Dendreon Corporation Reports Fourth Quarter and Year End 2002 Financial Results; 2002 - An Unprecedented Year of Progress.Business Editors/Health/Medical Writers BIOWIRE2K SEATTLE--(BUSINESS WIRE)--March 5, 2003 Dendreon Dendreon is a Seattle based biotechnology company. Its leading product candidate, Sipuleucel-T (known as Provenge during drug trials), is an immunotherapy for prostate cancer. Corporation (Nasdaq:DNDN) today reported results for the year and quarter ended December December: see month. 31, 2002. Revenues for the year ended December 31, 2002 were $15.3 million, compared to $13.8 million for the year ended December 31, 2001. Revenues for the fourth quarter of 2002 were $4.1 million, compared to $3.8 million for the same period in 2001. The increase in revenue for the year was due in part to a milestone payment received from Kirin Kirin, province, China Kirin: see Jilin, prov., China. Kirin, city, China Kirin, city: see Jilin, China. Brewery A brewery can be a building or place that produces beer, or a business (brewing company) whose trade is the production and sale of beer. Breweries can take up multiple city blocks, or be a collection of equipment in a homebrewer's kitchen. Co., Ltd. for its start of a clinical trial of Mylovenge in Japan. Revenues also included research support from Johnson & Johnson Pharmaceutical Research & Development, L.L.C. and Kirin. The net loss for the year ended December 31, 2002 was $24.7 million, or $0.96 per share, compared to $23.2 million, or $0.94 per share for the year ended December 31, 2001. The net loss for the fourth quarter of 2002 was $5.8 million, or $0.22 per share, compared to a net loss of $9.1 million, or $0.37 per share, for the same period in 2001. Cash used by operations in 2002 was $26.9 million compared to $13.6 million in 2001. The increase in net loss was due to lower interest income resulting from lower average cash balances and lower interest rates. Dendreon's total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the year ended December 31, 2002 of $41.2 million were essentially unchanged compared to the year ended December 31, 2001 of $41.2 million. As of December 31, 2002, Dendreon had approximately $55.0 million in cash, cash equivalents, short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. investments. This compares to $80.6 million as of December 31, 2001. "During 2002, we continued to manage our financial resources prudently to advance our diverse product pipeline," said Martin Simonetti, Senior Vice President of Finance and Chief Financial Officer. "Our collaborations provided funding for several of our programs and helped offset a significant portion of our research and development expenses." "2002 was a significant year of progress for Dendreon and we enter 2003 with growing momentum driving our product pipeline and collaborations," said Mitchell Mitchell, city (1990 pop. 13,798), seat of Davison co., SE S.Dak.; inc. 1881. Mitchell is a trade, distribution, and shipping center for a dairy and livestock area. H. Gold, M.D., Chief Executive Officer. "The encouraging data from our first placebo placebo (pləsē`bō), inert substance given instead of a potent drug. Placebo medications are sometimes prescribed when a drug is not really needed or when one would not be appropriate because they make patients feel well taken care of. controlled Phase III Noun 1. phase III - 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 FDA trial of Provenge(TM) enabled us to work with the 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. to structure a pivotal Phase III trial program for this product candidate. Looking ahead, we plan to advance other product opportunities from our promising 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. platform, and from our comprehensive collaboration Working together on a project. See collaborative software. with Genentech based on the Trp-p8 gene platform, including 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"). and small molecule drugs. As announced last week, we have entered into a definitive merger agreement under which we will acquire Corvas International, Inc., a strategic transaction that we believe will expand our product opportunities, enhance our research and development capabilities and significantly strengthen our balance sheet. We intend to aggressively advance our clinical programs, select additional preclinical preclinical /pre·clin·i·cal/ (-klin´i-k'l) before a disease becomes clinically recognizable. pre·clin·i·cal adj. 1. programs to move toward IND filings and to continue managing our financial resources to support our key programs and future growth." Highlights for 2002 include: -- Reporting data from the first placebo controlled Phase III trial of Provenge in patients with hormone resistant prostate cancer, D9901. While the trial did not meet the primary endpoint of the study, Provenge therapy did result in a significant increases in median time to disease progression as well as the