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CYTOGEN REPORTS SECOND QUARTER 2005 FINANCIAL RESULTS
R&D Day Scheduled for September 13, 2005 in New York
PRINCETON, N.J., (August 4, 2005) -- Cytogen Corporation (Nasdaq: CYTO), a
product-driven biopharmaceutical company, today reported its consolidated
financial results for the second quarter and six months ended June 30, 2005.
FINANCIAL HIGHLIGHTS
- --------------------
o Sales of QUADRAMET(R) (samarium Sm-153 lexidronam injection) were $2.2
million for the second quarter ended June 30, 2005 compared to $1.6 million
for the same quarter of 2004, representing 33% revenue growth
year-over-year. For the six months ended June 30, 2005, sales of QUADRAMET
were $4.2 million compared to $3.5 million in the same period of 2004,
representing 21% revenue growth year-over-year.
o Sales of PROSTASCINT(R) (capromab pendetide) kits were $1.9 million for the
second quarter ended June 30, 2005 compared to $2.3 million for the same
quarter in 2004. For the six months ended June 30, 2005, sales of
PROSTASCINT were $3.8 million compared to $4.0 million in the same period
of 2004. The decrease from the prior year periods is primarily due to
changes in distributor buying patterns evidenced in the second quarter of
2004.
o Total product revenues for the second quarter of 2005 were $4.1 million
compared to $3.9 million in the second quarter of 2004. For the six months
ended June 30, 2005, total product revenues were $8.0 million compared to
$7.5 million in the same period of 2004.
o Average gross margin for the six months ended June 30, 2005 improved to 43%
compared to 37% for the same period in 2004.
o Cytogen reported a net loss of $7.7 million, or $0.50 per basic and diluted
share in the second quarter of 2005, compared to $4.4 million, or $0.30 per
basic and diluted share, for the same period in 2004. For the six months
ended June 30, 2005, total net loss was $14.3 million, or $0.92 per basic
and diluted share, compared to $8.7 million, or $0.63 per basic and diluted
share, in the same period of 2004. The increase in net loss results
primarily from the implementation of new marketing initiatives and
expansion of the Company's sales force, which was substantially completed
in January 2005.
"The expansion of our sales force and marketing programs during the first half
of 2005 and our efforts to extend our product lines through targeted clinical
development initiatives will be important contributors to our future success,"
said Michael D. Becker, Cytogen's president and chief executive officer. "We
have hired great people throughout the ranks and our customers are giving us
positive feedback on our products and pipeline. As a commercial organization, I
believe we are better positioned today than ever and are excited by our
prospects for growth in the second half of 2005 and beyond."
PRODUCT REVENUE
- ---------------
QUADRAMET
QUADRAMET is Cytogen's flagship product for the relief of pain due to metastatic
bone disease arising from prostate, breast, multiple myeloma and other types of
cancer. Sales of QUADRAMET were $2.2 million for the quarter ended June 30, 2005
compared to $1.6 million for the same period in 2004, representing 33% revenue
growth year-over-year. For the six months ended June 30, 2005, sales of
QUADRAMET were $4.2 million compared to $3.5 million in the same period of 2004,
representing 21% revenue growth year-over-year.
QUADRAMET QUARTERLY REVENUE SUMMARY
($'s in millions)
2004 2004 2004 2004 | 2005 2005
Q1 Q2 Q3 Q4 | Q1 Q2
---- ---- ---- ---- ---- ----
Product Sales $1.9 $1.6 $1.9 $1.9 | $2.1 $2.2
PROSTASCINT
Sales of PROSTASCINT kits (for the preparation of Indium In-111 capromab
pendetide), the first and only commercial monoclonal antibody-based agent that
targets prostate-specific membrane antigen (PSMA) to image the extent and spread
of prostate cancer, were $1.9 million for the quarter ended June 30, 2005
compared to $2.3 million in the same period of 2004. For the six months ended
June 30, 2005, sales of PROSTASCINT were $3.8 million compared to $4.0 million
in the same period of 2004. The decrease from the prior year periods is
primarily due to changes in distributor buying patterns evidenced in the second
quarter of 2004.
