical trials and research and development programs, the regulatory approval process for clinical trials, competitive technologies and products, patents, continuation of corporate partnerships and the need for additional financings. For information about these and other risks which may affect Cell Genesys, please see the company's Annual Report on Form 10-K for the year ended December 31, 2002 dated March 31, 2003 as well as Cell Genesys' reports on Form 10-Q and 8-K and other reports filed from time to time with the Securities and Exchange Commission. The company assumes no obligation to update the forward-looking information in this press release.
SELECTED FINANCIAL INFORMATION
STATEMENT OF OPERATIONS DATA
(unaudited, in thousands except
per share data) Three Months Ended Six months ended
June 30, June 30,
2003 2002 2003 2002
Revenue under collaborative
agreements $13 $31,102 $1,051 $35,697
Operating expenses:
Research and development 22,578 17,800 43,636 34,363
General and administrative 6,930 4,348 11,971 8,006
Total operating expenses 29,508 22,148 55,607 42,369
Income (loss) from operations (29,495) 8,954 (54,556) (6,672)
Gain on sale of Abgenix, Inc.
common stock 7,288 -- 7,288 --
Interest and other income 1,350 2,165 3,281 4,582
Interest expense (1,411) (436) (1,710) (845)
Income (loss) before minority
interest and income taxes (22,268) 10,683 (45,697) (2,935)
Income (loss) attributed to
minority interest -- (175) -- 96
Income (loss) before income
taxes (22,268) 10,508 (45,697) (2,839)
Benefit (provision) for income
taxes 3,172 (4,027) 9,226 502
Net income (loss) $(19,096) $6,481 $(36,471) $(2,337)
Basic net income (loss) per
common share $(0.51) $0.18 (0.98) $(0.07)
Diluted net income (loss) per
common share $(0.51) $0.17 $(0.98) $(0.07)
Weighted average shares of common
stock outstanding - basic 37,193 35,645 37,060 35,635
Weighted average shares of
common stock outstanding
- diluted 37,193 37,855 37,060 35,635
BALANCE SHEET DATA
(in thousands) June 30, 2003 Dec. 31, 2002
(unaudited) (Note 1)
Cash, cash equivalents and short-term
investments, including restricted cash
and investments $134,840 $166,905
Receivable from Transkaryotic Therapies, Inc. -- 15,000
Investment in Abgenix common stock 82,494 64,076
Other current assets 2,211 1,340
Property and equipment, net 173,664 157,215
Other assets 799 1,312
Total assets $394,008 $405,848
Current liabilities $67,209 $63,051
Long-term obligations 112,711 104,017
Series B preferred stock 5,580 7,632
Stockholders' equity 208,508 231,148
Total liabilities and stockholders' equity $394,008 $405,848
Note 1. Derived from audited financial statements.
Source: Cell Genesys, Inc. |
