Incyte Reports 2001 Fourth Quarter and Year End Financial Results
PALO ALTO, Calif.--(BW HealthWire)--Feb. 13, 2002--Incyte Genomics, Inc. (Nasdaq:INCY - news), the leading genomic information company, today reported its consolidated financial results for the fourth quarter and fiscal year ended December 31, 2001.
``Fiscal 2001 concluded for Incyte on a high note,'' said Paul A. Friedman, M.D., Chief Executive Officer for Incyte. ``My appointment and Bob Stein's appointment as President and Chief Scientific Officer in November were quickly followed by the recruitment of a number of experienced pharmaceutical executives. Incyte is now poised to develop a first-rate capability in therapeutic discovery and development. In addition, building upon Incyte's industry-leading genomic intellectual property portfolio, we signed collaborations with Medarex and Cambridge Antibody Technology that establish us in the therapeutic antibody discovery arena. Fiscal 2001 also marks another successful year for the information business, in which the value of our patent estate continued to be substantiated as we licensed patents for several antibodies under development at Genentech. We also entered into an agreement with Merck & Co for our ZooSeq(TM) database and opened an office in Japan to serve our Asia-Pacific customers. Additionally, our exiting of the unprofitable custom genomics product lines allowed us to substantially resize our infrastructure expenses.''
Dr. Friedman added, ``The information business is an incredible asset. It includes the largest gene database in existence, the largest genomic intellectual property portfolio, and the largest number of pharmaceutical partnerships in the industry. We intend to use this asset to both complement our cutting edge scientific capabilities and to contribute funds to help support our therapeutic discovery and development activities. Going forward, we intend to exploit the numerous synergies that exist between the information business and our therapeutic discovery and development activities.''
Revenue for the quarter ended December 31, 2001 was $54.8 million versus $55.4 million for the comparable quarter in 2000. This brought revenue, for the year ended December 31, 2001, to $219.3 million, which was 13% higher than the $194.2 million for 2000. The reduction in the fourth quarter revenues resulted from the discontinuance of the custom genomic product lines announced in October 2001.
Included in the fourth quarter financial results are $130.4 million of non-recurring charges. This includes $61.7 million related to the restructuring activities and long-lived asset write-downs announced in October 2001, and $68.7 million related to the write-down of intangible assets associated with the acquisitions of Hexagen and Proteome. The net loss for the quarter ended December 31, 2001, before the above non-recurring charges, was $14.8 million, or $0.22 per diluted share, compared to the net loss of $7.4 million, or $0.11 per diluted share, for the quarter ended December 31, 2000. The net loss for the year ended December 31, 2001, before the above non-recurring charges, was $52.9 million, or $0.80 per diluted share, compared to a net loss of $29.7 million, or $0.47 per diluted share for 2000. The net loss for the quarter ended December 31, 2001, including the non-recurring charges, was $145.2 million, or $2.18 per diluted share, compared to the net loss of $7.4 million, or $0.11 per diluted share, for the same period in 2000. For the year ended December 31, 2001, the net loss, including the non-recurring charges, was $183.2 million, or $2.77 per diluted share, compared to a net loss of $29.7 million, or $0.47 per diluted share for 2000.
For the quarter ended December 31, 2001, database and partnership program revenues were $48.6 million compared to $40.6 million for the same quarter in 2000. For the year ended December 31, 2001, database and partnership program revenues increased 19% to $174.0 million compared to $146.1 million in 2000. Custom genomics revenues for the quarter ended December 31, 2001 were $6.2 million, a 58% decrease from the $14.8 million for the same quarter in 2000. This decrease was the result of the previously announced discontinuance of those product lines. For the year ended December 31, 2001, custom genomic revenues were $45.3 million, representing a 6% decrease from 2000 revenues of $48.1 million.
Research and Development expenses for the quarter ended December 31, 2001 were $50.5 million compared to $53.3 million for the same period in 2000. Research and Development expenses for the year ended December 31, 2001 were $203.3 million versus $190.2 million in 2000. The 7% increase for the year reflects continuing efforts to expand the Company's intellectual property portfolio, with a focus on pharmaceutically relevant full-length genes, as well as the investment in its target validation and therapeutic discovery programs.
Selling, General and Administrative expenses for the quarter ended December 31, 2001 were $17.6 million compared to $18.5 million for the same period in 2000. For the year ended December 31, 2001, Selling, General and Administrative expenses were $70.6 million versus $64.2 million for 2000.
