Axys Pharmaceuticals Reports Second Quarter 2001 Financial Results.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)--Aug. 7, 2001 Axys Pharmaceuticals, Inc. (Nasdaq:AXPH) today reported revenues for the quarter ended June June: see month. 30, 2001 of $820,000 compared to $1.5 million in the second quarter of 2000. Revenues for the six months ended June 30, 2001 were $3.9 million compared to $2.9 million for the same period in 2000. The increase in the year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. amount was due to milestones earned from Merck Merck may refer to:
See: New York Stock Exchange :MRK MRK Merck & Company (stock symbol) MRK Mayer-Rokitansky-Kuster (anomaly) MRK Manual Remote Keying ) and Aventis S.A. (NYSE:AVE) in the first quarter of 2001. Axys also reported a net loss of $13.4 million, or $0.36 per share, for the second quarter of 2001, compared to a profit of $21.4 million or $.61 per share for the second quarter of 2000. The profit in 2000 reflected the sale of Axys Advanced Technologies to Discovery Partners International in April 2000. Results for the six months ended June 30, 2001 reflect a net loss of $31.5 million, or $.84 per share, compared to a net profit of $12.9 million, or $.38 per share, for the same period of 2000. Year-to-date results for 2001 included a $9.0 million non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. representing the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of an investment in Akkadix Corporation. Second quarter 2001 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. were $12.5 million, compared to $10.9 million incurred in the comparable quarter last year. Research and development expenses were $8.4 million in second quarter of 2001, compared to $8.0 million for the same period in 2000. The increase in research and development expenses was associated with APC (1) (American Power Conversion Corporation, West Kingston, RI, www.apcc.com) The leading manufacturer of UPS systems and surge suppressors, founded in 1981 by Rodger Dowdell, Neil Rasmussen and Emanual Landsman, three electronic power engineers who had worked at MIT. 2059 clinical development. General and administrative expenses were $4.5 million in the second quarter of 2001 compared to $2.9 million for the same quarter in 2000. The increase in general and administrative expenses is associated with expenses incurred in connection with the company's proposed acquisition by Applera Corporation -- Celera Genomics Group (NYSE: CRA See Community Reinvestment Act. ). Applera and Axys announced in a June 13, 2001 press release that they had entered into a definitive agreement whereby Applera would acquire Axys in a stock-for-stock transaction. Under the terms of the agreement, each share of Axys common stock will convert into that number of shares of newly issued Celera Genomics common stock to be determined at the time of the merger, based upon the market price of Celera Genomics common stock, subject to a collar mechanism. Following the June 13, 2001 announcement, Applera and Axys made filings to obtain the necessary regulatory approvals of the proposed acquisition. These included the filing by Applera of a Registration Statement on Form S-4 with the Securities and Exchange Commission (SEC), which included Axys' preliminary proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of shareholder approval of the acquisition. The parties are currently awaiting comments from the SEC on that Registration Statement. Following completion of the SEC review, which is the last remaining governmental approval for the acquisition, Axys plans to mail its proxy statement soliciting shareholder approval. Axys has not yet set a date for its shareholder meeting to approve the acquisition. About Axys Axys Pharmaceuticals, Inc., an integrated small molecule drug discovery and development company, 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 oncology /on·col·o·gy/ (ong-kol´ah-je) the sum of knowledge regarding tumors; the study of tumors. on·col·o·gy n. . Axys also has investments in affiliated businesses that leverage the Axys technologies. Currently, these companies include Discovery Partners International, Inc. (Nasdaq:DPII DPII Discovery Partners International, Inc. ), a chemistry services company; and DNA DNA: see nucleic acid. DNA or deoxyribonucleic acid One of two types of nucleic acid (the other is RNA); a complex organic compound found in all living cells and many viruses. It is the chemical substance of genes. Sciences, a genetics genetics, scientific study of the mechanism of heredity. While Gregor Mendel first presented his findings on the statistical laws governing the transmission of certain traits from generation to generation in 1856, it was not until the discovery and detailed study of company. On June 12, 2001, Axys entered into a definitive agreement with Applera Corporation -- Celera Genomics Group whereby Celera will acquire Axys. Investors and security holders are advised to read the Form S-4, filed by Applera Corporation with the Securities and Exchange Commission dated July 9, 2001, for more information regarding the acquisition. It is currently anticipated that the Form S-4/proxy statement/prospectus will be mailed to stockholders of Axys later this year, seeking their approval of the proposed transaction. Investors and security holders may obtain a free copy of the proxy statement/prospectus and other documents filed by Axys at the Securities and Exchange Commission's web site at www.sec.gov http://www.sec.gov. The proxy statement/prospectus and such other documents may also be obtained from Axys by directing such request to Axys Pharmaceuticals, 180 Kimball Way, South San