REYKJAVIK, Iceland, August 10 /PRNewswire-FirstCall/ -- deCODE genetics
(Nasdaq: DCGN) today announced its consolidated financial results for the
quarter ended June 30, 2009. A conference call to discuss these results and
recent developments in the company's business will be webcast live tomorrow,
Tuesday, August 11, at 8:00am Eastern Daylight Time/12 noon GMT/1pm British
Summer Time (details below).
The financial results presented below reflect deCODE's strategic focus on
utilizing its leadership in human genetics to develop and commercialize
DNA-based risk assessment tests, personal genome scans, and intellectual
property. deCODE is pursuing various options aimed at underpinning and
advancing product development and commercialization in this core business.
One likely component of this effort is the sale of some or all of deCODE's US
medicinal chemistry and structural biology units. Although these units
continue to operate and contribute to deCODE, in view of their prospective
sale the company has accounted for these businesses as "discontinued
operations." With the exception of combined net loss figures, the operating
results discussed below are thus all for deCODE's continuing operations in
its core business of employing the company's capabilities in gene discovery
to advance DNA-based diagnostics, personal genome analysis, intellectual
property licensing opportunities, and contract genotyping. The results of
operations and related cashflows from deCODE's US operations, and for the
company's core and US operations combined, for the three and six-month
periods ended June 30, 2009 and 2008, are broken out in the table at the end
of this presentation.
Net loss for the quarter ended June 30, 2009 was $12.1 million, compared
to $17.6 million for the second quarter 2008. Net loss for the first six
months of 2009 was $24.3 million, compared to $43.6 million for the first six
months of last year. Figures for both 2008 periods include non-operating
losses resulting from the revaluation of auction rate securities (ARS) then
held by the company. Basic and diluted net loss per share was $0.20 and $0.39
for the second quarter and first six months of 2009, respectively, compared
to $0.29 and $0.71 for the same periods last year. At June 30, 2009, the
company had approximately 61.8 million shares outstanding. For continuing and
discontinued operations combined, net loss for the quarter ended June 30,
2009 was $13.1 million, compared to $18.4 million for the second quarter
2008. Net loss for the first six months of 2009 for combined operations was
$25.8 million, compared to $45.0 million for the first six months of last
year. Basic and diluted net loss per share for combined operations was $0.21
and $0.42 for the second quarter and first six months of 2009, respectively,
compared to $0.30 and $0.73 for the 2008 periods.
Revenue for the second quarter 2009 was $3.5 million, versus $9.0 million
for the second quarter last year. Revenue for the first half of 2009 was $7.6
million, compared to $18.1 million for the first half 2008. These figures
reflect the impact of lower year-on-year contract service revenues. At June
30, 2009, the company had $21.3 million in deferred revenue, to be recognized
over future reporting periods, including the upfront payment from the Celera
partnership signed in April.
Research and development expense for proprietary programs was $2.8
million for the second quarter of this year, compared to $8.0 million for the
same period last year. For the first six months of the year, research and
development expense was $6.9 million in 2009 and $20.6 million in 2008.
Selling, general and administrative expenses were $4.3 million for the second
quarter 2009, compared to $5.9 million for the second quarter 2008, and $8.6
million for the first half 2009 versus $11.7 million for the first half of
last year. These figures reflect the company's current focus on controlling
costs in its core genetics activities creating intellectual property and
novel content for its diagnostic tests, deCODEme scans, and outlicensing
opportunities, as well as costs related to the restructuring of the company.
At June 30, 2009, the company had cash and cash equivalents of $3.8
million, compared to $3.7 million at December 31, 2008. In early 2009 the
company sold its ARS for approximately $11.0 million in cash, and in April
the company signed licensing agreements with Celera Corporation under which
it received an upfront payment and will receive royalties on sales of Celera
testing products and services incorporating deCODE genetic risk markers. The
company believes it has sufficient resources to fund operations only into the
latter half of the third quarter. It is simultaneously pursuing several
options to ensure sufficient funding to take it to the execution of strategic
options that can support the near- and longer-term viability of its core
business.
"As the focus of our healthcare system shifts toward prevention,
measuring and controlling individual risk of disease will become a central
part of everyday medicine. DNA-based risk assessment tests and personal
genome scans such as those we have developed offer a novel and personalized
means of more accurately gauging risk. The goal of our strategic review is to
recast deCODE as a diagnostics company positioned to lead in this growing new
market. Over the past quarter we have made our gene discovery engine more
efficient, and shown that it continues to be second to none in delivering the
content required to create effective genetic risk tests for common diseases.
