deCODE genetics Announces Full-year 2005 Financial Results
Monday March 6, 4:08 pm ET
Advancing the Development of New Drugs for Heart Attack, Peripheral Artery Disease, Asthma and Pain
Executing On Strategy to Capture Maximum Value From Focused Investment In R&D
REYKJAVIK, Iceland, March 6 /PRNewswire-FirstCall/ -- deCODE genetics (Nasdaq: DCGN - News) today announced its consolidated financial results for the year ended December 31, 2005. A conference call to discuss the year's results and recent operating highlights will be webcast live tomorrow, Tuesday, March 7, at 8:00am EST/1:00 pm GMT (details below).
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Revenue for the year ended December 31, 2005 was $44.0 million, versus $42.1 million for the full year 2004. At December 31, 2005, the company had $12.3 million in deferred revenue, which will be recognized over future reporting periods.
Net loss for the year ended December 31, 2005 was $62.8 million, compared to $57.3 million for the full year 2004. The principal factor in this increase is higher research and development expense related to clinical trials and preclinical development work for the company's lead drug development programs. Basic and diluted net loss per share was $1.17 for the full year 2005, compared to $1.07 for the full year 2004. At the close of 2005, the company had approximately 54.7 million shares outstanding.
At December 31, 2005, the company had $155.6 million in cash and investments, compared to $198.3 million, including $6.0 million in restricted cash, at December 31, 2004.
Research and development expense for proprietary programs was $43.7 million for the full year 2005, compared to $24.9 million for the full year 2004. This increase is the result principally of costs associated with the conduct of clinical trials and preclinical work in heart attack, peripheral artery disease (PAD), and pain, as well as a portion of the costs relating to the Phase II clinical trial in asthma deCODE is conducting under a drug development alliance agreement with a third party.
Selling, general and administrative expenses for the full year 2005 were $20.1 million, compared to $20.2 million for 2004.
"deCODE is developing new drugs for some of the biggest indications in medicine. Building on the work of the past year, we are now preparing to begin the Phase III trial for DG031 for the prevention of heart attack, are concluding our Phase II trial in asthma, and have just announced encouraging results from our Phase I program for DG041 in peripheral artery disease. We are also making swift progress in our preclinical work on a follow-on compound for the prevention of heart attack and in an exciting program in pain. Hence by the end of this year we expect to have five compounds in clinical trials, compounds with a medical and market potential which I believe set us apart from virtually every other company of our size," said Kari Stefansson, CEO of deCODE.
"The success of our strategy is founded upon our leadership in human genetics and the exceptional quality of the chemistry and downstream development teams that are turning our discoveries into deCODE drugs. Our financial results demonstrate that we are generating significant value from the investment in our programs, with an operating structure that has enabled us to channel a growing proportion of our financial resources into our drug development effort. We are accelerating value creation through our drug development pipeline and are committed to capturing that value for our shareholders," said Kari Stefansson, CEO of deCODE.
Fourth quarter 2005 results
Revenue for the quarter ended December 31, 2005 was $9.8 million, compared to $11.2 million for the same period a year ago. Net loss for the fourth quarter 2005 was $21.1 million, compared to $19.4 million for the fourth quarter 2004. This increase was the result principally of the increase in research and development expense associated with the advancement of the company's drug development programs. Research and development expense for proprietary programs increased to $13.7 million for the fourth quarter 2005 from $8.7 million for the same period in 2004. For the fourth quarter 2005, selling, general and administrative expenses were $6.4 million versus $6.0 million for the 2004 period.
Company highlights over the past year include:
Drug Discovery and Development
-- Heart attack: DG031. deCODE is currently preparing to commence a
Phase III outcome trial for DG031, the company's lead developmental
compound for the prevention of heart attack. The trial is being
designed under a Special Protocol Assessment with the US Food and
Drug Administration (FDA). deCODE plans to focus the multicenter study
on African Americans heart patients who carry the HapK variant of the
gene encoding the leukotriene A4 hydrolase (LTA4H). deCODE published
its discovery of the link between HapK and increased risk of heart
attack in November. African Americans with the HapK variant are at a
more than a two and a half times greater risk of heart attack than are
controls. HapK, like the at-risk variants of FLAP, the target of
DG031, appears to confer increased risk of the disease by increasing
the production of leukotriene B4 (LTB4). LTB4 is a potent driver of
inflammation produced in atherosclerotic plaques. In Phase II trials
completed last year, DG031 was shown to be well tolerated at all doses
tested and to reduce the production of LTB4 in a dose-dependent
manner. By focusing the Phase III trial on those at highest risk
through the pathway targeted by DG031, deCODE believes it can conduct
a small and highly sensitive trial with the highest possible
likelihood of success. deCODE plans to commence this trial in the
second quarter of 2006.
-- Heart attack: DG051. We are conducting advanced preclinical work on an
inhibitor of the LTA4H as a follow-on compound for the prevention of
heart attack. In our preclinical studies this compound, DG051, has
been shown be a potent inhibitor of LTA4H, is orally bioavailable and
should allow for once-a-day oral dosing, and appears to have minimal
potential for drug-drug interaction. We expect to file an IND for
DG051 by mid-year 2006.
