Exhibit 99.1
| News Release |
FOR IMMEDIATE RELEASE
BULLETIN! | | BULLETIN! | | BULLETIN! |
SuperGen will hold a telephone conference call today, Thursday, Feb. 24, 2005 at 4:30 p.m. (EST) / 1:30 p.m. (PST). Dr. James Manuso, Chairman, President and Chief Executive Officer; Edward Jacobs, Chief Operating Officer; and Michael Molkentin, Chief Financial Officer, will discuss issues and answer questions relating to this news release. Those wishing to participate in the call should call 800-901-5213 (international callers dial +1-617-786-2962) at approximately 4:20 p.m. (EST). The passcode for the call is 90681621. Those not wishing to participate may listen to the live webcast of the conference call by visiting www.supergen.com. Upon conclusion, an audio recording of the call will be available on SuperGen’s web site for 90 days.
SuperGen Reports 2004 Fourth Quarter and Year-End Financial Results
DUBLIN, Calif., February 24, 2005 – SuperGen, Inc. (NASDAQ: SUPG) today announced financial results and corporate highlights for the fourth quarter and year ended December 31, 2004. The Company reported a net loss for 2004 of $46.9 million, or $1.04 per diluted share, compared with a net loss of $53.5 million, or $1.56 per diluted share, for the same prior year period. The decrease in net loss is primarily due to an increase in Nipent® (pentostatin for injection) net product revenues and revenues from the license agreement with MGI PHARMA, offset by an increase in overall costs and operating expenses.
Financial Highlights Include:
• Net product revenues for 2004 increased approximately 15% from the prior year primarily due to an increase in Nipent sales.
• Revenues from the license agreement from MGI were approximately $18.9 million.
• The Company closed the year in a stronger financial position with unrestricted cash, cash equivalents, and marketable securities totaling $56.8 million.
• During the 2004 fourth quarter, the Company repaid the remaining obligation associated with a convertible debt transaction completed in June 2003 through the issuance of common stock.
“SuperGen enters 2005 with an improved financial position. During 2004, we implemented important strategic measures that we believe will enable us to build for the future. Our improved financial position enhances SuperGen’s ability to execute its 2005 business plan and gives us the flexibility to expand our product pipeline,” said Dr. James Manuso, President and Chief Executive Officer.
2004 Fourth Quarter Results
The Company reported a net income for the 2004 fourth quarter of $5.5 million, or $0.11 per diluted share, compared with a net loss of $18.8 million, or $0.52 per diluted share, for the same prior year period. The increase in net income is primarily due to an increase in net product revenues, revenues from the license agreement with MGI PHARMA and a decrease in overall costs and operating expenses.
Total revenues for the 2004 fourth quarter were $23.3 million, compared with $0.7 million for the same prior year period. Total revenues include $12.5 million of milestone revenue, $2.5 million of development and license revenue for recognition of deferred revenue related to the upfront payment received and $2.9 million of reimbursable development costs pursuant to the license agreement entered into with MGI PHARMA in September 2004, which granted MGI exclusive rights to the development, manufacture, commercialization and distribution of Dacogen™ (decitabine). 2004 fourth quarter revenues also included $5.0 million from Nipent® (pentostatin for injection) revenues.
Total costs and operating expenses for the 2004 fourth quarter were $14.6 million, compared with $16.9 million for the same prior year period. The primary reason for the decrease in total costs and operating expenses for the 2004 fourth quarter was a decrease in development expenses associated with the Orathecin™ (rubitecan) capsules and Dacogen programs offset by an increase in cost of sales due to higher levels of net product revenue and an increase in sales and marketing expenses associated with the Orathecin and Dacogen programs in the United States and Europe.
The net income for the 2004 fourth quarter includes $0.4 million in interest expense, $2.9 million in amortization of deemed discount on convertible debt and a change in the valuation of derivative of $0.2 million offset by $0.3 million in interest income. The interest expense, amortization of deemed discount on convertible debt, and change in the valuation of derivative pertain to a convertible debt transaction completed in June 2003.
2004 Year-End Results
Total revenues for the 2004 fiscal year were $32.0 million compared to $11.5 million for the same prior year period. Total revenues include $12.5 million of milestone revenue, $2.7 million of development and license revenue for recognition of deferred revenue related to the upfront payment received and $3.6 million of reimbursable development costs pursuant to the license agreement entered into with MGI PHARMA in September 2004, which granted MGI exclusive rights to the development, manufacture, commercialization and distribution of Dacogen, and an increase of approximately 16 percent in Nipent sales due to an increase in demand and higher product pricing resulting from the acquisition of European marketing rights for Nipent.
