CYGNUS REPORTS 1992 RESULTS 'ENTERING THE MARKET'
REDWOOD CITY, Calif., Jan. 29 /PRNewswire/ -- Cygnus Therapeutic Systems (NASDAQ: CYGN), a transdermal drug delivery company, today reported total revenues of $25.6 million for the year ended Dec. 31, 1992, compared to $5.1 million for 1991. Shipments of NICOTROL(TM), Cygnus' proprietary 16-hour nicotine patch, contributed $20.3 million to revenues in 1992 in its first five months on the market. NICOTROL had an 8.8-percent share of total prescriptions written for smoking cessation products in the United States in December 1992, according to the report of IMS International, a recognized pharmaceutical auditing company (not independently verified by Cygnus). Cygnus posted a net loss of $17.5 million ($1.36 per share) for 1992, as compared to a loss of $7.1 million (64 cents per share) in 1991. Prior to August 1992 launch of NICOTROL, Cygnus incurred significant process development and manufacturing start-up expenses, as the company scaled up to full commercial production of its first product. These preproduction and manufacturing start-up expenses and several one-time non-recurring charges contributed to the loss for the year. "With these non-recurring expenses behind us," said Shirley Liu Clayton, chief financial officer, "we are looking forward to NICOTROL's continuing contribution to future operating results." Gross margin reached 38 percent of total revenues in the fourth quarter, up from 19 percent in the third quarter, and averaged 28 percent for the entire year. Total revenues of $25.6 million for 1992 were 407 percent higher than 1991 as a consequence of NICOTROL sales. Contract revenues were $5.3 million in 1992, compared to $5.1 million in 1991. Total operating expenses for 1992 were $25.7 million, of which $14.7 million were research and development expenses. In 1992 the company incurred $5.5 million in non-recurring charges (43 cents per share) associated with preproduction and manufacturing start-up, reserves for potential legal expenses associated with patent litigation and other contractual matters, a one-time write-down of manufacturing and R&D equipment, and one-time non-cash compensation charges. Approximately half of these non-recurring charges were items that did not impact cash for the year. Fourth Quarter Results In the fourth quarter of 1992, Cygnus reported revenues of $10.3 million, compared to $11.9 million for the third quarter. NICOTROL sales were $8.9 million in the fourth quarter, down from $11 million in the third quarter, as the initial surge of shipments to fill the distribution channels in the third quarter flattened out in the fourth. The fourth quarter gross margin was 38 percent of total revenues compared to 19 percent achieved in the third quarter 1992. Fourth quarter 1992 net loss was $1.7 million, compared to a $4.5-million loss in third quarter 1992. This resulted in reduction of loss per share from 33 cents in the third quarter to 13 cents in the fourth quarter. General and administrative expenses in the third quarter included several non-recurring charges, such as a reserve for potential legal expenses associated with patent litigation and contractual matters. In general, apart from these non-recurring costs, operating expenses remained relatively constant in the last half of 1992. As of Dec. 31, 1992, the company had cash of $34.5 million and working capital of $29.9 million. Cygnus, located in Redwood City, is an innovative developer of advanced transdermal drug delivery systems. In addition to NICOTROL, the company has two other products in advanced clinical trials: an estradiol patch to treat osteoperosis, and fentanyl patch for moderate to severe post-operative pain management. The company has an extensive product development portfolio. These products include eight female hormone replacement therapy patches for osteoperosis, menopause and contraception; and transdermal systems for sedation, analgesia and for treatment of angina, anxiety and hypertension. Cygnus' newest active transdermal drug delivery technology is electroporation, which uses pulsed electrical currents to create temporary reversible pathways through cells and tissues. Preliminary studies of this proprietary technology have shown that electroporation may be particularly promising for chemotherapy treatment of solid mass tumors. In comparison to iontophoresis, which moves molecules through existing pathways in the skin, electroporation may be more effective for delivery of large proteins and peptides and for non-invasive glucose monitoring. CYGNUS THERAPEUTIC SYSTEMS FINANCIAL SUMMARIES Quarter ended Dec. 31: 1992 1991 (Unaudited) Product sales $ 8,887,000 $ --- Contract revenues 1,391,000 $ 1,161,000 Royalty income 64,000 --- Total revenues 10,342,000 1,161,000 Cost of products sold 6,453,000 --- Research & development 3,093,000 3,471,000 Selling, general & administrative 2,726,000 975,000 Loss from operations (1,930,000) (3,285,000) Net loss (1,709,000) (2,883,000) Shares used in computation of net loss per share 13,573,569 11,540,118 Net loss per share $ (0.13) $ (0.25) Year ended Dec. 31: 1992 1991 (Audited) Product sales $20,292,000 --- Contract revenues 5,287,000 $ 5,057,000 Royalty income 64,000 --- Total revenues 25,643,000 5,057,000 Cost of products sold 18,549,000 --- Research & development 14,718,000 10,148,000 Selling, general & administrative 11,017,000 3,424,000 Loss from operations (18,641,000) (8,515,000) Net loss (17,501,000) (7,061,000) Shares used in computation of net loss per share 12,846,094 11,021,407 Net loss per share $ (1.36) $ (0.64) -0- 1/29/93 /CONTACT: Shirley Clayton of Cygnus, 415-369-4300/ (CYGN)
CO: Cygnus Therapeutic Systems ST: California IN: MTC SU: ERN
GT-SG -- SJ001 -- 0620 01/29/93 09:02 EST
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|Date:||Jan 29, 1993|
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