Abgenix Announces 2003 Fourth Quarter and Full Year Financial Results.Business Editors BIOWIRE2K FREMONT, Calif.--(BUSINESS WIRE)--Feb. 24, 2004 Abgenix, Inc. (Nasdaq:ABGX) today reported financial results for the fourth quarter and full year ended December 31, 2003. For the quarter ended December 31, 2003, the company reported a net loss of $53.0 million or $0.60 per share, compared to a net loss of $38.9 million or $0.44 per share for the same period in 2002. Fourth quarter 2003 expenses included $9.3 million in costs related to starting up the company's antibody production facilities. The net loss for the fourth quarter of 2003 and 2002 included a $7.9 million and $2.2 million charge, respectively, associated with investments made in connection with collaborations. Contract revenues for the fourth quarter of 2003 were $6.4 million compared to $3.2 million for the same quarter in 2002. Contract revenues for the quarter ended December 31, 2003 primarily included product collaboration revenues, as well as manufacturing service revenues and technology licensing fees. For the year ended December 31, 2003, the company reported a net loss of $196.4 million compared to a net loss of $208.9 million for 2002. The net loss for 2003 included $72.5 million in manufacturing start-up Start-up The earliest stage of a new business venture. costs. The manufacturing start-up costs included a charge of $28.0 million associated with the cancellation of an agreement with Lonza Biologics. The net loss for 2003 and 2002 included impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges, of $7.9 million and $74.4 million, respectively, associated with investments made in connection with collaborations. Contract revenues for 2003 were $16.9 million compared to $19.3 million in 2002. Net cash used in operating activities in the fourth quarter of 2003 was $17.2 million. For the year ended December 31, 2003, net cash used in operating activities was $118.2 million. For the fourth quarter of 2003, capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. totaled $2.8 million. For the year ended December 31, 2003, total capital spending was $30.5 million. Abgenix ended the year with $347.8 million in cash, cash equivalents and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has . In addition, Abgenix holds long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. investments, primarily equity in corporate collaborators, valued at $20.7 million. "In 2003, we continued our transition to becoming a fully integrated product company, while managing our cash resources to meet our goals for the year," said Ray Withy with·y adj. 1. Made of or as flexible as withes; tough. 2. Wiry and agile. n. pl. with·ies 1. A rope or band made of withes. 2. a. , PhD., president and chief executive officer of Abgenix. "We have also made significant strides to diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. our pipeline and put in place strategic product development alliances as we prepare to advance our portfolio in 2004." Withy continued, "As we invest with Amgen in the ABX-EGF ongoing pivotal trials and development program, and we advance our clinical portfolio outside of oncology oncology /on·col·o·gy/ (ong-kol´ah-je) the sum of knowledge regarding tumors; the study of tumors. on·col·o·gy n. , we expect to see an increase in our research and development expenses during 2004. At the same time, we expect that the net cash used in operating activities will be in the range of $110-$125 million, and that our capital spending will be approximately $20-25 million. We intend to continue to make substantial investments in clinical and preclinical studies preclinical studies, n.pl a term used to describe research done before a clinical study. May be laboratory or epidemiologic research. , and to increase the scope of our manufacturing activities to support our product portfolio, including the ABX-EGF development program." Fourth quarter 2003 and recent company highlights include: -- Amendment of the ABX-EGF codevelopment agreement with Amgen to clarify that Amgen will lead clinical development and commercialization of ABX-EGF, while Abgenix is responsible for clinical and commercial manufacturing. Under the amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. agreement, Abgenix has the right to access up to $60 million in advances to fund its share of development and commercialization costs for ABX-EGF after Abgenix has contributed $20 million toward development costs in 2004; -- Completion of a $100 million investment by AstraZeneca in Abgenix securities, following the companies' announcement of a broad alliance to discover, develop and commercialize fully human monoclonal antibodies This is a list of monoclonal antibodies, antibodies which are clones of a single parent cell. When used as medications, the generic names end in -mab (see "Nomenclature of monoclonal antibodies"). to treat cancer; -- Receipt of a Drug Manufacturers License from the State of California, Food & Drug Branch (FDB FDB Fluid Dynamic Bearing (hard disk technology) FDB Font Definition Block (Macromedia Flash SWF file) FDB Forwarding Database FDB First Data Bank FDB Flexor Digitorum Brevis ). This license allows Abgenix to manufacture and ship clinical material from its state-of-the-art, 100,000-square foot biologics manufacturing facility in Fremont; -- Launch of a pivotal trial for ABX-EGF as a third-line monotherapy monotherapy /mono·ther·a·py/ (-ther´ah-pe) treatment of a condition by means of a single drug. mon·o·ther·a·py n. Treatment of a disorder with a single drug. in advanced colorectal cancer colorectal cancer Malignant tumour of the large intestine (colon) or rectum. Risk factors include age (after age 50), family history of colorectal cancer, chronic inflammatory bowel diseases, benign polyps, physical inactivity, and a diet high in fat. patients following receipt of a Special Protocol Assessment (SPA) by the US Food and Drug Administration. A second pivotal study in colorectal co·lo·rec·tal adj. Relating to the colon and the rectum, or to the entire large bowel. colorectal pertaining to or of the nature of the colon and the rectum. cancer patients was also launched outside the US as part of a global development program; -- Initiation of a Phase 1 clinical trial phase 1 clinical trial Phase 1 study. See Phase study. of ABX-PTH, a fully human monoclonal antibody monoclonal antibody, an antibody that is mass produced in the laboratory