>>PRINCETON, N.J., Nov. 1 /PRNewswire/ -- Pharmacopeia, Inc. (Nasdaq: PCOP <http://finance.yahoo.com/q?s=pcop&d=t> - news <http://biz.yahoo.com/n/p/pcop.html>) today announced results for the third quarter and nine months ended September 30, 2001.
Software revenue for the 2001 third quarter rose 20% compared to the 2000 third quarter to $21.5 million, including the effects of acquisitions, while Drug Discovery revenue declined 11% to $7.0 million. Total revenue for the 2001 third quarter was $28.6 million compared to $27.1 million reported for the third quarter of 2000. Total revenue for the nine months ended September 30, 2001 was $84.9 million compared to $78.9 million for the nine months ended September 30, 2000. At September 30, 2001, Pharmacopeia had cash, cash equivalents and marketable securities of approximately $157 million.
Excluding charges (amortization of identifiable intangibles, amortization of goodwill and write-offs of in-process research and development) related to acquisitions, the pro forma net loss for the 2001 third quarter was $2.2 million, or $0.09 per share. This compares to pro forma net income of $2.4 million, or $0.10 per diluted share, reported for the third quarter of 2000. The pro forma net loss for the nine-month period ended September 30, 2001 was $6.4 million, or $0.27 per share, compared to net income of $7.8 million, or $0.32 per diluted share, reported for the comparable period in 2000. The net loss for the 2001 third quarter and nine months ended September 30, 2001, including acquisition-related charges, was $6.0 million, or $0.25 per share, and $17.1 million, or $0.72 per share, respectively.
``We continue to be encouraged by the performance of our Accelrys software business,'' said Joseph A. Mollica, Ph.D., Chairman, President, and CEO. ``In the third quarter we generated revenue growth of 20%, including organic growth of 5%, in spite of poor general economic conditions exacerbated by the tragic events of September 11th. In the quarter, we also introduced our Discovery Studio environment, a new architecture for our software product suite that we believe will improve workflow and integrate data and applications throughout the drug discovery process. This new client-server environment, which will enable complex calculations, 3-dimensional visualization, data management and all of our other software functionality to be performed from standard personal computers, is an important component of Accelrys' growth strategy going forward.''
Dr. Mollica continued, ``Accelrys' revenues in the quarter were negatively impacted by the economy. In addition, after September 11th, our sales force lost much of the rest of this critical month while our travel and customer travel was curtailed. Further, our consulting business has not accelerated at the rate we originally planned. Fortunately, our sales and marketing operations have now resumed fully, and our current backlog of both product and consulting opportunities leaves us cautiously optimistic that our year-to-date shortfall in orders can be made up by year end.''
``Our drug discovery revenue decline underscores the basis for our previously announced decision to reduce our dependency on fee for service collaborations and to become more focused on discovering our own drugs. A major initiative toward achieving this goal is our pending merger with Eos Biotechnology. We expect the potential benefits of this transaction to be numerous and to include: 1) a powerful combination of genomics, biology and chemistry which should enhance the ability of the combined company to discover and develop both antibody therapeutics and small molecule drugs; 2) additional product and services offerings that could include genome expression databases and proprietary bioinformatics software solutions; and 3) the potential to secure larger and more lucrative collaborations based on the combined company's therapeutic expertise in cancer, angiogenesis and inflammation. The merger process is progressing, and we anticipate closing the transaction around year end.''
``Our drug discovery business continues to prove its scientific utility,'' concluded Dr. Mollica. ``In the quarter, we signed new drug discovery agreements with Boehringer Ingelheim, Ester Neurosciences, and Antigenics. We also received milestone payments from Bristol-Myers Squibb and Otsuka. We remain confident that the science and technology underlying this business will enable us to continue discovering potential drugs both on our own and in collaboration with pharmaceutical and biotechnology partners.''
The Company also updated financial guidance as follows.
