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CYTOGEN REPORTS FIRST QUARTER 2006 FINANCIAL RESULTS
Double-digit year-over-year sales growth for both QUADRAMET(R) and
PROSTASCINT(R) drives record quarterly product revenue.
PRINCETON, N.J., (MAY 8, 2006) -- Cytogen Corporation (NASDAQ: CYTO) today
reported its consolidated financial results for the first quarter ended March
31, 2006.
FIRST QUARTER FINANCIAL HIGHLIGHTS
- ----------------------------------
o Total product revenues for the first quarter of 2006 were a record
$4.4 million compared to $4.0 million in the same period in 2005 and
$4.2 million in the fourth quarter of 2005, representing 12% revenue
growth year-over-year and 5% sequential growth from the fourth quarter
of 2005.
o Gross margin for the first quarter of 2006 improved to 46% compared to
39% for the same period in 2005.
o Cytogen reported a net loss of $7.7 million, or $0.34 per basic and
diluted share in the first quarter of 2006, compared to $6.6 million,
or $0.43 per basic and diluted share, for the same period in 2005. The
increase in net loss is primarily driven by a $1.2 million expense
related to the production of clinical materials to support upcoming
studies of CYT-500 (a therapeutic radiolabeled anti-PSMA monoclonal
antibody being developed by Cytogen), a first quarter charge of
$631,000 related to the increase in the fair value of the warrant
liability, and the recognition of $462,000 of share-based compensation
expenses for the first quarter of 2006 for options and restricted
shares granted to employees, following the adoption of Statement of
Financial Accounting Standards No. 123(R). These costs were partially
offset by lower selling, general, and administrative expenses.
"We have entered 2006 with continuing success in all areas of our business,"
stated Michael D. Becker, president and chief executive officer. "From a
commercial perspective, we continue to develop the infrastructure and product
pipeline that we believe is necessary to build a long-term, sustainable
business. We are encouraged by QUADRAMET(R) and PROSTASCINT(R) sales trends and
look forward to the introduction of SOLTAMOX(TM), which is expected during the
third quarter of this year. Our investment in R&D is on track and reflects our
commitment to the expansion of our product pipeline. In this regard, ongoing
studies to demonstrate the therapeutic potential of QUADRAMET in combination
with various synergistic agents are all proceeding on schedule. Further, with
our therapeutic CYT-500 clinical program targeting prostate-specific membrane
antigen (PSMA) and numerous PROSTASCINT studies, Cytogen remains a pioneer in
PSMA-related research and development."
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 a record $2.3
million for the quarter ended March 31, 2006 compared to $2.1 million for the
same period in 2005, representing 10% revenue growth year-over-year.
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 $2.2 million for the quarter ended March 31, 2006 compared
to $1.9 million in the same period of 2005, representing 15% revenue growth
year-over-year.
COSTS AND EXPENSES
- ------------------
Total operating expenses for the quarter ended March 31, 2006 were $11.8 million
compared to $10.7 million for the same period in 2005.
COST OF PRODUCT REVENUE
Cost of product revenue for each of the quarters ended March 31, 2006 and 2005
were $2.4 million and primarily reflect 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 March 31,
2006 were $6.2 million compared to $7.0 million for the same period in 2005.
R&D SPENDING
Research and development expenses for the quarter ended March 31, 2006 were $3.0
million compared to $739,000 for the same period in 2005. The increase in
research and development expenses is primarily driven by new clinical
development initiatives for both QUADRAMET and PROSTASCINT, and preclinical
development expenses associated with CYT-500. Total preclinical expenses related
to CYT-500 of $1.6 million include $1.2 million related to the production of
clinical materials to support upcoming studies of CYT-500.
"Our Phase I dose-finding VELSAM trial for QUADRAMET in combination with
bortezomib is ahead of schedule, and we expect this trial to conclude by
mid-2006 with preliminary results available at the upcoming American Society of
Clinical Oncology (ASCO) meeting," said William Goeckeler, Ph.D., senior vice
president of operations at Cytogen. "We are also looking forward to important
presentations at two upcoming major medical meetings demonstrating an
improvement in treatment outcomes from long-term follow-up studies of prostate
cancer patients using PROSTASCINT fusion imaging."
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 first quarter
ended March 31, 2006 was $133,000 compared to $498,000 for the same period in
2005.
INCREASE IN VALUE OF WARRANT LIABILITY
Cytogen's net loss for the first quarter ended March 31, 2006 was negatively
impacted due to the recognition of an increase in the value of 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 first quarter ended March 31, 2006,
Cytogen recorded a charge of $631,000 related to the increase in the fair value
of these warrants from the previous reporting period of December 31, 2005.
