ILEX Oncology Announces Second Quarter Results; Solid CRO Business Performance Drives Strong Revenue Growth.Business Editors & Health/Medical Writers SAN ANTONIO--(BUSINESS WIRE)--Aug. 3, 2000 ILEX Ilex a bush bearing berries containing saponins; cause vomiting, diarrhea. Called also holly. (tm) Oncology Inc. (Nasdaq:ILXO) today reported that total revenues for the second quarter of 2000 reached $7.5 million, up 79% over the second quarter of 1999, fueled by a higher-than-expected increase in contract research (CRO) services revenue. The company's overall quarterly loss fell to $4.5 million, or a loss of $0.18 per share, from $4.9 million, or a loss of $0.38 a share, in the second quarter of 1999, excluding $17.7 million (or $1.37 per share) in one-time charges taken in the 1999 period. "We are continuing to deliver on our business plan by advancing our product pipeline and profitably growing our services business," said 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. Richard Love. Commenting on the status of CAMPATH(R) (alemtuzumab), the company's leading drug candidate, Love said, "ILEX and our development partner, Millennium Pharmaceuticals Millennium Pharmaceuticals NASDAQ: MLNM is a biotechnology company based in the Cambridge, Massachusetts area of the United States of America. Founded in 1993, the company conducts research in various scientific areas, currently focusing on inflammation and oncology. Inc., are continuing to work constructively with the reviewers at both the U.S. Food and Drug Administration and the European Agency for the Evaluation of Medicinal Products medicinal product, n a substance administered to humans or animals through injection, application, oral ingestion, inhalation, and so forth, whose purpose is to ultimately restore health or eliminate disease in an individual. toward obtaining approvals in both markets. I remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that CAMPATH will be approved in the U.S. by the end of this year." Addressing the performance of the company's CRO business, Michael Dwyer Michael Dwyer (1772 – 1825) was a United Irish leader in the 1798 rising and later fought a guerilla campaign against the British army in the Wicklow Mountains from 1798-1803. , president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of ILEX Oncology Services Inc., said, "Our second quarter revenue growth of 130% in our CRO business is the fruition of the reorganization efforts we undertook at this time last year. Our focus on running the business more efficiently and increasing productivity has enabled us to drive much of this growth to the bottom line, where profitability has improved dramatically from an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $0.9 million in the first half of last year to operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $1.8 million in the first half this year." Second Quarter 2000 Financial Results Total ILEX revenue for the quarter increased 79% to $7.5 million, compared with $4.2 million in the second quarter of 1999. This includes $6.9 million in revenue from the company's CRO business, up 130% from $3.0 million in the same period a year ago. Research and development (R&D) spending, including equity in losses from R&D partnerships, totaled $8.3 million, up 60% from $5.2 million in the same period a year ago. Contributing to the increase were licensing payments totaling $2.3 million relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc products in the ILEX pipeline. Total net loss for the second quarter of 2000 was $4.5 million, or a loss of $0.18 per share, on 24.8 million weighted average shares outstanding. That compares to a net loss of $4.9 million, or a loss of $0.38 a share, on 12.9 million weighted average shares outstanding in the second quarter of 1999, excluding $17.7 million (or $1.37 per share) in one-time charges. As of June 30, 2000, ILEX had $211.8 million in cash, cash equivalents, restricted investments and investments in marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has . Net interest income for the second quarter of 2000 increased to $3.3 million, compared to $0.3 million in the same quarter last year. Recent Operating Highlights In addition to reporting financial highlights, the company announced the following recent highlights of operations: -- Appointment of Ze'ev Shaked, Ph.D., as president of ILEX Products Inc. with responsibility for overall development of the company's proprietary pipeline of anti-cancer drugs. -- Receipt of a complete response letter June 23 from the U.S. Food and Drug Administration related to Millennium & ILEX Partners, L.P.'s Biologics License Application for CAMPATH, an investigational humanized monoclonal antibody monoclonal antibody, an antibody that is mass produced in the laboratory from a single clone and that recognizes only one antigen. Monoclonal antibodies are typically made by fusing a normally short-lived, antibody-producing B cell (see immunity) to a fast-growing . -- Filing of a U.S. patent application covering a "second generation" eflornithine (difluoromethylornithine), the company's lead chemoprevention che·mo·pre·ven·tion n. The use of chemical agents, drugs, or food supplements to prevent disease. chemoprevention compound. ILEX believes the composition covered by the application has a potential for wider therapeutic benefit. -- Discontinuation dis·con·tin·u·a·tion n. A cessation; a discontinuance. Noun 1. discontinuation - the act of discontinuing or breaking off; an interruption (temporary or permanent) discontinuance of the development of aminopterin aminopterin: see metabolite. , an antifolate in the same family as methotrexate methotrexate, drug used in halting the growth of actively proliferating tissues. Introduced in the 1950s, it is used in the treatment of leukemia, psoriasis, and non-Hodgkin's lymphoma. . A Phase II trial in persistent, recurrent endometrial cancer Endometrial Cancer Definition Endometrial cancer