GAITHERSBURG, Md., Feb. 6 /PRNewswire-FirstCall/ -- BioVeris Corporation reported today the financial results for its fiscal third quarter ended December 31, 2006.
BioVeris recorded revenues of $9.1 million for the fiscal 2007 third quarter ended December 31, 2006, compared to $5.5 million in the corresponding prior year period. Revenues for the nine months ended December 31, 2006 were $18.7 million, compared to $16.5 million in the corresponding prior year period.
Revenues include product sales, which were $5.6 million for the three months ended December 31, 2006, compared to $5.1 million in the corresponding prior year period. Product sales were $14.1 million for the nine months ended December 31, 2006, compared to $15.4 million in the corresponding prior year period. Sales of biosecurity products for the three and nine months ended December 31, 2006 were $2.7 million and $6.3 million, respectively, compared to $1.8 million and $7.2 million in the respective prior year periods. Sales of products for the life science market for the three and nine months ended December 31, 2006 were $2.9 million and $7.8 million, respectively, compared to $3.3 million and $8.2 million in the respective prior year periods. These changes in product sales reflect the change of orders and product deliveries which are based on customers' requirements.
During the three months ended December 31, 2006, 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 represents 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.
Product costs were $2.2 million (39% of total product sales) for the quarter ended December 31, 2006 compared to $2.5 million (49% of total product sales) in the corresponding prior year period. Product costs were $7.9 million (56% of total product sales) for the nine months ended December 31, 2006 compared to $6.6 million (43% of total product sales) in the corresponding prior year period. The current year includes approximately $300,000 and $800,000 of costs incurred during the three and nine month periods, respectively, in connection with detection module upgrades for certain existing customers. During the three months ended December 31, 2006, approximately $200,000 of costs associated with BioVeris' Quality Systems Initiative (QSI), which were not clearly related to production, were reclassified as research and development expenses. Product costs also decreased in the current quarter by approximately $400,000 due to higher margin reagent sales being a larger component of the sales mix. Product costs increased in the current nine month period due to higher service costs related to instrumentation.
Research and development expenses were $4.9 million for the quarter ended December 31, 2006, compared to $4.1 million in the corresponding prior year period. Research and development expenses were $13.5 million for the nine months ended December 31, 2006, compared to $13.1 million in the corresponding prior year period. During the three months ended December 31, 2006, approximately $200,000 of costs associated with BioVeris' QSI project, which were not clearly related to production, were reclassified as research and development expenses. Research and development expenditures also increased in the current three and nine month periods 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 $6.2 million in each of the quarters ended December 31, 2006 and 2005. Selling, general and administrative expenses were $18.5 million in the nine months ended December 31, 2006, compared to $18.8 million in the prior year period. Changes in selling, general and administrative costs in the quarter and nine months ended December 31, 2006 are primarily attributable to an increase in professional fees, including the fees of the independent field monitor reviewing Roche's compliance with the license between Roche and BioVeris, and the independent auditor examining the sales and accounting records and accounts of all uses of BioVeris' technology by Roche, offset by lower facilities costs and legal and accounting related fees.
The net loss for the quarter ended December 31, 2006 was $2.7 million ($0.10 per common share), compared to a net loss of $7.5 million ($0.28 per common share) in the corresponding prior year period. The net loss for the nine months ended December 31, 2006 was $17.1 million ($0.64 per common share), compared to a net loss of $20.7 million ($0.77 per common share) in the corresponding prior year period.
At December 31, 2006, the Company had cash, cash equivalents and short- term investments of $50.0 million.
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 http://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.
(Financial data follows.)
Consolidated Statement of Operations
(In thousands, except per share data)
Three Months Ended Nine Months Ended
December 31, December 31,
2006 2005 2006 2005
Product sales $5,583 $5,051 $14,143 $15,420
Roche payment 2,800 - 2,800 -
Royalty income 763 414 1,777 1,084
Total 9,146 5,465 18,720 16,504
OPERATING COSTS AND EXPENSES:
Product costs 2,160 2,459 7,949 6,625
Research and development 4,936 4,122 13,530 13,136
Selling, general, and
administrative 6,238 6,238 18,458 18,816
Total 13,334 12,819 39,937 38,577
LOSS FROM OPERATIONS (4,188) (7,354) (21,217) (22,073)
INTEREST INCOME 1,285 116 3,742 2,684
OTHER, NET 179 (272) 350 (1,292)
NET LOSS $(2,724) $(7,510) $17,125) $(20,681)
Net loss per common share
(basic and diluted) $(0.10) $(0.28) $(0.64) $(0.77)
COMMON SHARES OUTSTANDING
(basic and diluted) 26,959 26,841 26,923 26,793
Consolidated Balance Sheet
December 31, March 31,
Cash and cash equivalents $ 30,969 $ 29,693
Short-term investments 19,019 39,938
Accounts receivable, net 5,248 3,360
Note receivable- current 1,405 1,230
Inventory, net 7,108 5,429
Other current assets 1,822 2,508
Total current assets 65,571 82,158
Equipment and leasehold improvements,
net 3,652 3,456
OTHER NONCURRENT ASSETS:
Note receivable, net 4,836 4,436
Technology licenses 13,894 15,356
Other 447 447
TOTAL ASSETS $ 88,400 $ 105,853
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 5,001 $ 5,362
Accrued wages and benefits 1,591 1,862
Other current liabilities 780 1,520
Total current liabilities 7,372 8,744
NONCURRENT DEFERRED LIABILITIES 610 546
Total liabilities 7,982 9,290
SERIES B PREFERRED STOCK, 1,000 shares
designated, issued and outstanding 7,500 7,500
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,
27,241,000 and 27,238,000 shares issued
and outstanding at December 31, 2006 and
March 31, 2006, respectively 27 27
Additional paid-in capital 205,238 205,997
Deferred compensation 0 (1,688)
Accumulated other comprehensive loss (9) (128)
Accumulated deficit (132,338) (115,145)
Total stockholders' equity 72,918 89,063
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 88,400 $ 105,853