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MEDIA/INVESTORS CONTACT:
Jonathan Fassberg
The Trout Group
(212) 477-9007 x16
CYTOGEN REPORTS FOURTH QUARTER AND FULL YEAR 2005 FINANCIAL RESULTS
PRINCETON, N.J., (FEBRUARY 23, 2006) -- Cytogen Corporation (NASDAQ: CYTO) today
reported its consolidated financial results for the fourth quarter and full year
ended December 31, 2005.
HIGHLIGHTS
- ----------
o Total product sales for the fourth quarter of 2005 were $4.2 million
compared to $3.7 million in the fourth quarter of 2004 and $3.5 million for
the third quarter of 2005, representing 13% revenue growth year-over-year
and 20% sequential growth from the third quarter of 2005.
o For the year ended December 31, 2005, total product sales were a record
$15.8 million compared to $14.5 million in the same period of 2004,
representing an increase of 9% over the prior year. The growth in product
sales during this period was driven primarily by a 14% increase in
QUADRAMET product sales.
o Gross margin for the year ended December 31, 2005 improved to 39% compared
to 36% for the same period in 2004.
o Cytogen reported a net loss of $4.8 million, or $0.25 per basic and diluted
share, for the fourth quarter of 2005 compared to $6.3 million, or $0.41
per basic and diluted share, for the same period in 2004. For the year
ended December 31, 2005, total net loss was $26.3 million, or $1.54 per
basic and diluted share, compared to $20.5 million, or $1.40 per basic and
diluted share, in the same period of 2004.
o Cytogen's cash, cash equivalents and short-term investments balance as of
December 31, 2005 was $30.3 million compared to $35.8 million as of
December 31, 2004.
o More than a dozen clinical trials are currently underway to expand the
potential use of QUADRAMET and PROSTASCINT in treating and diagnosing
various cancers.
"The expansion and refocusing of our commercial and clinical development
activities during the past year helped lead to record product sales, driven
primarily by our success with QUADRAMET," said Michael D. Becker, President and
Chief Executive Officer of Cytogen. "We believe our oncology portfolio and
product revenues will continue to grow in 2006 and beyond as we continue to
advance more than a dozen clinical development programs for our two currently
marketed products. We will also prepare to launch SOLTAMOX(TM) for the treatment
of breast cancer shortly after the execution of our definitive agreement with
Savient Pharmaceuticals. Lastly, we are on track to submit the IND for our
radiolabeled 7E11 antibody for the treatment of prostate cancer during the first
quarter."
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 December 31,
2005 compared to $1.9 million for the same period in 2004. For the year ended
December 31, 2005, sales of QUADRAMET were $8.4 million compared to $7.3 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 $2.1 million for the quarter ended December 31, 2005,
compared to $1.8 million in the same period of 2004. For the year ended December
31, 2005, sales of PROSTASCINT were $7.4 million compared to $7.2 million in the
same period of 2004.
COSTS AND EXPENSES
- ------------------
TOTAL OPERATING EXPENSES
Total operating expenses for each of the quarters ended December 31, 2005 and
2004 were $10.5 million. For the year ended December 31, 2005, total operating
expenses were $44.8 million compared to $35.7 million in the same period of
2004.
COST OF PRODUCT REVENUE
Cost of product revenue was $2.6 million for the quarter ended December 31,
2005, compared to $2.3 million in the same period of 2004. For the year ended
December 31, 2005, cost of product revenue was $9.6 million compared to $9.3
million in the same period of 2004. Cost of product revenue primarily reflects
QUADRAMET and PROSTASCINT manufacturing costs, sales-based royalties paid by
Cytogen, 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 December 31,
2005 were $5.4 million compared to $6.2 million for the same period in 2004. For
the year ended December 31, 2005, total selling, general and administrative
expenses were $25.9 million compared to $20.3 million in the same period of
2004. The year-over-year increase in selling, general and administrative
expenses was 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 December 31, 2005 were
$2.2 million compared to $1.3 million for the same period in 2004. For the year
ended December 31, 2005, total research and development expenses were $6.1
million compared to $3.2 million for 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 a radiolabeled
murine anti-PSMA
monoclonal antibody (7E11.C5.3) being developed by Cytogen, initially as a
treatment for metastatic hormone refractory prostate cancer.
