Tuesday November 3, 5:45 am Eastern Time
Company Press Release
SOURCE: Isis Pharmaceuticals, Inc.
Isis Pharmaceuticals Reports Third Quarter 1998
Results
CARLSBAD, Calif., Nov. 3 /PRNewswire/ -- Isis Pharmaceuticals, Inc. (Nasdaq: ISIP - news), today announced its
financial results for the third quarter ended September 30, 1998. The company's net loss for the quarter was $1.0 million, or
$0.04 per share, compared with net losses of $13.8 million, or $0.52 per share, for the second quarter of 1998 and $2.2
million, or $0.08 per share, for the third quarter of 1997. Isis earned revenue of $20.9 million in the quarter compared to $7.0
million during the second quarter of 1998 and $13.8 million in the third quarter of 1997. Third quarter revenue included $7.5
million in milestones from Isis' distribution partner, CIBA Vision Corporation (''CIBA''), due to the FDA's recent approval of
Vitravene(TM), a drug for the treatment of CMV retinitis in patients with AIDS. Isis delivered its first commercial shipment of
Vitravene(TM) to CIBA during the quarter, realizing product revenues of $0.6 million. In addition, Isis recognized fees of $4.0
million in connection with its licensing of certain issued patents covering immune stimulation by phosphorothioate
oligonucleotides to CpG ImmunoPharmaceuticals, Inc. Operating expenses for the quarter ended September 30, 1998 were
$18.9 million compared to $18.8 million for the second quarter 1998 and $15.2 million for the third quarter 1997. It is
expected that development expenses will increase in the future as drug candidates continue to progress through clinical trials.
Interest expense increased to $3.0 million in the current quarter from $2.1 million in the second quarter of 1998 and $.8 million
in the second quarter of 1997.
For the first nine months of 1998, Isis reported a loss of $26.3 million, or $0.98 per share, compared with a loss of $20.2
million, or $0.76 per share, for the same period in 1997. Revenue for the nine-month period in 1998 increased to $34.8
million from $25.9 million for the first nine months of 1997. Operating expenses for the first nine months of 1998 were $54.4
million compared with $44.1 million for the same period of 1997. This increase was primarily due to expenses related to
clinical and preclinical studies. Interest expense increased to $6.8 million for the first nine months of 1998 from $2.0 million for
the same period in 1997.
The increase in interest expense for both the third quarter and nine-month period in 1998 resulted from borrowing a total of
$40 million in the fourth quarter of 1997 and the second quarter of 1998 under ten-year debt financing arrangements.
Under the terms of these arrangements, payment of interest is deferred for the first five years. Therefore, of the $3.0 million of
interest expense recognized in the third quarter of 1998, $2.1 million was accrued under the long-term debt agreements and
will not require current cash payment. Similarly, of the $6.8 million of interest expense for the nine-month period ended
September 30, 1998, $4.3 million was accrued under the long-term debt agreements and will not require current cash
payment.
Cash and short-term investments amounted to $73 million at September 30, 1998, compared with $87 million at the end of
1997.
''We are very pleased with Isis' performance in the third quarter, which certainly ranks as one of the most exciting periods in
Isis' history,'' said B. Lynne Parshall, Executive Vice President and Chief Financial Officer. ''In August, Isis' CMV retinitis
drug, Vitravene(TM), was approved for marketing by the U.S. Food and Drug Administration, rapidly following a successful
review by an FDA Advisory Committee in July. Not only will this important therapeutic help many patients at risk for
developing CMV retinitis-induced blindness, but it also represents the world's first antisense drug to gain regulatory approval.
The rapidity and efficiency of the approval process underscores the experience and maturity of Isis' development,
manufacturing and regulatory organizations. We look forward to advancing additional antisense drugs toward the market in the
future.
''In the third quarter, Isis continued to exercise prudent cash management in support of our broad clinical development
program,'' continued Ms. Parshall. ''These efforts were supported by the license agreement with CpG
ImmunoPharmaceuticals which exemplifies the commercial and competitive value of our substantial patent estate. The financial
condition of Isis remains sound, with cash reserves that represent approximately two years of funding at currently anticipated
spending rates.
