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BioVeris Corporation (BIOV) Reports Fiscal 2007 Results


6/8/2007 11:50:53 AM

GAITHERSBURG, Md., June 7 /PRNewswire-FirstCall/ -- BioVeris Corporation reported today its financial results for the quarter and year ended March 31, 2007 and filed its Annual Report on Form 10-K with the Securities and Exchange Commission.

BioVeris recorded revenues of $24.1 million for the fiscal year ended March 31, 2007, compared to $20.6 million for the last fiscal year. Revenues for the three months ended March 31, 2007 were $5.3 million, compared to $4.1 million for the same period in 2006.

Revenues include product sales of $4.9 million and $19.0 million during the three months and year ended March 31, 2007, respectively, compared to $3.6 million and $19.1 million for the same respective prior year periods. Sales of biosecurity products for fiscal 2007 were $8.5 million, a decrease of $100,000 from the prior year. Sales of products for the life science market were $10.5 million for both fiscal 2007 and 2006. These product sales reflect orders and product deliveries which are based on customers' requirements.

During the fiscal year ended March 31, 2007, BioVeris also received and recognized as revenue, a $2.8 million payment from Roche Diagnostics, an operating division of F. Hoffman LaRoche Ltd (Roche). This payment represented Roche's unilateral, preliminary calculation of amounts owed to BioVeris for Roche's sales to certain customers in 2004 that were outside Roche's licensed field, under a license agreement between the parties. BioVeris has notified Roche that the $2.8 million payment does not represent full satisfaction of Roche's obligations for 2004 out-of-field sales and BioVeris has expressly reserved all rights to seek additional payments. Additionally, BioVeris does not believe that this payment is indicative of amounts that will be owed for years after 2004. As previously announced, on April 4, 2007, BioVeris and Roche Holding Ltd. entered into a merger agreement, pursuant to which BioVeris agreed to be acquired by Roche Holding Ltd. for $21.50 per share in cash.

Product costs were $3.1 million (64% of total product sales) for the three months ended March 31, 2007 compared to $2.1 million (57% of total product sales) in the corresponding prior year period. Product costs were $11.0 million (58% of total product sales) for the year ended March 31, 2007 compared to $8.7 million (46% of total product sales) in the corresponding prior year period. The current year increase includes approximately $400,000 and $1.2 million of costs incurred during the three months and year ended March 31, 2007, respectively, in connection with detection module upgrades for certain existing customers. Product costs also increased in fiscal 2007 by approximately $1.1 million due to lower margin instrument sales being a larger component of the sales mix and higher service costs related to instrumentation.

Research and development expenses were $5.0 million for the three months ended March 31, 2007 and $4.6 million for the corresponding prior year period. Research and development expenses increased to $18.5 million for the year ended March 31, 2007 from $17.7 million for the corresponding prior year period. Research and development expenditures increased in the current year due primarily to higher facilities and consulting costs. Research and development expenses primarily relate to ongoing development costs and product enhancements associated with vaccines, the M-SERIES family of products, development of new assays and research and development of new systems and technologies, including point-of-care products.

Selling, general and administrative expenses were $7.3 million for the three months ended March 31, 2007 compared to $5.9 million in the corresponding prior year period. Selling, general and administrative expenses were $24.6 million for the year ended March 31, 2007 compared to $24.7 million in the corresponding prior year period. Included as selling, general and administrative expenses during fiscal 2007 was share-based compensation expense under FAS 123R associated with our 2003 Stock Incentive Plan of approximately $600,000. These expenses in the current year were offset by lower facilities costs and legal and accounting related fees.

Costs of $5.3 million in the current year associated with the proposed Roche merger, disputes with Roche over the license agreement between Roche and the Company, fees of the independent field monitor reviewing Roche's compliance with the license agreement between the parties, and the independent auditor examining the sales and accounting records and accounts of all uses of the Company's technology by Roche, are classified as Roche and merger related costs. There were no significant similar costs in the prior fiscal year.

BioVeris' net loss for the three months ended March 31, 2007 was $13.4 million ($0.49 per common share), compared to a net loss of $7.2 million ($0.27 per common share) in the corresponding prior year period. BioVeris' net loss for the year ended March 31, 2007 was $30.5 million ($1.13 per common share), compared to a net loss of $27.9 million ($1.04 per common share) in the corresponding prior year period.

At March 31, 2007, the Company had cash, cash equivalents and short-term investments of $44.0 million.

BioVeris Corporation Safe Harbor

BioVeris Corporation is a global health care and biosecurity company developing proprietary technologies in diagnostics and vaccinology. The Company is dedicated to the development and commercialization of innovative products and services for healthcare providers, their patients and their communities. BioVeris is headquartered in Gaithersburg, Maryland. Further information about BioVeris is available at http://www.bioveris.com.