For the full year 2001, drug discovery revenues are expected to be in the range of $27 to $28 million, and the operating loss is expected to range from $8.8 to $9.2 million. With respect to Accelrys for 2001 in total, the Company expects a revenue growth rate of 30 to 35%, depending on consulting revenue recognition and on the rate by which business and the economy recover from the events of September. About half of this growth is expected to be generated internally, and the other half is expected to come from the effects of acquisitions completed after the beginning of last year's third quarter. Software pro forma operating profits are expected to be about $9 million in 2001 assuming software revenue growth of 35%. This is $1 million less than previous guidance primarily because of one-time accruals related to recent decisions to consolidate certain acquired locations. Including interest and other income, which is reduced from previous guidance due to lower interest rates and market conditions, 2001 pro forma net income for the Company as a whole is expected to range from $0.20 to $0.30 per share.
Assuming the close of the Eos transaction near year end, Pharmacopeia expects 2002 combined drug discovery and related data content revenues in the range of $35 to $45 million depending primarily upon the timing and successful execution of the commercialization of the Company's new data content business. 2002 drug discovery pro forma operating losses are expected to be about $30 million, excluding acquisition-related charges. These losses result from the planned change in the Company's strategy to an internally funded drug discovery and development approach intended to build a valuable drug discovery and development pipeline.
Pharmacopeia continues to expect 2002 Accelrys organic revenue growth in excess of 20% driving pro forma Accelrys operating profits, excluding acquisition related charges, of about $15 million.
While its current priority is the successful completion of the Eos merger, Pharmacopeia reiterated its intent to consider the eventual separation of its Accelrys software business from its drug discovery and development business. While the Company continues to see significant synergies between computational software development and experimental research, it believes that there are other corporate scenarios that would allow for productive inter-relationships while still allowing the value of each business to be optimized.
Further details regarding Pharmacopeia's third quarter performance will be publicized in a conference call today. Joseph Mollica, CEO and Bruce Myers, CFO, will host the call. Forward-looking and material information may be discussed on this conference call.
Date: November 1, 2001
Time: 5:00 p.m. EST
Domestic callers: (800) 997-8642
International callers: (973) 694-2225
Webcast: www.pharmacopeia.com <http://www.pharmacopeia.com>
A replay of the conference call, which can be accessed by dialing toll- free (800) 428-6051, and outside the U.S. (973) 709-2089, will be available for 2 weeks. The access code for the replay is 214123.
Pharmacopeia (www.pharmacopeia.com) is a leader in enabling science and technology that accelerates and improves the drug discovery and chemical development processes. Pharmacopeia's drug discovery business integrates proprietary small molecule combinatorial and medicinal chemistry, high-throughput screening, in-vitro pharmacology, computational methods and informatics to discover and optimize lead compounds. Pharmacopeia's software subsidiary, Accelrys, develops and commercializes molecular modeling and simulation software for the life sciences and materials research markets, cheminformatics and decision support systems, and bioinformatics tools including gene sequence analysis. Accelrys Consulting Services provides expert assistance in the configuration, implementation and integration of a wide variety of software solutions to enable superior research and discovery. Pharmacopeia employs approximately 800 people, generated 2000 revenues of approximately $119 million, and is headquartered in Princeton, NJ.
PHARMACOPEIA URGES INVESTORS AND SECURITY HOLDERS TO READ THE PROXY STATEMENT/PROSPECTUS REGARDING PHARMACOPEIA'S PROPOSED ACQUISITION OF EOS BIOTECHNOLOGY, INC. (``EOS'') WHEN IT BECOMES AVAILABLE, AS IT WILL CONTAIN IMPORTANT INFORMATION. Security holders may receive a free copy of the proxy statement/prospectus, as well as other related documents filed by Pharmacopeia, at the Commission's Web site, <http://www.sec.gov>. In addition, copies of documents filed with the Commission by Pharmacopeia can be obtained, without charge, by directing a request to Pharmacopeia Investor Relations at CN 5350, Princeton, NJ 08543-5350, or (609) 452-3600.
Pharmacopeia and its directors, executive officers, employees and certain other persons may be deemed to be participants in the solicitation of proxies of Pharmacopeia's stockholders to approve the proposed acquisition of Eos. Such individuals may have interests in the acquisition, including as a result of holding shares or options of Pharmacopeia. A detailed list of the names, affiliations and interests of the participants in the solicitation will be set forth in the proxy statement/prospectus referenced above.