Total costs and operating expenses for fiscal 2004 were $56.9 million, compared with $54.6 million for the same prior year period. The primary reason for the increase in total operating expenses for 2004 was an increase in cost of sales due to
higher levels of net product revenue and an increase in sales and marketing expenses associated with the Orathecin and Dacogen programs in the United States and Europe, offset by a decrease in development expenses associated with these programs.
The net loss for fiscal 2004 includes a non-cash charge of $3.6 million related to the derivative accounting treatment of initially unregistered warrants issued in connection with the private placement of shares of our common stock completed in March 2004 in accordance with EITF 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, a non-operating charge of $7.9 million that reflects an other than temporary decline in value in the Company’s equity investment in AVI BioPharma, $2.3 million in interest expense and $12.7 million in amortization of deemed discount on convertible debt partially offset by the change in the valuation of derivative of $3.9 million. The interest expense, amortization of deemed discount on convertible debt, and change in the valuation of derivative pertain to the convertible debt transactions completed during 2003.
Recent Corporate Events:
• October 2004: The European Agency for the Evaluation of Medicinal Products (EMEA) accepted for review SuperGen’s Marketing Authorization Application (MAA) of Dacogen.
• November 2004: SuperGen’s New Drug Application (NDA) seeking approval of Dacogen was submitted to the Food and Drug Administration (FDA). In January 2005, the Company announced the NDA was accepted for filing.
• November 2004: The FDA approved SuperGen’s Abbreviated New Drug Application (ANDA) for Paclitaxel Injection. The drug is equivalent to Bristol-Myers Squibb’s Taxol ® Injection; an anti-tumor agent that has become one of the most widely used anti-cancer products.
• December 2004: Eight abstracts of SuperGen’s marketed anticancer drug Nipent were highlighted during General Poster Sessions and in various oral symposia during the proceedings of the American Society of Hematology’s Annual Meeting held in San Diego, CA. The eight abstracts discussed the use of Nipent in combination with other chemotherapeutic agents, to treat chemotherapy-naïve B-cell Chronic Lymphocytic Leukemia (CLL) and Hairy Cell Leukemia patients. A novel regime of pentostatin, cyclophosphamide and rituximab (PCR) demonstrated clinical activity in B-cell CLL with modest toxicity.
• January 2005: SuperGen withdrew its NDA for Orathecin Capsules after determining that the current data package would not be sufficient to gain approval at this time in the U.S. The Company’s European submission of Orathecin is currently under review.
• January 2005: In connection with its 2005 corporate objectives, SuperGen reorganized its business operations and implemented an 18% workforce reduction.
Based in Dublin, California, SuperGen is a pharmaceutical company dedicated to the acquisition, rapid development and commercialization of therapies for solid tumors, hematological malignancies and blood disorders. The Company’s website can be found at www.supergen.com.
This press release contains “forward-looking” statements within the meaning of Section 21A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe harbor created thereby. The forward-looking statements include statements regarding the strength of our financial position, our ability to execute our 2005 business plan and expand our product line, expectations regarding demand for Nipent and related revenues, expectations about Orathecin and the MAA submission, expectations about the submission of the MAA for Dacogen, expectations about the filing of the NDA for Dacogen, expectations regarding the commercialization of Orathecin and Dacogen, expectations regarding the license agreement with MGI PHARMA, Inc. and expectations regarding future revenue and operating and net income or loss. The actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. Such factors may include, but not limited to, risks and uncertainties related to regulatory approval of Orathecin and Dacogen, conducting and completing clinical trials and obtaining regulatory approval of our other products and product candidates, and the successful commercialization of our products, if approved. For example, anticipated Nipent demand may be lower than expected due to the introduction of competing drugs or other factors, the analysis by the FDA of Dacogen data may take longer than currently anticipated and the data may not support FDA approval. Our future revenue and operating and net income or loss could be worse than anticipated if demand for our products is less than expected, or if the introduction of new products is delayed, for any reason, including regulatory delay. References made to the discussion of risk factors are detailed in the Company’s filings with the Securities and Exchange Commission including the report on Form 10-Q for the quarter ended September 30, 2004. These forward-looking statements are made only as of the date hereof, and we disclaim any obligation to update or revise the information contained in any such forward-looking statements, whether as a result of new information, future events or otherwise.
For further information about SuperGen, please contact:
Timothy L. Enns | Sharon Weinstein |
SuperGen, Inc. | Noonan/Russo |
Tel: (925) 560-0100 x111 | Tel: (212) 845-4271 |
E-mail: tenns@supergen.com | E-mail: sharon.weinstein@eurorscg.com |
Condensed Consolidated Statements of Operations and Balance Sheets to follow....
