Abgenix Announces Third Quarter 2005 Financial Results

FREMONT, Calif., Oct. 25 /PRNewswire-FirstCall/ -- Abgenix, Inc. today announced financial results for the third quarter ended September 30, 2005. The company reported a net loss of $36.8 million, or $0.41 per share, for the third quarter of 2005, compared to $42.4 million, or $0.48 per share, for the same period in 2004.

Net cash used in operating activities in the third quarter of 2005 was $21.8 million, compared to $36.5 million in the third quarter of 2004. During the quarter, the company repurchased approximately $13.8 million of its outstanding convertible notes due in 2007, and ended the third quarter of 2005 with $343.6 million in cash, cash equivalents and marketable securities.

"We continue to execute on our goals for 2005, including progress with our partner, Amgen, towards the initiation of our regulatory filing to the FDA for panitumumab before year-end 2005," said Bill Ringo, president and chief executive officer of Abgenix. "Our third quarter performance reflects expense reductions realized from our recently announced restructuring and facility consolidation, efforts to expand our product portfolio, and investment in the development and potential commercialization of panitumumab."

Revenues for the third quarter of 2005 were $4.7 million compared to $3.1 million for the same period in 2004. Revenues for the third quarter of 2005 consisted primarily of contract revenues from technology licensing agreements and included licensing revenues and an IND-related milestone from our partner Agensys. For the third quarter of 2004, revenues included a milestone payment from Amgen for advancement of denosumab (AMG-162), a XenoMouse(R)-derived antibody, into pivotal clinical trials for bone loss. The company's contract revenues generally vary from period to period based on the progress of research and development efforts by the company's collaborators and licensees.

Operating expenses for the third quarter of 2005 were $40.8 million, compared to $45.1 million for the same period in 2004. The majority of third quarter 2005 research and development costs related to advancement of the company's proprietary clinical product candidates, including its lead oncology product candidate, panitumumab, and ABX-10241, a fully human antibody being studied for the potential treatment of secondary hyperparathyroidism (SHPT). Included in both periods were manufacturing start-up costs related to the company's antibody production facility. Previously announced restructuring activities and other cost-containment initiatives contributed to the reduction in general and administrative expenses in 2005.

Third Quarter 2005 and Recent Company Highlights

-- Panitumumab development progress:

-- Top-line data from the ex-U.S. pivotal study (Study 408) are expected to be announced by mid-November 2005. The trial, anticipated to be the basis of a future Biologic License Application (BLA), measures progression free survival following panitumumab monotherapy for the treatment of advanced colorectal cancer (CRC) patients who have failed standard chemotherapy regimens, including irinotecan and oxaliplatin.

-- Dependent on the data outcome, initiation of the BLA for panitumumab monotherapy in advanced CRC patients who have failed such chemotherapy regimens is expected in late fourth quarter 2005.

-- Fast track status was granted for panitumumab by the U.S. Food and Drug Administration (FDA). Under the FDA Modernization Act of 1997, fast track designation allows the FDA to accept, on a rolling basis, portions of a marketing application for review prior to the completion of the final registration package.

-- As recently announced by our partner, Amgen, new interim data from two ongoing, single-arm, U.S. Phase 2 studies (Study 167 and Study 250) support that panitumumab is active as monotherapy in patients with advanced colorectal cancer who have failed multiple standard chemotherapy regimens.

-- Enrollment continues in the Panitumumab Advanced Colorectal Cancer Evaluation (PACCE) Study. The randomized, multi-center, controlled, open-label Phase 3 trial investigates the potential benefit of panitumumab in the first-line colorectal cancer setting when administered in combination with chemotherapy and Avastin(R) (bevacizumab).

-- Results of a Phase 2 study of panitumumab as a single agent therapy in metastatic renal cell carcinoma (mRCC) were presented on October 23, 2005 at the Fourth International Kidney Cancer Symposium in Chicago. No objective response was observed and overall survival was comparable to that associated with available mRCC treatments. Panitumumab appeared to be generally well tolerated and no panitumumab-induced human anti-human antibodies were observed.

-- Following our decision to co-promote panitumumab, we continued to make progress in recruiting the leadership of our commercial team and coordinating our efforts with Amgen.

-- Presentations of clinical and pre-clinical panitumumab studies at upcoming conferences:

-- Results of two clinical trials will be presented at the upcoming European Cancer Conference, or ECCO, in Paris on October 30 - November 3, 2005.

-- Primary analysis of results from the second part of a safety study of panitumumab plus irinotecan-containing chemotherapy in first line patients with metastatic CRC. Results from the first part of this study were presented at the 29th Congress of the European Society for Medical Oncology (ESMO) in November 2004.

-- Primary analysis of results from a Phase 2 study comparing panitumumab plus standard chemotherapy versus chemotherapy alone in first line advanced non-small cell lung cancer. Abgenix announced top-line results of this study in a press release on July 26, 2005.

-- Abstracts of five pre-clinical studies of panitumumab will be presented at the upcoming joint conference of the American Association of Cancer Research (AACR), National Cancer Institute (NCI) and the European Organisation for Research and Treatment of Cancer (EORTC) on November 14-18, 2005 in Philadelphia, PA.

-- Proprietary and partner pipeline activities:

-- Abgenix is entitled to a milestone payment from Pfizer following the filing by Pfizer of a Clinical Trial Application (CTA) with several European regulatory authorities. The CTA represents the fourth fully human antibody product candidate to enter clinical studies from the antibody research collaboration with Pfizer.