We are also advancing our strategic negotiations on several fronts, including
the sale of our US medicinal chemistry and structural biology units; finding
buyers or licensing partners to take forward our therapeutics programs;
additional licensing deals for our intellectual property and diagnostic
tests; and securing new equity financing. All of these are steps towards the
same goal: to provide the company with the operating structure and financial
means to advance a product portfolio that we believe will play an important
role in improving healthcare," said Kari Stefansson, CEO of deCODE.
Recent operating highlights include:
Corporate and Product Development
- Celera. In April, deCODE entered into agreements with Celera
Corporation under which it has granted Celera non-exclusive worldwide
licenses to deCODE's genetic markers for increased risk of major
cardiovascular and metabolic diseases, including heart attack, stroke,
atrial fibrillation (AF) and type 2 diabetes (T2D). Celera plans to
incorporate them into risk assessment and testing services offered by
its subsidiary Berkeley HeartLab, and deCODE will receive royalties on
sales of tests and services utilizing its markers.
- deCODE AF(TM). The company continued to expand the predictive power and
clinical utility of its reference laboratory test for measuring risk of
atrial fibrillation (AF) and stroke. Last month, deCODE scientists
published the discovery of another common single-letter variation (SNP)
in the sequence of the human genome conferring risk of AF and stroke.
More than a third of people of European descent carry at least one copy
of this new SNP on chromosome 16, putting them at more then 20% greater
risk of AF and stroke than non-carriers.
- Gene discovery. deCODE continues to reinforce its global leadership in
the discovery of genetic risk factors for common diseases. In June, a
deCODE team presented several new common SNPs linked to risk of skin
cancer, three of which appear to confer risk through underlying
mechanisms that are not modulated by sensitivity to the UV radiation in
sunlight. These variants were integrated into the deCODEme(TM) and
deCODEme Cancer(TM) scans, and one in particular, located in the
keratin 5 gene, may make a promising drug target. In another study,
deCODE scientists discovered a SNP on chromosome 21 that modulates risk
of both kidney stones and osteoporosis. As both conditions are
related to dysfunctional calcium metabolism, this finding may mark a
new pathway for drug discovery. deCODE has also led the largest ever
study of the genetics of schizophrenia, and, last month, the deCODE
team and colleagues from the SGENE consortium published the discovery
of several novel common SNPs linked to increased risk of the disease.
- CAP Certification. Supporting the company's efforts to broaden the
marketing and reimbursement of its DNA-based risk assessment tests,
deCODE's CLIA-registered DNA isolation and genotyping laboratory has
been accredited by the American College of Pathologists (CAP). The
laboratory processes the company's deCODEme(TM) personal genome scans
and risk assessment diagnostic tests. The US Centers for Medicare and
Medicaid Services (CMS) has granted the CAP Laboratory Accreditation
Program deeming authority, and its accreditations can also be used to
meet many state certification requirements.
Finance
- Nasdaq Global Market reinstatement. In June, the listing of deCODE's
common stock was reinstated to the Nasdaq Global Market. The
reinstatement followed the Nasdaq Hearing and Listing Review Council's
reversal of a decision in February by the Nasdaq Listing Qualifications
panel under which the listing of deCODE's common stock was transferred
to the Nasdaq Capital Market.
Subsequent Events
- On July 30, 2009, deCODE's stockholders approved the increase in
deCODE's authorized shares of common stock from 150,000 to 1,150,000
and also approved the amendment of its Amended and Restated Certificate
of Incorporation to allow for a reverse stock split at the discretion
of deCODE's Board of Directors. These steps position the company to
bring in new equity investment and to renegotiate its debt.
About deCODE
deCODE is a biotechnology company developing DNA-based tests to assess
individual risk of common diseases and to improve prevention, diagnosis and
treatment. deCODE is a global leader in human genetics, and has identified
key variations in the genome (SNPs) conferring increased risk of major public
health challenges from cardiovascular disease to cancer. Based upon these
discoveries deCODE has brought to market a growing range of DNA-based tests
for understanding risk and empowering prevention. Through its CLIA-registered
laboratory, deCODE offers deCODE T2(TM) for type 2 diabetes; deCODE AF(TM)
for atrial fibrillation and stroke; deCODE MI(TM) for heart attack; deCODE
ProstateCancer(TM) for prostate cancer; deCODE Glaucoma(TM) for a major type
of glaucoma; and deCODE BreastCancer, for the common forms of breast cancer.
