Corixa Announces Fourth Quarter and Year-End 2004 Financial Results.

SEATTLE -- Corixa Corporation (Nasdaq:CRXA), a developer of immunotherapeutics, today announced financial results for the fourth quarter and year ended December 31, 2004.

For the fourth quarter of 2004, Corixa reported total revenue of $8.3 million compared with total revenue of $12.5 million for the fourth quarter of 2003. Net loss applicable to common stockholders for the fourth quarter of 2004 was $24.8 million, compared with net loss of $16.9 million for the fourth quarter of 2003. Diluted net loss per common share for the fourth quarter of 2004 was $0.42 compared with diluted net loss per common share of $0.31 for the fourth quarter of 2003. Excluding acquisition-related charges, such as intangible and deferred compensation amortization, a lease-related impairment charge and restructuring charges, net loss applicable to common stockholders and diluted net loss per common share for the fourth quarter of 2004 were $20.1 million and $0.34, respectively, compared with net loss applicable to common stockholders and diluted net loss per common share of $14.4 million and $0.26, respectively for the fourth quarter of 2003.

On December 31, 2004, Corixa transferred all worldwide rights and responsibilities related to the manufacturing, development and commercialization of the BEXXAR(R) therapeutic regimen to GlaxoSmithKline (GSK). As a result, the company has classified all of its revenues and expenses related to BEXXAR since its approval in June 2003 as a discontinued operation in Corixa's statement of operations.

For the full year 2004, Corixa's total revenue was $25.0 million compared with $35.3 million for 2003. Net loss applicable to common stockholders was $77.0 million in 2004, compared with $84.9 million for 2003. Net loss applicable to common stockholders for 2004 and 2003 includes $2.6 million and $18.5 million, respectively, in lease-related impairment charges associated with our South San Francisco facilities.

Diluted net loss per common share for 2004 was $1.36 compared with diluted net loss per common share of $1.60 for 2003. Excluding acquisition-related charges, such as intangible and deferred compensation amortization, a lease-related impairment charge and restructuring charges, net loss applicable to common stockholders and diluted net loss per common share for 2004 were $71.8 million and $1.27, respectively, compared with net loss applicable to common stockholders and diluted net loss per common share of $62.4 million and $1.18, respectively for 2003.

A reconciliation of the Generally Accepted Accounting Principles (GAAP) net loss and net loss per share to the respective non-GAAP amounts for the three months and year ended December 31, 2004 and December 31, 2003, is set forth at the end of this press release.

As of December 31, 2004, Corixa had $116.2 million in cash, cash equivalents and investments.

"In 2004 we made adjustments to our business strategy that will enable us to more aggressively pursue adjuvant commercialization and the development of our innate immunity product portfolio," said Steven Gillis, Ph.D., chairman and chief executive officer of Corixa. "We are excited about the potential of our adjuvant and TLR4 programs and we look forward to continued clinical and commercial success in the year ahead."

2004 Key Accomplishments

--Signed license and supply agreements with Aventis Pasteur for the use of Corixa's RC-529 adjuvant in the development of several potential infectious disease vaccines. The agreements grant Aventis Pasteur co-exclusive and nonexclusive worldwide rights to RC-529 for use in multiple disease fields. Aventis Pasteur will pay Corixa upfront license fees and success-based milestone and royalty payments. Aventis Pasteur has also committed to placing annual orders for supply of RC-529 based on clinical trial and commercial forecasts.

--Initiated a Phase I clinical trial to test the safety and immune response activity of CRX-675 for seasonal allergic rhinitis. CRX-675 is one of Corixa's proprietary compounds that interact with and trigger toll-like receptor 4 (TLR4).

--Entered into a new manufacturing and guaranteed supply agreement with GSK covering the production of Corixa's flagship adjuvant, monophosphoryl lipid A, or MPL(R). The agreement, which runs through 2012, guarantees payment to Corixa for supplying GSK with increasing annual quantities of MPL peaking in 2008 at the current maximum output of Corixa's Hamilton, Montana, MPL manufacturing facility (approximately 2 kilograms/year).

Recent Developments (2005)

--In partnership with GSK, received European approval for Fendrix(R), a novel hepatitis B vaccine that contains Corixa's MPL(R) adjuvant. Fendrix builds on GSK's more than 15 years of experience with the hepatitis B vaccine, Engerix B(R), of which more than 1 billion doses have been distributed worldwide.

--Signed licensing agreements with Gen-Probe and DakoCytomation A/S, for the right to develop and commercialize diagnostic tests leveraging certain Corixa intellectual property covering multiple genetic sequences related to potential markers for various cancers.

--Signed licensing agreement with Genentech for the possible development of humanized antibody-based therapeutics. Under the terms of the agreement, Corixa received a $1.6 million up-front license fee, and may receive up to an additional $8.25 million in future success-based payments upon completion of certain regulatory and commercial milestones in addition to royalty payments on product sales. Genentech will be responsible for development and commercialization costs of any potential therapeutic based on Corixa's antibody target.

--As a result of increasing GSK sales projections for vaccines containing MPL Corixa has received a request from GSK to accelerate increased production of MPL in its Hamilton, Montana facility. GSK has provided Corixa with a firm forecast for MPL that approximates maximum capacity of Corixa's facility in calendar year 2006 and an extended forecast for the same amount in 2007. Previous forecasts used to drive minimum product purchase guarantees did not call for Corixa to reach maximum capacity output until 2008. Corixa is in the process of implementing a hiring plan at its Montana location that should allow it to accommodate GSK's request. This change in forecast will result in greater than previously anticipated adjuvant sales to GSK in 2006 and 2007.