PROSTASCINT QUARTERLY REVENUE SUMMARY
($'s in millions)
2004 2004 2004 2004 | 2005 2005
Q1 Q2 Q3 Q4 | Q1 Q2
---- ---- ---- ---- ---- ----
Product Sales $1.7 $2.3 $1.3 $1.8 | $1.9 $1.9
"Our strategy for increasing product sales is centered on key drivers of
long-term growth for both QUADRAMET and PROSTASCINT," said Thomas Lytle,
Cytogen's senior vice president of sales and marketing. "For QUADRAMET, these
include: (i) distinguishing the physical properties of QUADRAMET from
first-generation agents within its class, (ii) empowering and marketing to key
prescribing audiences, (iii) broadening palliative use within label beyond
prostate cancer to include breast, lung, multiple myeloma, (iv) evaluating the
role of QUADRAMET in combination with other commonly used oncology agents, and
(v) expanding clinical development to demonstrate the potential tumoricidal
versus palliative attributes of QUADRAMET. For PROSTASCINT, these drivers
include: (i) improving image quality through fusion technology, (ii) validating
the antigen targeted by PROSTASCINT as an independent prognostic factor, (iii)
the publication and presentation of outcomes data, (iv) development of
image-guided applications including brachytherapy, intensity modulated radiation
therapy, surgery, and cryotherapy, and (v) expanding clinical development to
demonstrate the potential for PROSTASCINT to both monitor response to cytotoxic
therapies and image PSMA expression in other cancers. We believe we now have the
resources, talent and unique opportunity to maximize the potential of these two
important products."
COSTS AND EXPENSES
- ------------------
TOTAL OPERATING EXPENSES
Total operating expenses for the quarter ended June 30, 2005 were $12.0 million
compared to $8.4 million for the same period in 2004. For the six months ended
June 30, 2005, total operating expenses were $22.7 million compared to $16.3
million in the same period of 2004.
COST OF PRODUCT REVENUE
Cost of product revenue for the second quarters ended June 30, 2005 and June 30,
2004 were $2.3 million and $2.4 million, respectively. For the six months ended
June 30, 2005, cost of product revenue was $4.7 million compared to $4.8 million
in the same period of 2004, and primarily reflects QUADRAMET and PROSTASCINT
manufacturing costs, royalties paid by Cytogen on the Company's product sales,
and the amortization of the up-front payment to Berlex to reacquire the
marketing rights to QUADRAMET.
SG&A EXPENSES
Selling, general and administrative expenses for the quarter ended June 30, 2005
were $6.7 million compared to $4.9 million for the same period in 2004. For the
six months ended June 30, 2005, total selling, general and administrative
expenses were $13.7 million compared to $8.8 million in the same period of 2004.
The increase in selling, general and administrative expenses is primarily driven
by expanded investment for the commercial support of both QUADRAMET and
PROSTASCINT, including the implementation of new marketing initiatives and
expansion of the Company's sales force, which was substantially completed in
January 2005.
R&D EXPENSES
Research and development expenses for the quarter ended June 30, 2005 were $1.4
million compared to $541,000 for the same period in 2004. For the six months
ended June 30, 2005, total internal research and development expenses were $2.1
million compared to $1.3 million in the same period of 2004. The increase in
research and development expenses is primarily driven by new clinical
development initiatives for both QUADRAMET and PROSTASCINT and a $500,000 charge
in the second quarter of 2005 for a non-cash milestone payment related to the
progress of PSMA development programs. In addition, research and development
expenses include preclinical development costs associated with the Company's
recently announced program to attach the therapeutic radionuclide lutetium-177
as a payload to the 7E11.C5.3 monoclonal antibody utilized in PROSTASCINT.