time to onset of cancer-related pain in men with a Gleason score of 7 or less. -- Establishing a strategic collaboration with Genentech, Inc. around Dendreon's Trp-p8 gene platform. -- Outsourcing operations at the company's California cell processing center to Progenitor Cell Therapy, L.L.C., resulting in manufacturing, operating and cost efficiencies. -- Working successfully with FDA to resolve product characterization questions related to the Company's second Phase III trial of Provenge, D9902, and to resume patient enrollment in this trial. -- Establishing D9902 as the pivotal trial for seeking marketing approval for Provenge. -- Presenting encouraging data from clinical and preclinical studies of APC8024, the company's investigational therapeutic vaccine for breast, ovarian and colon cancer. On February 25, 2003, Dendreon and Corvas International, Inc. announced that they had entered into a definitive merger agreement under which Dendreon will acquire Corvas. Under the terms of the agreement, each share of Corvas common stock will be exchanged for a fixed ratio of 0.45 shares of Dendreon common stock in a tax-free reorganization. Based on Dendreon's closing share price of $5.79 on February 24, 2003, the day prior to the announcement, the transaction is valued at $72.9 million. The acquisition, which has been approved unanimously by the boards of directors of both companies, is subject to approval by the stockholders of each company. Following the closing of the acquisition, and payment of existing Corvas convertible debt, Dendreon is expected to have approximately $110 million in cash. Dendreon's existing stockholders will own approximately 68.6% of the combined company and Corvas' existing stockholders will own approximately 31.4%. The transaction is anticipated to close in the second quarter of 2003. Dendreon Corporation is a biotechnology company developing targeted therapies for cancer. Dendreon currently has multiple therapeutic vaccines therapeutic vaccine Immunology A vaccine–eg, Salk's Remune™ intended to treat a viral infection by stimulating the immune system. See Vaccine therapy. in clinical trials and preclinical development. Dendreon's product pipeline also includes monoclonal antibodies and a pathway pathway /path·way/ (path´wa) 1. a course usually followed. 2. the nerve structures through which an impulse passes between groups of nerve cells or between the central nervous system and an organ or muscle. to small molecules. Dendreon has established important alliances with industry leaders Genentech, Inc. and Kirin Brewery Co., Ltd. For more information, visit http://www.dendreon.com. Additional Information About the Acquisition and Where to Find It Dendreon and Corvas intend to file with the Securities and Exchange Commission ("SEC") a joint proxy statement/prospectus with respect to the acquisition and other relevant materials. INVESTORS AND SECURITY HOLDERS OF DENDREON AND CORVAS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND THE OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT DENDREON, CORVAS AND THE ACQUISITION. The joint proxy statement/prospectus and other relevant materials (when they become available), and any other documents filed by Dendreon or Corvas with the SEC, may be obtained free of charge at the SEC's web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents (when they are available) filed with the SEC by Dendreon by directing a request to: Dendreon Inc., 3005 First Avenue, Seattle, WA 98121, Attn: Investor Relations Investor relations The process by which the corporation communicates with its investors. . Investors and security holders may obtain free copies of the documents filed with the SEC by Corvas by contacting Corvas Investor Relations at 3030 Science Park Road, San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. CA 92121. Dendreon, Corvas and their respective executive officers and directors may be deemed to be participants in the solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of proxies from the stockholders of Dendreon and Corvas in favor of upon the side of; favorable to; for the advantage of. See also: favor the acquisition. Information about the executive officers and directors of Dendreon and their ownership of Dendreon common stock is set forth in the proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. for Dendreon's 2002 Annual Meeting of Shareholders, which was filed with the SEC on April 12, 2002. Information about the executive officers and directors of Corvas and their ownership of Corvas common stock is set forth in the proxy statement for Corvas' 2002 Annual Meeting of Shareholders, which was filed with the SEC on April 26, 2002. Certain directors and executive officers of Corvas may have direct or indirect interests in the merger due to securities holdings, pre-existing or future indemnification Indemnification Used in insurance policy agreements as to compensation for damage or loss. In the context of corporate governance, Director