Corixa Announces Third Quarter Financial Results and Restructuring.Business Editors & Health/Medical Writers SEATTLE--(BUSINESS WIRE)--Nov. 6, 2003 Corixa Corp. (Nasdaq:CRXA), a leading provider of immunotherapeutics, today announced financial results for the third quarter ended September 30, 2003. The company also announced it is restructuring its operations to focus on priority programs and commercialization efforts. For the third quarter of 2003, Corixa reported total revenue of $7.4 million compared with total revenue of $9.9 million for the third quarter of 2002. Net loss applicable to common stockholders for the third quarter of 2003 was $28.1 million, compared with net loss of $16.8 million for the third quarter of 2002. Net loss applicable to common stockholders for the third quarter of 2003 includes a $5.9 million impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge associated with sub-leasing of an additional 17,000 square feet of improved space in 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. . 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. net loss per common share for the third quarter of 2003 was $0.51 compared with diluted net loss per common share of $0.37 for the third quarter of 2002. Excluding acquisition-related charges, such as intangible and deferred compensation amortization and the lease-related impairment charge, net loss applicable to common stockholders and diluted net loss per common share for the third quarter of 2003 were $21.9 million and $0.40, respectively, compared with net loss applicable to common stockholders and diluted net loss per common share of $16.2 million and $0.36, respectively for the third quarter of 2002. Corixa co-promotion revenue or expense under its agreement with GlaxoSmithKline for the sale of BEXXAR therapeutic regimen in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. is determined based on the calculation of joint profit or loss, which is included in sales, general and administrative expense for the quarter ended September 30, 2003. During the initial period of product availability, Corixa expects to record losses from this joint business agreement, reflecting increased expenses for the cost of co-promotion revenue, promotion, education and training. For the first nine months of 2003, Corixa's total revenue was $36.5 million compared with $39.3 million for the first nine months of 2002. For the first nine months of 2003 net loss applicable to common stockholders was $68.0 million, compared with $188.5 million for the first nine months of 2002. Net loss applicable to common stockholders for the first nine months of 2003 includes an $18.5 million impairment charge associated with sub-leasing of improved space in South San Francisco. Net loss applicable to common stockholders for the first nine months of 2002 includes a first quarter goodwill impairment charge of $161.1 million resulting from a delay in the launch of BEXXAR. Diluted net loss per common share for the first nine months of 2003 was $1.31 compared with diluted net loss per common share of $4.38 for the first nine months of 2002. Excluding acquisition-related charges, such as intangible and deferred compensation amortization, lease-related impairment charges and the goodwill impairment charge, net loss applicable to common stockholders and diluted net loss per common share for the first nine months of 2003 were $48.2 million and $0.93, respectively, compared with net loss applicable to common stockholders and diluted net loss per common share of $22.6 million and $0.53, respectively for the first nine months of 2002. A reconciliation of the Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) net income/(loss) and net income/(loss) per share to the respective non-GAAP amounts for the three months and nine months ended September 30, 2003 and September 30, 2002, is set forth at the end of this press release. The decrease in revenue for the third quarter of 2003 compared with the prior year period was due primarily to the anticipated expiration of the funded research phases of certain of Corixa's collaborative agreements, including Corixa's vaccine development collaborative agreement with GlaxoSmithKline, the company's lung cancer lung cancer, cancer that originates in the tissues of the lungs. Lung cancer is the leading cause of cancer death in the United States in both men and women. Like other cancers, lung cancer occurs after repeated insults to the genetic material of the cell. vaccine partnership with Japan Tobacco Inc., and its therapeutic antibody agreement with Purdue Pharma Purdue Pharma L.P., is privately-held pharmaceutical company founded by physicians. It is located in Stamford, Connecticut. Purdue is best known for painkillers, but they have also branched into other areas such as oncology and nutraceuticals. L.P. Decreases in research collaboration revenue were partially offset by increased revenue related to Corixa's WT-1 cancer vaccine The term cancer vaccine is often used to describe a process whereby a person's immune system is coaxed into recognizing and destroying malignant cells without harming normal cells. agreement with Kirin. As of September 30, 2003, Corixa had $200.9 million in cash, cash equivalents and investments. Corixa also continues to have access to, subject to certain conditions, a $75 million equity line of credit from BNY BNY Bank of New York Capital Markets, a subsidiary of the Bank of New York The Bank of New York, abbrieviated to BNY, was a global financial services company that existed until its merger with the Mellon Financial Corporation on July 2, 2007.[1] The bank now continues under the new name of The Bank of New York Mellon Corporation. . As of September 30, 2003, draws under the credit line totaled $2.6 million. "Corixa continued to make substantial progress during the third quarter," said Steven Gillis, Ph.D., chairman and chief executive officer of Corixa. "We delivered on our commitment to make BEXXAR commercially available just 30 days following FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. approval, began enrolling patients in the third of three new IND studies this year, and announced the approval of the first infectious disease Infectious disease A pathological condition spread among biological species. Infectious diseases, although varied in their effects, are always associated with viruses, bacteria, fungi, protozoa, multicellular parasites and aberrant proteins known as prions. vaccine containing our RC-529 adjuvant adjuvant /ad·ju·vant/ (aj?dbobr-vant) (a-joo´vant) 1. assisting or aiding. 2. a substance that aids another, such as an auxiliary remedy. 