Francisco, CA 94080, Attn: Investor Relations Investor relations The process by which the corporation communicates with its investors. , tel: (650) 829-1363. Certain statements in this press release are forward-looking. These may be identified by the use of forward-looking words or phrases such as "believe," "expect," "anticipate," and "potential," among others. These 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. are based on Axys' current expectations. The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 provides a "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " for such forward-looking statements. In order to comply with the terms of the safe harbor, Axys notes that a variety of factors could cause actual results and experience to differ materially from the anticipated results or other expectations expressed in forward-looking statements within this press release. The risks and uncertainties include but are not limited to: (1) failure of the merger transaction with Applera to close due to the failure to obtain regulatory or other approvals; (2) failure of the Axys shareholders to approve the transaction; (3) the risk that the Axys business will not be integrated successfully into Celera; (4) unanticipated costs of such integration; (5) failure to successfully manage relationships with customers, suppliers and strategic partners during the pendency Pend´en`cy n. 1. The quality or state of being pendent or suspended. 2. The quality or state of being undecided, or in continuance; suspense; as, the pendency of a suit s>. of and following the transaction; (6) unproven unproven Dubious, nonscientific, not proven, quack, questionable, unscientific adjective Relating to that which has not been validated by reproducible experiments or other scientific methods for determining effect or efficacy use of genomics information to develop products; (7) dependence on computer hardware, software, and internet applications; (8) potential adverse effect on the Celera Genomics group's intellectual property protection and the value of its products and services due to public disclosure of genomics sequence data; (9) government regulation of Celera's or Axys' products and services; (10) Axys' reliance on the efforts of its collaborative partners; (11) the risk that Axys' collaborations will not be successful; (12) the risk that clinical trials will not proceed as anticipated or may not be successful; (13) the risk that Axys will not be successful in entering into new collaborations; (14) market risk associated with Axys' substantial ownership interest in Discovery Partners International, Inc. and Axys' investments in its other affiliated businesses; and (15) other factors that might be described from time to time in Axys' filings with the Securities and Exchange Commission. Axys and its directors, executive officers and certain members of management and employees may solicit proxies from Axys shareholders in favor of upon the side of; favorable to; for the advantage of. See also: favor the adoption of the merger agreement and the transactions associated with the acquisition. A description of any interests that Axys directors and executive officers have in the acquisition are available in the joint proxy statement/prospectus.
AXYS PHARMACEUTICALS, INC.
Statements of Operations
(unaudited)
Three Months ended Six Months ended
June 30, June 30,
2001 2000* 2001 2000*
--------- -------- ---------- ---------
(in thousands, except per share amounts)
Collaboration and
license revenue $ 820 $ 1,508 $ 3,890 $ 2,922
--------- -------- ---------- ---------
Operating expenses:
Research and
development 8,435 8,039 17,364 15,897
General and
administrative 4,480 2,908 7,722 5,722
Non-cash compensation
expense (income) (397) - (1,448) -
Restructure charge - (78) - (623)
--------- -------- ---------- ---------
Total operating
expenses 12,518 10,869 23,638 20,996
--------- -------- ---------- ---------
Operating loss (11,698) (9,361) (19,748) (18,074)
Other income
(expense): (1,710) 554 (12,690) 519
--------- -------- ---------- ---------
Loss from continuing
operations, before
cumulative effect,
gain from sale
of subsidiary and
discontinued
operations (13,408) (8,807) (32,438) (17,555)
Cumulative effect of
a change in
accounting policy - - 972 -
Gain from sale
of subsidiary - 32,987 - 32,987
Loss from
discontinued operations - (2,785) - (2,529)
--------- -------- ---------- ---------
Net (loss)/income $ (13,408) $ 21,395 $ (31,466) $ 12,903
========= ======== ========== =========
Basic and diluted
net loss per share
from continuing
operations $ (0.36) $ (0.25) $ (0.87) $ (0.52)
Basic and diluted
net loss per share
from cumulative
effect of a change
in accounting
policy $ - $ - $ 0.03 $ -
Basic and diluted
earnings per share
from gain on sale
of subsidiary $ - $ 0.94 $ - $ 0.98
Basic and diluted
net loss per share
from discontinued
segments $ - $ (0.08) $ - $ (0.08)
--------- -------- ---------- ---------
Basic and diluted
net loss
per share $ (0.36) $ 0.61 $ (0.84) $ 0.38
========= ======== ========== =========
Shares used in
computing basic
and diluted net
loss per share 37,611 35,289 37,480 33,678
* The 2000 results of the Company's former subsidiaries, Axys Advanced
Technologies and PPGx, have been reclassified in accordance with APB
30 Reporting the Results of Operations
Condensed Balance Sheet Data
June 30, December 31,
2001 2000
(unaudited)
----------------- --------------
(in thousands)
Cash, cash equivalents & marketable
investments (includes $4.0M of
restricted cash) $ 20,827 $ 41,776
Total assets 99,244 118,696
Accumulated deficit (298,821) (267,355)
Total stockholders' equity 59,695 79,565
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