SUPERGEN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
| | Three months ended
December 31, | | Year ended December 31, | |
| | 2004 | | 2003 | | 2004 | | 2003 | |
| | (Unaudited) | | (Unaudited) | | | |
Revenues: | | | | | | | | | |
Net product revenue | | $ | 5,484 | | $ | 746 | | $ | 13,127 | | $ | 11,437 | |
Development and license revenue | | 17,847 | | — | | 18,866 | | — | |
Other revenue | | — | | — | | — | | 57 | |
| | | | | | | | | |
Total revenues | | 23,331 | | 746 | | 31,993 | | 11,494 | |
| | | | | | | | | |
Costs and operating expenses: | | | | | | | | | |
Cost of sales | | 1,221 | | 504 | | 4,135 | | 3,865 | |
Research and development | | 4,831 | | 8,871 | | 23,978 | | 26,312 | |
Selling, general, and administrative | | 8,559 | | 7,477 | | 28,800 | | 24,436 | |
| | | | | | | | | |
Total operating expenses | | 14,611 | | 16,852 | | 56,913 | | 54,613 | |
| | | | | | | | | |
Income (loss) from operations | | 8,720 | | (16,106 | ) | (24,920 | ) | (43,119 | ) |
| | | | | | | | | |
Interest income | | 306 | | 105 | | 624 | | 474 | |
Interest expense | | (420 | ) | (1,168 | ) | (2,338 | ) | (3,981 | ) |
Amortization of deemed discount on convertible debt | | (2,879 | ) | (4,589 | ) | (12,657 | ) | (13,738 | ) |
Other than temporary decline in value of investments | | — | | — | | (7,851 | ) | — | |
Change in valuation of derivatives | | (184 | ) | 2,924 | | 282 | | 6,894 | |
| | | | | | | | | |
Net income (loss) | | $ | 5,543 | | $ | (18,834 | ) | $ | (46,860 | ) | $ | (53,470 | ) |
Net income (loss) per common share: | | | | | | | | | |
Basic | | $ | 0.11 | | $ | (0.52 | ) | $ | (1.04 | ) | $ | (1.56 | ) |
Diluted | | $ | 0.11 | | $ | (0.52 | ) | $ | (1.04 | ) | $ | (1.56 | ) |
Weighted average shares outstanding: | | | | | | | | | |
Basic | | 50,262 | | 36,046 | | 44,953 | | 34,276 | |
Diluted | | 53,132 | | 36,046 | | 44,953 | | 34,276 | |
SUPERGEN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
| | December 31, | |
| | 2004 | | 2003 | |
| | (Unaudited) | | | |
ASSETS | | | | | |
| | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 38,394 | | $ | 5,055 | |
Marketable securities | | 18,235 | | 7,511 | |
Restricted cash and investments | | — | | 10,629 | |
Accounts receivable, net | | 4,926 | | 507 | |
Development revenue receivable | | 12,809 | | — | |
Due from related parties | | — | | 319 | |
Inventories | | 3,306 | | 3,965 | |
Prepaid financing costs | | — | | 1,811 | |
Prepaid expenses and other current assets | | 1,403 | | 2,433 | |
Total current assets | | 79,073 | | 32,230 | |
| | | | | |
Marketable securities, non-current | | 188 | | 1,921 | |
Investment in stock of related parties | | 798 | | 883 | |
Due from related parties, non-current | | 93 | | 118 | |
Property, plant and equipment, net | | 3,635 | | 4,420 | |
Developed technology at cost, net | | — | | 365 | |
Goodwill, net | | 731 | | 731 | |
Other intangibles, net | | 677 | | 111 | |
Restricted cash and investments, non-current | | 9,432 | | 13,927 | |
Other assets | | 30 | | 30 | |
Total assets | | $ | 94,657 | | $ | 54,736 | |
| | | | | |
LIABILITIES & STOCKHOLDERS’ EQUITY | | | | | |
| | | | | |
Current liabilities: | | | | | |
Accounts payable and accrued liabilities | | $ | 4,644 | | $ | 3,558 | |
Convertible debt, current portion, net of discounts | | — | | 13,593 | |
Derivative liability | | 1,607 | | 5,505 | |
Payable to AVI BioPharma, Inc. | | 565 | | 565 | |
Deferred revenue | | 11,572 | | — | |
Accrued payroll and employee benefits | | 2,129 | | 2,193 | |
Total current liabilities | | 20,517 | | 25,414 | |
| | | | | |
Deferred rent | | 927 | | 808 | |
Deferred revenue, non-current | | — | | 1,667 | |
Total liabilities | | 21,444 | | 27,889 | |
| | | | | |
Stockholders’ equity | | 73,213 | | 26,847 | |
Total liabilities and stockholders’ equity | | $ | 94,657 | | $ | 54,736 | |
