Cell Genesys Reports Second Quarter Results
Ends Quarter With $229 Million in Cash
FOSTER CITY, Calif., July 22 /PRNewswire-FirstCall/ -- Cell Genesys, Inc. (Nasdaq: CEGE - News) reported net income of $6.5 million or $0.17 per fully diluted share for the quarter ended June 30, 2002. This compares with a net loss of $4.7 million or $0.14 per share in the same quarter of 2001. The net income can be primarily attributed to revenue from a newly signed license agreement with Transkaryotic Therapies, Inc. (TKT) for the company's gene activation technology. Cell Genesys ended the quarter with approximately $228.9 million in cash, cash equivalents and short-term investments.
Revenues for the quarter ended June 30, 2002 were $31.1 million compared with $4.0 million for the comparable period in 2001. The increase is primarily related to the aforementioned license agreement with TKT. The company's research and development costs for the quarter were $17.8 million, compared with $11.0 million for the second quarter of 2001, an increase that can be attributed principally to the company's expanding product development programs for both its GVAX® cancer vaccines and oncolytic virus therapies. Capital expenditures for the first half of 2002, relating primarily to the construction of manufacturing facilities for Phase III trials and market launch, were $22.5 million.
"As a result of our license agreement with TKT, we achieved greater than expected revenues during the second quarter. Such revenues, together with careful expense management, continue to keep Cell Genesys financially strong and in a position to fund the development of multiple clinical stage programs for the treatment of various cancers," stated Stephen A. Sherwin, M.D., chairman and chief executive officer of Cell Genesys. "During the quarter, we reported encouraging clinical data from our two most advanced clinical programs, expanded clinical trials in a third, and reported continued progress in building our preclinical product pipeline."
Second Quarter 2002 and Other Recent Highlights:
-- Reported encouraging long term survival data at the American Society of
Clinical Oncology (ASCO) meeting from the initial Phase II multicenter
trial of GVAX(R) prostate cancer vaccine in patients with hormone
refractory prostate cancer metastatic to bone. In the 34-patient
study, seven of 10 (70 percent) patients receiving the higher of two
dose levels of the vaccine remain alive 2.5 years after treatment
(median survival > 30 months). Of the 24 patients receiving the lower
dose of the vaccine, nine of 22 patients (41 percent) remain alive
2.5 years after treatment (median survival = 22 months), and two were
lost to follow-up. These results compare favorably to reported median
survival of seven to 11 months for hormone refractory prostate cancer
patients with bone metastases treated with chemotherapy. Based on
these encouraging data, Cell Genesys expects to initiate a Phase III
clinical trial during the first half of 2003.
-- Reported updated data at the Third International Lung Cancer Congress
from a multicenter Phase II trial which evaluated GVAX(R) lung cancer
vaccine. The new findings included survival data for 33 advanced
disease patients which demonstrated a median survival of 8.0 months, as
compared to the reported 5.7 to 7.0 months for the approved second-line
chemotherapy for such patients (docetaxel) or 4.6 months for best
supportive care. Three patients were reported to have achieved durable
complete responses (complete disappearance of tumor at all sites) with
a median duration of at least 16 months, and two of these patients were
noted to have a subtype of lung cancer known as bronchoalveolar
carcinoma (BAC). Based on these and other related findings, Cell
Genesys expects to conduct two Phase II clinical trials in patients
with BAC targeted to begin in the late 2002 to early 2003 timeframe,
and a Phase III trial in all types of non small-cell lung cancer could
be targeted for late 2003.
-- Initiated a multicenter Phase II clinical trial of GVAX(R) pancreatic
cancer vaccine in patients with inoperable or metastatic pancreatic
cancer. The new Phase II trial is in addition to a second ongoing
Phase II trial in patients with operable pancreatic cancer who receive
GVAX(R) pancreatic cancer vaccine in combination with pancreatic cancer
surgery and standard adjuvant radiation and chemotherapy. The new
Phase II trial is expected to enroll approximately 40 patients.
-- Announced the completion of a worldwide licensing agreement with TKT
under which Cell Genesys has exclusively licensed to TKT intellectual
property relating to its gene activation technology for certain
therapeutic proteins. In exchange, Cell Genesys received an up-front
license fee of $26 million comprised of $11 million in cash and
$15 million in shares of TKT common stock and could receive future
patent-related milestone payments.
