Connetics Announces Fourth Quarter and Year-End Financial Results.Business Editors PALO ALTO Palo Alto, city, California Palo Alto (păl`ō ăl`tō), city (1990 pop. 55,900), Santa Clara co., W Calif.; inc. 1894. Although primarily residential, Palo Alto has aerospace, electronics, and advanced research industries. , Calif.--(BUSINESS WIRE)--Jan. 25, 2000 Connetics Corporation (Nasdaq:CNCT CNCT Connect CNCT Certified Network Computer Technician ) today announced financial results for the fourth quarter and fiscal year ending December 31, 1999. For the fourth quarter 1999, total revenues were $6.5 million, a 209% increase over revenues of $2.1 million in the same period last year. Net loss for the quarter was $8.6 million, or $0.33 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to the fourth quarter loss of $6.0 million or $0.32 per diluted share in 1998. For the fiscal year 1999, total revenues were $26.9 million versus $9.1 million in the prior year. Net loss for 1999 was $27.3 million, or $1.21 per diluted share, compared to a loss of $26.6 million, or $1.61 per diluted share a year ago. As of December 31, 1999, cash and investments were $26.3 million. Commenting on the company's performance, Thomas G. Wiggans, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Connetics, said &uot;1999 was the best year yet for Connetics. We nearly tripled revenues, expanded our sales force and launched our first dermatology dermatology (dûrmətŏl`əjē), branch of medicine concerned with diagnosis and treatment of diseases and disorders of the skin. product, filed an NDA (Non Disclosure Agreement) An agreement signed between two parties that have to disclose confidential information to each other in order to do business. In general, the NDA states why the information is being divulged and stipulates that it cannot be used for any for a second dermatology product, and signed a major technology license, which significantly enhanced our dermatology pipeline. In addition, we signed two corporate partnerships for relaxin re·lax·in n. A female hormone secreted by the corpus luteum that helps soften the cervix and relax the pelvic ligaments in childbirth. relaxin, n while retaining the U.S. commercial rights, completed enrollment of our pivotal trial in scleroderma scleroderma or progressive systemic sclerosis Chronic disease that hardens the skin and fixes it to underlying structures. Swelling and collagen buildup lead to loss of elasticity. The cause is unknown. , and initiated clinical trials with relaxin for infertility infertility, inability to conceive or carry a child to delivery. The term is usually limited to situations where the couple has had intercourse regularly for one year without using birth control. .&uot; &uot;As important as these achievements were in 1999, we believe they set the stage for continued revenue and product advances in 2000. Over the next year, we expect to continue our revenue growth, launch our second dermatology product, and announce pivotal trial results for scleroderma and Phase I/II results for the infertility trials. We are executing on our goal of developing a high-growth, specialty biopharmaceutical company. We are pleased with our accomplishments in 1999, and we are extremely excited about the year ahead,&uot; Mr. Wiggans said. The revenue growth in 1999 was attributed to the addition of two new products to the portfolio and to the increase in partnering activity for the relaxin program. In January 1999, Connetics expanded its licensing agreement with Genentech to include marketing rights to Actimmune(R) (interferon gamma interferon gamma IFN-γ A 21-25 kD glycoprotein lymphokine encoded on chromosome 12q and produced by activated T and NK cells; IFN-γ is antiviral, regulates class II MHC antigen expression, Fc receptors and immunoglobulin production and class switching, ), which is marketed for the management of infections in patients with CGD CGD Chronic granulomatous disease, see there . Connetics will retain those rights until the end of 2001, and thereafter will receive a royalty on Actimmune sales. In April 1999, Connetics launched its first dermatology product, Luxiq(TM) (betamethasone betamethasone /be·ta·meth·a·sone/ (ba?tah-meth´ah-son) a synthetic glucocorticoid, the most active of the antiinflammatory steroids; used topically as the benzoate, dipropionate, or valerate salts as an antiinflammatory, topically or valerate) Foam, 0.12%. Luxiq is a novel product developed using a proprietary, innovative foam delivery vehicle. Since its launch, Luxiq has been well received by patients and physicians, with unit sales unit sales Sales measured in terms of physical units rather than dollars. Unit sales data are often used by financial analysts when evaluating the health of a company. increasing steadily month-to-month. The increase in 1999 partnering revenue was attributed to the January partnership with Medeva PLC, for the development and commercialization of relaxin in Europe, and the July 1999 partnership with Paladin Paladin archetypal gunman who leaves a calling card. [TV: Have Gun, Will Travel in Terrace, I, 341] See : Wild West Labs, for development and commercialization of relaxin in Canada. To date, Connetics has received approximately $10.9 million in revenue from its relaxin partnerships. Relaxin is a human protein that is known to stimulate connective connective - An operator used in logic to combine two logical formulas. See first order logic. tissue turnover and the expression of VEGF VEGF vascular endothelial growth factor. and FGF FGF Fibroblast Growth Factor FGF Future Generation Foundation (Egypt) FGF Feel-Good Factor FGF Federación Gallega de Fútbol (Spain) FGF Fédération Guinéenne de Football (Guinea) in specific organ systems. Connetics is initially developing relaxin (ConXn(R) or recombinant human relaxin) for the treatment of scleroderma and infertility. Early in 1999, Connetics initiated a pivotal study with relaxin in diffuse diffuse /dif·fuse/ 1. (di-fus´) not definitely limited or localized. 