Transkaryotic Therapies (NASDAQ:TKTX)
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TKT Announces First Quarter 2005 Results
CAMBRIDGE, Mass., May 5 /PRNewswire-FirstCall/ -- Transkaryotic Therapies,
Inc. (NASDAQ:TKTX) today announced its consolidated financial results for the
three months ended March 31, 2005.
Total revenues for the three months ended March 31, 2005 were $22.6 million,
compared to $17.4 million for the same period in 2004. Sales of Replagal(TM)
(agalsidase alfa), TKT's enzyme replacement therapy for the treatment of Fabry
disease, for the first quarter of 2005 were approximately $22.5 million, a 29%
increase over the $17.4 million in sales in the same period in 2004. First
quarter Replagal sales in 2005 approximated Replagal sales recorded in the
fourth quarter of 2004. Replagal sales increased in the first quarter of 2005
over the first quarter of 2004 primarily due to higher unit sales. In addition,
foreign currency fluctuations contributed $1.3 million to the increase in the
first quarter 2005 product sales as compared to the first quarter of 2004.
Total operating expenses for the first quarter of 2005 were $40.5 million,
compared to $31.9 million in the first quarter of 2004.
Cost of goods sold for the first quarter of 2005 were approximately $3.1
million versus $2.2 million for the same period in 2004. The increase in cost
of goods sold was due primarily to increased unit sales of Replagal in 2005.
Research and development spending increased to approximately $25.2 million for
the first quarter of 2005 compared to $19.8 million in the corresponding
quarter in 2004. The increase in R&D spending was attributed primarily to
increases in costs associated with the company's extension study for the
company's enzyme replacement therapy for the treatment of Hunter syndrome, I2S,
as well as employee related costs associated with increases in research and
development head count period over period.
Selling, general and administration expenses totaled approximately $11.0
million in the first quarter of 2005 compared to approximately $9.0 million in
the first quarter of 2004. The increase in SG&A spending was primarily due to
increases in employee related costs associated with increased SG&A hiring over
2004.
The net loss for the first quarter was approximately $21.7 million, or $0.62
per share, compared to a net loss of approximately $14.2 million, or $0.41 per
share, for the corresponding period in 2004. The net loss in 2005 included
$4.1 million in charges associated with foreign currency losses determined in
connection primarily with re-measurements of the company's intercompany
balances held in a currency other than the dollar.
As of March 31, 2005, TKT had $130.5 million in cash and marketable securities.
On April 21, 2005, the company announced that it had signed a definitive
agreement with Shire Pharmaceuticals Group plc. under which Shire has agreed to
acquire TKT. Under the agreement, Shire has agreed to pay $37 in cash for each
share of TKT common stock, or approximately $1.6 billion. Closing of the
transaction is subject to, among other things, regulatory clearance and
approval of the stockholders of each company. The transaction is expected to
close in the third quarter of 2005.
Conference Call and Webcast:
TKT invites the public to participate on a conference call and live webcast
with investment analysts beginning today, May 5, 2005 at 10:00 a.m. Eastern
Time to discuss its first quarter 2005 financial results and its outlook for
the balance of 2005. To participate by telephone, dial (719) 457- 2642. A live
audio webcast can be accessed on the TKT web site at http://www.tktx.com/
within the Investor Information section.
A replay of the conference call and webcast will be available once a transcript
has been filed with the SEC. Participants may access this replay by dialing
(719) 457-0820 and using the access code 2495707. A replay of the webcast will
be archived on the TKT website under Events in the Investor Information
section.
About TKT
Transkaryotic Therapies, Inc. is a biopharmaceutical company primarily focused
on researching, developing and commercializing treatments for rare diseases
caused by protein deficiencies. Within this focus, the company markets
Replagal(TM), an enzyme replacement therapy for Fabry disease, and is
developing treatments for Hunter syndrome and Gaucher disease. In addition to
its focus on rare diseases, TKT intends to commercialize Dynepo(TM), its Gene-
Activated(R) erythropoietin product for anemia related to kidney disease, in
the European Union. TKT was founded in 1988 and is headquartered in Cambridge,
Massachusetts, with additional operations in Europe, Canada and South America.
Additional information about TKT is available on the company's website at
http://www.tktx.com/.
Important Additional Information Will Be Filed with the SEC
TKT plans to file with the SEC and mail to its stockholders a Proxy Statement
in connection with the proposed transaction with Shire. The Proxy Statement
will contain important information about TKT, the transaction and related
matters. Investors and security holders are urged to read the Proxy Statement
carefully when it is available.
Investors and security holders will be able to obtain free copies of the Proxy
Statement and other documents filed with the SEC by the company through the web
site maintained by the SEC at http://www.sec.gov/.
In addition, investors and security holders will be able to obtain free copies
of the Proxy Statement from TKT by contacting Corporate Communications, 700
Main Street, Cambridge, MA 02139.