Indemnification uses the bylaws and/or charter to indemnify officers and directors from certain legal expenses and judgements resulting from arrangements, vesting Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: of options, rights to severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when payments if their employment is terminated following the merger. Additional information regarding Dendreon, Corvas, and the interests of their respective executive officers and directors in the acquisition will be contained in the joint proxy statement/prospectus regarding the acquisition. Investors and security holders are urged to read the joint proxy statement/prospectus and the other relevant materials when they become available before making any voting or investment decision with respect to the acquisition. Except for historical information contained herein, this news release contains 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. , including statements about future financial and operating results and Dendreon's anticipated acquisition of Corvas. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties, particularly those risks and uncertainties inherent in any acquisition transaction and in the process of discovering, developing and commercializing drugs that are safe and effective for use as human therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. , that could cause actual results to differ materially from those described in the forward-looking statements. Statements of expected synergies, accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the , timing of closing, execution of integration plans and management and organizational structure  This article has no lead section.To comply with Wikipedia's lead section guidelines, one should be written. are all forward-looking statements. Risks and uncertainties include the possibility that the market for the sale of certain products may not develop as expected; that development of these products may not proceed as planned; the acquisition of Corvas does not close or that the companies may be required to modify aspects of the transaction to achieve regulatory approval; that prior to the closing of the proposed acquisition, the businesses of the companies suffer due to uncertainty; that the parties are unable to successfully execute their integration strategies or achieve planned synergies; reliance on key employees, especially senior management, risks related to Dendreon's limited operating history, risks associated with completing Dendreon's clinical trials, the risk that the results of one clinical trial will not be repeated in another clinical trial, the risk that the results of a clinical trial, including Phase III trials of Provenge, will not support applying for or approval of a biologics license by the FDA, the uncertainty of Dendreon's future access to capital, the risk that Dendreon may not secure or maintain relationships with collaborators, and dependence on intellectual property. Further information on the risks and uncertainties that could affect Dendreon's business, financial condition and results of operations are contained in Dendreon's filings with the SEC, including Dendreon's Registration Statement on Form S-3 (Reg REG, n.pr See random event generator. . No. 333-102351), as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. on January 6, 2003 under the caption "Risk Factors," which are available at www.sec.gov.
DENDREON CORPORATION
STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
Three months ended Year ended
Dec. 31, Dec. 31,
------------------- -----------------
2002 2001 2002 2001
--------- --------- -------- --------
Total revenue $4,135 $3,847 $15,269 $13,824
Operating expenses:
Research and development 7,491 10,812 30,927 31,314
General and administrative 2,627 2,351 9,542 8,117
Sales and marketing 94 539 719 1,788
--------- --------- -------- --------
Total operating expenses 10,212 13,702 41,188 41,219
--------- --------- -------- --------
Loss from operations (6,077) (9,855) (25,919) (27,395)
Interest income 328 900 1,803 4,795
Interest expense (91) (146) (353) (558)
------------------- -------- --------
Interest, net 237 754 1,450 4,237
------------------- -------- --------
Loss before foreign income taxes (5,840) (9,101) (24,469) (23,158)
Foreign income tax expense - - 200 -
--------- --------- -------- --------
Net loss (5,840) (9,101) (24,669) (23,158)
========= ========= ======== ========
Basic and diluted net loss per
share $(0.22) $(0.37) $(0.96) $(0.94)
========= ========= ======== ========
Shares used in computation of
basic and diluted net loss
per share 26,406 24,907 25,576 24,760
========= ========= ======== ========
DENDREON CORPORATION
BALANCE SHEET DATA
(in thousands)
Dec. 31, Dec. 31,
2002 2001
----------- -----------
Cash & cash equivalents, short- and
long-term investments $54,979 $80,600
Total assets 63,724 91,082
Total stockholders' equity 44,743 65,211
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