Conference call information

Abgenix will hold a conference call today at 4:30 pm ET, 1:30 pm PT to discuss financial results. To participate in the teleconference, please dial 866-700-7441 fifteen minutes before the conference begins. International callers should dial 617-213-8839. The pass code is 74073994. The call will also be webcast live at www.abgenix.com. A replay of the call will be available on the company's website or by dialing 888-286-8010. International callers should dial 617-801-6888. The replay participant code is 87765844.

About Abgenix

Abgenix is a biopharmaceutical company focused on the discovery, development and manufacturing of fully human therapeutic antibodies. The company's antibody development platform includes a leading antibody technology and state-of-the-art manufacturing capabilities that enable the rapid generation, selection and production of high affinity antibodies with the potential to target disease. Abgenix leverages its leadership position in human antibody technology to build a diversified product portfolio through its own development efforts and the establishment of collaborations with multiple pharmaceutical and biotechnology companies. For more information on Abgenix, visit the company's website at www.abgenix.com.

Statements made in this press release about Abgenix's technologies, product development activities, clinical study results, timing of potential FDA filings for panitumumab, collaborative and co-promotion arrangements and process science and manufacturing activities and about its projected financial results and the achievement of milestone or similar payments, other than statements of historical fact, 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 conducting clinical trials, the progress of research and product development programs, product manufacturing, regulatory filing, review and approval processes, competitive products and services, future capital requirements and the extent and breadth of Abgenix's patent portfolio. Please see Abgenix's public filings with the Securities and Exchange Commission for information about risks that may affect Abgenix, including its Form 10-K for the year ended December 31, 2004, and periodic reports on Form 10-Q and Form 8-K. Abgenix is providing this information as of the date of this press release and does not undertake any obligation to update any forward-looking statements.

ABGENIX, INC. Three Months Ended Nine Months Ended CONSOLIDATED STATEMENT OF September 30, September 30, OPERATIONS DATA 2005 2004 2005 2004 (in thousands except (unaudited) (unaudited) per share data) Revenues: Contract revenue $4,689 $3,116 $10,751 $10,195 Contract manufacturing revenue -- -- -- 1,325 Total revenues 4,689 3,116 10,751 11,520 Operating expenses: Cost of goods manufactured -- -- -- 1,857 Research and development 29,345 29,660 100,674 94,265 Manufacturing start-up costs 5,181 6,351 11,965 16,487 General and administrative 5,035 7,673 16,003 21,038 Amortization of intangible assets 846 1,441 3,728 5,024 Impairment of intangible assets -- -- 25,000 17,241 Restructuring and other 398 -- 15,138 -- Total operating expenses 40,805 45,125 172,508 155,912 Loss from operations (36,116) (42,009) (161,757) (144,392) Other income (expenses): Interest and other income (expenses), net 3,257 1,347 9,216 4,831 Interest expense (3,980) (1,758) (11,048) (5,048) Total other expenses (723) (411) (1,832) (217) Net loss $(36,839) $(42,420) $(163,589) $(144,609) Basic and diluted net loss per share $(0.41) $(0.48) $(1.83) $(1.63) Shares used in computing basic and diluted net loss per share 89,949 88,845 89,617 88,609 ABGENIX, INC. Three Months Ended Nine Months Ended RECONCILIATION OF September 30, September 30, GAAP NET LOSS TO 2005 2004 2005 2004 NON-GAAP NET LOSS (1) (unaudited) (unaudited) (in thousands except per share data) GAAP net loss $(36,839) $(42,420) $(163,589) $(144,609) Add: Impairment of intangible assets -- -- 25,000 17,241 Restructuring and other 398 -- 15,138 -- Non-GAAP net loss $(36,441) $(42,420) $(123,451) $(127,368) Basic and diluted non-GAAP net loss per share $(0.41) $(0.48) $(1.38) $(1.44) Shares used in computing basic and diluted non-GAAP net loss per share 89,949 88,845 89,617 88,609 (1)Non-GAAP amounts are intended to illustrate the Company's results of operations excluding impairment of intangible assets and restructuring charges.The non-GAAP results are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP measures used by other companies. ABGENIX, INC. September 30, December 31, CONSOLIDATED BALANCE SHEET DATA 2005 2004 (in thousands) (unaudited) * Cash, cash equivalents and marketable securities $343,604 $416,329 Other current assets 17,629 19,187 Total current assets 361,233 435,516 Property and equipment, net 199,884 223,004 Long-term investments 17,078 23,300 Intangible assets, net 66,063 94,790 Deposits and other assets 34,394 36,108 Total assets $678,652 $812,718 Deferred revenue $8,920 $11,692 Accrued restructuring charges 2,386 -- Other current liabilities 22,728 23,257 Total current liabilities 34,034 34,949 Convertible notes 449,890 463,630 Deferred rent 7,615 7,519 Non-current portion of accrued restructuring charges 5,214 -- Other long-term liabilities 63,941 25,626 Redeemable convertible preferred stock 49,869 49,869 Stockholders' equity 68,089 231,125 Total liabilities and stockholders' equity $678,652 $812,718 *Derived from the December 31, 2004 audited financial statements.

Abgenix, Inc.

CONTACT: Greg Mann, Director, Corporate Communications & InvestorRelations, +1-510-284-6566

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