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Earnings Plus
Tuesday October 21 6:06 AM EDT
Company Press Release
Hyseq Announces Third Quarter Results; Chiron
Collaboration, New Patent and Patent Filings Mark
Quarter
SUNNYVALE, Calif., Oct. 21 /PRNewswire/ -- Hyseq, Inc. (Nasdaq:HYSQ) today announced
that revenues for the third quarter ended September 30, 1997, were $2.4 million, versus revenues of
$43,000 in the third quarter of 1996. Christopher R. Wolf, Hyseq's Executive Vice President and
Chief Financial Officer, noted that third quarter revenues increased approximately 118 percent over
the 1997 second quarter revenues of $1.1 million, primarily reflecting income from the Company's
collaboration with Chiron Corporation to develop pharmaceutical treatments for cancer.
Other favorable developments during the third quarter included the issuance of a new patent that
enhances Hyseq's patent protection for its proprietary sequencing by hybridization (SBH)
technology, and filing for new patent protection on an additional 12,000 gene discoveries. Hyseq's
Gene Discovery Module now processes over 800,000 partial gene sequences per month, believed
to be the highest production rate in the world, and approximately twice the rate sequenced when the
Company went public in August 1997. Hyseq's HyGenomics(TM) Database now contains over
three million samples, which is in addition to the samples sequenced in the course of the Company's
commercial collaborations.
The operating loss for the third quarter ended September 30, 1997, increased to $1.6 million from
$1.3 million in the third quarter of 1996. Pro forma net loss per share totaled $0.15, compared to a
pro forma net loss per share of $0.13 in last year's third quarter. At September 30, 1997, the
Company had over $60 million in cash, cash equivalents and marketable securities, compared to
approximately $6.7 million at December 31, 1996. The increase in cash and cash equivalents was a
result of Hyseq's initial public offering of 3.45 million shares of common stock completed in the third
quarter of 1997, and the private placements with Chiron and Perkin-Elmer Corporation in May and
August 1997.
Revenues for the first nine months of 1997 were $3.8 million compared to $206,000 for the first
nine months of last year. Hyseq's additional investment in its proprietary gene sequencing technology,
which significantly increased production, resulted in a net loss for the first nine months of the year of
$5.0 million, or a pro forma net loss of $0.51 per share, compared to a net loss of $3.6 million, or a
pro forma net loss of $0.38 per share for the same period in 1996.
Lewis S. Gruber, President and Chief Executive Officer, stated: ''The third quarter was a productive
period for Hyseq. During this time, we secured a new patent on gene sequencing technology that
enhances the protection of our proprietary SBH technology. Our high throughput DNA screening
capability enabled us to file, in this quarter, for patent protection on 12,000 additional partial gene
sequences. Hyseq's library of samples, one of the world's largest, contains over three million partial
gene sequences, not including those sequences developed with any of our commercial partners.''
Christopher R. Wolf commented: ''Hyseq's third quarter results reflect our ongoing investment in the
power of our patented SBH technology, which continues to yield new proprietary genetic
discoveries. We believe that as our technology and alliances increase, they will provide Hyseq with
new commercial opportunities in therapeutics and diagnostics and will translate into enhanced
revenues and returns to our shareholders.''
Hyseq, Inc., based in Sunnyvale, California, applies the proprietary DNA array technology of its
integrated HyX(SM) genomics platform to produce gene-based therapeutic product candidates, the
only universal DNA sequencing chip, and diagnostic products and tests. Hyseq believes that its
proprietary HyGenomics database of partial gene sequences is the fastest growing and one of the
largest human gene databases in the world.
Statements included in this press release which are not historical in nature, are intended to be, and
are hereby identified as ''forward-looking statements'' for purposes of the safe harbor provided by
Section 21E of the Securities Exchange Act of 1934, as amended by Public Law 104-67.
Forward-looking statements may be identified by words including ''anticipate,'' ''believe,''
''intends,'' ''estimates,'' ''expect,'' and similar expressions. The company cautions readers that
forward-looking statements, including without limitation, those relating to the Company's future
business prospects are subject to certain risks and uncertainties that could cause actual results to
differ materially from those indicated in the forward-looking statements, due to factors, such as those
relating to prosecuting, maintaining and defending patent rights, and other risks and factors identified
from time to time in the Company's reports filed with the SEC.
HYSEQ, INC.
Summary of Operations
(in thousands, except per share amounts)
(unaudited)
Three months ended Nine months ended
September 30 September 30
1997 1996 1997 1996
Contract revenues: $2,360 $43 $3,766 $206
Operating expense:
Research and
Development: 3,285 956 6,433 2,723
General and
administrative: 1,234 443 2,960 1,218
Total operating
expenses: 4,519 1,399 9,393 3,941
Loss from operations: (2,159) (1,356) (5,627) (3,735)
Interest income:
(expenses), net: 537 88 671 138
Net loss: (1,622) (1,268) (4,956) (3,597)
Pro forma net loss
per share: ($0.15) ($0.13) ($0.51) ($0.38)
Shares used in
computing pro forma
net loss per share: 10,941 9,424 9,625 9,429
Condensed Balance Sheets
(in thousands)
(unaudited)
September 30, 1997 December 31, 1996 (a)
Current Assets
Cash and cash equivalents $39,357 $6,707
Short-term investments 22,957 --
Accounts receivable 2,360 147
Other current assets 499 312
Total current assets 65,173 7,166
Property and equipment, net 3,232 1,639
Other assets, net 565 561
Total Assets $68,970 $9,366
Liabilities and Stockholders' Equity
Current Liabilities $4,025 $1,211
Noncurrent portion of
capital lease obligations 63 174
Noncurrent portion of loan
obligations 638 617
Stockholders' equity 64,244 7,364
Total liabilities and
stockholders' equity $68,970 $9,366
(a) The condensed consolidated balance sheet at December 31, 1996, has
been derived from the audited financial statements at that date.
SOURCE Hyseq, Inc. |