-- Reported encouraging preclinical data at the American Society of Gene
Therapy (ASGT) meeting from the company's research collaboration with
EntreMed, Inc. for antiangiogenesis gene therapy of cancer. These data
demonstrate that the systemic delivery of the Angiostatin gene, an
angiogenesis inhibitor gene that blocks the growth of tumor blood
vessels, significantly decreased tumor burden and increased survival in
multiple types of cancer in preclinical animal studies. In these
studies, EntreMed's Angiostatin gene was combined with Cell Genesys'
adeno-associated viral (AAV) gene delivery system.
Cell Genesys is focused on the development and commercialization of innovative therapeutic products for cancer based on gene therapy technologies. The company is pursuing three cancer product platforms -- GVAX® cancer vaccines, oncolytic virus therapies and in vivo cancer gene therapies. Clinical trials of GVAX® vaccines are under way in prostate cancer, lung cancer, pancreatic cancer, leukemia and myeloma. Clinical trials of oncolytic virus therapies include CG7060 and CG7870 in prostate cancer. Preclinical stage programs include oncolytic virus therapies and gene therapies for multiple types of cancer. Cell Genesys' majority-owned subsidiary, Ceregene, is focused on gene therapies for neurologic disorders. Cell Genesys also continues to hold approximately nine million shares of common stock in its former subsidiary, Abgenix, an antibody products company. Cell Genesys is headquartered in Foster City, CA and has manufacturing operations in San Diego, CA, Hayward, CA and Memphis, TN. For additional information, please visit the company's website at www.cellgenesys.com.
Cell Genesys will host its quarterly conference call to discuss events that occurred during the second quarter of 2002 at 11:30 a.m. EDT on Tuesday, July 23, 2002. Investors may listen to the webcast of the conference call live on Cell Genesys' website. A replay of the webcast will be available for at least 48 hours following the call. Alternatively, investors may listen to a replay of the call by dialing 800-475-6701 from locations in the U.S. and 320-365-3844 from outside the U.S. The call-in replay will be available for 48 hours following the call. Please refer to access number 645045.
Statements made herein about the company and its subsidiaries, other than statements of historical fact, including statements about the application of the company's financial assets, progress reports and plans for clinical trials, the company's progress and results and timing of clinical trials and preclinical programs and the nature of product pipelines 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, clinical trials, the regulatory approval process for clinical trials, competitive technologies and products, patents, continuation of corporate partnerships and the need for 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 April 1, 2002 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. The company assumes no obligation to update the forward- looking information in this press release.
SELECTED FINANCIAL INFORMATION
(unaudited)
STATEMENTS OF OPERATIONS
Three months ended Six months ended
(in thousands except June 30, June 30,
per share data) 2002 2001 2002 2001
Revenue $31,102 $4,036 $35,697 $10,009
Operating expenses:
Research and development 17,800 11,010 34,363 21,760
General and administrative 4,350 2,839 8,006 5,514
Total operating expenses 22,150 13,849 42,369 27,274
Non-operating income (loss) (60) 1 (60) 95
Interest income, net 1,789 3,539 3,797 10,645
Net income (loss) before
minority interest and
income tax 10,681 (6,273) (2,935) (6,525)
Income (loss) attributed
to minority interest -- 27 98 (1)
Income (loss) before
income tax 10,681 (6,246) (2,837) (6,526)
Benefit (provision) for
income tax (4,200) 1,568 329 1,631
Net income (loss) $6,481 $(4,678) $(2,508) $(4,895)
Basic income (loss)
per common share $0.18 $(0.14) $(0.07) $(0.14)
Diluted income (loss)
per common share $0.17 $(0.14) $(0.07) $(0.14)
Weighted average shares of
common stock outstanding
- basic 35,645 34,366 35,635 34,229
Weighted average shares of
common stock outstanding
- diluted 37,855 34,366 37,929 34,229
Condensed Consolidated Balance Sheets
(in thousands) June 30, Dec. 31,
2002 2001
Cash, cash equivalents
and short-term investments $228,893 $258,649
Investment in TKT common stock 15,000 --
Investment in Abgenix common stock 87,751 301,217
Other current assets 2,141 10,603
Property and equipment, net 63,976 43,217
Other assets 1,536 1,624
Total assets $399,297 $615,310
Current liabilities $68,090 $149,690
Long-term obligations 55,556 60,000
Minority interest in equity
of subsidiary 0 96
Series B preferred stock 17,970 17,970
Stockholders' equity 257,681 387,554
Total liabilities and
stockholders' equity $399,297 $615,310
CONTACT: Jennifer Cook Williams, Associate Director, Corporate Communications of Cell Genesys, Inc., +1-650-425-4542.
SOURCE: Cell Genesys, Inc. |
