Large Scale Biology Corporation - LSBC - Reports Financial Results for the Fourth Quarter and Full Year 2002.

Business Editors/Health & Medical Writers

VACAVILLE, Calif.--(BUSINESS WIRE)--Jan. 29, 2003

Large Scale Biology Corporation (Nasdaq:LSBC) today reported results for the fourth quarter and year ended December 31, 2002.

LSBC's net loss was $7.3 million, or $0.29 per share for the fourth quarter of 2002 versus $9.6 million or $0.39 per share for the fourth quarter of 2001. Excluding a charge of $1.3 million for asset impairment, primarily goodwill, the net loss for the fourth quarter of 2002 was $6.0 million, or $0.24 per share. The results, as adjusted, compare to a net loss of $6.8 million, or $0.27 per share for the third quarter of 2002.

Revenues for the fourth quarter of 2002 were $1.0 million, an increase of $0.3 million over the same period last year, as well as the third quarter of 2002. Total operating costs and expenses were $8.4 million for the fourth quarter of 2002, a decrease of $2.3 million or 21% from $10.7 million incurred in the fourth quarter of 2001. Excluding a charge of $1.3 million for asset impairment, total operating costs and expenses for the fourth quarter of 2002 were $7.1 million, a decrease of $3.6 million, or 34% from the same period last year. The adjusted operating costs and expenses were $0.5 million, or 7% lower than the third quarter of 2002.

For the full year 2002, LSBC's net loss was $33.2 million, or $1.33 per share, compared to $20.7 million, or $0.84 per share for the same period last year. Excluding non-cash charges of $1.3 million for asset impairment, primarily goodwill, as well as a $0.9 million cash charge for a company reorganization in the second quarter of 2002, the net loss for the year was $31.0 million, or $1.24 per share.

Revenues for 2002 were $2.6 million, a decrease of 85% from $17.7 million for 2001, reflecting the end of all funding from the research collaboration phase of the Company's agreement with The Dow Chemical Company and Dow AgroSciences LLC, the Company's primary source of revenue for 2001. Total operating costs and expenses were $36.5 million for 2002 and $41.5 million for 2001. Excluding the charges taken for reorganization and asset impairment of $2.2 million, total operating costs and expenses for 2002 were $34.3 million, a decrease of $7.2 million or 17% from 2001.

Large Scale Biology Corporation ended the year with approximately $23.1 million in cash, cash equivalents and marketable securities. Notably, adjusted for reorganization costs, the fourth quarter net cash usage of $4.2 million represents the fourth consecutive quarterly decrease in utilization of cash and marketable securities.

Highlights since the end of the third quarter include:

-- $2 million grant from the National Institute of Standards and Technology (NIST) Advanced Technology Program (ATP) for development of next-generation vaccine technology

-- Licensing of proprietary proteomics sample preparation technology to Agilent Technologies

-- The appointment of Christine Arakelian, who has expertise structuring biotechnology and pharmaceutical deals, to the Company's business development team

-- Letter of Intent with the Government of Ukraine to develop biopharmaceuticals in living plants to meet long-range national and regional drug requirements, in cooperation with Germany's Icon Genetics AG

-- Presentation of the clinical data for the Company's personalized plant-produced non-Hodgkin's lymphoma vaccines at the annual meeting of the American Society of Hematology, supplemented by further presentations in stem cell research

-- Publication in the journal Blood of a Company scientist's findings demonstrating that bone marrow cells can be expanded quantitatively in vitro

-- A new contract with Growers Research Group for development of novel antimicrobial products for plant protection purposes through the application of LSBC's proprietary GENEWARE(R) technology

-- FDA orphan drug designation for LSBC's proprietary plant-produced human alpha-galactosidase A enzyme for the treatment of Fabry disease

Conference Call

LSBC will also host a conference call discussing fourth quarter 2002 financial results on January 29, 2003 at 2:00 p.m. (Pacific). This call is open to the public and will be hosted by Robert L. Erwin, Chief Executive Officer; John D. Fowler, Jr., President; and Ronald J. Artale, Chief Financial Officer. To participate in this conference call in the U.S., dial [phone], or outside of the U.S., dial [phone]. The conference identification number is 7636120. A live webcast of the call may be accessed on Large Scale Biology's website at www.lsbc.com. If you are unable to participate during the live webcast, the call will be archived on the LSBC web site through close of business on February 7, 2002.

An audio replay of the call will be available until 8:59 p.m. (Pacific), January 31, 2003, starting two hours after the call. For replay in the U.S., dial [phone]; outside of the U.S., dial [phone]; then enter the conference identification number 7636120. The call will also be webcast live over the internet. To access this broadcast, please go to the Company's website at www.lsbc.com.

About Large Scale Biology Corporation

Large Scale Biology Corporation (Nasdaq:LSBC) uses its functional genomics, proteomics, and biomanufacturing technologies to develop and manufacture personalized drugs, vaccines and diagnostics for rapid identification and effective treatment of disease. Corporate offices and the Research and Pharmaceutical Development divisions are headquartered in Vacaville, California; the Proteomics Division is located in Germantown, Maryland; and the Biomanufacturing Division is located in Owensboro, Kentucky. For more information about Large Scale Biology Corporation, visit the Company's website at www.lsbc.com.

                    Large Scale Biology Corporation
            Condensed Consolidated Statements of Operations
                               Unaudited
               (In thousands, except per share amounts)

                                 Three months          Year ended
                                 ended Dec. 31,          Dec. 31,
                                 2002      2001       2002       2001

Revenues                     $    997  $    678  $   2,622  $  17,731
Costs and expenses:
    Development agreements        380       251      1,247      3,467
    Research and development    4,433     6,015     21,191     22,391
    General and administrative  2,612     4,107     12,595     14,373
    Amortization of purchased
     intangibles                  156       325        624      1,300
    Impairment of goodwill        839        --        839         --

Total costs and expenses        8,420    10,698     36,496     41,531
Loss from operations           (7,423)  (10,020)   (33,874)   (23,800)
Interest income, net              103       401        690      3,111
Net loss                     $ (7,320) $ (9,619) $ (33,184) $ (20,689)
Net loss per share - basic
 and diluted                 $  (0.29) $  (0.39) $   (1.33) $   (0.84)
Weighted average shares
 outstanding - basic
 and diluted                   25,079    24,784     24,991     24,599


                    Large Scale Biology Corporation
                 Condensed Consolidated Balance Sheets
                               Unaudited
                            (In thousands)

                                                  Dec. 31,  Dec. 31,
                                                     2002      2001
Assets
Current assets:
    Cash and marketable securities               $ 23,078  $ 48,779
    Other current assets                            1,529     1,217
Total current assets                               24,607    49,996
Property, plant, and equipment, net                14,865    18,882
Intangible and other assets, net                    5,269     8,034
                                                 --------  --------
                                                 $ 44,741  $ 76,912

Liabilities and Stockholders' Equity
Current liabilities:
    Accounts payable and accrued expenses        $  1,527  $  2,921
    Current portion of long-term debt                 145       107
    Deferred revenue and customer advances            245       278
Total current liabilities                           1,917     3,306
Long-term debt                                        165       249
Long-term deferred revenue                             --       320
Total liabilities                                   2,082     3,875
Stockholders' equity                               42,659    73,037
                                                 --------  --------
                                                 $ 44,741  $ 76,912