EQUITY IN LOSS OF JOINT VENTURE
Joint venture research and development expenses reflect costs associated with
the PSMA Development Company LLC ("PDC"), a joint venture between Cytogen and
Progenics Pharmaceuticals, Inc., for the development of in vivo immunotherapies
targeting PSMA. Cytogen's share of the equity in the loss of PDC for the second
quarter and six months ended June 30, 2005 were $1.7 million and $2.2 million,
respectively, compared to $542,000 and $1.4 million, respectively, in the
comparable periods in 2004. The increase over prior year periods is primarily
due to Cytogen's share of the $2.0 million upfront fee incurred by PDC to
license proprietary antibody-drug conjugate (ADC) technology from Seattle
Genetics, Inc. for use with PDC's antibodies targeting PSMA, as previously
communicated on June 20, 2005.
INVENTORIES
Inventories as of June 30, 2005 were $5.1 million compared to $3.6 million as of
December 31, 2004. The increase in inventories is due primarily to the current
manufacturing runs of PROSTASCINT. In September
2004, Cytogen entered into a manufacturing agreement with Laureate Pharma, L.P.
pursuant to which Laureate is manufacturing PROSTASCINT for Cytogen in its
Princeton, NJ facility. Cytogen believes that the agreement will provide a
sufficient supply of PROSTASCINT to satisfy commercial requirements for
approximately the next four years, based upon current sales levels. In addition,
Cytogen believes that the agreement will provide sufficient supply of the
7E11.C5.3 monoclonal antibody required for initial clinical development of the
Company's therapeutic program.
CASH POSITION
- -------------
Cytogen's cash, cash equivalents and short-term investments balance as of June
30, 2005 was $20.5 million compared to $35.8 million as of December 31, 2004.
This June 30, 2005 balance does not reflect approximately $14.0 million in gross
proceeds from the July 2005 sale of common stock and warrants, which closed
during the third quarter of 2005.
SECOND QUARTER PRODUCT AND PIPELINE HIGHLIGHTS
- ----------------------------------------------
QUADRAMET
o The publication of new data from a phase II study of QUADRAMET in
combination with docetaxel (Taxotere(R), Aventis Pharmaceuticals, a member
of the sanofi-aventis Group) for the treatment of patients with hormone
refractory prostate cancer. The published abstract is part of the
proceedings at the 2005 American Society of Clinical Oncology (ASCO) Annual
Meeting and the lead investigator was Anders Widmark, M.D., Ph.D.,
professor, department of oncology, Umea University, Sweden.
o The presentation of a new clinical study evaluating the use of high dose
QUADRAMET in conjunction with gemcitabine for the treatment of
osteosarcoma. The data was presented during the 2005 ASCO Annual Meeting
and the lead investigator was Peter Anderson, M.D., Ph.D., a pediatric
oncologist who performed the work at the Mayo Clinic and is now at The
University of Texas MD Anderson Cancer Center, another center active in
studies using QUADRAMET.
o The presentation of data from studies in which patients received multiple
doses of QUADRAMET. The data were presented during the 2005 ASCO Annual
Meeting and the lead author was Oliver Sartor, M.D., a medical oncologist
who is director of the Stanley S. Scott Cancer of Louisiana State
University Health Sciences Center in New Orleans.
o The presentation of new data demonstrating the use of QUADRAMET alone and
in conjunction with chemotherapy for the treatment of prostate, breast,
lung, and other cancers. The abstracts were presented during the 2005
Society of Nuclear Medicine (SNM) Annual Meeting and were reported by
independent investigators.
PROSTASCINT
o The presentation of outcome data obtained over a seven-year follow-up
period demonstrating that PROSTASCINT imaging both increased disease-free
survival rates and independently predicted a three-fold increase in risk of
recurrent disease in prostate cancer patients following definitive local
therapy. The study was presented during the 26th American Brachytherapy
Society (ABS) Annual Meeting and was carried out by investigators from Case
Western Reserve University, University Hospital of Cleveland and Aultman
Hospital in Canton, Ohio and was led by Rodney Ellis, M.D., radiation
oncologist at Aultman Hospital and assistant professor of urology at Case
Western Reserve University School of Medicine.
