PRINCETON, N.J., Oct. 30 /PRNewswire-FirstCall/ -- Medarex, Inc.
(Nasdaq: MEDX) announced today its financial results for the quarter ended
September 30, 2008.
Medarex's net loss for the quarter ended September 30, 2008 was
$45.7 million, or ($0.36) per share, as compared to a net loss of
$51.6 million, or ($0.41) per share, for the third quarter of 2007. Included
in the 2008 results was a non-cash charge of $5.4 million, or ($0.04) per
share, for stock based compensation recorded in accordance with FAS 123(R) and
a non-cash equity in net loss of affiliate charge of $2.8 million, or ($0.02)
per share, related to our share of the net loss of Celldex Therapeutics, Inc.
(formerly AVANT Immunotherapeutics, Inc.). Excluding the impact of these
items, Medarex's net loss on a non-GAAP basis for the quarter ended September
30, 2008 was $37.4 million, or ($0.29) per share.
Total revenues for the quarter ended September 30, 2008 were
$10.2 million, as compared to $12.4 million for the third quarter of 2007.
Research and development (R&D) expenses for the quarter ended September 30,
2008 decreased by $5.0 million, from $49.2 million in the third quarter of
2007 to $44.2 million in the third quarter of 2008. General and administrative
expenses decreased by $2.0 million for the quarter ended September 30, 2008,
from $13.1 million in the third quarter of 2007 to $11.1 million in the third
quarter of 2008.
Medarex ended the third quarter of 2008 with approximately $388.4 million
in cash, cash equivalents and marketable securities. In addition, as of
September 30, 2008, the fair market value of Medarex's equity interests in
Genmab A/S and Celldex Therapeutics, Inc. were approximately $131.7 million
and $57.7 million, respectively.
Non-GAAP Financial Measurements
This press release and the accompanying tables include non-GAAP financial
measures. Please see the section of the accompanying tables titled
"Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Loss" for a
description of these non-GAAP financial measures, including reasons for
Medarex management's decision to use each measure, and reconciliations of
these non-GAAP financial measures to the most directly comparable financial
measures prepared in accordance with Generally Accepted Accounting Principles.
"As seen in previous quarters, this third quarter also exemplifies our
consistent management of our cash resources with the exciting research and
clinical development activities that support our advancing portfolio of
potentially important assets," said Howard H. Pien, President and CEO of
Medarex. "Our efforts will continue to be focused on managing the business to
reflect a strong balance sheet and a strong pipeline, fundamental drivers that
will keep our company healthy and growing for the long-term."
Medarex's 2008 Third Quarter Highlights:
-- Providing at Medarex's R&D Day a comprehensive review of the business
strategy, product opportunities, and highlights of Medarex's technology and
financial assets that position it for value creation and future growth.
-- Demonstrating consistency of updated survival data for ipilimumab,
where approximately half of patients with advanced melanoma treated with
ipilimumab were still alive beyond one year. These updated survival data from
three Phase 2 trials were presented at the 33rd Congress of the European
Society for Medical Oncology (ESMO).
-- Filing an Investigational New Drug (IND) application for MDX-1105, an
anti-PD-L1 HuMAb(TM) for the treatment of patients with advanced or recurrent
solid tumors.
-- Announcing the receipt of milestone payments from our licensing
partners Centocor R&D Inc. and Pfizer Inc. for the filing of IND applications
for two separate antibodies generated by Medarex's UltiMAb(R) technology.
-- Announcing the receipt of a milestone payment from MedImmune, Inc. for
initiation of a Phase 2a multi-dose clinical trial of MEDI-545, an
anti-interferon-alpha HuMAb(TM) for systemic lupus erythematosis.
