Tercica Reports Third Quarter Financial Results.New Increlex Prescriptions Increase by Greater Than 35% for the Second Consecutive Quarter BRISBANE, Calif. -- Tercica, Inc. (Nasdaq:TRCA TRCA Toronto and Region Conservation Authority TRCA Trademark Remedy Clarification Act TRCA Terminal Radar Control Area (FAA) TRCA Teddy Roosevelt Conservation Alliance ) today announced financial results for the quarter and nine months ended September 30, 2006. Net product sales for the quarter ended September 30, 2006 totaled $316,000. The net loss for the quarter was $13.1 million, or $0.35 per share, compared to a net loss of $11.5 million, or $0.37 per share, for the third quarter of 2005. Research and development expenses for the third quarter of 2006 were $3.5 million, compared to $5.7 million for the third quarter of 2005. Research and development expenses were lower in the third quarter of 2006 as the expenses in the prior year quarter included a license fee payment related to Tercica's U.S. License and Collaboration Agreement with Genentech, and costs associated with production and validation of Tercica's rhIGF-1 manufacturing process. Selling, general and administrative expenses for the third quarter of 2006 were $10.2 million, up from $6.4 million for the third quarter of 2005, due to increased expenses associated with commercial operations and medical education. Tercica reported product sales of $567,000 for the nine months ended September 30, 2006. Net loss for the first nine months of 2006 was $42.0 million, or $1.14 per share, compared to $33.0 million, or $1.09 per share, for the first nine months of 2005. Total costs and expenses for the nine months ended September 30, 2006 were $45.1 million, compared to $33.9 million for the same period in 2005. Cash, cash equivalents and short-term investments as of September 30, 2006 were $54.3 million, compared to $58.6 million as of December 31, 2005, reflecting net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of $34.2 million from the common stock offering completed in January 2006, offset by $38.3 million in cash used in operating activities for the first nine months of 2006. In October, in connection with the transaction with Ipsen, Tercica received cash proceeds of $77.3 million from the sale of newly issued shares and $11.8 million (net of withholding taxes The amount legally deducted from an employee's wages or salary by the employer, who uses it to prepay the charges imposed by the government on the employee's yearly earnings. ) from the upfront Increlex[TM] licensing payment. Net of transaction expenses, the closing of the transaction provided Tercica with a cash infusion of approximately $86.2 million. Recent Highlights and Updates Increlex Launch * In the third quarter, new prescriptions for Increlex increased by 38% (from 89 to 123) over the second quarter. * At the end of the third quarter, a total of 277 prescriptions for Increlex had been written by 135 physicians. * In the third quarter compared to the second quarter, Increlex net revenue increased by 90% (from $166,000 to $316,000). Ipsen Transaction * On October 16, 2006, Tercica and Ipsen (Euronext: IPN IPN Instant Payment Notification (PayPal) IPN Instituto Politecnico Nacional (México) IPN Infectious Pancreatic Necrosis IPN Interplanetary Internet (JPL) ) announced the closing of a worldwide strategic collaboration in endocrinology endocrinology Medical discipline dealing with regulation of body functions by hormones and other biochemicals and treatment of endocrine system imbalances. In 1841 Friedrich Gustav Henle first recognized “ductless glands,” which secrete products directly into . The transaction was finalized See finalization. following approval by Tercica stockholders in a special meeting of stockholders held on October 12, 2006. Somatuline([R]) Autogel([R]) * Earlier this week, Ipsen submitted a New Drug Application (NDA (Non Disclosure Agreement) An agreement signed between two parties that have to disclose confidential information to each other in order to do business. In general, the NDA states why the information is being divulged and stipulates that it cannot be used for any ) for Somatuline([R])Autogel([R]) to the U.S. Food and Drug Administration for the long-term treatment of patients with acromegaly acromegaly (ăk'rōmĕg`əlē), adult endocrine disorder resulting from hypersecretion of growth hormone produced by the pituitary gland. who have had inadequate response to or cannot be treated with surgery and/or radiotherapy radiotherapy /ra·dio·ther·a·py/ (-ther´ah-pe) treatment of disease by means of ionizing radiation; tissue may be exposed to a beam of radiation, or a radioactive element may be contained in devices (e.g. , and for the relief of symptoms associated with acromegaly. * The first product shipments of Somatuline([R])Autogel([R]) to Canada will begin in the next few weeks. Tercica plans to launch Somatuline([R])Autogel([R]) in Canada in January 2007. Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. * On October 31, 2006, in connection with the Company's patent infringement patent infringement n. the manufacture and/or use of an invention or improvement for which someone else owns a patent issued by the government, without obtaining permission of the owner of the patent by contract, license or waiver. litigation against Insmed Incorporated, the U.S. District Court for the Northern District of California issued an order denying Insmed's motion for partial reconsideration of the Court's June 30, 2006 order in which the Court ruled that Insmed had infringed claims 1, 2, and 9 of U.S. patent no. 6,331,414. Insmed had sought reconsideration of the Court's infringement ruling on claims 1 and 2. The trial will begin on November 6, 2006. Organizational * Chris Rivera, Senior Vice President of Commercial Operations has resigned from Tercica. Chris is leaving Tercica to become the Chief Executive Officer of a newly formed specialty pharmaceutical company. Financial Guidance For 2006, Tercica expects Increlex revenues of approximately $1 million and cash burn, including expenses related to the Ipsen/Tercica transaction, of $61 million to $65 million. "We are encouraged by the continued positive momentum in our commercial launch of Increlex with new prescriptions increasing by more than 35% for the second consecutive quarter. Additionally, more than one in four of the Pediatric pediatric /pe·di·at·ric/ (pe?de-at´rik) pertaining to the health of children. pe·di·at·ric adj. Of or relating to pediatrics. Endocrinologists we call on have now written at least one prescription for Increlex," said John A. Scarlett M.D., Tercica's President and Chief Executive Officer. "We are also very pleased by the closing of the transaction with Ipsen," added Dr. Scarlett. "We now have a second product in Somatuline Autogel prepared for launch in the Canadian market, with an NDA submission underway to gain marketing approval 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. . We believe this transaction significantly enhances our business prospects and we are confident it provides us with a strong platform to create value for our shareholders." Conference Call and Webcast Information Tercica's senior management team will review third quarter financial results via conference call and webcast today beginning at 4:30 p.m. Eastern time. To access the live teleconference, please dial 888-803-8296 (U.S.) or 706-634-1250 (international), and reference the conference ID# 9455167. To access the webcast, please go to the Events page on the Investors section of the Company's Web site at www.tercica.com. A telephone replay will be available approximately two hours after the call for 48 hours by dialing 800-642-1687 from the U.S., or 706-645-9291 for international callers, and entering reservation number 9455167. A replay of the webcast will be available on the Company's Web site for 21 days at www.tercica.com. About Tercica Tercica is a biopharmaceutical company committed to improving endocrine endocrine /en·do·crine/ (en´do-krin, en´do-krin) 1. secreting internally. 2. pertaining to internal secretions; hormonal. See also under system. en·do·crine adj. health by partnering with the endocrine community to develop and commercialize new 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. for short stature Short stature refers to a height of a human being which is below expected. Shortness is a vague term without a precise definition and with significant relativity to context. and other metabolic disorders Noun 1. metabolic disorder - a disorder or defect of metabolism disorder, upset - a physical condition in which there is a disturbance of normal functioning; "the doctor prescribed some medicine for the disorder"; "everyone gets stomach upsets from time to time" . For further information on Tercica, please visit www.tercica.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement Except for the historical statements contained herein, this press 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. concerning the Company's prospects and results, including that: (A) in Canada, product shipments of Somatuline[R] Autogel[R] will begin in the next few weeks and Tercica plans to launch Somatuline[R] Autogel[R] in January 2007; (B) Tercica believes there is positive momentum in the Increlex[TM] launch and expects Increlex[TM] revenues of approximately $1 million and cash burn, including expenses related to the Ipsen/Tercica transaction, of $61 million to $65 million; (C) Ipsen has an NDA filing underway to gain marketing approval of Somatuline[R] Autogel[R] in the United States; and (D) Tercica believes that the Ipsen transaction significantly enhances the Company's business prospects and provides a strong platform to create value for shareholders. Because Tercica's forward-looking statements are subject to risks and uncertainties, there are important factors that could cause actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, risks and uncertainties related to the following: (i) Somatuline[R] Autogel[R] might never achieve marketing approval for the targeted indication, or any indication, in the United States on a timely basis, or at all; (ii) for the remainder of 2006, physicians may not prescribe Increlex[TM] at the rate Tercica expects; (iii) product shipments to and/or the commercial launch in Canada could be delayed; and (iv) the risks and uncertainties disclosed from time to time in reports filed by Tercica with the SEC, including most recently Tercica's Form 10-Q Form 10-Q See 10-Q. for the quarter ended June 30, 2006 filed with the SEC on August 9, 2006. Tercica disclaims any obligation or undertaking to update or revise any forward-looking statements contained in this press release. [TABLE OMITTED] [TABLE OMITTED] |
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