ZymoGenetics Reports Third Quarter 2004 Financial Results; Major Business Development Initiatives Enable Greater Focus on Genomics-Based Pipeline.SEATTLE -- ZymoGenetics, Inc. (Nasdaq:ZGEN) today reported its financial results for the third quarter and nine months ended September 30, 2004. The company reported a net loss of $22.0 million, or $0.41 per share, for the quarter ended September 30, 2004, compared to a net loss of $15.0 million, or $0.32 per share, in the prior year period. For the nine months ended September 30, 2004, the company's net loss was $65.4 million, or $1.23 per share, versus a net loss of $42.3 million, or $0.92 per share, in the comparable 2003 period. The company's financial condition remained strong, with cash, cash equivalents and 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. investments totaling $250.4 million as of September 30, 2004. This reported amount does not reflect approximately $96 million of 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). receivable in the fourth quarter from two transactions completed in October: a strategic alliance with Serono and a license of recombinant recombinant /re·com·bi·nant/ (re-kom´bi-nant) 1. the new entity (e.g., gene, protein, cell, individual) that results from genetic recombination. 2. pertaining or relating to such an entity. See also under DNA. Factor XIII factor XIII n. A factor in the clotting of blood that is converted by thrombin into its active form, which cross-links subunits of the fibrin clot to form insoluble fibrin. Also called Laki-Lorand factor. to Novo Nordisk Wikipedia is not the place for advertisement or self-advertising. Novo Nordisk (, NYSE: NVO) manufactures and markets pharmaceutical products and services. Founded in Denmark in 1923, the company has since become a world leader in diabetes care with the broadest . "ZymoGenetics successfully accomplished a number of critical events over the past several months. In keeping with our strategy of monetizing our broad pipeline while retaining U.S. rights for our core products, we signed two significant alliance and licensing agreements, and each offers sizeable financial rewards," said Bruce Bruce, Scottish royal family descended from an 11th-century Norman duke, Robert de Brus. He aided William I in his conquest of England (1066) and was given lands in England. L.A. Carter, Ph.D., President and Chief Executive Officer of ZymoGenetics. "In addition, we began clinical development of TACI-Ig as a treatment for B-cell malignancies. Clinical trials with our lead candidates for treating cancer, 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 and surgical bleeding continue to move ahead. Finally, we hired a well-known industry veteran, Doug Williams There are several people named Doug Williams, including:
Revenues for the quarter increased to $11.9 million versus $8.2 million for the same period in the prior year. The increase was primarily attributable to several license fees and milestone payments earned in the current year period. These included a milestone payment from Novo Nordisk related to the start of IL-21 clinical trials outside North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. ; fees earned from Novo Nordisk related to the license of IL-28, IL-29 and IL-31 outside North America; and continued recognition of IL-20 license fee revenue received from Novo Nordisk earlier this year. An increase in royalty revenues also contributed to the overall revenue increase. Research and development expenses for the quarter increased to $27.0 million, compared to $17.5 million for the comparable quarter of 2003. The increase was primarily attributable to increased clinical development costs, including those resulting from higher development staffing levels and external contracts for process development and manufacturing of the company's product candidates, as well as increased payments to Serono to cover the company's share of TACI-Ig development costs. Also contributing to the increase were cost reimbursements in the prior year earned from Novo Nordisk related to the preclinical preclinical /pre·clin·i·cal/ (-klin´i-k'l) before a disease becomes clinically recognizable. pre·clin·i·cal adj. 1. development of IL-21, which were recorded as reductions to expense. General and administrative expenses for the quarter increased to $4.8 million, compared to $3.8 million for the comparable 2003 quarter, reflecting costs associated with business development activities, compliance with the Sarbanes-Oxley Act See SOX. , and growth in other areas supporting the company's business, particularly human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. and information technology. Recent Highlights Recent company highlights since the start of the third quarter of 2004 include the following: Product Development --Together with our collaborator Serono, began clinical trials of TACI-Ig, examining the effects of treatment in systemic lupus erythematosus Systemic Lupus Erythematosus Definition Systemic lupus erythematosus (also called lupus or SLE) is a disease where a person's immune system attacks and injures the body's own organs and tissues. Almost every system of the body can be affected by SLE. and rheumatoid arthritis rheumatoid arthritis Chronic, progressive autoimmune disease causing connective-tissue inflammation, mostly in synovial joints. It can occur at any age, is more common in women, and has an unpredictable course. patients. --Received regulatory clearance to proceed with testing of TACI-Ig in patients with B-cell malignancies, and announced plans, together with our collaborator Serono, to begin two clinical trials of TACI-Ig in multiple myeloma multiple myeloma A malignant proliferation of abnormal plasma cells that populate the marrow-containing bones of the body. The affected plasma cells produce myeloma protein, a monoclonal antibody that replaces normal antibodies in the blood, thereby increasing susceptibility patients and in patients with other forms of B-cell cancer. --Earned a milestone payment related to the start of IL-21 clinical trials outside North America by Novo Nordisk A/S. --Continued enrollment in the Phase 1 study of IL-21 in cancer patients and Phase 2 studies of recombinant human Thrombin thrombin: see blood clotting. in surgical bleeding. Business Development --Entered into a broad strategic alliance with Serono involving both co-research and co-development of genomics-derived proteins, which is structured to enhance the company's ability to identify new development candidates, and to