PSMA
o Cytogen and Dowpharma(SM) contract manufacturing services, a business unit
of The Dow Chemical Company, announced a collaboration to create a targeted
oncology product designed to treat prostate and other cancers. Under the
agreement, Dowpharma's proprietary MeO-DOTA bifunctional chelant technology
will be used to radiolabel Cytogen's 7E11.C5.3 monoclonal antibody with the
therapeutic radionuclide lutetium-177. Cytogen recently completed the scale
up and manufacture of the toxicology lot for this product candidate and
preclinical toxicology studies are scheduled to begin during the third
quarter of 2005 in advance of filing an investigational new drug (IND)
application for the treatment of prostate cancer in the first quarter of
2006.
o Seattle Genetics licensed its proprietary antibody-drug conjugate (ADC)
technology to PDC. The license provides PDC with rights to utilize the ADC
technology to link cell-killing drug payloads to PDC's fully human
monoclonal antibodies that target PSMA.
FINANCIAL OUTLOOK FOR 2005
- --------------------------
This section provides forward-looking information about Cytogen's financial
outlook for 2005 based upon our current operations. The disclosure notice
paragraph regarding forward-looking statements at the end of this news release
is especially applicable to this section.
Cytogen today commented on its financial outlook for the year ending December
31, 2005. The Company continues to believe, based on current business trends,
that total revenue for the year will be within the guidance of approximately $20
to $25 million previously provided on May 5, 2005, but at the low end of that
range. Average gross margin is expected to be within the guidance of
approximately 40% to 50%. Selling, general and administrative expenses are
expected to be within the guidance of approximately $25 to $30 million. Total
internal and external joint venture research and development expenses are
expected to be within the guidance of approximately $10 to $15 million.
UPCOMING EVENTS
- ---------------
Cytogen expects to discuss its current and future clinical programs during its
Research & Development (R&D) Day on Tuesday, September 13, 2005, in New York
City.
CONFERENCE CALL & WEBCAST INFORMATION
- -------------------------------------
Cytogen will broadcast its quarterly investor conference call live over the
Internet today, August 4, 2005 at 9:00 a.m. Eastern Standard Time. The dial-in
number for the U.S. is 1-800-299-9086 and the pass code number is 62921717. The
dial-in number for international callers is 1-617-786-2903 and the pass code
number is 62921717. This event can also be accessed by going to Cytogen's Web
site, www.cytogen.com, and clicking on the "Investor Relations" link. A link to
the webcast is under the Calendar of Events header. The event will be archived
and available for replay starting approximately one hour after the call and
continuing for 7 days thereafter. The replay dial-in number for the U.S. is
888-286-8010 and the dial-in number for international callers is 617-801-6888.
The replay pass code number is 18186782.
NOTE:
- -----
QUADRAMET is indicated for the relief of pain in patients with confirmed
osteoblastic metastatic bone lesions that enhance on radionuclide bone scan.
This press release describes clinical applications that differ from that
reported in the QUADRAMET package insert.
PROSTASCINT is indicated as a diagnostic imaging agent in newly diagnosed
patients with biopsy-proven prostate cancer, thought to be clinically localized
after standard diagnostic evaluation and who are thought to be
at high risk for pelvic lymph node metastases. PROSTASCINT is also indicated as
a diagnostic imaging agent in post-prostatectomy patients with a rising PSA and
a negative or equivocal standard metastatic evaluation in whom there is a high
clinical suspicion of occult metastatic disease. This press release describes
clinical applications and imaging performance that differs from that reported in
the PROSTASCINT package insert.
A copy of the full prescribing information for QUADRAMET and PROSTASCINT may be
obtained in the U.S. from Cytogen Corporation by calling toll free 800-833-3533
or by visiting the web site at www.cytogen.com, which is not part of this press
release.
ABOUT CYTOGEN CORPORATION
- -------------------------
Founded in 1980, Cytogen Corporation of Princeton, NJ is a product-driven
biopharmaceutical company that develops and commercializes innovative molecules
that can be used to build leading franchises. Cytogen's marketed products
include QUADRAMET(R) (samarium Sm-153 lexidronam injection) and PROSTASCINT(R)
(capromab pendetide) kit for the preparation of Indium In-111 capromab pendetide
in the United States. Cytogen also has exclusive United States marketing rights
to COMBIDEX(R) (ferumoxtran-10) for all applications, and the exclusive right to
market and sell ferumoxytol (previously Code 7228) for oncology applications in
the United States. Cytogen's development pipeline consists of therapeutics
targeting prostate-specific membrane antigen (PSMA), a protein highly expressed
on the surface of prostate cancer cells and the neovasculature of solid tumors.
