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/
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