Axys Pharmaceuticals Announces Second Quarter 2000 Financial Results; Quarter is Profitable on Gain on Sale of AAT Subsidiary.Business Editors/Health & Medical Writers SOUTH SAN FRANCISCO South San Francisco, city (1990 pop. 54,312), San Mateo co., W Calif.; inc. 1908. South San Francisco has several industrial parks; its manufactures include medical supplies and equipment, foods, paint, paper products, consumer goods, and clothing. , Calif.--(BW HealthWire)--August 2, 2000 Axys Pharmaceuticals, Inc. (Nasdaq:AXPH) today announced financial results for the quarter ended June 30, 2000. The results for the quarter included a gain on the sale of the Company's subsidiary, Axys Advanced Technologies (AAT Alpha-1-antitrypsin (AAT) A blood component that breaks down infection-fighting enzymes such as elastase. Mentioned in: Chronic Obstructive Lung Disease ), to Discovery Partners International, Inc. (Nasdaq:DPII DPII Discovery Partners International, Inc. ), a San Diego-based provider of drug discovery technologies to pharmaceutical and biopharmaceutical companies. Axys reported net income of $21.4 million, or $0.61 per share, in the second quarter of 2000, as compared to a loss of $13.2 million, or $0.44 per share, in the second quarter of 1999. Axys' net income of $21.4 million for the quarter reflected a $33 million gain that resulted from the April 28, 2000 merger of its AAT combinatorial chemistry Combinatorial chemistry involves the rapid synthesis or the computer simulation of a large number of different but structurally related molecules. Introduction Synthesis of molecules in a combinatorial fashion can quickly lead to large numbers of molecules. subsidiary into Discovery Partners International (DPII), in which Axys received 7.425 million shares of DPII common stock, a 40% ownership interest in DPII. For accounting purposes, the $33 million gain accounts for approximately 60% of the total gain on the transaction; the remaining 40% has been booked as an offset to the investment in DPII and will be reported as gain on sale in future quarterly statements as Axys' ownership interest in DPII declines. Year-to-date, net income of $12.9 million compared favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to the $21 million net loss reported for the six-month period ended June 30, 1999. The results for the quarter and year-to-date do not include Axys' equity interest in the results of DPII for the two months ended June 30, 2000. Second quarter 2000 operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the were $13.1 million, representing a 34% reduction from 1999's second quarter operating expenses of $19.7 million. Year-to-date operating expenses of $25.7 million compared favorably to the $37.4 million from continuing operations reported for the first half of 1999. The results reflected action taken by management in mid-1999 to eliminate early stage research as well as to realign re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. research expertise and programs to focus on nearer-term 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. research and development opportunities. General and administrative expenses of $2.8 million for the second quarter of 2000 were 29% below the same period in 1999. Research and development expenses of $10.4 million for the current quarter showed a 34% decrease from the year ago quarter. Collaboration partner revenues for Q2 2000, comprised primarily of research funding Research funding is a term generally covering any funding for scientific research, in the areas of both "hard" science and technology and social science. The term often connotes funding obtained through a competitive process, in which potential research projects are evaluated and for Axys' collaborative programs with Merck and Aventis, were $1.9 million, compared to revenues from continuing operations of $4.9 million for the corresponding quarter a year ago. The difference represented reduced research funding related to collaborations that were concluded last year in keeping with the Company's narrowed focus on an oncology pipeline. Cash, 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 and receivables totaled $42 million as of June 30, 2000. This balance does not include the proceeds from the equity investment from Acqua Wellington announced in July 2000, or the market value of the shares of DPII stock owned by the Company. On July 27, 2000 DPII stock began trading on Nasdaq following its initial public offering. John Walker, Chairman and Chief Executive Officer, stated, "At the beginning of 1998, we launched our strategy to fund ongoing drug discovery and development activities by incubating several affiliated technology units, eventually spinning them out as independent value-creating businesses. Since that time, we have executed on that strategy, with the spinouts of our agricultural biotech bi·o·tech n. Informal Biotechnology. biotech Noun short for biotechnology Noun 1. venture, Akkadix; our pharmacogenomics Pharmacogenomics is the branch of pharmacology which deals with the influence of genetic variation on drug response in patients by correlating gene expression or single-nucleotide polymorphisms with a drug's efficacy or toxicity. business, PPGx; and most recently, the merger of AAT with DPII. Based upon the DPII IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. price last Thursday, the value created by the AAT spinout spin·out n. An instance of spinning out: a motorist who was injured in a spinout. was approximately $134 million. As a result, the cash and marketable securities on hand at July 27 represents over five years of coverage based on a current projected annual burn rate of $25 million. "I am personally very pleased at the marriage of our strong science with a much stronger balance sheet. We can now pursue our strategy of becoming a vertically integrated oncology company with renewed vigor VIGOR Internal medicine A clinical study–Vioxx GI Outcomes Report comparing a proprietary COX-2 inhibitor to standard NSAIDs , knowing that our partnerships, as well as our affiliates provide a tangible level of support for our market valuation as well as our cash needs," Walker indicated. Company Highlights Highlights of the quarter's developments include: -- Tryptase Inhibitor for Ulcerative Colitis ulcerative colitis Inflammation of the colon, especially of its mucous membranes. The inflamed membranes develop patches of tiny ulcers, and the diarrhea contains blood and mucus. : In June, Axys announced that, following its review of a planned interim data analysis of its Phase II clinical study of APC-2059, the study would continue to its conclusion which involves evaluating 61 patients' clinical endpoints In a research trial, a clinical endpoint refers to a disease, symptom, or sign that constitutes one of the target outcomes of the trial. The results of a clinical trial generally indicate the number of people enrolled who reached the pre-determined clinical endpoint during the by the end of this calendar year. The planned interim analysis reviewed a variety of data from 25 patients, including the safety and tolerability tol·er·a·ble adj. 1. Capable of being tolerated; endurable. 