Diversa Reports Financial Results for the Quarter And Year Ended December 31, 2003
Not a bad result for a development stage biotech...
SAN DIEGO, Feb. 9 /PRNewswire-FirstCall/ -- Diversa Corporation (Nasdaq: DVSA - News) today reported financial results for the quarter and year ended December 31, 2003. Revenues for the quarter and year ended December 31, 2003, respectively, were $19.4 million and $49.0 million, compared to $9.1 million and $31.7 million for the same periods in 2002. The net loss for the quarter and year ended December 31, 2003 was $4.5 million, or $0.10 per share, and $57.7 million, or $1.39 per share, respectively. The net loss included non-cash acquisition expenses of $1.3 million and $23.7 million for the quarter and year, respectively. The net loss for the quarter and year ended December 31, 2002 was $6.3 million, or $0.18 per share, and $28.0 million, or $0.79 per share, respectively. At December 31, 2003, the Company had cash, cash equivalents, short-term investments, and receivables totaling $132.9 million.
The increase in revenues was primarily due to additional research funding from the Company's most recent research collaboration with Syngenta, increases in grant revenue, new product revenue, and revenue associated with the restructuring of Innovase. In December 2003, the Company and The Dow Chemical Company signed a definitive agreement to restructure the Innovase joint venture, resulting in the Company regaining the rights to certain products from Innovase and receiving an additional cash payment from Dow. In connection with the restructuring, the Company recorded $5.0 million in revenue in the fourth quarter. Revenues have historically fluctuated from period to period and likely will continue to fluctuate substantially in the future based upon the timing and composition of funding under existing and future collaboration agreements and joint ventures.
The increase in the net loss for the year was primarily due to pre-clinical development costs related to our antifungal program and professional services costs related to strategic transactions during the year. The net loss also included non-cash expenses of $8.7 million for the acquisition of the antifungal program from GlaxoSmithKline in July 2003 and $15.0 million for the Syngenta transactions that closed in February 2003.
Research and development expenses for the quarter and year ended December 31, 2003, respectively, were $20.4 million and $73.7 million, compared to $13.2 million and $50.2 million for the same periods in 2002. These increases were primarily related to headcount and facility related costs as a result of 71 additional researchers that were hired by the Company in conjunction with the February 2003 Syngenta collaboration agreement. In addition, pre-clinical development costs were incurred as a result of the acquisition of the antifungal program from GlaxoSmithKline in July 2003.
Selling, general and administrative expenses for the quarter and year ended December 31, 2003, respectively, were $3.0 million and $12.2 million, compared to $2.2 million and $10.3 million for the same periods in 2002. These increases were primarily attributable to headcount related costs to support the growth of the Company and professional service costs related to strategic transactions.
2003 Achievements
Diversa's achievements in 2003 reflect the success of the Company in several key areas:
-- Launched Phyzyme(TM) XP in collaboration with Danisco
-- Received regulatory approval of Zymetrics' product, Quantum(TM),
in Mexico
-- Identified antibody candidates against validated targets
-- Signed antibody collaborations with Medarex, Xoma, and Syngenta
-- Acquired antifungal program from GlaxoSmithKline
-- Received BioDefense awards representing a minimum potential of
$10 million from Department of Defense and National Institutes
of Health
-- Signed new collaborations with Bayer and Dupont
-- Entered into major collaboration with Syngenta (second expansion)
-- Completed Innovase restructuring
-- Achieved milestones with Givaudan and BASF
-- Signed Biosphere Microbial Sequencing Project with Joint Genome
Institute
-- Further expanded patent portfolio from 160 to 180 issued patents
"2003 represented a critical year for achievement of our collaboration and product advancement goals. As a result of many of the milestones achieved last year, we are projecting significant increases in revenue from our near-term industrial, chemical and agricultural products in 2004," stated Jay M. Short, Ph.D., President and Chief Executive Officer.
