CEGE reports earnings (see below). Anyone care to comment about their cash position and burn rate. The way I figure it, when you back out the $12 million from Japan Tobacco (36 cents) and $7 million from the sale of part of ABNX (21 cents), you end up with a loss of 23 cents per share for the quarter. This is compares with a loss of 31 cents last year and an estimated loss of 28 cents for last quarter. They have cut there burn rate by 26% and beat analysts estimates by 5 cents. They are achieving their goal of cutting costs while they push their products toward approval.
Any comments?
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Tuesday January 26, 8:33 am Eastern Time
Company Press Release
SOURCE: Cell Genesys, Inc.
Cell Genesys Reports Fourth
Quarter and 1998 Results; Ends Year with $53 Million in
Cash
FOSTER CITY, Calif., Jan. 26 /PRNewswire/ -- Cell Genesys, Inc. (Nasdaq: CEGE - news)
reported net income for the quarter ended December 31, 1998 of $10.2 million or $0.34 per
share, and a net loss for the year then ended of $13.2 million, or $0.46 per share. This compares
with net losses of $8.7 million and $123.5 million in the same quarter and full year of 1997,
respectively. Included in income during the fourth quarter of 1998 was $12.0 million of revenue
earned through the company's newly signed worldwide collaboration for selected targets in the
company's GVAX(TM) cancer vaccine program with the pharmaceutical division of Japan
Tobacco Inc. (JT). Also contributing to income for the quarter was a $7.0 million gain on the sale
of shares of Abgenix, Inc. (Nasdaq: ABGX - news) common stock. The 1997 results included
certain non-recurring charges including a $78.8 million charge for in-process technology and
restructuring costs related to the acquisition of Somatix Therapy Corporation in May 1997.
Revenues for the fourth quarter and year ended December 31, 1998 were $12.5 million and
$24.1 million, respectively, compared with $8.2 million and $23.8 million in the comparable
periods of 1997. 1998 revenues were derived primarily from the above-mentioned GVAX(TM)
collaboration, the company's collaboration with Hoechst Marion Roussel for AIDS gene therapy
which is now focused on Phase II clinical trials, and the company's licensing program in gene
activation technology. Results for 1998 include the results of Abgenix only during the first half of
the year, prior to Abgenix's successful initial public offering (IPO) in July 1998. Following this
IPO, Cell Genesys' ownership of Abgenix dropped below 50 percent, with the result that Abgenix
is no longer consolidated into the individual financial statement lines but is shown instead as equity
in the losses of an unconsolidated subsidiary.
Research and development costs were $6.6 million and $37.9 million in the fourth quarter and
year ended December 31, 1998, respectively, compared with $10.2 million and $36.8 million for
the comparable periods of 1997. The decrease in the fourth quarter is primarily related to the
restructuring completed by Cell Genesys in the third quarter of 1998, plus the exclusion of
Abgenix, compared with the prior year.
During the fourth quarter of 1998, Cell Genesys announced the signing of a worldwide
collaboration with the pharmaceutical division of JT for the company's GVAX(TM) cancer
vaccine for prostate cancer and a second undisclosed cancer target. The two companies will share
equally in product development costs and future profits. Cell Genesys will have marketing rights in
North America, JT will have marketing rights in Japan, Taiwan and Korea, and the companies will
share rights in Europe and the rest of the world. Cell Genesys expects to receive approximately
$45 million during the first two years of the agreement. An ongoing clinical trial of GVAX(TM) for
kidney cancer in Japan will also be supported and if the two companies agree to proceed with the
development of this GVAX(TM) product, Cell Genesys will be eligible to receive additional
funding to be agreed upon at a later date. The announcement of the collaboration followed the
release of encouraging results from the initial Phase I/II clinical trials of GVAX(TM) for prostate
cancer. Based on these results, Cell Genesys has initiated expanded GVAX(TM) trials for
prostate cancer.
Cell Genesys is focused on the development and commercialization of gene therapies to treat
major, life-threatening diseases, including cancer and AIDS. The company is conducting Phase
I/II human clinical trials for its GVAX(TM) cancer vaccine in prostate cancer, lung cancer and
melanoma, and the company's AIDS gene therapy is in Phase II human clinical testing. Preclinical
stage programs include gene therapy for hemophilia, Parkinson's disease and cardiovascular
disorders. Cell Genesys' assets outside gene therapy include its approximately 30 percent
ownership of the antibody therapy company, Abgenix, Inc., and the company's licensing program
in gene activation technology.
Statements made herein, other than statements of historical fact, including statements about the
future of the collaborations with Japan Tobacco (JT) and Hoechst Marion Roussel, including the
timing and amount of payments to Cell Genesys, the company's and Abgenix's progress and
results of clinical trials and preclinical programs, marketability of potential products and nature of
product pipelines, licenses and intellectual property 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 research and development
programs, the regulatory approval process, competitive technologies and products, patents,
continuation of corporate partnerships with JT and other entities and 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 dated March 31, 1998 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.
SELECTED FINANCIAL INFORMATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS Three months ended Year ended
(in thousands except per share data) December 31, December 31,
1998 1997 1998 1997
Revenue under collaborative
agreements $12,462 $8,165 $24,146 $23,806
Operating expenses:
Research and development 6,554 10,151 37,932 36,830
General and administrative 1,307 3,120 8,204 10,659
Charge for cross-license
and settlement -- 3,750 -- 22,500
Restructuring costs related
to acquisition -- -- -- 6,576
Charge for in-process technology -- -- -- 72,270
Total operating expenses 7,861 17,021 46,136 148,835
Equity in loss of unconsolidated
subsidiary (1,595) -- (2,917) --
Gain on sale of stock of
unconsolidated subsidiary 7,020 -- 7,020 --
Interest income, net 343 164 1,567 1,500
Net income (loss) before
minority interest 10,369 (8,692) (16,320) (123,529)
Loss attributed to minority
interest -- -- 4,192 --
Net income (loss) 10,369 (8,692) (12,128) (123,529)
Deemed dividend to preferred
stockholders (213) -- (1,088) --
Net income (loss) attributed
to common stockholders $10,156 $(8,692) $(13,216)$(123,529)
Net income (loss) per
share - basic $0.34 $(0.31) $(0.46) $(5.33)
Net income (loss) per
share - diluted $0.31 $(0.31) $(0.46) $(5.33)
Weighted average shares
outstanding - basic 29,445 28,087 28,607 23,172
Weighted average shares
outstanding - diluted 33,274 28,087 28,607 23,172
CONDENSED CONSOLIDATED
BALANCE SHEETS
(in thousands) December 31, 1998 December 31, 1997
Cash, cash equivalents and
short-term investments $52,874 $88,816
Other current assets 1,121 2,943
Property and equipment, net 6,079 13,815
Other assets 5,725 1,313
Total assets $65,799 $106,887
Current liabilities $9,964 $39,955
Long-term obligations 4,860 11,082
Redeemable convertible preferred stock 12,083 19,817
Minority interest in subsidiary -- 17,392
Stockholders' equity 38,892 18,641
Total liabilities and stockholders' equity $65,799 $106,887
SOURCE: Cell Genesys, Inc |