EQUITY IN LOSS OF JOINT VENTURE
Joint venture 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
December 31, 2005 was $0.3 million compared to $0.7 million for the same period
of 2004. For the year ended December 31, 2005, Cytogen's share of the equity in
the loss of PDC was $3.2 million compared to $2.9 million for the same period in
2004. The equity in the loss of the joint venture for the year ended December
31, 2005 includes Cytogen's share of the $2.0 million up-front 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 announced in June 2005.
DECREASE IN VALUE OF WARRANT LIABILITY
Cytogen's net loss for the quarter and year ended December 31, 2005 was
positively impacted due to the recognition of a decrease in the value of the
warrant liability related to warrants issued by Cytogen in July and August of
2005. During the third quarter of 2005, Cytogen recorded the warrants as a
liability at their fair value using a Black-Scholes option-pricing model and
will remeasure them at each reporting period until exercised or expired. Changes
in the fair value of the warrants are reported in the statements of operations
as non-operating income or expense. For the quarter and year ended December 31,
2005, Cytogen recorded a gain of $1.0 million and $1.7 million, respectively,
related to the decrease in the fair value of these warrants from either the
previous reporting period or their respective issuance dates.
INVENTORIES
- -----------
Inventories were $3.6 million as of both December 31, 2005 and 2004. In
September 2004, Cytogen entered into an agreement with Laureate Pharma, Inc. to
manufacture PROSTASCINT for Cytogen. Cytogen believes that the agreement will
provide a sufficient supply of PROSTASCINT to satisfy commercial requirements
for approximately the next three to four years based upon recent sales levels.
In addition, Cytogen believes that the agreement will provide sufficient supply
of the 7E11.C5.3 monoclonal antibody required for the company's initial clinical
development activities for its therapeutic Lu-177 labeled 7E11 program.
CASH POSITION
- -------------
Cytogen's cash, cash equivalents and short-term investments balance as of
December 31, 2005 was $30.3 million compared to $35.8 million as of December 31,
2004. The December 31, 2005 balance reflects the receipt of approximately $12.6
million in net proceeds from the December 2005 sale of common stock and
warrants.
RECENT DEVELOPMENTS
- -------------------
o On February 8, 2006, Cytogen and Savient Pharmaceuticals announced the
execution of a binding letter of intent to negotiate a definitive agreement
granting Cytogen exclusive marketing rights for SOLTAMOX(TM) (tamoxifen
citrate) in the United States. SOLTAMOX, a cytostatic estrogen receptor
antagonist, is the first oral liquid hormonal therapy approved in the U.S.
and is indicated for the treatment of breast cancer in adjuvant and
metastatic settings and to reduce the risk of breast cancer in women with
ductal carcinoma in situ (DCIS) or with high risk of breast cancer.
o On January 24, 2006, Cytogen announced the publication of data from
preclinical studies involving the use of QUADRAMET both as a monotherapy
and in combination with the proteasome inhibitor
bortezomib (Velcade(R), Millennium Pharmaceuticals, Inc.) in a murine
myeloma model. These studies demonstrated significantly prolonged median
survival, rapidly reduced clonogenicity of bone-marrow resident 5TGM1
cells, slowed elevation of serum myeloma-associated paraprotein levels, and
longer-term preservation of bone mineral density.
o On December 13, 2005, Cytogen announced that the company entered into a
securities purchase agreement with certain institutional investors to raise
$12.6 million in net proceeds through the sale of common stock and
warrants. The transaction closed on December 14, 2005 and Rodman & Renshaw
acted as placement agent.
o On December 12, 2005, Cytogen announced the presentation of preclinical
data for QUADRAMET in combination with bortezomib. The findings were
presented during the American Society of Hematology (ASH) 47th Annual
Meeting.