About Diversa
Diversa Corporation is a leader in applying proprietary genomic technologies for the rapid discovery and optimization of novel products from genes and gene pathways. Diversa is directing its integrated portfolio of technologies to the discovery, evolution, and production of commercially valuable molecules with pharmaceutical applications, such as optimized monoclonal antibodies and orally active drugs, as well as enzymes and small molecules with agricultural, chemical, and industrial applications. In addition, the Company has formed alliances and joint ventures with market leaders, such as Celera Genomics, The Dow Chemical Company, DuPont Bio-Based Materials, GlaxoSmithKline plc, Invitrogen Corporation, and affiliates of Syngenta AG. Additional information is available at Diversa's website: www.diversa.com .
Conference Call Information
Diversa will host a conference call with live Internet broadcast on Tuesday, February 10, 2004 at 1:00 p.m. EST. The call will provide a review of 2003 accomplishments, a preview of 2004, and financial guidance. To listen to the webcast, log on to the Internet at www.diversa.com/conferencecall . The call will be archived and available for rebroadcast until February 24, 2004 by logging onto this Internet address.
Forward-Looking Statements
Statements in this press release that are not strictly historical are "forward-looking" and involve a high degree of risk and uncertainty. These include statements related to fluctuating revenues under existing and future collaboration agreements and joint ventures, statements relating to BioDefense award values, and statements related to financial guidance, all of which are prospective. Such statements are only predictions, and actual events or results may differ materially from those projected in such forward-looking statements. Factors that could cause or contribute to differences include, but are not limited to, risks involved with the Company's new and uncertain technologies, risks associated with the Company's dependence on patents and proprietary rights, risks associated with the Company's protection and enforcement of its patents and proprietary rights, the Company's dependence on existing collaborations and its ability to achieve milestones under existing and future collaboration agreements, the ability of the Company to commercialize products using the Company's technologies, the development or availability of competitive products or technologies, and the future ability of the Company to enter into and/or maintain collaboration and joint venture agreements. Certain of these factors and others are more fully described in the Company's filings with the Securities and Exchange Commission, including, but not limited to, the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003. These forward-looking statements speak only as of the date hereof. The Company expressly disclaims any intent or obligation to update these forward-looking statements.
Note: Phyzyme is a trademark of Danisco Animal Nutrition.
For further information please contact: Hillary Theakston, Investor Relations, Diversa Corporation, +1-858-526-5121
Selected Financial Information
Condensed Statements of Operations
(unaudited, in thousands, except per share amounts)
Three Months Year Ended
Ended December 31, December 31,
2003 2002 2003 2002
Revenues:
Collaborative, net of
amortization $16,113 $8,395 $41,980 $30,276
Grant and product 3,254 684 6,979 1,379
Total revenues 19,367 9,079 48,959 31,655
Expenses:
Research and
development 20,365 13,172 73,652 50,162
In-process research
and development -- -- 19,479 --
Selling, general and
administrative 3,040 2,239 12,181 10,269
Amortization of
intangible assets 690 39 2,290 156
Non-cash, stock-based
compensation 2 98 132 701
Total operating expenses 24,097 15,548 107,734 61,288
Loss from operations (4,730) (6,469) (58,775) (29,633)
Interest and other
income, net 238 1,036 2,334 4,178
Equity in loss of
joint venture -- (830) (1,255) (2,532)
Net loss $(4,492) $(6,263) $(57,696) $(27,987)
Basic and diluted
net loss per share $(0.10) $(0.18) $(1.39) $(0.79)
Weighted average shares
used in computing
basic and diluted
net loss per share 43,045 35,767 41,592 35,650
Condensed Balance Sheet
(in thousands)
December 31, December 31,
2003 2002
Cash, cash equivalents and
short-term investments $127,483 $163,096
Accounts receivable 5,416 2,031
Other current assets 1,459 783
Property and equipment, net 32,123 27,427
Other assets 54,842 3,860
Total assets $221,323 $197,197
Current liabilities $18,435 $15,652
Deferred revenue 11,314 12,075
Long-term liabilities 10,131 12,155
Stockholders' equity 181,443 157,315
Total liabilities and
stockholders' equity $221,323 $197,197
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