Corixa Reports Second Quarter Results.Business Editors, Health & Medical Writers BIOWIRE2k SEATTLE--(BW HealthWire)--Aug. 8, 2002 Corixa Corporation (Nasdaq:CRXA), a developer of immunotherapeutics, today announced results for the second quarter ended June 30, 2002. For the second quarter, Corixa reported total revenue of $13.9 million compared with total revenue of $15.6 million for the prior year period. Net income applicable to common stockholders for the second quarter was $5.2 million compared with a net loss of $32.4 million for the second quarter of 2001. Net income applicable to common stockholders for the second quarter included other income of $21.9 million from the sale of certain preclinical preclinical /pre·clin·i·cal/ (-klin´i-k'l) before a disease becomes clinically recognizable. pre·clin·i·cal adj. 1. assets and equipment to Medarex. 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 income per common share for the second quarter of 2002 was $0.12 compared with diluted net loss per common share of $0.79 for the second quarter of 2001. Excluding acquisition-related charges, such as intangible and deferred compensation amortization and restructuring charges 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. related to Corixa's 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. operations, net income applicable to common stockholders and diluted net income per common share for the second quarter of 2002 were $7.8 million and $0.16, respectively compared with net loss applicable to common stockholders and diluted net loss per common share of $14.2 million and $0.35, respectively for the second quarter of 2001. On May 23, 2002, Corixa announced the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of its South San Francisco operations. Corixa also announced the sale of specific preclinical assets to Medarex, and associated transfer of approximately 30 employees to Medarex to support those programs. In total, the workforce in South San Francisco was reduced by approximately 60 percent. Corixa recorded restructuring charges of $1.9 million in the second quarter of 2002 related to the workforce reduction. Corixa also expects to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. additional charges related to its leased facilities if it enters into sublease sublease n. the lease of all or a portion of premises by a tenant who has leased the premises from the owner. A sublease may be prohibited by the original lease, or require written permission from the owner. arrangements for these facilities. The reductions implemented at Corixa's South San Francisco operations are expected to result in annual cost savings in excess of $30 million. For the first six months of 2002, Corixa's total revenue was $29.5 million compared with $29.1 million for the prior year period. For the first six months of 2002 net loss applicable to common stockholders was $171.7 million, compared with $75 million for the first six months of 2001. Net loss applicable to common stockholders for the first six months of 2002 includes a first quarter goodwill 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 of $161.1 million resulting from a delay in the potential launch of BEXXAR(R). Diluted net loss per common share for the first six months of 2002 was $4.12 compared to diluted net loss per common share of $1.84 for the first six months of 2001. The decrease in revenue for the second quarter of 2002 compared with the prior year period primarily was due to a decline in milestone revenue from Corixa's collaborative agreement for BEXXAR with GlaxoSmithKline, as well as the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of its ex-vivo agreement with The 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. Research Institute. These decreases were partially offset by increased revenue from collaborative agreements with Beaufour Ipsen, Japan Tobacco, Organon or·ga·non or or·ga·num n. pl. or·ga·nons or or·ga·nums or or·ga·na 1. An organ. 2. A set of principles for use in scientific investigation. organon pl. organa [Gr.] organ. and Wyeth Lederle. At the end of the quarter, Corixa had approximately $80.5 million in cash, cash equivalents and investments. This cash balance does not reflect approximately $18 million payable in cash or stock that is owed Corixa under the terms of its recently announced asset sale to Medarex. In addition, this cash balance does not include Corixa's $75 million equity line of credit from BNY BNY Bank of New York Capital Markets that has not yet been accessed. Corixa expects its quarterly revenues to continue to vary as it enters into new agreements, reaches certain research and development milestones and receives license and research and development payments under existing and new agreements. "The actions we took in May to restructure our operations and refocus Verb 1. refocus - focus once again; The physicist refocused the light beam" focus - cause to converge on or toward a central point; "Focus the light on this image" 2. our staff and financial resources on core 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 development efforts have strengthened our balance sheet," said Steven Gillis, Ph.D., chairman and chief executive officer of Corixa. "We are committed more than ever to aggressively pursuing priority programs that we consider key to our success." Program Updates BEXXAR Corixa announced on June 27, 2002, that the company had been granted an appeal by the U.S. Food and Drug Administration (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. ) regarding the regulatory review status of BEXXAR, an investigational radioimmunotherapy for the treatment of low-grade or transformed low-grade non-Hodgkin's lymphoma non-Hodg·kin's lymphoma n. Any of various malignant lymphomas characterized by the absence of Reed-Sternberg cells. Non-Hodgkin's lymphoma . As stated previously, Corixa currently expects to present data on BEXXAR at an Oncologic on·col·o·gy n. The branch of medicine that deals with tumors, including study of their development, diagnosis, treatment, and prevention. [Greek onkos, mass, tumor; see nek- Drugs Advisory Committee meeting before the end of this year. PVAC PVAC Polyvinyl Acetate PVAC Petaluma Valley Athletic Club PVAC Professional Video Analyzing Computer PVAC Pajaro Valley Arts Council (Watsonville, CA) PVAC Peninsula Volunteer Ambulance Corps (Rockaway, NY) (TM) Corixa announced on June 6, 2002, that it has initiated an additional U.S. clinical study designed to evaluate the potential effectiveness of PVAC treatment for patients with mild to moderate plaque plaque (plak) 1. any patch or flat area. 2. a superficial, solid, elevated skin lesion. attachment plaques psoriasis psoriasis (sôrī`əsĭs), occasionally acute but usually chronic and recurrent inflammation of the skin. The exact cause is unknown, but the disease appears to be an inherited, possibly autoimmune disorder that causes the . Patients have begun enrollment at clinical sites across 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. . MELACINE(R) Effective July 31, 2002, Corixa reacquired worldwide rights to its MELACINE vaccine vaccine Preparation containing either killed or weakened live microorganisms or their toxins, introduced by mouth, by injection, or by nasal spray to stimulate production of antibodies against an infectious agent. from Schering Plough plough: see plow. . Schering Plough exercised its right to 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: its commitment to sales and marketing of MELACINE if the product was not approved in the United States by June 30, 2002. Schering Plough's subsidiary, Schering Canada, has agreed to continue to distribute MELACINE on Corixa's behalf under the terms of the prior agreement until Corixa enters into a new agreement with Schering Canada or another distributor. The MELACINE agreement with Schering Plough represented a commercialization agreement established by the former Ribi Immunochem Research, Inc. acquired by Corixa in 1999, under which Schering Plough provided no funding for the manufacturing or clinical development of the product. Corixa has begun to discuss potential commercialization of MELACINE with other parties that have expressed interest. Conference Call Corixa's earnings conference call and web cast will take place on Thursday, Aug. 8, 2002 at 5:00 p.m. ET/2:00 p.m. PT. Participants can access the call by dialing 888/202-2422 (international use 913/981-5592). Web cast participants can sign up at the Investors page of Corixa's web site at http://www.corixa.com/default.asp?pid=investor. Individuals who are unable to participate in Thursday's conference call can access a recorded rebroadcast by going to the Investors page of Corixa's web site (www.corixa.com) or by dialing 888/203-1112, (international use 719/457-0820) passcode 502461. The call will be rebroadcast until 11:00 p.m. ET, Aug. 10, 2002. About Corixa Corixa is a developer of immunotherapeutics with a commitment to treating and preventing autoimmune diseases Autoimmune diseases A group of diseases, like rheumatoid arthritis and systemic lupus erythematosus, in which immune cells turn on the body, attacking various tissues and organs. Mentioned in: Complement Deficiencies, Premature Menopause , 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. . Corixa is focused on immunotherapeutic 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. Corixa currently has 18 programs in clinical development. 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/ or call the company's investor relations Investor relations The process by which the corporation communicates with its investors. information line at 877/4CORIXA (426-7492) or 877/426-7492. Corixa Forward Looking Statements Except for the historical information presented, certain matters discussed in this press release are 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. . 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 risk that Corixa does not realize the expected financial benefits of its South San Francisco restructuring, the risk that the FDA does not approve BEXXAR for commercialization in a timely fashion, if at all, the risk that, if approved, Corixa is unable to successfully commercialize BEXXAR or its other product candidates, the risk that clinical trials for PVAC are not successful and the "Important Factors That May Affect Our Business, Our Results of Operations and Our Stock Price," described in Corixa's Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended March 31, 2002, copies of which are available from Corixa's 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.
Corixa Corporation
Consolidated Statement of Operations
(In thousands except per share data)
Three months ended Six months ended
June 30, June 30,
-------------------- ----------------------
2002 2001 2002 2001
--------- ---------- ----------- ----------
Revenue:
Collaborative agreements $ 13,110 $ 15,052 $ 28,115 $ 27,648
Government grants 776 573 1,337 1,478
--------- ---------- ----------- ----------
Total revenue 13,886 15,625 29,452 29,126
Operating expenses:
Research and development 26,382 32,423 51,067 71,219
Sales, general and
administrative 4,666 4,975 11,649 11,898
Intangible amortization 495 14,388 990 28,825
Goodwill impairment - - 161,060 -
--------- ---------- ----------- ----------
Total operating
expenses 31,543 51,786 224,766 111,942
Loss from operations (17,657) (36,161) (195,314) (82,816)
Interest income 1,054 2,491 2,249 5,569
Interest expense (587) (548) (1,137) (1,255)
Other income 22,521 2,425 22,843 4,737
--------- ---------- ----------- ----------
Net income (loss) 5,331 (31,793) (171,359) (73,765)
Preferred stock dividend (84) (625) (310) (1,250)
--------- ---------- ----------- ----------
Net income (loss)
applicable to common
stockholders $ 5,247 $ (32,418) $ (171,669) $ (75,015)
========= ========== =========== ==========
Basic net income (loss)
per common share $ 0.13 $ (0.79) $ (4.12) $ (1.84)
========= ========== =========== ==========
Shares used in computation
of basic net income
(loss) per
common share 41,737 40,875 41,667 40,740
========= ========== =========== ==========
Diluted net income (loss)
per common share $ 0.12 $ (0.79) $ (4.12) $ (1.84)
========= ========== =========== ==========
Shares used in computation
of diluted net income
(loss) per
common share 48,713 40,875 41,667 40,740
========= ========== =========== ==========
Balance Sheet Data:
Cash, cash equivalents and securities
available-for-sale $ 80,473 $ 121,064
Working capital 61,753 53,946
Total assets 183,726 367,382
Long-term obligations less current portion 29,667 27,657
Accumulated deficit (1,074,601) (903,242)
Total stockholders' equity 111,546 281,765
Three months ended
June 30,
-------------------
2002 2001
-------- ----------
Reconciliation of net income (loss) to net
income (loss) excluding acquisition related charges:
Net income (loss) applicable to common
stockholders $ 5,247 $ (32,418)
Intangible amortization 495 14,388
Deferred compensation amortization 226 3,855
Other charges 1,866 -
-------- ----------
Net income (loss) excluding acquisition related
charges $ 7,834 $ (14,175)
======== ==========
Basic net income (loss) per share excluding
acquisition
related charges $ 0.19 $ (0.35)
======== ==========
Diluted net income (loss) per share excluding
acquisition
related charges $ 0.16 $ (0.35)
======== ==========
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