REDWOOD CITY, Calif., Oct. 25 /PRNewswire-FirstCall/ -- Maxygen, Inc. today reported financial results for the third quarter ended September 30, 2005 and provided an update on the company’s business. Maxygen reported a loss applicable to common stockholders of $10.6 million, or $0.30 per share, for the third quarter of 2005 compared to a loss applicable to common stockholders of $13.5 million, or $0.38 per share excluding discontinued operations in the third quarter of 2004.
As a result of the change in Maxygen’s accounting for its investment in Codexis on the equity accounting basis, Maxygen does not include the operating results of Codexis in its financial statements after February 28, 2005. Financial results for 2004 contained herein include the operating results of Codexis for the three and nine month periods reported.
Revenues in the third quarter of 2005 were $735,000 compared to $3.9 million for the same period in 2004. The decrease in revenues is primarily attributable to the completion of the research and development funding terms of some of our collaborations and the exclusion of Codexis’ revenue from Maxygen’s results during the third quarter of 2005.
Expenses relating to research and development decreased in the third quarter of 2005 to $10.0 million from $14.4 million in the same period in 2004 due principally to the exclusion of Codexis’ expenses during the third quarter of 2005.
At September 30, 2005, cash, cash equivalents and marketable securities totaled $189.6 million.
“We are pleased with the progress towards clinical development of our next-generation G-CSF and improved interferon alpha programs,” said Russell Howard, CEO of Maxygen. “We are also delighted that Maxygen has been awarded over $14 million in U.S. government grant funding to continue our work in HIV vaccine discovery. While our primary focus is to advance our next generation protein therapeutics, we believe our MolecularBreeding(TM) directed molecular evolution technologies hold great promise for the development of novel vaccines.”
Corporate Update Maxygen continues to advance its key development programs. MAXY-Alpha
Maxygen currently has a next-generation interferon alpha in development with Roche for the treatment of hepatitis C and hepatitis B viral infections. The Company announced the achievement of a preclinical milestone in this collaboration in March of this year. Roche has informed Maxygen that Roche is on track to file an IND for this product in 2006.
MAXY-G-CSF
Maxygen is on track to file an IND for its next-generation G-CSF product in 2006. Maxygen is currently performing required toxicology studies in preparation for the IND filing.
MAXY-VII
Maxygen is advancing its factor VII program for multiple indications including trauma, intracranial hemorrhage and hemophilia. The market for factor VII based products is growing significantly and Maxygen believes its product candidates have key advantages over the currently marketed factor VII- based product.
Vaccine Grants
Maxygen recently announced that it has been awarded over $14 million in U.S. government grant and contract funding to conduct research regarding a novel prophylactic HIV vaccine. The funding will be provided by the National Institutes of Health through the HIV Research and Development program, the SBIR program and the U.S. Department of Defense.
About Maxygen
Maxygen, Inc., headquartered in Redwood City, California, is focused on creating novel products using its integrated proprietary technologies for human therapeutics. Maxygen’s technologies bring together advances in molecular biology and protein modification to create novel biotechnology products.
Forward-Looking Statements
This news release contains forward-looking statements about our research and business prospects, including those relating to: the status of our clinical development timeline; the timing of any INDs we might file; the ability of our next-generation G-CSF product to reduce the duration of neutropenia and the dosing schedule of any G-CSF product. Such statements involve risks and uncertainties that may cause results to differ materially from those set forth in these statements. Among other things these risks and uncertainties include, but are not limited to: changing research and business priorities of Maxygen and/or its collaborators; competitors producing superior and/or more cost effective products; our reliance on third-party manufacturers; and the risk that results of preclinical studies may not accurately predict the results in human clinical trials. These and other risk factors are more fully discussed in our Form 10-K for the year ended December 31, 2004, including under the caption “Risk Factors,” and in our other periodic SEC reports, all of which are available from Maxygen at www.maxygen.com. Maxygen disclaims any obligation to update or revise any forward-looking statement contained in this release as a result of new information or future events or developments. Maxygen and the Maxygen logo are trademarks of Maxygen, Inc.
Selected Consolidated Financial Information Condensed Consolidated Statements of Operations (in thousands, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2005(1) 2004(3) 2005(2) 2004(3) (unaudited) (unaudited) Revenues: Collaborative research and development revenue $106 $3,451 $6,509 $11,087 Grant revenue 629 474 1,721 1,267 Total revenues 735 3,925 8,230 12,354 Expenses: Research and development 9,982 14,428 30,975 37,041 General and administrative 2,997 3,670 10,138 9,950 Stock compensation expense 4 65 121 347 Total operating expenses 12,983 18,163 41,234 47,338 Loss from operations (12,248) (14,238) (33,004) (34,984) Interest income and other (expense),net 1,659 1,015 3,808 2,286 Equity in net losses of minority investee -- -- -- (1,000) Loss from continuing operations (10,589) (13,223) (29,196) (33,698) Net income from discontinued operations -- 61,197 -- 58,428 Cumulative effect adjustment -- -- 16,616 -- Net income (loss) $(10,589) $47,974 $(12,580) $24,730 Net income (loss) $(10,589) $47,974 $(12,580) $24,730 Subsidiary preferred stock accretion -- (250) (167) (750) Income (loss) applicable to common stockholders $(10,589) $47,724 $(12,747) $23,980 Basic and diluted income (loss)per common share: Continuing operations $(0.30) $(0.38) $(0.82) $(0.96) Discontinued operations $-- $1.74 $-- $1.67 Cumulative effect adjustment $-- $-- $0.47 $-- Applicable to common stockholders $(0.30) $1.35 $(0.36) $0.68 Shares used in computing basic and diluted earnings (loss) per common share 35,812 35,236 35,724 35,082 (1) Does not include operations of Codexis (2) Includes operations of Codexis through February 28, 2005 (3) Includes operations of Codexis for all of period Condensed Consolidated Balance Sheets (in thousands) September 30, December 31, 2005 2004 (unaudited, Note 1) (Notes 2 and 3) Cash, cash equivalents and marketable securities $189,627 $232,893 Other current assets 3,978 8,781 Property and equipment, net 3,343 7,677 Goodwill and other intangibles, net 12,192 12,192 Other assets 357 1,562 Total assets $209,497 $263,105 Current liabilities $7,561 $16,080 Non-current deferred revenue -- 1,718 Long-term obligations 19 1,786 Minority Interest -- 32,180 Stockholders’ equity 201,917 211,341 Total liabilities and stockholders’ equity $209,497 $263,105 Note 1: Does not include Codexis Note 2: Derived from consolidated audited financial statements as of December 31, 2004. Note 3: Cash, cash equivalents and marketable securities as of December 31, 2004 includes $17.2 million that was to be used exclusively for Codexis operations.
Maxygen, Inc.
CONTACT: Jeannine Medeiros, Investor & Public Relations of Maxygen, Inc.,+1-650-298-5853, or fax, +1-650-364-2715
Web site: http://www.maxygen.com/