INVENTORIES
Inventories as of March 31, 2006 were $2.1 million compared to $3.6 million as
of December 31, 2005. The decrease in inventories is due primarily to the use of
certain raw materials for the manufacturing of clinical materials for the
CYT-500 therapeutic development program.
CASH POSITION
- -------------
Cytogen's cash and cash equivalents as of March 31, 2006 was $26.1 million
compared to $30.3 million as of December 31, 2005.
RECENT DEVELOPMENTS
- -------------------
o On February 27, 2006, Cytogen announced that positive findings from several
clinical studies of QUADRAMET in prostate cancer patients with metastatic
bone disease were presented at the ASCO Prostate Cancer Symposium. Four
abstracts described the clinical use of QUADRAMET both alone and with
chemotherapy.
o On April 4, 2006, Cytogen announced that data from a preclinical study with
QUADRAMET was presented at the 97th Annual Meeting of the American
Association for Cancer Research (AACR) demonstrating that exposure to
ionizing radiation from QUADRAMET increases the expression of surface
molecules on cancer cells, potentially improving the ability of the body's
immune system to recognize and kill tumor cells.
o On April 5, 2006, Cytogen announced that data from a preclinical study with
QUADRAMET was presented at the 97th Annual Meeting of the AACR suggesting
that a novel method of administration of the product may increase local
targeted exposure to the osteosarcoma tumor in a single limb and minimize
systemic exposure to radioactivity.
o On April 6, 2006, Cytogen announced the submission of an Investigational
New Drug (IND) application to the U.S. Food and Drug Administration (FDA)
for CYT-500, the company's lead therapeutic candidate targeting PSMA.
Cytogen today separately announced that the FDA cleared the IND for
CYT-500, which became effective 30 days after the company's initial
submission to the FDA.
o On April 24, 2006, Cytogen announced the sale of its 50% ownership interest
in PDC to Progenics Pharmaceuticals, Inc. for an up-front cash payment of
$13.2 million, potential future milestone payments totaling up to $52.0
million payable upon regulatory approval and commercialization of PDC
products, and royalties on future PDC product sales. Under the terms of the
sale agreement, Cytogen will no longer be responsible for funding PDC.
o On April 24, 2006, Cytogen and Savient Pharmaceuticals, Inc. finalized an
exclusive distribution agreement for SOLTAMOX (tamoxifen citrate), a
cytostatic estrogen receptor antagonist and the first oral liquid hormonal
therapy approved in the U.S. SOLTAMOX 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. Cytogen paid an up-front licensing fee of $2.0
million to Savient and may also pay additional contingent sales-based
milestone payments totaling up to $4.0 million to Savient and its wholly
owned subsidiary, Rosemont Pharmaceuticals Ltd. Savient and Rosemont will
also receive royalties on net sales of SOLTAMOX. Additionally, Cytogen
entered into a supply agreement with Rosemont for the manufacture and
supply of SOLTAMOX. Cytogen expects to launch SOLTAMOX during the third
quarter of 2006.
o Cytogen today separately announced that it has entered into a royalty
buyout agreement with Berlex, Inc. for QUADRAMET. Under the terms of the
agreement, Cytogen will no longer pay Berlex a royalty on QUADRAMET sales
in exchange for a one-time cash payment of $6 million and the issuance of
623,441 shares of Cytogen common stock at a price of $3.21 per share to
Berlex. The closing of the transaction is expected within 90 days, subject
to certain closing conditions. As additional consideration, Cytogen will
also pay Berlex one-time, sales-based milestone payments of $3,340,000 and
$5,010,000 the first time net sales of QUADRAMET in the U.S. territory
reach $20 million and $30 million, respectively, in any 12-month period.
The two sales-based milestone payments will be made in four equal quarterly
installments.