TKT, and its directors and executive officers, may be deemed to be participants
in the solicitation of proxies in respect of the proposed transaction with
Shire. Information regarding TKT's directors and executive officers is
contained in TKT's Annual Report on Form 10-K for the year ended December 31,
2004, as amended on May 2, 2005, its proxy statement dated April 27, 2004, and
its Current Reports on Form 8-K dated March 30, 2005, April 15, 2005, and April
27, 2005, each of which is filed with the SEC. As of April 22, 2005, TKT's
directors and executive officers and their affiliates, including Warburg Pincus
& Co., beneficially owned approximately 6,085,200 shares, or 17.4%, of TKT's
common stock. All outstanding options for TKT common stock, whether or not
vested, including those held by current directors and executive officers, will
be cashed out in the merger based on the $37 per share purchase price. In
addition, Shire has committed to maintaining TKT's 2005 Management Bonus Plan,
in which the company's executive officers participate in accordance with its
current terms in respect of the 2005 performance year. Following the merger,
Shire has agreed to provide certain retention and severance benefits to TKT's
employees, including its executive officers. A more complete description will
be available in the Proxy Statement when it is filed with the SEC.
Safe Harbor for Forward-Looking Statements
This press release contains forward-looking statements regarding the proposed
transaction between Shire and TKT, the company's development of certain
products, including Replagal, I2S and Dynepo, the timing of clinical trials,
clinical trial results and regulatory filings, and statements regarding the
company's financial outlook, as well as statements about future expectations,
beliefs, goals, plans or prospects, including statements containing the words
"believes," "anticipates," "plans," "expects," "estimates," "intends,"
"should," "could," "will," "may," and similar expressions. There are a number
of important factors that could cause actual results to differ materially from
those indicated by such forward-looking statements, including: the ability to
obtain the approval of the merger from the stockholders of each company; the
ability to consummate the transaction; whether any of the company's products
will achieve the commercial success anticipated by the company; whether
competing products will reduce the market opportunity for such products;
whether I2S will be safe and effective as a treatment for Hunter syndrome;
whether GA-GCB will be safe and effective as a treatment for Gaucher disease;
whether the company will be able to successfully complete clinical trials of
its products; enrollment rates for clinical trials; whether the results of
clinical trials, will be indicative of results obtained in later clinical
trials; whether future clinical trials will be conducted and conducted on a
timely basis; the ability of the company and its collaborators to successfully
complete development of its products; the ability to manufacture sufficient
quantities of its products to satisfy both clinical trial requirements and
commercial demand; the timing of submissions to and decisions by regulatory
authorities in the United States, Europe, Japan and other countries regarding
clinical trials and marketing and other applications; whether the FDA and
equivalent regulatory authorities grant marketing approval for the company's
products on a timeline consistent with the company's expectations, or at all;
the availability and extent of coverage from third party payors and the receipt
of reimbursement approvals for the company's products; whether competing
products will reduce any market opportunity that may exist; results of
litigation; whether the company will be successful in establishing European
manufacturing for Dynepo; and other factors set forth under the caption
"Certain Factors That May Affect Future Results" in the company's Annual Report
on Form 10-K for the year ended December 31, 2004, which is on file with the
SEC and which factors are incorporated herein by reference. While the company
may elect to update forward-looking statements at some point in the future, the
company specifically disclaims any obligation to do so, even if its
expectations change.
Gene-Activated(R) is a registered trademark and Replagal(TM) is a trademark of
Transkaryotic Therapies, Inc. Dynepo(TM) is a trademark of Sanofi-Aventis SA.
For More Information Contact:
Justine E. Koenigsberg
Senior Director, Corporate Communications
(617) 349-0271
Daniella M. Lutz
Manager, Corporate Communications
(617) 349-0205
- Consolidated Financial Table To Follow -
Condensed Consolidated Statements of Operations (unaudited)
Three Months Ended March 31,
(In thousands, except per share
amounts) 2005 2004
Product sales $22,496 $17,372
License and research revenues 78 62
22,574 17,434
Operating expenses:
Cost of goods sold 3,082 2,236
Research and development 25,203 19,837
Selling, general and
administrative 10,950 8,958
Restructuring charges 671 861
Amortization of intangible assets 562 -
40,468 31,892
Loss from operations before minority
interest (17,894) (14,458)
Minority interest in net income of
consolidated subsidiary - (1)
Loss from operations after minority
interest (17,894) (14,459)
Foreign currency exchange loss (4,104) -
Net interest income 430 308
Provision for income taxes (119) -
Other income 4 -
Net loss $(21,683) $(14,151)
Basic and diluted net loss per share $(0.62) $(0.41)
Shares used to compute basic and
diluted net loss per share 34,875 34,612
Condensed Consolidated Balance Sheets (unaudited)
March 31, December 31,
(In thousands) 2005 2004
Cash and marketable securities $130,525 $155,214
Other current assets 56,512 51,275
Property and equipment, net 58,614 60,992
Goodwill 39,038 39,038
Intangible assets, net 21,369 21,931
Other assets 4,933 4,900
Total assets $310,991 $333,350
Total current liabilities $35,147 $36,735
Long term liabilities 7,868 8,304
Long term debt 94,000 94,000
Total stockholders' equity 173,976 194,311
Total liabilities and stockholders'
equity $310,991 $333,350
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DATASOURCE: Transkaryotic Therapies, Inc.
CONTACT: Justine E. Koenigsberg, Senior Director, Corporate
Communications, +1-617-349-0271, or Daniella M. Lutz, Manager, Corporate
Communications, +1-617-349-0205, both of Transkaryotic Therapies, Inc.
Web site: http://www.tktx.com/
Company News On-Call: http://www.prnewswire.com/comp/120657.html