from a single clone and that recognizes only one antigen. Monoclonal antibodies are typically made by fusing a normally short-lived, antibody-producing B cell (see immunity) to a fast-growing generated by Abgenix's technology platform that targets and neutralizes the action of parathyroid hormone parathyroid hormone or parathormone, a hormone secreted by the parathyroid glands that regulates the metabolism of calcium and phosphate in the body. (PTH PTH abbr. parathyroid hormone Parathyroid hormone (PTH) A chemical substance produced by the parathyroid glands. This hormone is a major element in regulating calcium in the body. ). ABX-PTH is being developed for treatment of secondary hyperparathyroidism secondary hyperparathyroidism Endocrinology ↑ Parathyroid activity with overproduction of PTH due to parathyroid hyperplasia in response to an extraparathyroid defect that results in ↓ Ca2+ Etiology Rickets, vitamin D deficiency, chronic renal failure (SHPT SHPT Senior Health Physics Technician ), a chronic disorder that is frequently observed in patients with chronic kidney disease Kidney Disease Definition Kidney disease is a general term for any damage that reduces the functioning of the kidney. Kidney disease is also called renal disease. ; -- Announcement of a milestone payment from Pfizer following its recent Investigational New Drug (IND) application filing with the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. to advance a third XenoMouse(R)-derived antibody into the clinic. Conference call information Abgenix will hold a conference call today at 4:30 p.m. ET, 1:30 p.m. PT to discuss financial results. To participate in the teleconference, please dial 800-901-5231 fifteen minutes before the conference begins. International callers should dial 617-786-2961. The pass code is 66470202. The call will also be webcast live at www.abgenix.com. A replay of the call will be available until March 9, 2004 on the company's website or by dialing 888-286-8010. The replay participant code is 92816174. About Abgenix Abgenix is a biopharmaceutical company focused on the discovery, development and manufacturing of human therapeutic antibodies. The company's antibody development platform includes a leading technology and state-of-the-art manufacturing capabilities that enable the rapid generation, selection and production of high affinity, fully human antibody product candidates to a variety of disease targets. Abgenix leverages its leadership position in human antibody technology to build a diversified diversified (di·verˑ·s product portfolio through the establishment of collaborations with multiple pharmaceutical and biotechnology companies Top 100 Biotechnology Companies The following is a list of the top 100 biotechnology companies ranked by revenue. The first nine companies qualify for the list of the top 50 pharmaceutical companies. . For more information on Abgenix, visit the company's website at www.abgenix.com. Statements made in this press release about Abgenix's technologies, product development activities, collaborative arrangements and process science and manufacturing activities and about its projected financial results and the achievement of milestone or similar payments, other than statements of historical fact, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 clinical trials, the progress of research and product development programs, product manufacturing, regulatory approval processes, competitive products and services, future capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. and the extent and breadth of Abgenix's patent portfolio. Please see Abgenix's public filings with the Securities and Exchange Commission for information about risks that may affect Abgenix.
Three Months Ended Year Ended
CONSOLIDATED STATEMENT OF December 31, December 31,
OPERATIONS DATA --------------------- ---------------------
2003 2002 2003 2002
(in thousands except ----------- --------- ---------- ----------
per share data) (unaudited) (unaudited) *
Revenues:
Contract revenues $6,389 $3,158 $16,852 $19,293
Operating expenses:
Research and development 31,659 31,005 99,602 128,494
Manufacturing start-up
costs 9,346 -- 72,473 --
General and administrative 9,027 8,753 30,209 31,625
Restructuring charges -- 1,751 -- 1,751
Amortization of intangible
assets 1,792 1,814 7,190 7,251
----------- --------- ---------- ----------
Total operating expenses 51,824 43,323 209,474 169,121
----------- --------- ---------- ----------
Loss from operations (45,435) (40,165) (192,622) (149,828)
Other income (expense):
Interest and other income 1,943 4,685 9,953 20,145
Interest expense (1,651) (1,169) (5,784) (4,830)
Impairment of investments (7,892) (2,234) (7,892) (74,385)
----------- --------- ---------- ----------
Total other income
(expense) (7,600) 1,282 (3,723) (59,070)
----------- --------- ---------- ----------
Loss from operations
before income tax expense (53,035) (38,883) (196,345) (208,898)
Foreign income tax expense -- -- 84 --
----------- --------- ---------- ----------
Net loss ($53,035) ($38,883) ($196,429) ($208,898)
=========== ========= ========== ==========
Basic and diluted net
loss per share ($0.60) ($0.44) ($2.23) ($2.39)
=========== ========= ========== ==========
Shares used in computing
basic and diluted
net loss per share 88,175 87,580 87,930 87,237
=========== ========= ========== ==========
December 31,
CONSOLIDATED BALANCE SHEET DATA 2003 2002
----------- ----------
(in thousands) (unaudited) *
Cash, cash equivalents
and marketable securities $347,763 $396,549
Other current assets 17,816 21,182
----------- ----------
Total current assets 365,579 417,731
Property and equipment, net 246,277 244,419
Long-term investments 20,695 20,939
Intangible assets, net 118,496 127,129
Deposits & other assets 29,146 31,779
----------- ----------
Total assets $780,193 $841,997
=========== ==========
Deferred revenue $10,919 $3,416
Other current liabilities 50,368 32,525
----------- ----------
Total current liabilities 61,287 35,941
Convertible subordinated notes 200,000 200,000
Deferred rent 6,153 4,417
Redeemable convertible
preferred stock 99,737 --
Stockholders' equity 413,016 601,639
----------- ----------
Total liabilities and
stockholders' equity $780,193 $841,997
=========== ==========
* Derived from the December 31, 2002 audited financial statements.
Certain amounts have been reclassified to conform to the current
year presentation.
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