2. (di-fuz´) to pass through or to spread widely through a tissue or substance. dif·fuse adj. scleroderma, the most severe form of the disease. By the end of the year, the trial was fully enrolled with 239 patients, becoming one of the largest clinical trials ever conducted in this population. In December, Connetics initiated Phase I/II clinical trials with relaxin for infertility. Playing a key role in driving the relaxin development program in 2000 will be Dr. Krisztina Zsebo who was recently appointed to the position of EVP EVP Executive Vice President EVP EGR (Exhaust Gas Recirculation) Valve Position Sensor EVP Electronic Voice Phenomenon EVP Europäische Volkspartei (Germany) EVP Employee Value Proposition , Research and Product Development. Dr. Zsebo joins Connetics with over 16 years experience in the biotech bi·o·tech n. Informal Biotechnology. biotech Noun short for biotechnology Noun 1. industry, notably working at Amgen for 8 years on programs such as Epogen(R) and Neupogen(R), products that have combined sales of over $2 billion. In addition, Dr. Zsebo will be focused on the development of the company's dermatology portfolio, and will be working closely with Greg Vontz who was recently appointed EVP and Chief Commercial Officer for the company. Mr. Vontz joined Connetics in December after spending twelve years at Genentech on strategic product development, senior marketing management and sales activities. Both Zsebo and Vontz will continue to bring valuable experience and vision to the business as the company continues development and expands commercialization for its dermatology business and relaxin program, and prepares for the commercialization of additional novel therapies. About Connetics Connetics Corporation, headquartered in Palo Alto, California “Palo Alto” redirects here. For other uses, see Palo Alto (disambiguation). Palo Alto (IPA: /ˌpæloʊˈʔæltoʊ/, from Spanish: palo: "stick" and alto: "high", i.e. , is a specialty biopharmaceutical company focused on novel product development and commercialization for dermatology and other specialty medical markets. For more information about Connetics and its products, please visit Connetics' Web Site at www.connetics.com, or send e-mail to ir@connetics.com. This news release may contain 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. or predictions. These statements represent our judgement as of this date and are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed in such forward-looking statements. Potential risks and uncertainties include, without limitation, those associated with product development, clinical trials, future revenues and profitability, and obtaining marketing approval. These and other factors are discussed in more depth in Connetics' Form S-3 dated October 5, 1999 for the Company's recently completed public offering and in the Company's other filings with the SEC. These documents contain and identify important factors that could cause the actual results to differ materially from those contained in the projections or forward-looking statements.
CONNETICS CORPORATION
Condensed Statements of Operations
(In thousands, except per share amounts)
Three Months Ended Years Ended
December 31, December 31,
1999 1998 1999 1998
Revenues:
Product $ 4,939 $ 2,093 $ 16,595 $ 7,473
Contract 1,532 - 10,311 1,648
-------- -------- -------- --------
Total revenues 6,471 2,093 26,906 9,121
Operating costs and expenses:
Cost of product revenues 950 348 5,229 1,374
License amortization 1,120 1,680 6,160 6,720
Research and development 6,946 2,978 20,834 11,446
Selling, general and
administrative 5,301 3,013 21,309 11,680
Charge for pre-FDA
approved product rights 1,000 - 1,000 4,000
-------- -------- -------- --------
Total operating
expenses 15,317 8,019 54,532 35,220
Interest and other income 378 204 1,211 808
Interest expense (119) (273) (868) (1,304)
-------- -------- -------- --------
Net loss $ (8,587) $ (5,995) $(27,283) $(26,595)
======== ======== ======== ========
Basic and diluted net
loss per share $ (0.33) $ (0.32) $ (1.21) $ (1.61)
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Shares used to calculate
basic and diluted net loss
per share 26,420 18,761 22,619 16,533
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Condensed Balance Sheets
(In thousands)
Year Ended December 31,
1999 1998
Assets
Assets:
Cash, equivalents and short-term
investments $ 26,299 $ 23,020
Accounts receivables and other
current assets 2,425 603
Property and equipment, net 1,505 1,128
Long-term assets 181 6,643
------------ ---------
Total Assets $ 30,410 $ 31,394
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Liabilities and Stockholders' Equity
Liabilities and stockholders' equity:
Current liabilities $ 15,323 $ 11,159
Other liabilities 799 7,783
Stockholders' equity 14,288 12,452
------------ ---------
Total liabilities and
stockholders' equity $ 30,410 $ 31,394
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