Virologic (NASDAQ:VLGC)
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ViroLogic Announces Second Quarter 2004 Financial Results
Conference Call to Review Details at 5:00 p.m. EDT Today
SOUTH SAN FRANCISCO, Calif., Aug. 4 /PRNewswire-FirstCall/ -- ViroLogic, Inc.
(NASDAQ:VLGC) today reported financial results for the second quarter and six
months ended June 30, 2004.
Revenue for the second quarter of 2004 was $9.2 million, an increase of 16
percent over revenue of $8.0 million for the second quarter of 2003. The
Company's patient testing business increased to $6.5 million from $6.1 million
in the second quarter of 2003 and $5.8 million in the first quarter of 2004.
The Company's pharmaceutical business increased approximately 35 percent to
$2.3 million from $1.7 million for the same period in 2003.
Gross margin on product revenue was 49 percent in the second quarter of 2004
compared to 45 percent reported during the same quarter last year. Operating
costs and expenses for the second quarter of 2004 were $10.6 million, compared
to $10.2 million for the same period in 2003. Operational improvements,
coupled with reduced expenses for leased facility space, were partially offset
by higher costs and expenses associated with increased sample volume and
research and development activities.
For the second quarter of 2004, the net loss applicable to common stockholders
was $1.4 million, or $0.03 per common share, compared to a net loss applicable
to common stockholders of $2.7 million, or $0.09 per common share, for the same
period in 2003.
The Company had $10.1 million of cash, cash equivalents, short-term investments
and restricted cash at June 30, 2004. The Company generated cash from
operations of $0.6 million during the second quarter of 2004. Cash from
operations can fluctuate from one quarter to the next depending on timing of
cash receipts and payment of costs and expenses.
"We experienced good growth in the use of PhenoSense GT(TM), our combination
drug resistance assay, which helped increase our sequential patient testing
revenues by 12% over the first quarter of this year. This is a significant
improvement in our patient testing business after two relatively flat
quarters," said Bill Young, CEO and Chairman of ViroLogic. "We continue to
aggressively develop our business in all areas and remain the partner of choice
for pharmaceutical companies developing new agents for HIV and hepatitis. The
merger with ACLARA, which we anticipate completing in the fourth quarter, will
expand our clinical testing expertise into a significantly larger new market --
molecular diagnostics for the development of individualized cancer therapies."
Six Month Results
The Company reported revenue of $18.2 million for the first half of 2004, an
increase of 22 percent over revenue of $14.9 million for the same period of
2003. Operating costs and expenses for the first half of 2004 were $20.9
million, compared to $19.7 million for the same period of 2003.
Net loss for the first half of 2004 was $2.6 million, or $0.05 per common
share, compared to a net loss of $4.7 million, or $0.16 per common share, for
the same period in 2003.
In the first half of 2004, the Company recorded a non-cash deemed dividend to
preferred stockholders of $0.1 million, resulting in net loss applicable to
common stockholders of $0.05 per common share. In the first half of 2003, the
Company recorded a non-cash deemed dividend to preferred stockholders of $2.2
million resulting from a warrant exchange approved by the Company's
stockholders on February 4, 2003 relating to the sale of Series C convertible
preferred stock, and recorded stock dividends to preferred stockholders of $1.0
million, resulting in net loss applicable to common stockholders of $0.27 per
common share.
Recent Achievements
* Entered into a definitive merger agreement with ACLARA BioSciences,
Inc., to create an industry-leading company to develop and
commercialize advanced molecular diagnostics for personalized
medicine focused on oncology and infectious diseases;
* Signed an expanded distribution agreement with Quest Diagnostics to
become preferred provider of HIV phenotypic resistance testing;
* Received $1.5 million phase II Small Business Innovation Research
(SBIR) grant from the National Institutes of Health (NIH) to further
assess the clinical utility of HIV replication capacity (RC), a
gauge of viral "fitness," as a predictor of the pace of progression
to clinical AIDS. This phase II grant is a continuation of a two-
year phase I grant originally awarded in July 2001 that was used to
successfully develop a rapid, reproducible assay for the assessment
of RC; and
* Researchers and collaborators presented 13 studies demonstrating the
breadth and applicability of ViroLogic's technology at the 13th
International HIV Drug Resistance Workshop held in June in the
Canary Islands, Spain.