develops when the cells that make up the inner lining of the uterus (the endometrium) become abnormal and grow uncontrollably. failed to show sufficient efficacy to warrant ILEX's continued development. First Six Months of 2000 Financial Highlights Total revenue for the first six months of 2000 increased 86% to $14.1 million, compared with $7.6 million in the first half of 1999. This includes $12.5 million in revenue from the Company's CRO business, up 123% from $5.6 million a year ago. R&D spending, including equity in losses from the R&D partnerships, totaled $13.6 million in the first six months of 2000, up 45% from $9.4 million in the first half of 1999. The increase in R&D spending was attributable to increased costs associated with development of the company's product pipeline, including eflornithine and OXYPRIM(tm), both of which are in pivotal studies, and the preclinical preclinical /pre·clin·i·cal/ (-klin´i-k'l) before a disease becomes clinically recognizable. pre·clin·i·cal adj. 1. angiogenesis inhibitors angiogenesis inhibitor Oncology A chemotherapy adjuvant which inhibits the angiogenesis required for tumor growth and survive, especially for metastastatic tumors See CAI, CM101, IFN-alpha, IL-12, Marimastat, Pentosan polysulfate, Platelet factor 4, Thalidomide, TNP-470. , and to licensing payments associated with other pipeline products. Total net loss for the first six months was $7.9 million, or a loss of $0.34 per share, compared to a net loss of $9.4 million, or a loss of $0.74 per share, a year ago, excluding $17.7 million (or $1.37 per share) in one-time charges during the 1999 second quarter. About ILEX Oncology ILEX Oncology Inc. is a drug development company focused predominantly on the accelerated development of drugs for the treatment and prevention of cancer. The company does this in two ways: by advancing a diversified portfolio of anti-cancer drugs through its ILEX Products subsidiary, and, by offering drug development services on a contract basis to pharmaceutical and biotech bi·o·tech n. Informal Biotechnology. biotech Noun short for biotechnology Noun 1. companies through its ILEX Oncology Services subsidiary. These complementary businesses draw from the company's core relationships with international oncology experts, strategic alliances providing unparalleled access to patient recruitment for clinical trials, and simultaneous European and U.S. drug development and approval capabilities. Certain statements contained herein, including those relating to potential approval of CAMPATH by the Food and Drug Administration 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. , are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995). Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such 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. . Factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, the early stage of ILEX's compounds under development; risks in technology and product development; failure to successfully complete clinical trials; failure to adequately respond to information requests from 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. ; failure to receive market clearance from regulatory agencies regulatory agency Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S. ; dependence on third parties and partners and those risks described in ILEX's Form S-3 filed March 8, 2000 (Commission file No. 333-32000), and ILEX's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended Dec. 31, 1999, and in other filings made by ILEX with the SEC. ILEX disclaims any obligation to update these forward-looking statements.
ILEX ONCOLOGY INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Thousands)
June 30, Dec. 31,
2000 1999
---- ----
(Unaudited)
ASSETS
Cash, cash equivalents,
restricted investments
and marketable securities $ 211,801 $ 89,126
Receivables, net 11,753 8,481
Prepaid expenses and
other current assets 1,052 576
Investment in and advances
to research and development
partnerships (4,741) (2,534)
Property and equipment, net
of accumulated depreciation 5,502 4,705
--------- ---------
TOTAL ASSETS $ 225,367 $ 100,354
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 13,163 $ 10,324
Long-term liabilities 565 369
Minority interest 5,232 5,082
Stockholders' equity 206,407 84,579
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 225,367 $ 100,354
========= =========
ILEX ONCOLOGY INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts) (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2000 1999 2000 1999
---- ---- ---- ----
REVENUE:
Product development $ 621 $ 1,159 $ 1,659 $ 2,069
Contract research
services 6,908 3,031 12,484 5,567
-------- -------- -------- --------
Total revenue 7,529 4,190 14,143 7,636
-------- -------- -------- --------
OPERATING EXPENSES:
Research and
development costs 6,815 3,944 12,154 7,496
CRO costs 5,636 3,512 10,741 6,500
General and
administrative 1,365 1,319 2,304 2,189
Special charges -- 13,882 -- 13,882
-------- -------- -------- --------
Total operating
expenses 13,816 22,657 25,199 30,067
-------- -------- -------- --------
OPERATING LOSS (6,287) (18,467) (11,056) (22,431)
-------- -------- -------- --------
OTHER INCOME (EXPENSE):
Equity in income (losses) of:
Research and
development
partnerships (1,450) (1,264) (1,411) (1,889)
Contract research
affiliate -- (3,133) -- (3,310)
Interest income, net 3,316 255 4,832 541
Minority interest in
loss of consolidated
subsidiary (75) -- (150) --
-------- -------- -------- --------
LOSS BEFORE INCOME TAXES (4,496) (22,609) (7,785) (27,089)
Provision for foreign
income taxes 48 -- 143 --
-------- -------- -------- --------
NET LOSS $ (4,544) $(22,609) $ (7,928) $(27,089)
======== ======== ======== ========
BASIC & DILUTED NET
LOSS PER SHARE $ (0.18) $ (1.75) $ (0.34) $ (2.12)
======== ======== ======== ========
WEIGHTED AVERAGE NUMBER
OF SHARES OF COMMON
STOCK OUTSTANDING 24,825 12,916 23,432 12,790
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