3. . We continue to make progress with key business initiatives designed to support increased commercial opportunities for Corixa." Restructuring Corixa also announced today that it is restructuring its resources to focus on priority programs with the greatest opportunity for near term commercial success. The restructuring plan will reduce the scope and number of priority programs to allow the company to concentrate more resources on its core areas of expertise -- monoclonal antibodies This is a list of monoclonal antibodies, antibodies which are clones of a single parent cell. When used as medications, the generic names end in -mab (see "Nomenclature of monoclonal antibodies"). , vaccines and adjuvants and TLR TLR Trailer TLR Toll Like Receptor (immunological research) TLR Temple (University) Law Review TLR Twin Lens Reflex TLR Texas Law Review TLR The Last Resort (gaming clan) 4 agonists and antagonists antagonists, n muscles that counterbalance agonists during specific movements. opioid Neurology A pain-attenuating peptide that occurs naturally in the brain, which induces analgesia by mimicking endogenous opioids at opioid . This restructuring will result in an approximate 18 percent immediate reduction in Corixa's workforce, including the elimination of certain unfilled open positions, as well as existing positions. The workforce reduction is expected to result in annual cost savings of more than $8 million and the company expects to incur a fourth quarter restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of up to $2.5 million. Following the reductions, Corixa will have approximately 344 employees at facilities in Seattle, Washington  This page is protected from moves until disputes have been resolved on the .The reason for its protection is listed on the protection policy page. , South San Francisco, California South San Francisco is a city in San Mateo County, California, United States, located on the San Francisco Peninsula in the San Francisco Bay Area. The population was 60,552 at the 2000 census. and Hamilton, Montana Hamilton is a city in Ravalli County, Montana, United States. The population was 3,705 at the 2000 census. It is the county seat of Ravalli CountyGR6. History Hamilton was founded by copper king Marcus Daly in the late 19th century. . "Research activities over the past several years have yielded more opportunities than we can financially afford to pursue at this time," Gillis added. "Although decisions to eliminate programs and resources are difficult, focusing the scope of our pursuits on the greatest opportunities for near term commercial success are critical steps in achieving our financial and commercial objectives and will allow us to more efficiently allocate resources to priority programs." Program Update As a part of its ongoing portfolio analysis, the company also announced today that it will discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: the U.S. development of its MELACINE vaccine for melanoma melanoma: see skin cancer. melanoma Dark-coloured malignant tumour of skin cells that produce the protective skin-darkening pigment melanin. . Corixa has discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: the program based on the requirement to conduct an additional U.S. Phase III clinical trial Noun 1. phase III clinical trial - a large clinical trial of a treatment or drug that in phase I and phase II has been shown to be efficacious with tolerable side effects; after successful conclusion of these clinical trials it will receive formal approval from the that would likely take another five to seven years before an application for approval in the United States could be considered. The company is currently in discussions with multiple parties regarding potential out-licensing and product acquisition opportunities. Conference Call Corixa will hold a conference call and webcast to discuss the third quarter earnings Thursday, November 6, 2003 at 5 p.m. EDT/2 p.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT . To access the live conference call, dial 800-289-0496 or 913-981-5519. 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 888-203-1112 (domestic) or 719-457-0820 (international), and entering passcode 655565. The call will be rebroadcast until 12 a.m. ET, November 14, 2003. About Corixa Corixa is a developer of immunotherapeutics with a commitment to treating and preventing cancer and infectious diseases infectious diseases: see communicable diseases. by understanding and directing the immune system immune system Cells, cell products, organs, and structures of the body involved in the detection and destruction of foreign invaders, such as bacteria, viruses, and cancer cells. Immunity is based on the system's ability to launch a defense against such invaders. . On June 30, 2003, Corixa announced that the FDA approved BEXXAR for the treatment of patients with CD20 positive, follicular fol·lic·u·lar adj. 1. Relating to, having, or resembling a follicle or follicles. 2. Affecting or growing out of a follicle or follicles. , NHL NHL Non-Hodgkin's lymphoma, see there , with and without transformation, whose disease is refractory refractory Material that is not deformed or damaged by high temperatures, used to make crucibles, incinerators, insulation, and furnaces, particularly metallurgical furnaces. to Rituximab and has relapsed following chemotherapy. Corixa is focused on immunotherapeutic im·mu·no·ther·a·py n. pl. im·mu·no·ther·a·pies Treatment of disease by inducing, enhancing, or suppressing an immune response. im products and has a broad technology platform enabling both fully integrated vaccine design and the use of its separate, proprietary product components on a standalone stand·a·lone adj. Self-contained and usually independently operating: a standalone computer terminal. basis. In addition to BEXXAR, Corixa currently has multiple programs in clinical development, including several product candidates 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, Mont., and South San Francisco. For more information, please visit Corixa's Web site at http://www.corixa.com. Corixa 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. This press release contains forward-looking statements, including statements regarding the prospects for commercialization of BEXXAR and other statements about 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 Form 10-Q See 10-Q. for the quarter ended June 30, 2003, copies of which are available from our investor relations Investor relations The process by which the corporation communicates with its investors. department. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release.