facilitate the clinical and commercial development of such candidates. The company receives $81.25 million from Serono upfront, including a $50 million investment in common stock. --Completed a worldwide license of recombinant Factor XIII to Novo Nordisk A/S, facilitating the company's strategic product development objectives, while retaining a significant economic interest in the product candidate. The company receives $15 million upon signing, with $62 million of potential development milestone payments and potential royalties on sales. --Announced license agreements with Novo Nordisk A/S, granting exclusive rights outside North America to ZymoGenetics' patents covering IL-28A, IL-29 and IL-31, proteins with antiviral antiviral /an·ti·vi·ral/ (-vi´ral) destroying viruses or suppressing their replication, or an agent that so acts. an·ti·vi·ral adj. and anti-inflammatory therapeutic potential. Corporate Leadership --Hired Dr. Douglas E. Williams as Chief Scientific Officer and Executive Vice President, replacing Dr. Frank Collins Frank Joseph Collin (born November 3, 1944), was the leader of the National Socialist Party of America, whose plan to march in the predominantly Jewish Chicago suburb of Skokie, Illinois was the centerpiece of a major First Amendment decision by the U.S. , who is retiring. Dr. Williams brings to ZymoGenetics over fifteen years of experience within the biotechnology industry, including previous positions as Executive Vice President and Chief Technology Officer at Immunex Corporation and Chief Scientific Officer at Seattle Genetics genetics, scientific study of the mechanism of heredity. While Gregor Mendel first presented his findings on the statistical laws governing the transmission of certain traits from generation to generation in 1856, it was not until the discovery and detailed study of . --Appointed James A. Harper to the company's Board of Directors effective July 1, 2004. Mr. Harper has thirty years of global experience in the pharmaceutical and medical device industries, and recently retired from the post of Group Vice President of Global Marketing and Sales at Eli Lilly and Company Eli Lilly and Company (NYSE: LLY) is a global pharmaceutical company and one of the world's largest corporations. Eli Lilly's global headquarters is located in Indianapolis, Indiana, in the United States. . Upcoming Event ZymoGenetics senior management will hold an Analyst & Investor Briefing on Friday, December 10 from 9:30 am to 1:00 pm, at the Four Seasons Hotel in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. . To attend this session, please contact Susan Specht at 206-442-6592 or spechts@zgi.com. About ZymoGenetics ZymoGenetics is a biopharmaceutical company focused on the discovery, development and commercialization of therapeutic proteins for the prevention or treatment of human diseases. The Company is developing a diverse pipeline of potential proprietary product candidates that are moving into and through clinical development. These span a wide array of clinical opportunities that include bleeding, autoimmune diseases and cancer. ZymoGenetics intends to commercialize these product candidates through internal development, collaborations with partners, and out-licensing of patents from its extensive patent portfolio. For further information, visit www.zymogenetics.com. 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. " within the meaning of 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. These forward-looking statements are based on the current intent and expectations of the management of ZymoGenetics. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. ZymoGenetics' actual results and the timing and outcome of events may differ materially from those expressed in or implied by the forward-looking statements because of risks associated with our unproven unproven Dubious, nonscientific, not proven, quack, questionable, unscientific adjective Relating to that which has not been validated by reproducible experiments or other scientific methods for determining effect or efficacy discovery strategy, preclinical and clinical development, regulatory oversight
Oversight may refer to:
When a person begins a civil lawsuit, the person enters into a process called litigation. and other risks detailed in ZymoGenetics' public filings with the Securities and Exchange Commission, including ZymoGenetics' 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 December 31, 2003. Except as required by law, ZymoGenetics undertakes no obligation to update any forward-looking or other statements in this press release, whether as a result of new information, future events or otherwise.
ZYMOGENETICS, INC.
STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------------------
2004 2003 2004 2003
-------- -------- -------- --------
Revenues:
Royalties $ 3,408 $ 2,325 $ 8,181 $ 7,085
Option fee 1,875 1,875 5,625 5,625
License fees and milestone
payments 6,653 4,012 12,171 7,456
-------- -------- -------- --------
Total revenues 11,936 8,212 25,977 20,166
Operating expenses:
Research and development,
excluding noncash stock-
based compensation 26,963 17,504 68,871 46,471
General and administrative,
excluding noncash stock-
based compensation 4,758 3,821 13,153 11,595
Noncash stock-based
compensation expense 1,490 1,707 7,822 5,371
-------- -------- -------- --------
Total operating expenses 33,211 23,032 89,846 63,437
-------- -------- -------- --------
Loss from operations (21,275) (14,820) (63,869) (43,271)
Other (expense) income, net (727) (175) (1,496) 977
-------- -------- -------- --------
Net loss $(22,002) $(14,995) $(65,365) $(42,294)
======== ======== ======== ========
Basic and diluted net loss
per share $ (0.41) $ (0.32) $ (1.23) $ (0.92)
======== ======== ======== ========
Weighted-average number of
shares used in computing net
loss per share 53,762 46,221 53,225 46,037
======== ======== ======== ========
BALANCE SHEETS
(in thousands)
(unaudited)
Sept. 30, Dec. 31,
2004 2003
-------- --------
Cash, cash equivalents and short-term investments $250,372 $299,892
Other current assets 10,033 8,652
Property and equipment, net 69,890 62,341
Other assets 5,372 5,024
-------- --------
Total assets $335,667 $375,909
======== ========
Current liabilities $ 19,508 $ 21,131
Lease obligation 65,839 50,570
Construction advance from landlord -- 7,918
Other non-current liabilities 8,088 8,375
Shareholders' equity 242,232 287,915
-------- --------
Total liabilities and shareholders' equity $335,667 $375,909
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