MEDIA/INVESTORS CONTACT:
Jonathan Fassberg
The Trout Group
(212) 477-9077 x16
CYTOGEN REPORTS THIRD QUARTER 2005 FINANCIAL RESULTS
Company announces receipt of the 2005 Frost & Sullivan Technology Innovation
Award for its contributions to the development of novel therapies
incorporating PSMA for combating prostate cancer.
Company remains on track for filing an investigational new drug application
of its lead therapeutic product candidate for the treatment of hormone
refractory prostate cancer in the first quarter of 2006.
PRINCETON, N.J., (NOVEMBER 2, 2005) -- Cytogen Corporation (Nasdaq: CYTO) today
reported its consolidated financial results for the third quarter and nine
months ended September 30, 2005.
FINANCIAL HIGHLIGHTS
- --------------------
o Total revenues for the third quarter of 2005 were $3.6 million
compared to $3.3 million in the third quarter of 2004. For the nine
months ended September 30, 2005, total revenues were $11.7 million
compared to $10.8 million in the same period of 2004.
o Gross margin for the nine months ended September 30, 2005 improved to
39% compared to 35% for the same period in 2004.
o Cytogen reported a net loss of $7.8 million, or $0.44 per basic and
diluted share in the third quarter of 2005, compared to $5.6 million,
or $0.36 per basic and diluted share, for the same period in 2004. For
the nine months ended September 30, 2005, total net loss was $22.2
million, or $1.36 per basic and diluted share, compared to $14.3
million, or $0.99 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.
"We believe that we are pursuing the right commercial strategies to increase
product sales within their current indications and the right clinical
development strategies to realize their full potential," said Michael D. Becker,
Cytogen's president and chief executive officer. "Our clinical development
initiatives with QUADRAMET in combination with various potentially synergistic
agents, PROSTASCINT for monitoring treatment response and image-guided
applications, and our pipeline of product candidates targeting prostate-specific
membrane antigen (PSMA) are all of great interest to key opinion leaders who see
value in these innovative molecules. We look forward to reporting progress with
these initiatives in the months ahead."
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 $2.0 million for the quarter ended September 30,
2005 compared to $1.9 million for the same period in 2004. For the nine months
ended September 30, 2005, sales of QUADRAMET were $6.2 million compared to $5.4
million in the same period of 2004.
PROSTASCINT
Sales of PROSTASCINT kits, the first and only commercial monoclonal
antibody-based agent that targets PSMA to image the extent and spread of
prostate cancer, were $1.5 million for the quarter ended September 30, 2005
compared to $1.3 million in the same period of 2004. For the nine month periods
ended September 30, 2005 and 2004, sales of PROSTASCINT were $5.3 million each,
demonstrating a consistent demand for the product year-over-year.
Cytogen's strategy for increasing product sales is centered on key drivers of
long-term growth for both QUADRAMET and PROSTASCINT. For QUADRAMET, these
drivers 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) clinically
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) clinical 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.
COSTS AND EXPENSES
- ------------------
TOTAL OPERATING EXPENSES
Total operating expenses for the quarter ended September 30, 2005 were $11.5
million compared to $8.9 million for the same period in 2004. For the nine
months ended September 30, 2005, total operating expenses were $34.2 million
compared to $25.2 million in the same period of 2004.
COST OF PRODUCT REVENUE
Cost of product revenue for the quarters ended September 30, 2005 and September
30, 2004 were $2.4 million and $2.2 million, respectively. For the nine months
ended September 30, 2005, cost of product revenue was $7.1 million compared to
$7.0 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 in 2003 to
reacquire the marketing rights to QUADRAMET.
SG&A EXPENSES
Selling, general and administrative expenses for the quarter ended September 30,
2005 were $6.7 million compared to $5.3 million for the same period in 2004. For
the nine months ended September 30, 2005, total selling, general and
administrative expenses were $20.5 million compared to $14.1 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 September 30, 2005 were
$1.7 million compared to $608,000 for the same period in 2004. For the nine
months ended September 30, 2005, total research and development expenses were
$3.8 million compared to $2.0 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
lead therapeutic product candidate incorporating the same 7E11.C5.3 monoclonal
antibody utilized in PROSTASCINT linked to a therapeutic payload to deliver
lethal doses of radiation to PSMA-expressing cells.
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 quarter
ended September 30, 2005 was $677,000 compared to $805,000 for the same period
of 2004. For the nine months ended September 30, 2005, Cytogen's share of the
equity in the loss of PDC was $2.9 million compared to $2.2 million for the same
period in 2004. The nine months ended September 30, 2005 reflects Cytogen's
share of the $2.0 million upfront fee incurred in the second quarter of 2005 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 in June 2005.