2. Fairly good; passable. See Synonyms at average. tol of the drug, efficacy as measured by the Disease Activity Index (DAI Dai n. & adj. Variant of Tai. ), a clinically accepted measurement of the severity of ulcerative colitis; maintenance of the therapeutic benefit 14 days post-therapy; timing for onset of benefit; and an investigators' assessment after the course of therapy was completed. -- PPGx Developments: PPGx, a majority-owned joint venture of Axys and PPD (1) (Parallel Presence Detect) The method used by earlier SIMM memory modules to communicate their capacity to the computer. A binary number coming from a parallel set of pins was read by the system, with each pin representing one bit. Contrast with SPD. , Inc. (Nasdaq:PPDI) announced a collaboration to provide a web-based education and information resource based on important developments in pharmacogenomics for consumers and healthcare professionals. PPD and ADOCTORINYOURHOUSE, a premier health and wellness community Internet company, are providing the site design, educational material production and marketing infrastructure in collaboration with the pharmacogenomic technical expertise and services of PPGx to create a global Internet resource on pharmacogenomics. The pharmacogenomics site will provide educational videos and chat rooms, insight to ethical issues, links to related sites and support groups for consumers. -- Asthma Collaboration: In May, Axys' collaborative partner Bayer AG Bayer AG German chemical and pharmaceutical company. Founded in 1863 by Friedrich Bayer (1825–1880), it now operates plants in more than 30 countries. Bayer has originated scores of pharmaceuticals, chemicals, and synthetic materials; it was the first developer and indicated that it was discontinuing development of BAY 44-3428, a potential oral treatment for asthma due to toxicological properties of the compound. Axys Pharmaceuticals, Inc. is an integrated small molecule drug discovery and development company. Axys has a broad pipeline of products for chronic therapeutic applications that are partnered with world-class pharmaceutical companies and a proprietary product portfolio in oncology. Axys is also building shareholder value through affiliated businesses that leverage the Axys technologies in order to provide capital for Axys' drug discovery and development programs. In addition to the minority interest in DPII resulting from the AAT-DPII merger, Axys' technology leveraging businesses are: PPGx, a majority-owned pharmacogenomics company, and Akkadix Corporation, an agricultural biotechnology company. Except for the historical information contained herein, this press release contains 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. that involve risks and uncertainties which could cause Axys' actual results to differ materially from those discussed here, including the risks inherent in early stage development and the reliance on the efforts of collaborative partners, the risk that Axys collaborations will not be successful, the risk that clinical trials will not proceed as anticipated or may not be successful, the risk that Axys will not be successful in entering into new collaborations, market risk associated with Axys' substantial ownership interest in DPII, competition and marketing risk, and general economic conditions that may affect Axys' actual results and developments. Additional factors that could cause or contribute to such differences include, but are not limited to, those discussed in the sections entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "What Factors Could Cause Our Results to Differ Significantly from Those You Might Expect?" and "What Other Matters Should Stockholders Consider with Respect to Axys?" in the Axys' SEC Reports, including Axys' report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended December 31, 1999. For more information about Axys Pharmaceuticals, Inc., please visit the company's website at http:\\www.axyspharm.com.
AXYS PHARMACEUTICALS, INC.
Consolidated Statements of Operations
(unaudited)
(in thousands, except per share amounts)
Three months ended Six months ended
June 30, June 30,
2000 1999 2000 1999
Revenues
Collaboration and
licensing revenues $ 1,488 $ 4,734 $ 2,886 $ 13,063
Service revenues 366 162 619 342
Total revenues 1,854 4,896 3,505 13,405
Operating expenses:
Research and development 10,437 15,865 20,256 31,069
General and administrative 2,757 3,865 6,028 6,356
Restructuring charge (79) --- (625) ---
Total operating expenses 13,115 19,730 25,659 37,425
Operating loss (11,261) (14,834) (22,154) (24,020)
Interest income, net 347 295 223 695
Equity interest in loss of
joint venture --- (267) --- (830)
Minority interest 380 625 788 911
Other income, net (2) --- (2) ---
Loss from continuing
operations (10,536) (14,181) (21,145) (23,244)
Discontinued operations
Income (Loss) from
operations of
Discontinued segment (1,056) 967 1,061 2,283
Gain on disposal of segment 32,987 --- 32,987 ---
Net income (loss) $ 21,395 $(13,214) $ 12,903 $(20,961)
Basic and diluted net loss
per share from continuing
operations $ (0.30) $ (0.47) $ (0.63) $ (0.77)
Basic and diluted net
income (loss) per share $ 0.61 $ (0.44) $ 0.38 $ (0.69)
Shares used in computing
basic and diluted net
income (loss) per share 35,289 30,359 33,678 30,340
Consolidated Balance Sheet Data
(unaudited)
June 30, December 31,
2000 1999
(in thousands)
Cash & marketable investments $ 39,510 $ 26,657
Accounts receivable 2,396 4,786
Total assets 98,444 55,734
Accumulated deficit (264,308) (277,211)
Total stockholders' equity 64,340 14,047
Note: Quarterly and year to date results do not include Axys' equity interest in the results of DPII for the two months ended June 30, 2000. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion