Cytogen To Remain On Nasdaq National Market
Dow Jones Newswires
PRINCETON, N.J. -- Cytogen Corp. (CYTO) said it will continue to trade on the Nasdaq National Market, following discussions with the exchange about its current financial situation.
In a press release Wednesday, the biopharmaceutical company said its financial condition, mentioned in a letter to shareholders Jan. 14, will be included in a public filing shortly. Cytogen added that it will adhere to its 1998 turnaround plan.
**************** Letter to shareholders *******************************
January 14, 1999
Dear CYTOGEN Stockholders:
CYTOGEN has accomplished a great deal in the past few months. So let me welcome you to the new year with my personal observations on CYTOGEN's strengthened financial position, our Company's 1998 turnaround achievements and plans for 1999.
In 1998, CYTOGEN tackled our turnaround objectives head on. We did so with a clearly defined strategic focus on preserving and enhancing the core CYTOGEN operations and competencies we need for long-term growth. And we achieved every restructuring priority: We exited non-core operations, increased operating efficiencies, improved our financial position and strengthened product marketing. We culminated these turnaround efforts with the recently announced sale of our manufacturing facility.
As we move into the new year, CYTOGEN is poised to emerge from our 1998 restructuring with streamlined operations, improved financial condition and new marketing programs. Our Company is now in solid shape to tackle our 1999 goals of growth and profitability. Following are highlights of these achievements and our 1999 plans.
•Strengthened Financial Position
With the completion of our turnaround plan, CYTOGEN is starting 1999 off with a sound financial base. As of this date, our cash on hand is approximately $10 million and our net tangible asset level has risen to more than $5.3 million.
I am also pleased to inform you that CYTOGEN will be taking advantage of legislation enacted by The State of New Jersey which permits New Jersey-based businesses to sell tax losses and R&D credits to other state-based businesses. We expect this to result in proceeds of approximately $5 million, $4 million of which is anticipated to be received in the first quarter of 1999. Receipt of these funds will substantially increase our net tangible assets and further improve our cash position.
The sale of our manufacturing facility to Bard BioPharma L.P., a subsidiary of Purdue Pharma, provided an upfront cash payment of $4 million in early January as well as a new manufacturing arrangement that will substantially decrease our cost of goods and reduce operating expenses. These reductions, along with revenue growth, can help CYTOGEN achieve profitability in 1999.
CYTOGEN's January completion of a $4.5 million sale of registered common stock to the Hillman Company and the State of Wisconsin demonstrated the confidence of our largest stockholders in our Company's achievements and prospects. This will provide funding for corporate development initiatives. Lastly, our $12 million funding facility from Kingsbridge Capital, Ltd. is expected to provide a significant source of additional funds we can draw on as needed for corporate purposes.
•1998 Turnaround Plan
The steps CYTOGEN took to strengthen our financial position were consistent with our corporate objectives: To strengthen our business in a way that preserves the core competencies we need for long-term growth. Specifically, four initiatives shaped our turnaround efforts:
· Closure or sale of research/development programs with no demonstrated potential for near-term economic returns: We closed Cellcor, sold our interest in the Targon subsidiary, and curtailed basic research.
· Significant expense reductions on a strategic basis: In addition to closing non-core developmental programs, we reduced our workforce and effectively outsourced manufacturing operations.
· Securing capital financing sources: We arranged financing approaches supporting our longer-term financial needs.
· Improved marketing partnerships: We selected a new marketing partner for our Quadramet product.
1999 Plans
As CYTOGEN's 1998 turnaround accomplishments take root, we can now focus on the fundamentals of our business. These efforts will continue CYTOGEN's work on business growth through further improvements in product marketing and strategic development.
In 1998, we announced a new marketing partner for Quadramet®, Berlex Laboratories. Berlex already has expanded, and is actively training, its dedicated oncology sales force, and is now laying the groundwork for relaunching Quadramet and implementing innovative marketing programs within first quarter 1999.
We also plan to participate in the national sales meeting of our ProstaScint® marketing partner, C.R. BARD, in January. At that time, we will introduce new ProstaScint marketing programs, oriented toward expanding the use of ProstaScint in the newly diagnosed patient population while maintaining our emphasis on the recurrent disease setting. In particular, we plan to evaluate ProstaScint in the emerging treatment approach of brachytherapy (seed implantation). Coupled with these steps, we are expanding our PIE site program with about 100 new sites to be added on a selective basis during 1999.
Our 1999 sales strategy also anticipates a renewed refocus on OncoScint®, particularly in the area of ovarian cancer.
In addition to expanding CYTOGEN product presence, we are working to develop our marketing territories internationally as well as product indications. In December, we submitted ProstaScint for approval to be marketed in Canada, and we expect an expedited review, which would potentially allow us to launch ProstaScint in that country during late 1999. We acquired an expanded license from The Dow Chemical Company for exclusive rights on the international use of Samarium EDTMP (trademarked Quadramet in North and Latin Americas) for rheumatoid arthritis. During 1999, we expect Phase I trials to be completed, and Phase II clinical development for this indication might possibly be initiated as well.
Having strengthened the Company, we plan to focus on development of our later-stage technology in 1999. CYTOGEN has a strategic commitment to position its AxCell Biosciences subsidiary as a player in the proteomics field. As part of that commitment, we recently appointed Brian Bullard, formerly of Perkin-Elmer, as AxCell's Chief Information Officer. Brian's recognized expertise in information technology will shape AxCell's proprietary database development and strengthen AxCell's ability to provide a unique, cost-efficient proteomic resource for drug discovery. CYTOGEN is aggressively pursuing discussions with the pharmaceutical industry during the first quarter of 1999.
As we begin 1999, CYTOGEN is committed to the achievement of this year's strategic priorities toward realizing stockholder value and renewed investor confidence. Therein, I want to recognize the support of our stockholders during 1998 and assure you of our continued determination to achieving our 1999 objectives with the same drive and resolve which enabled us to meet our 1998 goals. In this regard, we will also strive to continually improve our stockholder communications, and you can look forward to receiving these letters on a regular basis in 1999. We expect to announce 1998 year-end operating results early in February; please also visit our CYTOGEN website (www.cytogen.com) for more comprehensive information on our Company.
H. Joseph Reiser, Ph.D.
President and Chief Executive Officer
CYTOGEN Corporation |
