REDWOOD CITY, Calif., March 31 /PRNewswire-FirstCall/ -- Genitope Corporation today reported financial results for the fourth quarter and year ended December 31, 2005.
2005 Corporate Progress and Outlook
“2005 was a very important year for Genitope Corporation,” said Dan W. Denney Jr., Ph.D., Genitope Corporation’s chairman and chief executive officer. “All of the patients in our pivotal Phase 3 trial of MyVax(R) personalized immunotherapy for patients with previously untreated follicular non-Hodgkin’s lymphoma (fNHL) completed their course of immunization and are now in follow-up. We are looking forward to the planned second interim analysis of the data in this trial in mid-year 2006.”
Additional Phase 2 data for MyVax(R) personalized immunotherapy for fNHL was presented at the American Society of Hematology Meeting in December of 2005. While the patient data in the 21-patient trial already reached its median time-to-progression in 2004, nine of the 21 patients in this trial remained progression-free as of their last clinical follow-up at 56 to 78 months post-chemotherapy. Furthermore, 19 of the 21 evaluated patients scored in the intermediate or high-risk prognostic groups according to the Follicular Lymphoma International Prognostic Index (FLIPI), including eight of the nine patients who remain in remission as of their last follow-up.
In December 2005, Genitope announced that it is developing a panel of monoclonal antibodies directed against specific epitopes in the variable regions of the B-cell receptor. This panel of monoclonal antibodies potentially represents a novel, more personalized approach than current monoclonal antibody therapies for treating non-Hodgkin’s lymphoma (NHL) and may lend itself to an off-the-shelf therapy that does not require customization.
Financial Results
For the fourth quarter of 2005, Genitope Corporation reported total operating expenses of $9.7 million and a net loss of $8.8 million, or $0.31 per share. This compares to total operating expenses of $7.2 million and a net loss of $6.8 million, or $0.28 per share, for the fourth quarter of 2004. The increase in operating expenses reflected increased staffing levels, increased expenses related to additional corporate infrastructure and other operating costs required to support the Company’s growth, as well as increased rent expense associated with new lease agreements for the Company’s new manufacturing facility and corporate headquarters.
For the year ended December 31, 2005, Genitope Corporation reported total operating expenses of $33.5 million and a net loss of $30.4 million, or $1.08 net loss per share. This compares to total operating expenses of $27.7 million and a net loss of $27.0 million, or $1.31 per share, for the year ended December 31, 2004. The increase in operating expenses for the current year versus the prior year was a result of the same factors as noted above for the fourth quarter. These expense increases for the year were partially offset by higher interest income in 2005 compared to 2004, due to higher average monthly balances for cash, cash equivalents and marketable securities during 2005 relative to 2004.
In the course of conducting the audit of Genitope Corporation’s year-end financial statements, the company’s policy with respect to accounting for the leases for the company’s new manufacturing facility and corporate headquarters was reassessed. Following extensive discussions between management and PricewaterhouseCoopers LLP, Genitope Corporation’s independent registered public accounting firm, it was determined that the company had not properly applied the provisions of EITF 97-10, “The Effect of Lessee Involvement in Asset Construction,” in accounting for these lease agreements. Proper application of the provisions of EITF 97-10 to this transaction required the Company to restate its previously issued second and third quarter of 2005 financial statements.
The impact of the changes to the second and third quarter statement of operations resulting from the restatement is a reduction in the net loss for second quarter of $.7 million, or $.02 per basic and diluted share, and for the third quarter of $1.4 million, or $.05 per basic and diluted share. The restatement had a significant non-cash impact on the company’s balance sheet and had no impact on cash flows as previously reported. For further detail, please refer to the company’s Form 10-K for 2005 filed today with the Securities and Exchange Commission.
As of December 31, 2005, Genitope Corporation had cash and cash equivalents and marketable securities of $81.1 million, inclusive of $38.8 million that secures a letter of credit related to the build-out costs of the company’s new manufacturing and corporate headquarter facility and is restricted as to its use.
Additional Recent Corporate Progress and Outlook
“Since the beginning of 2006, Genitope Corporation has completed an extremely successful follow-on public offering that raised over $58 million,” added Denney. We are now well positioned to optimize development of our lead product candidate, MyVax(R) personalized immunotherapy, as well as rapidly advance our monoclonal antibody project and expand our commercialization infrastructure.”
“We have also initiated our planned Phase 2 clinical trial of MyVax(R) personalized immunotherapy in Chronic Lymphocytic Leukemia (CLL). Based on the body of scientific and clinical evidence to date, we believe that MyVax(R) personalized immunotherapy has significant potential to treat this disease, for which there are currently no optimal treatment options.
John Vuko, Genitope Corporation’s chief financial officer, provided the following comments: “We are moving forward with our plans to grow our development, administrative and commercialization infrastructure. We signed leases for a new commercial manufacturing facility and corporate headquarters in mid-2005 and initiated the build-out in the fourth quarter of 2005. We anticipate that cash consumption will increase in 2006 as we move forward in these areas.”
