REYKJAVIK, Iceland, August 10 /PRNewswire-FirstCall/ -- deCODE genetics 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.
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.
* 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.
SOURCE DeCODE Genetics Inc
CONTACT: 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