''As we near the year-end, we remain pleased with our overall progress,'' added Ms. Parshall. ''Our inflammatory disease
and cancer programs are advancing, and we anticipate initiating a variety of additional clinical trials in 1999. The interim
analysis of the ISIS 2302 pivotal quality trial in Crohn's disease should begin shortly. The outcome of that analysis, which the
company will not be able to announce publicly in order to preserve the integrity of the trial, will provide a basis for
development and regulatory decisions by Isis and Boehringer Ingelheim. We hope to complete the trials for rheumatoid
arthritis and kidney transplant rejection in the coming months, and are continuing to explore the potential of topical delivery of
ISIS 2302 for psoriasis and enema delivery for ulcerative colitis. The broad Phase II program for cancer drugs ISIS 3521 and
ISIS 5132 is progressing and should begin to yield results in 1999. The Phase I trial for cancer drug ISIS 2503 should be
completed soon, and the Phase II program should be initiated in 1999. In addition, we anticipate moving additional antisense
drugs into the clinic in 1999, underscoring the productivity of Isis' research and development programs and the proven broad
utility of antisense technology.''
This press release contains forward-looking statements concerning the financial position of Isis and the therapeutic and
commercial potential of compounds developed by the company. Such statements are subject to certain risk factors and
uncertainties, particularly those inherent in the process of discovering, developing and commercializing drugs that are safe and
effective for use as human therapeutics and the endeavor of building a business around such potential products. Actual results
could differ materially from those projected in this release. As a result, the reader is cautioned not to place undue reliance on
these forward-looking statements. These and other risks are described in additional detail in Isis' Annual Report on Form
10-K for the year ended December 31, 1997 and in the Company's most recent quarterly report on Form 10-Q, which are
on file with the U.S. Securities Exchange Commission, copies of which are available from the company.
Isis Pharmaceuticals, based in northern San Diego County, is engaged in the discovery and development of novel human
therapeutic compounds. Isis has six compounds in human clinical trials: Vitravene(TM) (fomivirsen), a drug to treat
CMV-induced retinitis in AIDS patients, has been approved for marketing by the FDA and is currently undergoing regulatory
review in Europe; ISIS 2302, an inhibitor of ICAM-1, is in a pivotal quality trial for Crohn's disease, Phase II clinical trials for
renal transplant rejection, rheumatoid arthritis and ulcerative colitis, and is being explored as a topical administration for
psoriasis and an aerosol administration for asthma; ISIS 3521 is in Phase II trials as a treatment for cancer; ISIS 5132 is in
Phase II clinical trials as a treatment for cancer; ISIS 2503 is in Phase I trials as a treatment for cancer; and ISIS 13312 is in
Phase I/II clinical trials for the treatment of CMV retinitis in AIDS patients. The company also has several additional
compounds in preclinical development. Isis' broad medicinal chemistry and biology research programs support efforts in both
antisense and small molecule drug discovery.
ISIS PHARMACEUTICALS
SELECTED FINANCIAL INFORMATION
(in thousands, except per share amounts)
Condensed Statements of Operations
Three months ended Nine months ended
September 30, September 30,
1998 1997 1998 1997
Revenues: (unaudited) (unaudited)
Contract revenue $19,279 $12,641 $30,951 $23,060
Product revenue 560 -- 560 --
Interest and other
income 1,038 1,133 3,309 2,846
Total revenues 20,877 13,774 34,820 25,906
Expenses:
Research and
development 16,540 13,368 47,931 38,528
General and
administrative 2,310 1,805 6,430 5,566
Interest expense 2,983 791 6,789 1,982
Total expenses 21,833 15,964 61,150 46,076
Net loss ($956) ($2,190) ($26,330) ($20,170)
Basic and diluted
net loss per share ($0.04) ($0.08) ($0.98) ($0.76)
Shares used in computing
basic and diluted net
loss per share 26,868 26,519 26,815 26,393
Condensed Balance Sheets
September 30, December 31,
1998 1997
(Unaudited)
Assets:
Current assets $75,575 $89,150
Property, plant and
equipment, net 20,347 18,785
Other assets 10,840 9,946
$106,762 $117,881
Liabilities and stockholders' equity:
Current liabilities $20,774 $26,577
Long-term obligations,
net of current portion 73,923 56,452
Stockholders' equity 12,065 34,852
$106,762 $117,881
SOURCE: Isis Pharmaceuticals, Inc. |