Through its chemistry and biology units deCODE has also developed a
therapeutic product portfolio, which includes DG041, an antiplatelet compound
being developed for the prevention of arterial thrombosis; DG051, a compound
targeting the leukotriene pathway for the prevention of heart attack; and
DG071 and a platform for other PDE4 modulators with therapeutic applications
in Alzheimer's disease and other conditions. The company intends to partner
or directly outlicense these programs. Visit us on the web at
http://www.decode.com; on our diagnostics site at
http://www.decodediagnostics.com; for our pioneering deCODEme(TM) personal
genome analysis service and focused deCODEme Cardio(TM) and deCODEme
Cancer(TM) scans at http://www.decodeme.com; and on our blog at
http://www.decodeyou.com. deCODE is delivering on the promise of the new
genetics.SM
Conference Call Information
A conference call, during which deCODE CEO Kari Stefansson and CFO Lance
Thibault will discuss the past quarter's financial results and operating
highlights, will be webcast tomorrow, Tuesday, August 11, at 8:00am EDT/12
noon GMT/1pm BST. The webcast can be accessed via the Investors section of
deCODE's website, http://www.decode.com, or through http://www.earnings.com.
A replay of the call will be available on these websites for at least one
week following the call. A digitized telephone replay of the call can be
accessed for the week following the call by dialing 1-800-475-6701 from the
US, or +1-320-365-3844 from outside the US. The access code is 111342.
Condensed Consolidated Statements of Operations
For the three months For the six months
ended June 30, ended June 30,
2009 2008 2009 2008
in thousands, except per share amounts
(unaudited)
Revenue............... $ 3,501 $ 8,956 $ 7,613 $ 18,129
Operating expenses
Cost of revenue..... 4,436 8,199 8,555 18,343
Research and development 2,841 7,964 6,872 20,578
Selling, general and
administrative.......... 4,318 5,929 8,582 11,678
Total operating expense. 11,595 22,092 24,009 50,599
Operating income (loss)
from continuing operations (8,094) (13,136) (16,396) (32,470)
Interest income....... 18 452 175 1,489
Interest expense...... (4,380) (3,716) (8,611) (7,336)
Other non-operating
income and (expense),
net*.................. 330 (1,170) 565 (5,247)
Net loss from continuing
operations.............. (12,126) (17,573) (24,267) (43,564)
Loss from discontinued
operations.............. (1,070) (784) (1,566) (1,455)
Net loss ............. $ (13,196) $ (18,354) $ (25,833) $ (45,019)
Basic and diluted net
loss per share from
continuing
operations: $ (0.20) $ (0.29) $ (0.39) $ (0.71)
Basic and diluted
net loss per share
from discontinued
operations: $ (0.01) $ (0.01) $ (0.03) $ (0.02)
Basic and diluted
net loss per share: $ (0.21) $ (0.30) $ (0.42) $ (0.73)
Shares used in
computing basic and
diluted net loss per
share...... ... 61,489 61,371 61,481 61,318
Condensed Consolidated Balance Sheet Data
At June 30, At December 31,
2009 2008
in thousands (unaudited)
Cash and cash equivalents. $ 3,765 $ 3,701
Total assets........................ 69,853 75,137
Total liabilities................... 313,927 296,213
Total shareholders' equity..... (244,074) (221,076)
* Other non-operating expense for the three and six months ended June 30,
2009 and 2008 principally reflect an unrealized loss resulting from the
revaluation of the company's non-current auction rate security investments
and for the three and six months ended June 30, 2009 offset by foreign
currency translation gains.
Any statements contained in this presentation that relate to future
plans, events or performance are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are subject to a number of risks and uncertainties
that could cause actual results, and the timing of events, to differ
materially from those described in the forward-looking statements. These
risks and uncertainties include, among others, those relating to our ability
to obtain sufficient financing to continue as a going concern, our ability to
develop and market diagnostic products, the level of third party
reimbursement for our products, our ability to form collaborative
relationships, the effect of government regulation and the regulatory
approval processes, market acceptance, our ability to obtain and protect
intellectual property rights for our products, dependence on collaborative
relationships, the effect of competitive products, industry trends and other
risks identified in deCODE's filings with the Securities and Exchange
Commission, including, without limitation, the risk factors identified in our
most recent Annual Report on Form 10-K and any updates to those risk factors
filed from time to time in our Quarterly Reports on Form 10-Q or Current
Reports on Form 8-K. deCODE undertakes no obligation to update or alter these
forward-looking statements as a result of new information, future events or
otherwise.
Contacts:
deCODE genetics
Joy Bessenger
+1-212-481-3891
ir@decode.is
Gisli Arnason
+354-570-1900
info@decode.is
Edward Farmer
+354-570-1900
info@decode.is