Conference Call

Corixa will hold a conference call and webcast to discuss the fourth quarter and full year financial results Monday, March 14, 2004 at 8:30 a.m. ET / 5:30 a.m. PT. To access the live conference call, dial [phone] or [phone]. Webcast participants can sign up at the Investors page of Corixa's Web site (http://www.corixa.com/default.asp?pid=invest). A recorded replay of the conference call can be accessed through the Web site, or by dialing [phone] or [phone] and entering code 3037493. The call will be rebroadcast from March 14, 2005 at 11:30 a.m. ET to March 25, 2005 at 11:59 p.m. ET.

About Corixa

Corixa is a biopharmaceutical company developing vaccine adjuvants and immunology based products that manage human diseases. Corixa's products are currently in multiple clinical development programs, including several that have advanced to and through late-stage clinical trials. The company partners with numerous developers and marketers of pharmaceuticals, targeting products that are Powered by Corixa(TM) technology with the goal of making its potential products available to patients around the world. Corixa was founded in 1994 and is headquartered in Seattle, with additional operations in Hamilton, Montana. For more information, please visit Corixa's Web site at www.corixa.com.

Corixa Forward-Looking Statements

This press release contains forward-looking statements, including statements regarding the commercial potential for MPL adjuvant, the contribution of recent accomplishments to our long term success, and our plans, objectives, intentions and expectations. Forward-looking statements are based on the opinions and estimates of management at the time the statements are made. They are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Factors that could affect Corixa's actual results include, but are not limited to, the "Factors Affecting Our Operating Results, Our Business and Our Stock Price," described in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2004, copies of which are available from our investor relations department. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release.

Consolidated Statement of Operations

                           Three Months ended    Twelve months ended
                              December 31,           December 31,
                           ------------------- -----------------------
                              2004      2003      2004        2003
                           ------------------- -----------------------
Revenue:
  Collaborative agreements   $5,603   $11,465     $16,927     $29,911
  Product sales               1,449       529       4,547       3,031
  Government grants and
   contracts                  1,240       478       3,482       2,403
                           ------------------- -----------------------
    Total revenue             8,292    12,472      24,956      35,345

Operating expenses:
  Research and development   16,776    19,235      62,322      84,054
  Sales, general and
   administrative             3,480     2,324      10,254      11,762
  Manufacturing               1,498       314       3,246       1,380
  Restructuring               1,906     2,231       1,906       2,452
  Impairment of lease-
   related assets             2,572         -       2,572      18,491
                           ------------------- -----------------------
    Total operating
     expenses                26,232    24,104      80,300     118,139
                           ------------------- -----------------------
Loss from operations        (17,940)  (11,632)    (55,344)    (82,794)
Interest income                 491       928       2,875       3,414
Interest expense             (1,381)   (1,924)     (6,798)     (4,378)
Other income                    (11)    2,487       9,849       2,518
                           ------------------- -----------------------
Net loss from continuing
 operations                 (18,841)  (10,141)    (49,418)    (81,240)

Net loss from discontinued
 operations                  (5,833)   (6,700)    (26,989)     (2,679)
                           ------------------- -----------------------

Net loss                    (24,674)  (16,841)    (76,407)    (83,919)

Preferred stock dividend        (90)      (30)       (595)       (948)
                           ------------------- -----------------------

Net loss applicable to
 common stockholders       $(24,764) $(16,871)   $(77,002)   $(84,867)
                           =================== =======================

Basic and diluted net loss
 per common share:
  Continuing operations      $(0.32)   $(0.18)     $(0.87)     $(1.53)
                           =================== =======================
  Discontinued operations    $(0.10)   $(0.12)     $(0.48)     $(0.05)
                           =================== =======================
  Net loss applicable to
   common stockholders       $(0.42)   $(0.31)     $(1.36)     $(1.60)
                           =================== =======================

Shares used in computation
 of basic and diluted net
 loss per common share       59,294    55,265      56,569      52,981
                           =================== =======================


                                                December    December
                                                   31,         31,
                                                  2004        2003
                                               -----------------------
Balance Sheet Data:
Cash, cash equivalents and securities
 available-for-sale                              $116,187    $191,985
Working capital                                    72,878     106,771
Total assets                                      191,201     250,566
Long-term obligations less current portion        119,110     108,138
Accumulated deficit                            (1,270,967) (1,194,560)
Total stockholders' equity                         20,292      80,956


                           Three months ended    Twelve months ended
                              December 31,           December 31,
                              2004      2003       2004        2003
                           ------------------- -----------------------
Non-GAAP Financial
 Measures:
Reconciliation of net loss
 to net loss excluding
 acquisition related
 charges:

Net loss applicable to
 common stockholders       $(24,764) $(16,871)   $(77,002)   $(84,867)
  Impairment of lease-
   related assets             2,572         -       2,572      18,491
  Intangible asset and
   leasehold amortization       182       182         727       1,344
  Deferred compensation
   amortization                   -        18          15         188
  Restructuring charges       1,906     2,231       1,906       2,452
                           ------------------- -----------------------

Net loss excluding
 acquisition related
 charges                   $(20,104) $(14,440)   $(71,782)   $(62,392)
                           =================== =======================

Basic and diluted net loss
 per share excluding
 acquisition related
 charges                     $(0.34)   $(0.26)     $(1.27)     $(1.18)
                           =================== =======================

To supplement our consolidated financial statements presented on a GAAP basis, Corixa uses non-GAAP measures of net loss and net loss per share, which are adjusted to exclude certain expenses we believe appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our current period GAAP results are made with the intent of providing both management and investors a more complete understanding of Corixa's underlying operational results and trends and our marketplace performance. For example, the non-GAAP results are an indication of our baseline performance before other charges that are considered by management to be outside of our core operating results. In addition, these adjusted non-GAAP results are among the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net loss or net loss per share prepared in accordance with generally accepted accounting principles in the United States.