Conference Call Details
ViroLogic will host a conference call today at 5:00 p.m. Eastern Time. To
access the live call, please dial 1-800-299-0433 (U.S.) or 617-801-9712
(international) fifteen minutes before the conference begins. Live audio of the
conference call will be simultaneously broadcast over the Internet and will be
available to members of the news media, investors and the general public.
Access to live and archived audio of the conference call will be available by
following the appropriate links at http://www.virologic.com/ and clicking on
the Investor Relations link. Following the live broadcast, a replay of the
call will also be available at 1-888-286-8010 or 617-801-6888 for international
callers, until August 14. The replay passcode is 81397935.
The information provided on the teleconference is only accurate at the time of
the conference call, and ViroLogic will take no responsibility for providing
updated information except as required by law.
About ViroLogic
ViroLogic is a biotechnology company advancing individualized medicine by
discovering, developing and marketing innovative products to guide and improve
treatment of serious viral diseases such as AIDS and hepatitis. The Company's
products are designed to help doctors optimize treatment regimens that lead to
better patient outcomes and reduced costs. ViroLogic's technology is also
being used by numerous biopharmaceutical companies to develop new and improved
anti-viral therapeutics and vaccines targeted at emerging drug-resistant
viruses. More information about the Company and its technology can be found on
its web site at http://www.virologic.com/.
Certain statements in this press release are forward-looking, including
statements relating to expectations for 2004 revenues, the pipeline and timing
of customer clinical trials, and anticipated completion of the proposed merger
with ACLARA BioSciences, Inc. (ACLARA). These forward-looking statements are
subject to risks and uncertainties and other factors, which may cause actual
results to differ materially from anticipated results or expectations and
include, but are not limited to, the timing of customer clinical trials, risks
related to our pending merger with ACLARA, including the risk that the closing
conditions of the merger may not be satisfied and the merger may not be
completed, and costs related to the proposed merger may adversely impact
ViroLogic's financial performance and/or condition, the risks that the
Company's products may not perform, whether ViroLogic successfully introduces
new products, risks related to the implementation of the Company's distribution
agreement with Quest Diagnostics, whether others introduce competitive
products, the risk that the Company's products may not continue to be accepted
or that increased demand may not develop as anticipated, the risk that gross
margins may not increase as expected, whether payors will authorize
reimbursement for its products, whether the FDA or any other agency will decide
to regulate ViroLogic's products or services, whether the Company will
encounter problems or delays in automating its processes, whether intellectual
property underlying the Company's technology is adequate, whether licenses to
third party technology will be available, and whether ViroLogic will be able to
raise sufficient capital when required. For a discussion of these and other
factors that may cause ViroLogic's actual events to differ from those
projected, please refer to the Company's most recent annual report on Form
10-K, quarterly reports on Form 10-Q, and the preliminary Joint
Proxy/Prospectus related to the proposed merger with ACLARA, as well as other
subsequent filings with the Securities and Exchange Commission.
In connection with a proposed merger with ACLARA, ViroLogic filed a
registration statement on Form S-4 with the Securities and Exchange Commission
on June 30, 2004. The registration statement includes a joint proxy statement
of ACLARA and ViroLogic for a meeting of ACLARA's stockholders to consider and
vote upon the proposed merger and for a meeting of ViroLogic's stockholders to
consider and vote upon the issuance of shares of ViroLogic in the proposed
merger and an amendment to ViroLogic's certificate of incorporation. The
registration statement when finalized and declared effective will also serve as
a prospectus of ViroLogic with respect to the shares and contingent value
rights of ViroLogic to be distributed to stockholders of ACLARA pursuant to the
merger. Investors and security holders are advised to read the joint proxy
statement/prospectus, as it may be amended from time to time, because it
contains important information about ViroLogic, ACLARA, the merger and related
matters. Investors and security holders may obtain a free copy of the joint
proxy statement/prospectus and other documents filed by ViroLogic and ACLARA at
the Securities and Exchange Commission's web site at http://www.sec.gov/. The
joint proxy statement/prospectus and such other documents may also be obtained,
when available, from ViroLogic by directing such request to ViroLogic Investor
Relations. The joint proxy statement/prospectus and such other documents may
also be obtained, when available, from ACLARA by directing such request to
ACLARA Investor Relations. ViroLogic, ACLARA and their respective executive
officers and directors may be deemed to be participants in the solicitation of
proxies from stockholders of ViroLogic and ACLARA with respect to the
transactions contemplated by the merger agreement. A description of any
interests that ViroLogic's or ACLARA's directors and executive officers have in
the proposed merger will be available in the joint proxy statement/prospectus.