When used anywhere in this document, the words ``expects,'' ``believes,'' ``anticipates,'' ``estimates'' and similar expressions are intended to identify forward-looking statements. Forward-looking statements herein may include statements addressing future financial and operating results of Pharmacopeia and the timing, benefits and other aspects of the proposed merger. Pharmacopeia has based these forward-looking statements on its current expectations about future events. Such statements are subject to risks and uncertainties including, but not limited to, the successful implementation of Pharmacopeia's strategic plans, the acceptance of new products, the obsolescence of existing products, the resolution of existing and potential future patent issues, additional competition, changes in economic conditions, and other risks described in documents Pharmacopeia has filed with the Securities and Exchange Commission, including its most recent report on Form 10-K and subsequent reports on Form 10-Q. All forward-looking statements in this document are qualified entirely by the cautionary statements included in this document and such filings. These risks and uncertainties could cause actual results to differ materially from results expressed or implied by forward-looking statements contained in this document. These forward-looking statements speak only as of the date of this document. Pharmacopeia disclaims any undertaking to publicly update or revise any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
PHARMACOPEIA, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except share data)
Statements of Operations
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
2001 2000 2001 2000
Revenue:
Drug discovery $7,044 $7,933 $20,323 $30,700
Software license, service and
other 21,456 17,929 60,957 44,176
Hardware 100 1,278 3,620 4,006
Total revenue 28,600 27,140 84,900 78,882
Cost of revenue:
Drug discovery 5,191 5,766 15,781 17,865
Software license, service and
other 4,715 2,613 13,451 6,599
Hardware 126 1,097 3,287 3,527
Total cost of revenue 10,032 9,476 32,519 27,991
Gross margin 18,568 17,664 52,381 50,891
Operating costs and expenses:
Research and development 8,566 6,620 25,801 18,409
Sales, general and
administrative 15,531 12,287 43,923 32,323
Amortization of goodwill 2,000 1,064 5,640 2,136
Write-off of in-process research
and development - 2,340 - 8,740
Total operating costs and
expenses 26,097 22,311 75,364 61,608
Operating loss (7,529) (4,647) (22,983) (10,717)
Interest and other income, net 1,744 2,923 6,671 6,785
Loss before provision for income
taxes (5,785) (1,724) (16,312) (3,932)
Provision for income taxes 168 221 829 741
Net loss $(5,953) $(1,945) $(17,141) $(4,673)
Net loss per share - Basic $(0.25) $(0.08) $(0.72) $(0.21)
Net loss per share - Diluted $(0.25) $(0.08) $(0.72) $(0.21)
Weighted average number of common
stock outstanding - Basic 23,824 23,165 23,707 22,423
Weighted average number of common
stock outstanding - Diluted 23,824 23,165 23,707 22,423
Reconciliation of Pro Forma Net Income
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
2001 2000 2001 2000
Net loss $(5,953) $(1,945) $(17,141) $(4,673)
Less charges related to
acquisitions:
Amortization of identifiable
intangibles -
Included in cost of revenue 1,228 578 3,685 916
Included in sales, general and
administrative 488 338 1,398 711
Amortization of goodwill 2,000 1,064 5,640 2,136
Write-off of in-process research
and development - 2,340 - 8,740
3,716 4,320 10,723 12,503
Pro forma net income (loss) $(2,237) $2,375 $(6,418) $7,830
Pro forma net income (loss) per
share - Basic $(0.09) $0.10 $(0.27) $0.35
Pro forma net income (loss) per
share - Diluted $(0.09) $0.10 $(0.27) $0.32
Weighted average number of common
stock outstanding - Basic 23,824 23,165 23,707 22,423
Weighted average number of common
stock outstanding - Diluted 23,824 24,938 23,707 24,426
PHARMACOPEIA, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands)
Balance Sheets
September 30, December 31,
2001 2000
Cash, cash equivalents and marketable
securities $156,761 $165,178
Trade receivables, net 23,219 39,017
Other assets, net 73,094 80,571
Total assets $253,074 $284,766
Current liabilities $53,916 $70,346
Long-term liabilities 3,887 4,553
Total stockholders' equity 195,271 209,867
Total liabilities and stockholders' equity $253,074 $284,766<<
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Cheers, Tuck |