UPCOMING EVENTS
- ---------------
o The following PROSTASCINT abstract will be presented at the American
Urological Association (AUA) annual meeting in May and is currently
available on the AUA website at http://www.auanet.org, which is not part of
this press release:
o "SPECT/CT Capromab Pendetide Independently Predicts bDFS in Long
Term Outcome Study" will be presented on Wednesday, May 24 from
1:00 p.m. to 3:00 p.m. during a Podium Session on Prostate
Cancer: Staging (II) (Abstract # 1649).
o The Scientific Program Committee of the ASCO has selected the following
QUADRAMET abstract for presentation at its 2006 ASCO Annual Meeting in
June:
o "Phase I study of bortezomib and 153Sm-lexidronam combination for
refractory and relapsed multiple myeloma" will be presented in
the Lymphoma and Plasma Cell Disorders General Poster Session.
o The following PROSTASCINT abstracts will be presented at the 27th American
Brachytherapy Society Annual Meeting held May 10-12, 2006 in Philadelphia,
PA:
o "The Significant Impact of PROSTASCINT Imaging on Prostate
Brachytherapy Patient Management"
o "The Impact of Capromab Pendetide (PROSTASCINT) for Treatment
Planning Versus Standard Planning Techniques for Biochemical
Disease Free Survival at 6 Years Follow-up in a University VS.
Community Setting"
CONFERENCE CALL & WEBCAST INFORMATION
- -------------------------------------
Cytogen will broadcast its quarterly investor conference call live over the
Internet today, May 8, 2006 at 4:15 p.m. Eastern Standard Time. The dial-in
number for the U.S. is 1-800-659-2037 and the pass code number is 83643211. The
dial-in number for international callers is 1-617-614-2713 and the pass code
number is 83643211. 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 19936426.
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.
SOLTAMOX is indicated for the treatment of breast cancer in adjuvant and
metastatic settings and to reduce the risk of breast cancer in women with DCIS
or with high risk of breast cancer. Use of SOLTAMOX in risk reduction setting
(women at high risk for cancer and women with DCIS) has been shown to cause
cancer of the uterus, as well as stroke, and blood clots. The benefits of
SOLTAMOX outweigh its risks in women already diagnosed with breast cancer.
SOLTAMOX should not be used in women who require concomitant use of
coumarin-type anticoagulant, or in women with history of deep vein thrombosis or
pulmonary embolus. Women who are pregnant or plan to become pregnant should not
take SOLTAMOX. Cataracts and resultant cataract surgery can also occur more
frequently with SOLTAMOX. The most frequently reported adverse reactions with
SOLTAMOX were hot flashes and vaginal discharge.
A copy of the full prescribing information for QUADRAMET, PROSTASCINT, and
SOLTAMOX 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 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), PROSTASCINT(R) (capromab pendetide) kit
for the preparation of Indium In-111 capromab pendetide, and SOLTAMOX(TM)
(tamoxifen citrate) in the United States. Cytogen's development pipeline
consists of CYT-500, a therapeutic radiolabeled antibody targeting
prostate-specific membrane antigen (PSMA), a protein highly expressed on the
surface of prostate cancer cells and the neovasculature of solid tumors. 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. 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
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
MARCH 31,
-------------------------------
2006 2005
----------- ------------
Product Revenue:
QUADRAMET $ 2,256 $ 2,054
PROSTASCINT 2,184 1,899
----------- ---------
Total Product Revenue 4,440 3,953
License and Contract Revenue 2 41
----------- ---------
Total Revenues 4,442 3,994
----------- ---------
Operating Expenses:
Cost of Product Revenue 2,416 2,427
Selling, General and Administrative 6,237 7,024
Research and Development 2,982 739
Equity in Loss of Joint Venture 133 498
----------- ---------
Total Operating Expenses 11,768 10,688
----------- ---------
Interest Income, Net 291 101
Increase in Value of Warrant Liability* (631) -
----------- ---------
Net Loss $ (7,666) $ (6,593)
=========== =========
Basic and Diluted Net Loss Per Share $ (0.34) $ (0.43)
=========== =========
Weighted Average Common Shares Outstanding 22,474 15,513
=========== =========
*Reflects a mark-to-market increase of $631 for the three months ended March 31,
2006 in the value of the warrant liability related to warrants issued in July
and August 2005.
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31,
2006 2005
-------------- -------------
Assets:
Cash, Cash Equivalents and Short-Term Investments $ 26,112 $ 30,337
Accounts Receivable, Net 1,944 1,743
Inventories 2,089 3,582
Property and Equipment, Net 916 886
QUADRAMET License Fee, Net 6,153 6,327
Other Assets 1,622 1,915
----------- ----------
Total Assets $ 38,836 $ 44,790
=========== ==========
Liabilities and Stockholders' Equity:
Accounts Payable and Accrued Liabilities $ 5,716 $ 5,271
Other Current Liabilities 52 26
Warrant Liability 2,500 1,869
Other Long-Term Liabilities 98 46
Stockholders' Equity 30,470 37,578
----------- ----------
Total Liabilities and Stockholders' Equity $ 38,836 $ 44,790
=========== ==========