About Genitope Corporation
Genitope Corporation (Redwood City, Calif.) is a biotechnology company focused on the research and development of novel immunotherapies for the treatment of cancer. Genitope Corporation’s lead product candidate, MyVax(R) personalized immunotherapy, is a patient-specific active immunotherapy based on the unique genetic makeup of a patient’s tumor and is designed to activate the patient’s immune system to identify and attack cancer cells. For more information on the company, please log on to http://www.genitope.com.
Forward-Looking Statements
This news release contains “forward-looking statements.” For this purpose, any statements contained in this press release that are not statements of historical fact may be deemed forward-looking statements, including statements about the timing of the initiation of the second interim analysis of data in Genitope Corporation’s Phase 3 clinical trial, the planned growth of its development, administrative and commercialization infrastructure, the anticipated increase of cash consumption in 2006, the potential efficacy of MyVax(R) personalized immunotherapy for the treatment of NHL and CLL, the potential efficacy of the panel of monoclonal antibodies that we are developing, the rate at which we will advance our monoclonal antibody project and expand our commercialization infrastructure and the anticipated timing, scope and potential outcome of Genitope Corporation’s Phase I/II clinical trial of MyVax(R) personalized immunotherapy for the treatment of CLL. Words such as “believes,” “anticipates,” “plans,” “expects,” “will,” “intends” and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause Genitope Corporation’s results to differ materially from those indicated by these forward-looking statements, including without limitation, risks relating to the progress, timing and results of Genitope Corporation’s clinical trials and other research and development activities, risks relating to the manufacturing of MyVax(R) personalized immunotherapy and other risks detailed in Genitope Corporation’s filings with the Securities and Exchange Commission, including under the heading “Risk Factors” in the Annual Report on Form 10-K for the fiscal year ended December 31, 2005 filed by Genitope Corporation with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Genitope Corporation undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date hereof.
GENITOPE CORPORATION (A DEVELOPMENT STAGE ENTERPRISE) STATEMENTS OF OPERATIONS (in thousands, except per share data) Cumulative Period from 15-Aug-96 (date of Three Months Twelve Months inception) Ended Ended to December December 31 December 31 31, 2005 2004 2005 2004 2005 Operating expenses: Research and development $7,370 $5,769 $25,867 $22,571 $100,933 Sales and marketing 1,116 484 2,704 1,793 7,427 General and administrative 1,211 929 4,938 3,356 17,522 Total operating expenses 9,697 7,182 33,509 27,720 125,882 Loss from operations (9,697) (7,182) (33,509) (27,720) (125,882) Loss on extinguishment of convertible notes and cancellation of Series E convertible preferred stock warrants - - - - (3,509) Interest expense (24) (1) (26) (4) (3,008) Interest and other income, net 958 334 3,111 698 5,593 Net loss (8,763) (6,849) (30,424) (27,026) (126,806) Dividend related to issuance of convertible preferred shares and the beneficial conversion feature of preferred stock - - - - (18,407) Net loss attributable to common stockholders $(8,763) $(6,849) $(30,424) $(27,026) $(145,213) Basic and diluted net loss per share attributable to common stockholders $(0.31) $(0.28) $(1.08) $(1.31) Shares used in computing basic and diluted net loss attributable to common stockholders 28,384 24,165 28,271 20,683 GENITOPE CORPORATION (A DEVELOPMENT STAGE ENTERPRISE) BALANCE SHEETS (in thousands, except share and per share data) December 31, December 31, 2005 2004 ASSETS Current assets: Cash and marketable securities $42,358 $116,509 Prepaid expenses and other current assets 2,210 1,101 Total current assets 44,568 117,610 Restricted cash and marketable securities 38,762 - Property and equipment, net 31,065 2,196 Other assets 1,000 59 Total assets $115,395 $119,865 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable 4,084 2,073 Accrued and other current liabilities 4,128 1,502 Lease Financing Liability - current 4,400 - Current lease obligations 24 46 Total current liabilities 12,636 3,621 Lease Financing Liability - noncurrent 14,997 - Accrued Interest - noncurrent 790 - Noncurrent lease obligations 24 48 Total liabilities 28,447 3,669 Stockholders’ equity: Common stock, $0.001 par value, 65,000,000 shares authorized; Issued and outstanding: 28,454,385 shares at December 31, 2005 and 28,191,145 shares at December 31, 2004 28 28 Additional paid-in capital 232,620 231,784 Deferred stock-based compensation (166) (733) Accumulated other comprehensive loss (321) (94) Deficit accumulated during the development stage (145,213) (114,789) Total stockholders’ equity 86,948 116,196 Total liabilities and stockholders’ equity $115,395 $119,865
Genitope Corporation
CONTACT: John Vuko, of Genitope Corporation, +1-650-472-2113,jvuko@genitope
Web site: http://www.genitope.com/
