HORSHAM, Pa., Nov. 2 /PRNewswire-FirstCall/ -- Neose Technologies, Inc. today announced financial results for the third quarter and nine months ended September 30, 2005.
For the quarter ended September 30, 2005, the Company reported a net loss of $22,621,000, or $0.69 per basic and diluted share, compared to a net loss of $10,824,000, or $0.44 per basic and diluted share, for the same period in 2004. The Company’s net loss for the quarter ended September 30, 2005 included charges related to the restructuring announced in August 2005 of $14,002,000, of which $13,187,000 represented non-cash property and equipment impairment charges and $815,000 represented expected payments for employee severance. The impairment charge for the 2005 period was partially offset by reductions in research and development expenses of $1,784,000, decreases in general and administrative expenses of $176,000, and increased interest income of $220,000.
In August 2005, the Company announced it would evaluate alternatives relative to the Company’s current headquarters and clinical manufacturing facility (the “Witmer Road Facility”), which it owns subject to a mortgage, including the potential disposition of the facility. As a result of the announcement, the Company calculated and recorded during the third quarter of 2005 a non-cash impairment charge of $13,000,000, which was included in restructuring charges on the Company’s statements of operations, on the Witmer Road Facility and related equipment. As part of the restructuring announced in August 2005, the Company decided to centralize research activities in Horsham, Pennsylvania by ending operations in its leased facility in San Diego, California. During the three months ended September 30, 2005, the Company recorded a non-cash impairment charge of approximately $187,000, which was included in restructuring charges on the Company’s statements of operations, related to property and equipment located in the San Diego facility.
The decrease in research and development expenses during the third quarter of 2005 resulted primarily from reduced purchases of laboratory supplies and raw materials, as well as lower recruiting, relocation and discretionary personnel costs. The decrease in research and development expenses during the 2005 period was also caused by a decrease in depreciation expense related to the Company’s Witmer Road Facility. General and administrative costs decreased by $176,000 during the 2005 period primarily due to decreased payroll, consulting and depreciation expenses, partially offset by higher patent legal fees. The $220,000 increase in interest income during the 2005 period was due to higher interest rates.
For the nine months ended September 30, 2005, the Company reported a net loss of $44,173,000, or $1.42 per basic and diluted share, compared to a net loss of $30,653,000, or $1.38 per basic and diluted share, for the same period in 2004. The increased net loss during the 2005 period was primarily due to the restructuring charges described above.
The Company reported revenues of $4,271,000 for the first nine months of 2005, compared to $3,592,000 for the same period in 2004. The increase in revenues for the 2005 period was primarily due to revenues recognized under the Company’s collaboration with BioGeneriX, which collaboration began late in the second quarter of 2004.
For the nine months ended September 30, 2005, the Company’s research and development expenses were $26,133,000, compared to $24,971,000 for the comparable 2004 period. The increased research and development expenses during the 2005 period were primarily due to higher personnel costs, as well as increased purchases of outside services, including preclinical studies and consulting. Partially offsetting these increases during the 2005 period were decreased recruiting and relocation costs, reduced laboratory supplies and maintenance costs, and lower depreciation expense.
The Company’s marketing, general, and administrative expenses were $8,469,000 for the nine months ended September 30, 2005, compared to $9,047,000 for the comparable 2004 period. The decrease for the 2005 period was primarily due to reduced salaries, consulting, and depreciation expenses, which were partially offset by higher accounting and patent legal expenses.
For the nine months ended September 30, 2005, the Company’s interest income was $1,138,000, compared to $431,000 for the comparable 2004 period. The increase during the 2005 period was due to higher interest rates.
The Company ended the third quarter with $45,453,000 in cash, cash equivalents, and marketable securities.
Conference Call
The Company will host a conference call at 5:00 p.m. (ET) on November 2, 2005, to discuss the third quarter financial results and update investors on company developments. The dial-in number for domestic callers is (800) 946-0705. The dial-in number for international callers is (719) 457-2637. A replay of the call will be available for 7 days beginning approximately three hours after the conclusion of the call. The replay number for domestic callers is (888) 203-1112 using the passcode 1159649. The replay number for international callers is (719) 457-0820, also using the passcode 1159649. The call will also be webcast live through the Company’s website via the following link:
http://phx.corporate-ir.net/phoenix.zhtml?c=60494&p=irol-calendar
To listen to the live call, please go to the web site at least fifteen minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call.
About Neose
Neose is a biopharmaceutical company using its proprietary enzymatic technologies to develop improved drugs, focusing primarily on therapeutic proteins. Neose uses its GlycoAdvance(R) and GlycoPEGylation(TM) technologies to develop improved versions of drugs with proven safety and efficacy. Neose intends to apply its technologies to products it is developing on its own and to products it co-develops and co-owns with others. It also expects to make its technologies available, through strategic partnerships, to improve the products of other parties. Neose’s first two proprietary candidates are NE-180 (GlycoPEG-EPO), a long-acting version of erythropoietin, and GlycoPEG-GCSF, a long-acting version of granulocyte colony stimulating factor (G-CSF).
Statements of Operations (in thousands, except per share amounts) (unaudited) Three months Nine months ended September 30, ended September 30, 2005 2004 2005 2004 Revenue from collaborative agreements $1,503 $1,451 $4,271 $3,592 Operating expenses: Research and development 7,521 9,305 26,133 24,971 General and administrative 2,685 2,861 8,469 9,047 Restructuring charges 14,002 - 14,002 - Total operating expenses 24,208 12,166 48,604 34,018 Operating loss (22,705) (10,715) (44,333) (30,426) Other income - - 22 - Interest income 415 195 1,138 431 Interest expense (331) (304) (1,000) (658) Net loss $(22,621) $(10,824) $(44,173) $(30,653) Basic and diluted net loss per share $(0.69) $(0.44) $(1.42) $(1.38) Weighted-average shares outstanding used in computing basic and diluted net loss per share 32,782 24,712 31,188 22,284 Condensed Balance Sheets (in thousands) (unaudited) Assets September 30, 2005 December 31, 2004 Cash, cash equivalents and marketable securities $45,453 $45,048 Accounts receivable and other current assets 2,045 2,768 Total current assets 47,498 47,816 Property and equipment, net 25,010 41,133 Intangible and other assets, net 1,103 1,782 Total assets $73,611 $90,731 Liabilities and Stockholders’ Equity Current liabilities $10,886 $11,897 Long-term debt and capital lease obligations 11,284 13,759 Deferred revenue, net of current portion 3,316 3,688 Other liabilities 486 533 Total liabilities 25,972 29,877 Stockholders’ equity 47,639 60,854 Total liabilities and stockholders’ equity $73,611 $90,731 CONTACTS: Neose Technologies, Inc. A. Brian Davis Sr. Vice President and Chief Financial Officer (215) 315-9000 Barbara Krauter Manager, Investor Relations (215) 315-9004 For more information, please visit http://www.neose.com.
Neose Technologies, Inc.
CONTACT: A. Brian Davis, Sr. Vice President and Chief Financial Officer,+1-215-315-9000, or Barbara Krauter, Manager, Investor Relations,+1-215-315-9004, both of Neose Technologies
Web site: http://www.neose.com//