About Medarex
Medarex is a biopharmaceutical company focused on the discovery,
development and potential commercialization of fully human antibody-based
therapeutics to treat life-threatening and debilitating diseases, including
cancer, inflammation, autoimmune disorders and infectious diseases. Medarex
applies its UltiMAb(R) technology and product development and clinical
manufacturing experience to generate, support and potentially commercialize a
broad range of fully human antibody product candidates for itself and its
partners. Over forty of these therapeutic product candidates derived from
Medarex technology are in human clinical testing or have had INDs submitted
for such trials, with the most advanced product candidates currently in Phase
3 clinical trials or the subject of regulatory applications for marketing
authorization. Medarex is committed to building value by developing a diverse
pipeline of antibody products to address the world's unmet healthcare needs.
For more information about Medarex, visit its website at www.medarex.com.
Statement on Cautionary Factors
Except for the historical information presented herein, the statements
relating to Medarex's investments and advances related to its products in this
press release may constitute forward-looking statements, as defined in the
Private Securities Litigation Reform Act of 1995, that are subject to certain
risks and uncertainties that could cause actual results to differ materially
from any future results, performance or achievements expressed or implied by
such statements. Statements that are not historical facts, including
statements preceded by, followed by, or that include the words "potential";
"preliminary"; or similar statements are forward-looking statements. Medarex
disclaims any intent or obligation to update these forward-looking statements.
Risks and uncertainties include risks associated with product discovery and
development, uncertainties related to the outcome of clinical trials, slower
than expected rates of patient recruitment, unforeseen safety issues resulting
from the administration of antibody products in patients, uncertainties
related to product manufacturing, the need for additional capital, compliance
with regulatory requirements, risks associated with the use of hazardous
substances and risks associated with the enforceability of our patents, as
well as risks detailed from time to time in Medarex's public disclosure
filings with the U.S. Securities and Exchange Commission (SEC), including its
Annual Report on Form 10-K for the fiscal year ended December 31, 2007 and its
quarterly reports on Form 10-Q. There can be no assurance that such
development efforts will succeed or that developed products will receive
required regulatory clearance or that, even if such regulatory clearance were
received, such products would ultimately achieve commercial success. Copies of
Medarex's public disclosure filings are available from its investor relations
department.
Medarex(R), the Medarex logo, UltiMAb(R) and HuMAb(TM) are trademarks of
Medarex, Inc. All rights are reserved.
MEDAREX, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
(unaudited) (unaudited)
2008 2007 2008 2007
Contract and license revenues $6,264 $6,973 $20,139 $20,771
Reimbursement of development
costs 3,944 5,454 12,032 14,990
Total revenues 10,208 12,427 32,171 35,761
Costs and expenses:
Research and development 44,153 49,165 146,019 141,460
General and administrative 11,068 13,149 35,912 35,020
Acquisition of in-process
technology - 6,900 - 6,900
Operating loss (45,013) (56,787) (149,760) (147,619)
Equity in net loss of affiliate (2,813) - (8,144) -
Interest income, net 1,919 3,635 162,233 162,981
Impairment loss on investments
in partners - - - (2,141)
Minority interest - Celldex - 1,602 - 4,542
Income (loss) before
provision for income taxes (45,907) (51,550) 4,329 17,763
Provision (benefit) for income
taxes (222) 5 (199) 7
Net income (loss) $(45,685) $(51,555) $4,528 $17,756
Basic net income (loss) per
share $(0.36) $(0.41) $0.04 $0.14
Diluted net income (loss) per
share $(0.36) $(0.41) $0.04 $0.14
Weighted average number of
common shares outstanding during
the year - basic 128,335 127,125 128,064 126,200
- diluted 128,335 127,125 128,064 128,501
Condensed Consolidated Balance Sheets
(In thousands)
September 30, December 31,
2008 2007
(unaudited) (1)
Cash, cash equivalents and marketable
securities - Medarex $388,399 $334,772
Cash and cash equivalents - Celldex - 14,000
Marketable securities - Genmab - 152,000
Other current assets 15,898 29,013
Property, buildings and equipment, net 72,127 79,925
Marketable securities - Genmab non-current 131,704 139,165
Investment in Celldex Therapeutics 4,996 -
Other assets 9,192 10,985
$622,316 $759,860
Current liabilities $66,854 $81,645
Other liabilities 81,191 89,454
Convertible notes 144,949 143,505
Shareholders' equity 329,322 445,256
$622,316 $759,860
(1) Derived from the December 31, 2007 audited financial statements. For
further information, refer to the consolidated financial statements
and footnotes thereto included in Medarex's Annual Report on Form 10-K
for the year ended December 31, 2007.