INVENTORIES
Inventories as of September 30, 2005 were $4.5 million compared to $3.6 million
as of December 31, 2004. The increase in inventories is due primarily to the
current manufacturing progress on PROSTASCINT. In September 2004, Cytogen
entered into a manufacturing agreement with Laureate Pharma, Inc. 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 lead
therapeutic program.
CASH POSITION
- -------------
Cytogen's cash, cash equivalents and short-term investments balance as of
September 30, 2005 was $23.5 million compared to $35.8 million as of December
31, 2004. The September 30, 2005 balance reflects a $2.3 million payment to Elan
Corporation, plc to satisfy the Company's obligations for a promissory note that
matured in August 2005 and the receipt of 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.
THIRD QUARTER PRODUCT AND PIPELINE HIGHLIGHTS
- ---------------------------------------------
o The publication of positive clinical findings from a study of
QUADRAMET in combination with gemcitabine (Gemzar(R), Eli Lilly) a
nucleoside analog which is known to be a radiation sensitizer. Results
were published in the peer-reviewed journal Clinical Cancer Research
(Volume 11(19): pages 6895-6900). The study was conducted by
independent investigators who evaluated the use of high dose QUADRAMET
in conjunction with gemcitabine for the treatment of osteosarcoma. 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, a leading center for
the treatment of osteosarcoma.
o The presentation of positive 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 results were presented at the
12th Annual Prostate
Cancer Foundation Scientific Retreat in Phoenix, AZ. The lead
investigator was Anders Widmark, M.D., Ph.D., Professor, Department of
Oncology, Umea University, Sweden.
o The presentation of positive preclinical findings for a novel PSMA ADC
were reported by PDC at the 12th Annual Prostate Cancer Foundation
Scientific Retreat.
o At an Analyst and Investor Meeting in September, Cytogen discussed its
current and future clinical programs with presentations from
management and clinical investigators. Topics included QUADRAMET,
PROSTASCINT and the PSMA pipeline. Presenters included: Rodney J.
Ellis, M.D., Radiation Oncologist, Aultman Hospital, Canton, Ohio and
Assistant Professor Urology, CASE School of Medicine, Cleveland, Ohio;
Adam Brufsky, M.D., Ph.D., Co-Director, Assistant Professor of
Medicine, Magee-Womens Cancer Program at UPMC Cancer Centers,
Pittsburgh, Pennsylvania; Peter Anderson, M.D., Ph.D., Professor of
Pediatrics, MD Anderson Cancer Center, Houston, Texas; and Howard I.
Scher, M.D., Chief, Genitourinary Oncology Service, Memorial
Sloan-Kettering Cancer Center, New York, New York.
o On July 19, 2005, Cytogen entered into a securities purchase agreement
with certain institutional investors for the sale of 3,104,380 shares
of our common stock and 776,096 warrants to purchase shares of our
common stock having an exercise price of $6.00 per share, through a
registered direct offering. In exchange for $4.50, the purchasers
received one share of common stock and warrants to purchase .25 shares
of common stock. These warrants are exercisable for ten years,
beginning six months after their issuance. The transaction provided
gross proceeds of approximately $14.0 million to the Company before
deducting costs associated with the offering. The transaction closed
on July 20, 2005 and August 2, 2005. There was no placement agent in
this transaction.
UPCOMING EVENTS AND ACTIVITIES
- ------------------------------
o Cytogen today announced receipt of the 2005 Frost & Sullivan
Technology Innovation Award, in the field of immunotherapies for
prostate cancer. The Frost & Sullivan Technology Innovation Award
recognizes Cytogen for its contributions to the development of new
generation in vivo immunotherapies incorporating PSMA for combating
prostate cancer. Leveraging its proprietary PSMA platform, Cytogen has
introduced PROSTASCINT in the market and is building a pipeline of
product candidates that are focused primarily on novel therapies for
prostate cancer.
o In April 2005, Cytogen announced a new clinical development initiative
for a targeted oncology product designed to treat prostate and
potentially other cancers. The product candidate uses DOTA-based
bifunctional chelant technology to radiolabel Cytogen's proprietary
7E11.C5 monoclonal antibody to PSMA with a therapeutic radionuclide.
