NEW HAVEN, Conn., Feb. 1 /PRNewswire-FirstCall/ -- Genaissance Pharmaceuticals, Inc. (Nasdaq: GNSC - news), today reported its financial results for the fourth quarter and year ended December 31, 2001.
For the quarter ended December 31, 2001, revenues were $2.2 million compared to $1.1 million in the previous quarter and $566,000 for the fourth quarter last year -- or increases of 100 percent and 289 percent, respectively. Operating expenses for the quarter were $15.0 million, of which $12.0 million were attributable to research and development. This compares to operating expenses of $15.6 million and research and development expenses of $12.6 million in the previous quarter. Operating expenses for the fourth quarter of 2000 were $13.3 million, of which $10.0 million were attributable to research and development. The Company reported a net loss for the quarter ended December 31, 2001 of $11.4 million or $0.50 per share, which includes the benefit of a $1.5 million tax credit.
In the fourth quarter, revenues increased significantly while expenses decreased as compared to the previous quarter. The Company anticipates that this trend will continue and is confirming its previous guidance for a significantly lower burn rate in 2002. The Company now has a technology infrastructure in place to support anticipated additional partnerships as well as its HAP(TM) Drug development trials.
Revenues for the twelve-month period ended December 31, 2001 were $5.3 million compared to $753,000 for the same period last year -- an increase of over 600 percent. Operating expenses for the year were $58.3 million, with $46.0 million attributable to research and development. This compares to operating expenses of $40.3 million and research and development expenses of $25.7 million for the full year ended December 31, 2000. The Company reported a net loss for the year of $47.6 million or $2.09 per share.
As of December 31, 2001 the Company had cash, cash equivalents and marketable securities totaling $59.7 million.
``Genaissance made substantial progress in 2001 on the medical, scientific and commercial fronts, continuing to set the gold standard for pharmacogenomics,'' said Gualberto Ruano, M.D., Ph.D., Chief Executive Officer of Genaissance. ``It was very gratifying to see our HAP(TM) Technology recognized through the two new partnerships formed during the year with Pfizer and AstraZeneca and to have our HAP(TM) Marker data on gene variation published in the prestigious international journal Science. We are now in a position to leverage our HAP(TM) Technology for the development of our own internal pipeline of drug candidates to create added value.''
Highlights of the fourth quarter include:
* Technology partnerships were signed with Pfizer, Inc. and AstraZeneca
for access to selected data from Genaissance's HAP(TM) Database and
technology platform. Genaissance now has agreements with three of the
top five pharmaceutical companies in the world.
* Enrollment was completed in the Company's second clinical study,
STRENGTH II, marking another milestone for the Company that was
completed within the timetable originally set. The STRENGTH studies are
a key element of the Company's internal product development initiatives.
Data analysis is on schedule for initial genetic correlations to be
reported by the end of the first quarter of 2002 for STRENGTH I, with
STRENGTH II data expected during the third quarter of 2002.
* Shortly after the end of the quarter, Genaissance outlined its strategy
for developing its own internal pipeline of drug candidates. The
Company will apply its proprietary technology to develop HAP(TM) Drugs
personalized medicines with improved drug safety and efficacy profiles
in target patients. The Company's first two HAP(TM) Drugs will be
targeted for schizophrenia and cholesterol management. This strategy of
applying HAP(TM) Markers to drugs has been validated by a major
agreement announced today with Biogen, Inc.
* The HAP(TM) Typing Facility became a molecular diagnostics laboratory
registered under the Clinical Laboratories Improvements Amendments of
1988, or CLIA. Operating under the stringent CLIA standards allows
Genaissance to provide test results in support of development,
regulatory approval and marketing of therapeutics. As one of the
largest facilities of its kind in the country, over 1,500,000 DNA tests
have already been completed since the HAP(TM) Typing Facility was
dedicated just over a year ago.
``Last year we focused our attention on scaling up our technology and building the infrastructure to support our commercialization efforts,'' said Kevin Rakin, President and Chief Financial Officer of Genaissance. ``With that completed, our resources are now focused on capitalizing on our business development successes and continuing to sign new partners from which we can obtain a recurring revenue stream as well as drug royalties. We remain comfortable with the financial guidance we provided last quarter and believe we will achieve a continued reduction in our net loss.''