-- PAD: DG041. In February this year we concluded the Phase I clinical
program for DG041, our compound for the treatment of peripheral artery
disease (PAD). DG041 is a novel, first-in-class, orally-administered
small molecule inhibitor of the EP3 receptor for prostaglandins E2
(PGE2), developed entirely through deCODE's drug discovery
capabilities. deCODE identified EP3 as a target in PAD through its
population genetics research, which linked variants in the gene
encoding EP3 to increased risk of the disease. Nearly 200 healthy
subjects were exposed to DG041 in the Phase I program, at doses up to
1600mg/day for seven days. The results of these studies showed DG041
to be well-tolerated, without any drug-related serious adverse events
noted, and demonstrated that DG041 effectively inhibits platelet
aggregation in a dose-dependent manner without increasing bleeding
time. We expect to begin a Phase II clinical trial in the first half
of 2006.
-- Asthma. We are conducting a Phase II clinical trial in asthma under
a drug development alliance with another company. The compound,
developed by this third party originally for a different indication,
is an inhibitor of the MAP3K9 kinase, the product of a gene deCODE has
linked to risk of asthma. The study is examining safety and
tolerability, as well as improvement in lung function and reduction in
airway inflammation. deCODE expects this trial to conclude in the
first quarter of 2006.
-- Pain: DG061. The recent identification of increased cardiovascular
risk associated with selective COX-2 inhibitors and other non-
selective anti-inflammatory drugs (NSAIDs) has created an urgent need
for new, non-opiate based drugs for treating acute and chronic pain.
Exploiting its drug discovery work on inhibitors of the EP3 receptor
for prostaglandins E2, deCODE is bringing forward a lead preclinical
candidate, DG061, to meet this need. Preclinical studies of DG061
demonstrate that it is orally active and efficacious in an animal
model for pain. Moreover, by targeting EP3 it may be possible to avert
the risk of cardiovascular events and gastric ulceration that
accompany the long-term use of selective COX -2 inhibitors and other
NSAIDs. deCODE expects to file an IND on DG061 in 2006.
Target Discovery
-- Heart attack. In November, the company published its discovery of a
variant in the gene encoding LTA4H conferring increased risk of heart
attack. The link between the variant, known as HapK, and increased
risk of heart attack, first made in Iceland, was confirmed in studies
of three cohorts in the United States. In Icelanders and in Americans
of European origin the at-risk version of the gene is quite common and
confers a moderate increase in risk of the disease. The variant occurs
much less frequently in African Americans but more than triples the
risk of heart attack.
-- Type 2 Diabetes. Earlier this year deCODE reported the discovery of
the most significant genetic risk factor for type 2 diabetes (T2D)
found to date. More than one third of individuals in the populations
studied carry one copy of the at-risk variant and are at an
approximately 45% greater risk of the disease than are controls; 7%
carry two copies and are at a 141% greater risk. The original finding
was made in Iceland and was subsequently confirmed in studies in
Denmark and the United States. The variant is in a gene on chromosome
10 encoding a protein called transcription factor 7-like 2 (TCF7L2).
The company is employing the discovery in its diagnostic and drug
discovery programs in T2D.
Personnel
-- Dan Hartman. In July, deCODE announced the appointment of Daniel
Hartman, MD, as Senior Vice President of Product Development. Dr.
Hartman came to deCODE from Pfizer, where he held senior clinical
development positions.
-- Linda Buck. Dr. Linda Buck joined deCODE's Board of Directors in
November 2005. Dr. Buck, who received a Nobel Prize in physiology or
medicine in 2004 for her discoveries on the workings of the olfactory
system, is Associate Director of the Basic Sciences Division at Fred
Hutchinson Cancer Research Center in Seattle and is a Howard Hughes
Medical Institute investigator. She also is an affiliate professor of
physiology and biophysics at the University of Washington.
About deCODE
deCODE is a biopharmaceutical company applying its discoveries in human genetics to the development of drugs for common diseases. deCODE is a global leader in gene discovery -- our population approach and resources have enabled us to isolate key genes contributing to major public health challenges from cardiovascular disease to cancer, genes that are providing us with drug targets rooted in the basic biology of disease. deCODE is also leveraging its expertise in human genetics and integrated drug discovery and development capabilities to offer innovative products and services in DNA-based diagnostics, bioinformatics, genotyping, structural biology, drug discovery and clinical development. deCODE is delivering on the promise of the new genetics.(SM) Visit us on the web at www.decode.com.
Conference Call Information
A conference call, during which deCODE President and CEO Kari Stefansson and CFO Lance Thibault will discuss the past year's financial results and recent operating highlights, will be webcast tomorrow, Tuesday, March 7, at 8:00am EST/1:00pm GMT. The webcast can be accessed via the Investors section of deCODE's website, www.decode.com, or through www.fulldisclosure.com. A replay of the call will be available on these websites for at least one week following the call. A digitized telephone replay of the call can be accessed for the week following the call by dialing 1 800 475 6701 from the US, or +1 320 365 3844 from outside the US. The access code is 820970. |