During the third quarter of 2005, Cytogen initiated the requisite
toxicology, biodistribution and preclinical efficacy studies in
advance of filing an investigational new drug (IND) application for
the treatment of hormone refractory prostate cancer in the first
quarter of 2006.
o An abstract titled "Development of Optimal Lu-177 Labeled Monoclonal
Antibody (7E11) Constructs for Radioimmunotherapy of Prostate Cancer"
has been accepted for poster presentation at the AACR-NCI-EORTC
International Conference on Molecular Targets and Cancer Therapeutics:
Discovery, Biology, and Clinical Applications, the premier
international meeting featuring novel cancer therapeutics, held
November 14-18, 2005 at the Pennsylvania Convention Center in
Philadelphia, PA.
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.
On October 4, 2005 Cytogen withdrew its previously provided revenue guidance for
the year ending December 31, 2005, as the Company anticipated that actual
results would be lower than its previous guidance of approximately $20 million.
Gross margin is expected to be within the company's previous guidance of
approximately 40% to 50%. Selling, general and administrative expenses are
expected to be within the company's previous guidance of approximately $25 to
$30 million. Total internal and external joint venture research and development
expenses are expected to be within the company's previous guidance of
approximately $10 to $15 million.
CONFERENCE CALL & WEBCAST INFORMATION
- -------------------------------------
Cytogen will broadcast its quarterly investor conference call live over the
Internet today, November 2, 2005 at 4:15 p.m. Eastern Standard Time. The dial-in
number for the U.S. is 800-561-2718 and the pass code number is 47914567. The
dial-in number for international callers is 617-614-3525 and the pass code
number is 47914567. 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 42522168.
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,
including warnings, precautions, adverse events and other safety information,
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 biopharmaceutical
company that acquires, develops and commercializes innovative molecules
targeting the sites and stages of cancer progression. 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 800-833-3533. For more
information, please visit the Company's website at www.cytogen.com, which is not
part of this press release.
ABOUT FROST & SULLIVAN
- ----------------------
Frost & Sullivan, a global growth consulting company, has been partnering with
clients to support the development of innovative strategies for more than 40
years. The company's industry expertise integrates growth consulting, growth
partnership services, and corporate management training to identify and develop
opportunities. Frost & Sullivan serves an extensive clientele that includes
Global 1000 companies, emerging companies, and the investment community by
providing comprehensive industry coverage that reflects a unique global
perspective and combines ongoing analysis of markets, technologies,
econometrics, and demographics. For more information, visit www.frost.com.
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 additional capital; 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 NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------------- -----------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Product Revenue:
QUADRAMET $ 1,991 $ 1,924 $ 6,198 $ 5,394
PROSTASCINT 1,525 1,308 5,348 5,347
Others - - - 1
----------- ----------- ----------- -----------
Total Product Revenue 3,516 3,232 11,546 10,742
License and Contract Revenue 35 29 155 72
----------- ----------- ----------- -----------
Total Revenues 3,551 3,261 11,701 10,814
----------- ----------- ----------- -----------
Operating Expenses:
Cost of Product Revenue 2,386 2,188 7,064 6,983
Selling, General and Administrative 6,740 5,343 20,456 14,148
Research and Development 1,746 608 3,847 1,953
Equity in Loss of Joint Venture 677 805 2,879 2,156
----------- ----------- ----------- -----------
Total Operating Expenses 11,549 8,944 34,246 25,240
----------- ----------- ----------- -----------
Interest Income, Net 174 87 387 164
----------- ----------- ----------- -----------
Net Loss $ (7,824) $ (5,596) $ (22,158) $ (14,262)
=========== =========== =========== ===========
Basic and Diluted Net Loss Per Share $ (0.44) $ (0.36) $ (1.36) $ (0.99)
=========== =========== =========== ===========
Weighted Average Common Shares Outstanding 17,857 15,435 16,326 14,386
=========== =========== =========== ===========
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31,
2005 2004
----------------- ---------------
Assets:
Cash, Cash Equivalents and Short-Term Investments $ 23,467 $ 35,825
Accounts Receivable, Net 1,606 1,406
Inventories 4,542 3,623
Property and Equipment, Net 847 787
QUADRAMET License Fee, Net 6,501 7,024
Other Assets 1,893 1,748
------------ ------------
Total Assets $ 38,856 $ 50,413
============ ============
Liabilities and Stockholders' Equity:
Accounts Payable and Accrued Liabilities $ 6,163 $ 7,644
Other Current Liabilities 18 2,692
Long-Term Liabilities 33 47
Stockholders' Equity 32,642 40,030
------------ ------------
Total Liabilities and Stockholders' Equity $ 38,856 $ 50,413
============ ============