Cell Genesys (MM) (NASDAQ:CEGE)
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Cell Genesys Reports Third Quarter Financial Results
SOUTH SAN FRANCISCO, Calif., Oct. 27 /PRNewswire-FirstCall/ -- Cell Genesys,
Inc. reported a net loss of $2.9 million, or $0.07 per share, for the quarter
ended September 30, 2003. This compares with a net loss of $12.7 million, or
$0.35 per share, in the same quarter of 2002. The reduction in net loss
compared with the comparable quarter of 2002 can be attributed primarily to
revenue from collaborations recognized during the quarter. Cell Genesys ended
the quarter with approximately $182.3 million in cash and investments, including
restricted cash and investments, and in addition, held approximately 7.7 million
shares of its former subsidiary, Abgenix, Inc. The increase in cash and
investments during the quarter from $134.8 million can be attributed to payments
from collaborations including a newly announced alliance with Novartis AG for
oncolytic virus therapies, as well as the signing of a $35.0 million term loan
secured by certain of the company's property assets.
Revenues for the quarter ended September 30, 2003 were $15.7 million compared
with $1.5 million for the comparable period in 2002. The increase in revenues
relates to amounts recognized under certain collaborations, including revenue
from a GVAX(R) cancer vaccine collaboration agreement that was terminated in
2002. The company's research and development costs for the quarter were $20.4
million, compared with $19.5 million for the third quarter of 2002.
"We are pleased with our overall progress during the third quarter and remain
highly focused on advancing our lead product candidate -- GVAX(R) prostate
cancer vaccine -- into Phase 3 clinical trials," stated Stephen A. Sherwin,
M.D., chairman and chief executive officer of Cell Genesys. "We were also very
glad to announce this quarter the signing of a global strategic alliance for our
oncolytic virus therapies with Novartis, one of the world's leading oncology
companies."
Third Quarter 2003 and Other Recent Highlights:
-- Announced a global alliance with Novartis AG for the development and
commercialization of oncolytic virus therapies. Under the agreement, Cell
Genesys acquired exclusive worldwide rights to the oncolytic virus therapy
products and related intellectual property of Genetic Therapy, Inc. (GTI), an
affiliate of Novartis, and received a signature payment of $28.5 million from
Novartis. In exchange, Cell Genesys has issued to Novartis 1,999,840 shares of
common stock with the result that Novartis has become the holder of
approximately five percent of Cell Genesys' currently outstanding common stock.
-- Reported long-term follow-up data from a Phase 1 clinical trial of GVAX(R)
melanoma vaccine, a patient-specific vaccine made directly from patient tumor
biopsies. Of the 35 patients enrolled in this early study, 10 patients (29
percent) were reported to be alive with a minimum follow-up of 36 months,
including four patients without evidence of recurrent disease following surgical
resection of their tumors. One complete response, one partial response and one
mixed response were observed following the initial treatment period, and the
overall median survival was 15 months. Treatment with GVAX(R) vaccine was safe
and well tolerated in the outpatient setting, and vaccine was successfully
manufactured in 97 percent of the enrolled patients. These data were reported in
the September 1st issue of the Journal of Clinical Oncology-the official journal
of the American Society of Clinical Oncology.
-- Announced that Cell Genesys reached an agreement with the pharmaceutical
division of Japan Tobacco Inc. (JT) regarding approximately $16.8 million in
clinical and patent-related milestone and wind down payments arising from a
former collaboration agreement with JT for GVAX(R) cancer vaccines which was
terminated in October 2002. Under the agreement, JT paid Cell Genesys
approximately $8.3 million in cash and waived $8.5 million in future repayment
obligations for capital expenditures associated with Cell Genesys' manufacturing
facilities in Hayward, CA and Memphis, TN. Cell Genesys currently holds
worldwide commercial rights to its entire portfolio of GVAX(R) cancer vaccine
products.
-- Signed a $35 million term loan with Silicon Valley Bank, a subsidiary of
Silicon Valley Bancshares. This debt financing is secured by certain of the
company's property assets and the proceeds are not classified as restricted
cash. The terms of the loan specify that the majority of the principal be
repaid in 2008. The funds will be used for general business purposes including
the funding of the company's multiple ongoing clinical trials of GVAX(R) cancer
vaccines and oncolytic virus therapies.
Cell Genesys is focused on the development and commercialization of novel
biological therapies for patients with cancer. The company is pursuing three
cancer product platforms-GVAX(R) cancer vaccines, oncolytic virus therapies and
antiangiogenesis therapies. Clinical trials of GVAX(R) vaccines are under way in
prostate cancer, lung cancer, pancreatic cancer, leukemia and myeloma. Clinical
programs of oncolytic virus therapies include CG7870 for prostate cancer.