Information regarding ViroLogic officers and directors is included in
ViroLogic's 10-K/A filed with the Securities and Exchange Commission on April
23, 2004. Information regarding ACLARA's officers and directors is included in
ACLARA's 10-K/A filed with the Securities and Exchange Commission on April 29,
2004. These materials are available free of charge at the Securities and
Exchange Commission's web site and from ViroLogic and ACLARA.
VIROLOGIC, INC.
SELECTED FINANCIAL DATA
(In thousands, except per share amounts)
Three months ended Six months ended
June 30, June 30,
2004 2003 2004 2003
(Unaudited) (Unaudited)
Statement of Operations Data:
Revenue:
Product revenue $8,734 $7,786 $17,374 $14,337
Contract revenue (a) 493 167 875 584
------- ------- -------- -------
Total revenue $9,227 $7,953 $18,249 $14,921
Operating costs and expenses:
Cost of product
revenue 4,475 4,268 8,891 8,087
Research and
development 1,600 1,089 2,993 2,435
General and
administrative 1,750 2,375 3,830 4,841
Sales and marketing 2,784 2,469 4,742 4,311
Lease termination
charge -- -- 433 --
------- ------- -------- -------
Total operating costs
and expenses 10,609 10,201 20,889 19,674
------- ------- -------- -------
Operating loss (1,382) (2,248) (2,640) (4,753)
Interest income 19 26 40 63
Interest expense (8) (36) (19) (88)
Other income -- 52 -- 104
------- -------- -------- --------
Net loss (1,371) (2,206) (2,619) (4,674)
Deemed dividend to
preferred stockholders -- -- -- (2,155)
Preferred stock
dividend (77) (506) (145) (973)
------- ------- -------- -------
Net loss applicable
to common
stockholders $(1,448) $(2,712) $(2,764) $(7,802)
==== ==== ===== ====
Basic and diluted
amounts per common
share:
Net loss $(0.03) $(0.07) $(0.05) $(0.16)
Dividends to preferred
stockholders -- (0.02) -- (0.11)
------- ------- -------- -------
Net loss applicable to
common stockholders $(0.03) $(0.09) $(0.05) $(0.27)
==== ==== ===== ====
Weighted average shares
used in computing
basic and diluted net
loss per common share 53,494 29,643 53,376 29,001
June 30, December 31,
2004 2003 (b)
(Unaudited)
Balance Sheet Data
Cash, cash equivalents and short-term
investments $9,466 $9,430
Accounts receivable, net 5,858 6,165
Working capital 10,162 13,038
Restricted cash 676 776
Total assets 28,420 28,378
Long term obligations, less current portion 43 87
Redeemable convertible preferred stock 1,994 1,994
Total stockholders' equity $18,355 $20,587
(a) Contract revenue consists of NIH grant, commercial development and
other revenue. The expenses associated with contract revenue for
the three and six months ended June 30, 2004 totaled $493,000 and
$875,000, respectively, compared to $145,000 and $335,000,
respectively, for the corresponding periods in 2003, and are
included in research and development expenses.
(b) The balance sheet data is derived from audited financial statements
for the year ended December 31, 2003, included in the Company's
Annual Report on Form 10-K filed with the Securities and Exchange
Commission.
DATASOURCE: ViroLogic, Inc.
CONTACT: Karen Wilson, CFO of ViroLogic, Inc., +1-650-624-4164, or
Web site: http://www.virologic.com/