This press release contains forward-looking statements within the meaning of the federal securities laws that relate to future events or BioVeris' future financial performance. All statements in this press release that are not historical facts, including any statements about future financial information, future payments from Roche and future financial or operational plans are hereby identified as "forward-looking statements." The words "may," "should," "will," "expect," "could," "anticipate," "believe," "estimate," "plan," "intend" and similar expressions have been used to identify certain of the forward-looking statements. In this press release, BioVeris has based these forward-looking statements on management's current expectations, estimates and projections and they are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those described in the forward-looking statements. Such forward-looking statements should, therefore, be considered in light of various important factors, including changes in BioVeris' strategy and business plans; BioVeris' ability to develop and introduce new or enhanced products; BioVeris' ability to enter into new collaborations on favorable terms, if at all; and changes in general economic, business and industry conditions. The foregoing sets forth some, but not all, of the factors that could impact upon BioVeris' ability to achieve results described in any forward-looking statements. A more complete description of the risks applicable to BioVeris is provided in the Company's filings with the SEC available at the SEC's web site at www.sec.gov. Investors are cautioned not to place undue reliance on these forward-looking statements. Investors also should understand that it is not possible to predict or identify all risk factors and that neither this list nor the factors identified in BioVeris' SEC filings should be considered a complete statement of all potential risks and uncertainties. BioVeris has no obligation to publicly update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this press release.

BioVeris Corporation Consolidated Statement of Operations (In thousands, except per share data) (Unaudited) Three Months Ended Twelve Months Ended March 31, March 31, 2007 2006 2007 2006 REVENUES: Product sales $ 4,815 $ 3,634 $ 18,958 $ 19,054 Roche payment - - 2,800 - Royalty income 528 477 2,305 1,561 Total 5,343 4,111 24,063 20,615 OPERATING COSTS AND EXPENSES: Product costs 3,085 2,081 11,034 8,706 Research and development 4,989 4,559 18,518 17,695 Selling, general, and administrative 7,256 5,872 24,621 24,688 Roche and merger related costs 4,214 - 5,306 - Total 19,544 12,512 59,479 51,089 LOSS FROM OPERATIONS (14,201) (8,401) (35,416) (30,474) INTEREST INCOME 765 1,167 4,506 3,851 OTHER, NET 74 62 424 (1,230) NET LOSS $(13,362) $ (7,172) $ (30,486) $ (27,853) Net loss per common share (basic and diluted) $ (0.50) $ (0.27) (1.13) $ (1.04) COMMON SHARES OUTSTANDING (basic and diluted) 26,990 26,862 26,940 26,810 BioVeris Corporation Consolidated Balance Sheets (In thousands, except share data) (Unaudited) March 31, 2007 2006 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 17,550 $ 29,693 Short-term investments 26,428 39,938 Accounts receivable, net 4,966 3,360 Note receivable - current 1,603 1,230 Inventory, net 6,446 5,429 Other current assets 1,524 2,508 Total current assets 58,517 82,158 Equipment and leasehold improvements, net 3,617 3,456 OTHER NONCURRENT ASSETS: Note receivable 4,388 4,436 Technology licenses 13,406 15,356 Other 437 447 TOTAL ASSETS $ 80,365 $ 105,853 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and accrued expenses $ 8,177 $ 5,362 Accrued wages and benefits 3,426 1,862 Other current liabilities 603 1,520 Total current liabilities 12,206 8,744 NONCURRENT DEFERRED LIABILITIES 816 546 Total liabilities 13,022 9,290 COMMITMENTS and CONTINGENCIES SERIES B PREFERRED STOCK, 1,000 shares designated, issued and outstanding 7,500 7,500 STOCKHOLDERS' EQUITY: Preferred stock, par value $0.01 per share, 15,000,000 shares authorized, issuable in series: Series A, 600,000 shares designated, none issued - - Common stock, par value $0.001 per share, 100,000,000 shares authorized, 27,248,000 and 27,238,000 shares issued and outstanding 27 27 Additional paid-in capital 205,549 205,997 Deferred compensation - (1,688) Accumulated other comprehensive loss (5) (128) Accumulated deficit (145,728) (115,145) Total stockholders' equity 59,843 89,063 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 80,365 $ 105,853

BioVeris Corporation

CONTACT: George Migausky of BioVeris Corporation, +1-301-869-9800 ext.2013; or Investors, Jonathan Fassberg of The Trout Group, +1-212-477-9007ext. 16; or Media, Andrew Cole, +1-415-618-8750, or Lesley Bogdanow,+1-212-687-8080, both of Sard Verbinnen & Co


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