This press release dated October 30, 2008, contains non-GAAP financial
measures. The following table reconciles the non-GAAP financial measures
contained in the press release to the most directly comparable financial
measures prepared in accordance with GAAP. These non-GAAP financial measures
include non-GAAP net loss and non-GAAP net loss per share. Non-GAAP financial
measures should be considered in addition to, and not as a substitute for, or
superior to, financial measures prepared in accordance with GAAP.
The following reconciliation of GAAP net income (loss) to non-GAAP net
loss and GAAP net income (loss) per share to non-GAAP net loss per share is
provided as a complement to results presented in accordance with GAAP because
Medarex's management believes these non-GAAP financial measures provide better
insight into Medarex's performance by focusing on results generated by its
ongoing operations and are important in comparing current results with prior
period results. Non-GAAP net loss and non-GAAP net loss per share are intended
to illustrate Medarex's results of operations for the periods presented
excluding the items discuss below. Medarex's management believes investors'
understanding of Medarex's financial performance is enhanced as a result of
our disclosing these non-GAAP financial measures. Non-GAAP net loss and
non-GAAP net loss per share should not be viewed in isolation or as a
substitute for GAAP net income (loss) or GAAP net income (loss) per share.
MEDAREX, INC.
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Loss
(In thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(unaudited) (unaudited)
2008 2007 2008 2007
GAAP Net income (loss) $(45,685) $(51,555) $4,528 $17,756
Celldex net loss (1) - 4,007 2,924 11,355
Minority interest - Celldex (1) - (1,602) - (4,542)
Stock-Based compensation
expense (2) 5,442 5,955 16,701 13,776
Acquisition of in-process
technology - 6,900 - 6,900
Impairment loss on investments - - - 2,141
Equity in net loss of affiliate 2,813 - 8,144 -
Gain on sale of Genmab stock - - (151,834) (152,143)
Non-GAAP Net loss $(37,430) $(36,295) $(119,537) $(104,757)
GAAP Net income (loss) per
share,
basic $(0.36) $(0.41) $0.04 $0.14
diluted $(0.36) $(0.41) $0.04 $0.14
Non-GAAP Net loss per share,
basic and diluted $(0.29) $(0.29) $(0.93) $(0.83)
Shares used in computing
basic and diluted GAAP net
income (loss) per share and
Non-GAAP net loss per share 128,335 127,125 128,064 126,200
(1) In management's view, the operations of Celldex prior to its merger
with AVANT Immunotherapeutics, Inc. (now Celldex Therapeutics, Inc.),
effective March 7, 2008, are not necessarily indicative of, or
directly attributable to, Medarex's continuing operations. Celldex's
operations relate primarily to the research, development and
commercialization of therapeutic vaccines, which is outside the scope
of Medarex's core business operations.
(2) For the three and nine months ended September 30, 2008, Medarex
incurred $5.4 million and $16.7 million in non-cash stock compensation
expense, of which $2.6 million and $7.4 million are included in
research and development expenses and $2.8 million and $9.3 million,
respectively, are included in general and administrative expenses.
Stock compensation expense includes costs associated with stock
awards, including stock options which were recorded in accordance with
the provisions of FAS 123(R). FAS 123(R) requires companies to record
stock-based payments in the financial statements using a fair value
method.
In addition to excluding the items described in footnotes 1 and 2 above,
items have been excluded based upon management's evaluation (on an individual
basis) of both quantitative and qualitative aspects of the item, including,
(i) size and nature, (ii) whether it relates to our ongoing business
operations, and (iii) whether management expects it to occur as part of our
normal business on a regular basis. Those additional items excluded for
purposes of determining non-GAAP net loss and non-GAAP net loss per share are
gain on sales of Genmab stock, equity in net loss of affiliate, acquisition of
in-process technology and impairment loss on investments in partners.