PEOPLE
As Incyte accelerates its expansion of internal capabilities in therapeutic discovery, the Company is pleased to announce the addition of the following senior scientific staff:
* Brian Metcalf, Ph.D., joined as Executive Vice President and Chief Drug Discovery Scientist. Dr. Metcalf was most recently Vice President and Chief Scientific Officer with Kosan Biosciences, Inc. Prior to his position with Kosan, Dr. Metcalf was Senior Vice President, Discovery Chemistry & Platform Technologies worldwide for SmithKline Beecham. Dr. Metcalf received his B.S. and Ph.D. degrees in organic chemistry from the University of Western Australia, and performed postdoctoral work at Stanford University. He has published approximately 120 scientific papers and book chapters, and is co-inventor on 36 issued patents.
* Michael Donovan, Ph.D., M.D., joined during the fourth quarter as Senior Vice President of Molecular Pathology and Oncology. Prior to joining Incyte, Dr. Donovan was most recently the Director of Molecular Pathology at Millennium Pharmaceuticals in Cambridge, Massachusetts, while holding a joint appointment as a Staff Pathologist at Children's Hospital in Boston. He received his M.D. and Ph.D. degrees from Rutgers University, completed postdoctoral training at Harvard and residencies in Pathology and Pediatric Pathology at NYU and Children's Hospital Boston, respectively.
* Steven M. Friedman, M.D., has joined as Senior Vice President of Drug Discovery Biology. Prior to joining Incyte, Dr. Friedman was Vice President for Discovery Biology at Bristol Myers Squibb's Wilmington site. Dr. Friedman is a proven physician-scientist with specialized expertise in inflammation and immunology. In addition, he was formerly a full tenured professor of Rheumatology at Cornell Medical Center and is a Board Certified Rheumatologist.
THERAPEUTIC DISCOVERY AND DEVELOPMENT
``We are pleased with the rapid progress we are making,'' said Dr. Friedman. ``In addition to the above-mentioned senior scientific staff, we have already hired 30 individuals with extensive biology and chemistry experience in pharmaceutical drug discovery. Many of them have special expertise in the areas of immunology, inflammation and allergy. These are among the areas in which we plan to do discovery research.''
``We are in the process of leasing an existing modern research facility in the mid-Atlantic area, which will require minimal tenant improvements, thus allowing us to be running experiments by the end of the first quarter. Additionally, we are integrating our existing scientific target validation data into our therapeutic discovery plans. These data are invaluable in helping us select novel targets for therapeutic intervention,'' added Dr. Friedman.
OUTLOOK
The following contains forward-looking guidance regarding Incyte's financial outlook for 2002. This guidance excludes the impact of any potential business acquisition, technology acquisition, or significant strategic equity investment that may be made. The following statements are based on current expectations.
* Revenue is anticipated to be in the range of $130 to $150 million. In keeping with our strategy of exploiting synergies between the information business and therapeutic discovery and development activities, we plan to move a portion of Incyte's database subscription and intellectual property licensing business into collaborative or other types of agreements. This will result in reduced near term revenue while increasing intellectual property and/or development rights. Therefore, the timing of quarterly revenue may be irregular.
* Total anticipated expenses related to Incyte's information business are forecasted to be in the range of $125 to $130 million.
* Expenses related to Incyte's therapeutic discovery efforts are forecasted to be in the range of $85 to $90 million. This includes the build-up of the East Coast small molecule capability and continuing target validation efforts, including ongoing collaborations with Lexicon and Medarex.
* Total operating expenses for the Company are anticipated to be approximately $210 to $220 million.
* Net interest income/expense/other expense is anticipated to be approximately $5 million of income.
* The cash and marketable securities balance for fiscal year-end 2002 is forecasted to be in the range of $400 to $420 million. This includes the use of cash for the therapeutic discovery efforts, payment of accruals related to the previously announced restructuring, capital spending and anticipated cash generated from the information business.
* Net loss for the year is anticipated to be in the range of $65 to $85 million.
``I want to emphasize that we are moving aggressively into the therapeutic discovery and development arena,'' said Dr. Friedman. ``Because we are using our information assets differently -- specifically the database and our intellectual property -- we will have lower near term revenues. As examples, we plan to use a portion of Incyte's database subscription and intellectual property licensing business to facilitate co-development or other types of agreements. These types of agreements will allow us to maximize the long term value of Incyte.''
CONFERENCE CALL & WEBCAST
Company management will host a conference call on Wednesday, February 13, 2002 at 2:00 p.m. PST to discuss the Company's results. The domestic dial in number for the conference call will be (877) 692-2588 and the international dial in number will be (973) 872-3462. A replay of the conference call will be available through February 20, 2002 (12:00 midnight PST). The replay dial in number for both U.S. and International callers will be (973) 341-3080 and the PIN number access code will be 3099979.
A webcast will be distributed over CCBN's Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center at www.companyboardroom.com or by visiting any of the investor sites in CCBN's Individual Investor Network such as America Online's Personal Finance Channel. Institutional investors can access the call via CCBN's password protected event management site, StreetEvents (www.streetevents.com). |