o On November 28, 2005, Cytogen announced initiation of a multicenter Phase I
clinical trial to investigate the use of QUADRAMET in combination with
bortezomib for the treatment of multiple myeloma. The clinical study is
designed to evaluate the safety profile and preliminary incidence and
duration of clinical benefits of bortezomib in combination with QUADRAMET.
o On November 15, 2005, Cytogen announced that an abstract titled
"Development of Optimal Lu-177 Labeled Monoclonal Antibody (7E11)
Constructs for Radioimmunotherapy of Prostate Cancer" was presented 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 in
Philadelphia, PA.
CONFERENCE CALL & WEBCAST INFORMATION
- -------------------------------------
Cytogen will broadcast its quarterly investor conference call live over the
Internet today, February 23, 2006, beginning at 9:00 a.m. Eastern Standard Time.
The dial-in number for the U.S. is 866-383-8008 and the pass code number is
86406174. The dial-in number for international callers is 617-597-5341 and the
pass code number is 86406174. 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 seven 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 30145799.
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
- -------------------------
Cytogen Corporation of Princeton, NJ is a biopharmaceutical company dedicated to
improving the lives of patients with cancer by acquiring, developing and
commercializing 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 U.S. 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.
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
successfully consummating the strategic relationship with Savient; 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;
the risks associated with Cytogen's strategic relationships, 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 YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------ -------------------
2005 2004 2005 2004
--------- ---------- ---------- --------
Product Revenue:
QUADRAMET $ 2,152 $ 1,899 $ 8,350 $ 7,293
PROSTASCINT 2,059 1,839 7,407 7,186
Others - - - 1
--------- ---------- ---------- --------
Total Product Revenue 4,211 3,738 15,757 14,480
License and Contract Revenue 34 67 189 139
--------- ---------- ---------- --------
Total Revenues 4,245 3,805 15,946 14,619
--------- ---------- ---------- --------
Operating Expenses:
Cost of Product Revenue 2,557 2,326 9,621 9,309
Selling, General and Administrative 5,439 6,170 25,895 20,318
Research and Development 2,217 1,253 6,064 3,206
Equity in Loss of Joint Venture 296 740 3,175 2,896
--------- ---------- ---------- --------
Total Operating Expenses 10,509 10,489 44,755 35,729
--------- ---------- ---------- --------
Interest Income, Net 211 99 598 263
Decrease in Value of Warrant Liability * 963 - 1,666 -
Income Tax Benefit (256) (307) (256) (307)
-------- ---------- ---------- --------
Net Loss $ (4,834) $ (6,278) $ (26,289) $(20,540)
======== ========== ========== ========
Basic and Diluted Net Loss Per Share $ (0.25) $ (0.41) $ (1.54) $ (1.40)
======== ========== ========== ========
Weighted Average Common Shares Outstanding 19,466 15,454 17,117 14,654
======== ========== ========== ========
* Reflects a mark-to-market decrease of $963 and $1,666 for the three and twelve
month periods ended December 31, 2005 respectively, on the value of warrant
liability related to warrants issued in July and August of 2005.
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, DECEMBER 31,
2005 2004
---------------- ---------------
Assets:
Cash, Cash Equivalents and Short-Term Investments $ 30,337 $ 35,825
Accounts Receivable, Net 1,743 1,406
Inventories 3,582 3,623
Property and Equipment, Net 886 787
QUADRAMET License Fee, Net 6,327 7,024
Other Assets 1,915 1,748
------------ ------------
Total Assets $ 44,790 $ 50,413
============ ============
Liabilities and Stockholders' Equity:
Accounts Payable and Accrued Liabilities $ 5,271 $ 7,644
Other Current Liabilities 26 2,692
Warrant Liability 1,869 -
Other Long-Term Liabilities 46 47
Stockholders' Equity 37,578 40,030
------------ ------------
Total Liabilities and Stockholders' Equity $ 44,790 $ 50,413
============ ============