Genaissance will host a conference call to discuss results for the quarter as well as further elaborate on its HAP(TM) Drug strategy today at 11:00am, Eastern Time. To participate in this call, dial 913-981-5571, confirmation code 523886, shortly before 11:00am. A replay of the call will be available from 2:00pm, Eastern Time through midnight Wednesday, February 6th. The replay number is 719-457-0820, confirmation code 523886.
Genaissance Pharmaceuticals, Inc. is the world leader in the discovery and use of human gene variation for the development of personalized medicines. The Company has identified candidates for development in its own pipeline of products -- HAP(TM)-Clozapine and HAP(TM)-Statin -- utilizing its proprietary genetic markers. The Company also markets its technology and clinical development skills to the pharmaceutical industry as a complete solution for improving the development, marketing and prescribing of drugs. Genaissance has agreements with three of the top five pharmaceutical companies as well as one of the premier biopharmaceutical companies: AstraZeneca, Biogen, Johnson & Johnson and Pfizer. Genaissance is located in Science Park in New Haven, Connecticut. Please visit genaissance.com for additional information.
This press release contains forward-looking statements, including statements about the Company's expected results of operations for 2002, its expectation with respect to future collaborations, the ability of Genaissance to apply its technologies to the development, marketing and prescribing of drugs, and the expected release of clinical trials data. Such statements are subject to certain factors, risks and uncertainties that may cause actual results, events and performance to differ materially from those referred to in such statements, including, but not limited to, the development of new products, the extent to which genetic markers (haplotypes) are predictive of drug efficacy and safety, the adoption of our technologies by the pharmaceutical industry, the timing and success of clinical trials, competition from pharmaceutical, biotechnology and diagnostics companies, the strength of our intellectual property rights and those risks identified in our Registration Statement on Form S-3 filed with the Securities and Exchange Commission on October 18, 2001 and our Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 2, 2001. The forward-looking statements contained herein represent the judgment of Genaissance as of the date of this release. Genaissance disclaims any obligation to update any forward-looking statement.
GENAISSANCE PHARMACEUTICALS, INC.
Statements of Operations
(In thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2001 2000 2001 2000
Revenue
License revenue $2,196 $491 $5,345 $678
Other income -- 75 -- 75
Total revenue 2,196 566 5,345 753
Operating expenses:
Research and development 11,964 10,035 45,982 25,680
Selling, general
and administrative 2,885 3,131 11,786 8,837
Sublicense royalty obligations 26 15 54 530
Stock based compensation 117 155 498 5,256
Total operating expenses 14,992 13,336 58,320 40,303
Interest income 495 1,946 3,918 4,623
Interest expense (579) (509) (2,599) (1,839)
Income tax benefit 1,500 -- 4,074 --
Net loss (11,380) (11,333) (47,582) (36,766)
Preferred stock
dividends and accretion -- -- -- (6,327)
Beneficial conversion feature
of Series B, KBH and
C preferred stock -- -- -- (50,180)
Net loss attributable to
common shareholders,
basic and diluted $(11,380) $(11,333) $(47,582) $(93,273)
Net loss per common share,
basic and diluted $(.50) $(.50) $(2.09) $(8.55)
Weighted average shares used in
computing net loss per common
share, basic and diluted 22,774 22,666 22,753 10,908
Net loss per common share
assuming conversion of
outstanding shares of
preferred stock and
automatic exercise of
warrants from date of
original issuance, and
excluding beneficial conversion $(2.19)
Weighted average shares
outstanding, assuming
conversion and exercise from
date of original issuance 16,790
Balance Sheet Data
(in thousands)
Dec. 31, 2001 Dec. 31, 2000
Cash, cash equivalents and marketable securities $59,673 $110,376
Working capital 47,775 98,123
Total assets 92,457 143,892
Long-term liabilities 18,150 24,305
Stockholders' equity 58,979 105,675
Contact:
Kevin Rakin Paul Oestreicher, Ph.D. (media)
President & Chief Financial Officer Vice President, Public Affairs
Genaissance Pharmaceuticals, Inc. Genaissance Pharmaceuticals, Inc.
203.786.3404 203.786.3490
k.rakin@genaissance.com p.oestreicher@genaissance.com
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