Corixa Corporation
Consolidated Statement of Operations
(In thousands except per share data)
Three months ended Nine months ended
September 30, September 30,
---------------------------------------------
2003 2002 2003 2002
--------- --------- ------------ -----------
Revenue:
Collaborative
agreements $ 6,996 $ 9,274 $ 34,600 $ 37,389
Government grants and
contracts 395 602 1,924 1,939
--------- --------- ------------ -----------
Total revenue 7,391 9,876 36,524 39,328
Operating expenses:
Research and
development 21,037 23,677 69,932 76,030
Sales, general and
administrative 6,448 3,225 14,912 13,489
Intangible asset
amortization 110 110 330 330
Impairment of lease-
related assets 5,927 - 18,491 -
Goodwill impairment - - - 161,060
--------- --------- ------------ -----------
Total operating
expenses 33,522 27,012 103,665 250,909
--------- --------- ------------ -----------
Loss from operations (26,131) (17,136) (67,141) (211,581)
Interest income 954 1,130 2,486 3,379
Interest expense (1,716) (578) (2,453) (1,715)
Other income (866) 3 31 21,977
--------- --------- ------------ -----------
Net loss (27,759) (16,581) (67,077) (187,940)
Preferred stock dividend (316) (220) (918) (530)
--------- --------- ------------ -----------
Net loss applicable to
common stockholders $ (28,075)$ (16,801)$ (67,995)$ (188,470)
========= ========= ============ ===========
Basic net loss per common
share $ (0.51)$ (0.37)$ (1.31)$ (4.38)
========= ========= ============ ===========
Shares used in computation of basic
and diluted net loss
per common share 54,875 45,607 51,709 43,000
========= ========= ============ ===========
September 30, December 31,
2003 2002
------------ -----------
Balance Sheet Data:
Cash, cash equivalents and securities
available-for-sale $ 200,908 $ 116,757
Working capital 111,037 55,792
Total assets 260,946 196,106
Long-term obligations less current portion 103,430 6,920
Accumulated deficit (1,177,718) (1,110,641)
Total stockholders' equity 95,206 128,392
Three months ended Nine months ended
September 30, September 30,
---------------------------------------------
2003 2002 2003 2002
--------- --------- ------------ -----------
Non-GAAP Financial
Measures:
Reconciliation of net income/(loss)
to net income/(loss)
excluding acquisition
related charges:
Net income/(loss)
applicable to common
stockholders $ (28,075)$ (16,801)$ (67,995)$ (188,470)
Goodwill impairment - - - 161,060
Impairment of lease-
related assets 5,927 - 18,491 -
Intangible asset and
leasehold amortization 218 495 1,162 1,485
Deferred compensation
amortization 31 104 170 1,411
Other charges - - - 1,866
--------- --------- ------------ -----------
Net loss excluding
acquisition related
charges $ (21,899)$ (16,202)$ (48,172)$ (22,648)
========= ========= ============ ===========
Basic and diluted net loss per
share excluding acquisition
related charges $ (0.40)$ (0.36)$ (0.93)$ (0.53)
========= ========= ============ ===========
To supplement our consolidated financial statements presented on a
GAAP basis, Corixa uses non-GAAP measures of net income/(loss) and net
income/(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 income/(loss) or net income/(loss) per share
prepared in accordance with generally accepted accounting principles
in the United States.
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