Full prescribing information for the Company's products is available at
www.cytogen.com or by calling 1-800-833-3533. For more information, please visit
the Company's website at www.cytogen.com, which is not part of this press
release.
This press release contains certain "forward-looking" statements within the
meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E
of the Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical facts, included in this press release regarding our
strategy, future operations, financial position, future revenues, projected
costs, prospects, plans and objectives of management are forward-looking
statements. Such forward-looking statements involve a number of risks and
uncertainties and investors are cautioned not to put any undue reliance on any
forward-looking statement. There are a number of important factors that could
cause Cytogen's results to differ materially from those indicated by such
forward-looking statements. In particular, Cytogen's business is subject to a
number of significant risks, which include, but are not limited to: the risk of
obtaining the necessary regulatory approvals; the risk of whether products
result from development activities; the risk of shifts in the regulatory
environment affecting sales of Cytogen's products such as third-party payor
reimbursement issues; the risk associated with Cytogen's dependence on its
partners for development of certain projects, as well as other factors expressed
from time to time in Cytogen's periodic filings with the Securities and Exchange
Commission (the "SEC"). As a result, this press release should be read in
conjunction with Cytogen's periodic filings with the SEC. The forward-looking
statements contained herein are made only as of the date of this press release,
and Cytogen undertakes no obligation to publicly update such forward-looking
statements to reflect subsequent events or circumstances.
###
CYTOGEN CORPORATION & SUBSIDIARIES
(All amounts in thousands except per share data)
(Unaudited)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ ----------------
2005 2004 2005 2004
------ ------ ------ ------
Product Revenue:
QUADRAMET $ 2,153 $ 1,616 $ 4,207 $ 3,470
PROSTASCINT 1,924 2,312 3,823 4,039
Others - - - 1
-------- ------- -------- --------
Total Product Revenue 4,077 3,928 8,030 7,510
License and Contract Revenue 79 24 120 43
-------- ------- -------- --------
Total Revenues 4,156 3,952 8,150 7,553
-------- ------- -------- --------
Operating Expenses:
Cost of Product Revenue 2,251 2,396 4,678 4,795
Selling, General and Administrative 6,692 4,914 13,716 8,805
Research and Development 1,362 541 2,101 1,345
Equity in Loss of Joint Venture 1,704 542 2,202 1,351
-------- ------- -------- --------
Total Operating Expenses 12,009 8,393 22,697 16,296
-------- ------- -------- --------
Interest Income, Net 112 57 213 77
-------- ------- -------- --------
Net Loss $ (7,741) $(4,384) $(14,334) $ (8,666)
======== ======= ======== ========
Basic and Diluted Net Loss Per Share $ (0.50) $ (0.30) $ (0.92) $ (0.63)
======== ======= ======== ========
Weighted Average Common Shares Outstanding 15,525 14,848 15,519 13,859
======== ======= ======== ========
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31,
2005 2004
----------------- ----------------
Assets:
Cash, Cash Equivalents and Short-Term Investments $ 20,532 $ 35,825
Accounts Receivable, Net 1,821 1,406
Inventories 5,103 3,623
Property and Equipment, Net 801 787
QUADRAMET License Fee, Net 6,675 7,024
Other Assets 1,108 1,748
------------ ------------
Total Assets $ 36,040 $ 50,413
============ ============
Liabilities and Stockholders' Equity:
Accounts Payable and Accrued Liabilities $ 6,130 $ 7,644
Other Current Liabilities 3,398 2,692
Long-Term Liabilities 38 47
Stockholders' Equity 26,474 40,030
------------ ------------
Total Liabilities and Stockholders' Equity $ 36,040 $ 50,413
============ ============