Preclinical studies are in progress for additional GVAX(R) cancer vaccines,
oncolytic virus therapies and antiangiogenesis therapies for multiple types of
cancer. Cell Genesys' majority-owned subsidiary, Ceregene, Inc., is focused on
gene therapies for neurologic disorders. Cell Genesys also continues to hold an
equity interest in its former subsidiary, Abgenix, Inc., an antibody products
company. Cell Genesys is headquartered in South San Francisco, CA and has
manufacturing operations in San Diego, CA, Hayward, CA and Memphis, TN. For
additional information, please visit the company's website at
http://www.cellgenesys.com/.
Cell Genesys will host its quarterly conference call to discuss events that
occurred during the third quarter of 2003 at 8:30 a.m. PST on Tuesday, October
28, 2003. Investors may listen to the webcast of the conference call live on
Cell Genesys' website. A replay of the webcast will be available for at least
48 hours following the call. Alternatively, investors may listen to a replay of
the call by dialing 800-475-6701 from locations in the U.S. and 320-365-3844
from outside the U.S. The call-in replay will be available for 48 hours
following the call. Please refer to access number 703287.
Statements made herein about the company and its subsidiaries, other than
statements of historical fact, including statements about the company's
progress, results and timing of clinical trials and preclinical programs and the
nature of product pipelines are forward-looking statements and are subject to a
number of uncertainties that could cause actual results to differ materially
from the statements made, including risks associated with the success of
clinical trials and research and development programs, the regulatory approval
process for clinical trials, competitive technologies and products, patents,
continuation of corporate partnerships and the need for additional financings.
For information about these and other risks which may affect Cell Genesys,
please see the company's Annual Report on Form 10-K for the year ended December
31, 2002 filed on March 31, 2003 as well as Cell Genesys' reports on Forms 10-Q
and 8-K and other reports filed from time to time with the Securities and
Exchange Commission. The company assumes no obligation to update the
forward-looking information in this press release.
CONTACT: Jennifer Cook Williams, Director, Corporate Communications and
Investor Relations of Cell Genesys, Inc., +1-650-266-3200.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Nine months ended
(unaudited, in thousands except
per share data) September 30, September 30,
2003 2002 2003 2002
Revenue under collaborative
agreements $15,710 $1,476 $16,761 $37,173
Operating expenses:
Research and development 20,371 19,490 64,007 53,853
General and administrative 6,439 3,370 18,410 11,376
Purchased in-process
technology -- (186) -- (186)
Total operating expenses 26,810 22,674 82,417 65,043
Loss from operations (11,100) (21,198) (65,656) (27,870)
Gain on sale of Abgenix, Inc.
common stock 2,617 -- 9,905 --
Interest and other income 918 2,649 4,199 7,231
Interest expense (1,412) (72) (3,122) (917)
Loss before minority interest
and income taxes (8,977) (18,621) (54,674) (21,556)
Loss attributed to minority
interest -- -- -- 96
Loss before income taxes (8,977) (18,621) (54,674) (21,460)
Income tax benefit 6,063 5,909 15,289 6,411
Net loss $(2,914) $(12,712) $(39,385) $(15,049)
Basic and diluted net loss per
common share $(0.07) $(0.35) $(1.05) $(0.42)
Weighted average shares of
common stock
outstanding - basic and
diluted 38,898 35,830 37,680 35,700
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
Sept. 30, Dec. 31,
2003 2002
(unaudited) (note 1)
Cash, cash equivalents and
short-term investments,
including restricted cash
and investments $182,315 $166,905
Receivable from Transkaryotic
Therapies, Inc. -- 15,000
Investment in Abgenix, Inc.
common stock 111,489 64,076
Other current assets 2,534 1,340
Property and equipment, net 173,911 157,215
Other assets 812 1,312
Total assets $471,061 $405,848
Deferred tax liability $42,062 $23,147
Deferred revenue 9,120 5,871
Other current liabilities 24,401 34,033
Noncurrent portion of debt
financing 95,559 51,656
Noncurrent portion of facility
lease obligation 51,937 52,361
Series B preferred stock 2,354 7,632
Stockholders' equity 245,628 231,148
Total liabilities and
stockholders' equity $471,061 $405,848
Note 1. Derived from audited financial statements.
DATASOURCE: Cell Genesys, Inc.
CONTACT: Jennifer Cook Williams, Director, Corporate Communications and
Investor Relations of Cell Genesys, Inc., +1-650-266-3200
Web site: http://www.cellgenesys.com/