LYNX releases earnings, way below estimates (street consensus was loss of .29/share, actual loss is .44/share)...
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Tuesday October 31, 8:02 am Eastern Time
Lynx Reports Financial Results for the Third Quarter Ended September 30, 2000
HAYWARD, Calif., Oct. 31 /PRNewswire/ -- Lynx Therapeutics, Inc. (Nasdaq: LYNX - news) today reported a net loss of $5.0 million, or $(0.44) per share, and $8.6 million, or $(0.76) per share, for the third quarter and nine months ended September 30, 2000, respectively. This compares to a net loss of $4.0 million, or $(0.36) per share, and $11.7 million, or $(1.06) per share, for the same respective periods in 1999.
Revenues for the third quarter and nine-month period ended September 30, 2000, were $3.4 million and $9.3 million, respectively, comprised of technology access and service fees from Lynx's customers and collaborators. For the corresponding third quarter and nine-month period of 1999, Lynx's revenues were $1.1 million and $2.7 million, respectively, comprised of technology access fees from its customers and collaborators.
The nine-month results in 2000 include in other income a gain of approximately $3.1 million from the receipt of shares of common stock from Inex Pharmaceuticals Corporation, as part of the proceeds related to the March 1998 sale of Lynx's former antisense program. As of September 30, 2000, Lynx had cash, cash equivalents and short-term investments of $19.8 million.
``Lynx's activities in 2000 have been, and will continue to be, directed toward the expansion of the commercial applications of its genomics technologies, both through new collaborations and other agreements, as well as internal discovery projects. As such, operating expenses were $8.6 million and $21.8 million for the third quarter and nine-month period, respectively, in 2000. For the same periods in 1999, operating expenses were $5.3 million and $15.2 million, respectively. The increases in Lynx's operating expenses in the 2000 periods, as compared to the same periods in 1999, reflect higher personnel-related and facilities expenses and an increase in materials consumed in commercial operations. General and administrative expenses in the 2000 periods were also higher due to increased costs for outside services.
Additionally, the growth in research and development spending in the third quarter over the prior quarters in 2000 was due to Lynx's internal investment in building a store of human genomic information. This genomic information is high-resolution gene expression data produced by applying Lynx's MPSS® technology to samples from a broad assortment of healthy human tissues and cell lines. Lynx's decision to undertake this investment was based on input from potential customers and members of the academic research community. Their scientific interest in such information and its projected high commercial value results, in part, from the publishing of the first pass draft of the human genome sequence earlier this year. Lynx intends to commercialize this body of genomic information in line with its business strategy of advancing to market higher-value commercial products and services.
For the fourth quarter and the total year 2000, Lynx estimates revenues from its existing customers and collaborators will be approximately $3.5 million and $12.5 million, respectively. The level of estimated revenues from existing customers and collaborators for the total year 2000 will be derived almost entirely from technology access and service fees, and would reflect an increase of approximately 60% over the $7.8 million in revenues from such activities in all of 1999. Estimated revenues from Lynx's existing customers and collaborators are tied primarily to the estimated number and timing of samples to be received from such parties, as well as Lynx's performance of the related genomics discovery services on those samples. Based on the level of estimated revenues from existing customers and collaborators, Lynx estimates its net loss for the fourth quarter and the total year 2000 will be approximately $4.5 million and $13.5 million, respectively. Growth in revenues and a decrease in net losses from the related estimated levels above for these periods will be based heavily on the type and timing of new Lynx collaborations and agreements and the related demand for, and delivery of, Lynx's services or products.
Lynx is a leader in the development and application of novel technologies for the discovery of gene expression patterns and genomic variations important to the pharmaceutical, biotechnology and agricultural industries. These technologies are based on the Megaclone(TM) technology, Lynx's unique and proprietary cloning procedure, which transforms a sample containing millions of DNA molecules into one made up of millions of micro-beads, each of which carries approximately 100,000 copies of one of the DNA molecules in the sample. Megaclone(TM) technology is the foundation for Lynx's analytical applications, including: Massively Parallel Signature Sequencing, or MPSS®, technology, which provides gene sequence information and high-resolution gene expression data; Megasort(TM) technology, which provides differentially expressed gene sets; and Megatype(TM) technology, which is expected to provide single nucleotide polymorphism, or SNP, disease- or trait-association information. For more information, visit Lynx's web site at lynxgen.com.
Statements included in this press release that are not historical in nature, are ``forward-looking statements'' within the meaning of the ``safe harbor'' provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this third quarter earnings press release relate to guidance for the fourth quarter and full-year 2000 future revenues and net losses, the addition of new corporate partnerships and collaborations, Lynx's performance of its genomics discovery services for current and future partners, and the expansion of the Company's commercial applications of its technologies. The Company cautions readers that forward-looking statements 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 the risks and factors identified from time to time in the Company's reports filed with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 1999, and Quarterly Report on Form 10-Q for the quarter ended June 30, 2000. Lynx does not take the responsibility to update this information as it changes.
Condensed Consolidated Statements of Operations
(in thousands, except per-share amounts)
Three months ended Nine months ended
September 30, September 30,
2000 1999 2000 1999
(unaudited) (unaudited) (unaudited) (unaudited)
Net revenues:
Technology access
and service fees $3,425 $1,122 $9,275 $2,737
Total revenues 3,425 1,122 9,275 2,737
Operating costs
and expenses:
Cost of service fees 1,166 -- 2,564 --
Research & development 5,868 4,261 14,634 12,427
General
& administrative 1,568 1,057 4,593 2,778
Total operating
costs and expenses 8,602 5,318 21,791 15,205
Loss from operations (5,177) (4,196) (12,516) (12,468)
Other income, net 211 296 4,022 967
Provision for
income taxes -- 50 119 206
Net loss $(4,966) $(3,950) $(8,613) $(11,707)
Basic and diluted
net loss per share $(0.44) $(0.36) $(0.76) $(1.06)
Shares used in
computation of
net loss per share 11,399 11,108 11,315 11,086
Condensed Consolidated Balance Sheets
(in thousands)
September 30, December 31,
2000 1999
(unaudited)
Assets
Cash, cash equivalents
and short-term investments $19,818 $30,786
Other current assets 5,836 5,424
Total current assets 25,654 36,210
Property and equipment, net 15,275 12,878
Other assets 697 2,550
Total assets $41,626 $51,638
Liabilities and Stockholders' Equity
Current liabilities $3,741 $2,730
Deferred revenue - current 5,417 8,438
Total current liabilities 9,158 11,168
Deferred revenue - noncurrent 15,753 16,896
Noncurrent liabilities 4,258 3,928
Stockholders' equity 12,457 19,646
Total liabilities and stockholders' equity $41,626 $51,638
SOURCE: Lynx Therapeutics, Inc. |
