Exhibit 99.1
Ciphergen Reports Third Quarter 2003 Financial Results
Revenue Increased 57% vs. Year Prior Period and Operating Loss Narrows 44%
FREMONT, Calif., Oct. 30 /PRNewswire-FirstCall/ -- Ciphergen Biosystems,
Inc. (Nasdaq: CIPH) reported financial results for the third quarter of 2003.
For the quarter ended September 30, 2003, total revenue increased 57% to $16.1
million, up from revenue of $10.2 million in the third quarter of 2002. The
increase in revenue was due to increased sales of ProteinChip(R) Systems and
Arrays, increased sales of automation accessories, increased revenue from
Ciphergen's BioSepra(R) Process Proteomics products, and increased revenue
from service activities. Ciphergen reported a loss from operations of $4.6
million for the third quarter of 2003, a decline of 44% from the operating
loss of $8.3 million in the comparable period of 2002. The Company reported a
net loss of $5.2 million for the third quarter of 2003, a decline of 34% as
compared to a net loss of $7.9 million for the comparable period of 2002.
"Our third quarter results demonstrate a clear trend toward profitability,
as efforts to moderate the growth in our operating expenses resulted in the
sharp decline in our net losses for the quarter," commented William Rich,
President and CEO of Ciphergen. "Our financials also reflect strong revenue
growth in what remains a difficult economic environment for providers of mass
spectrometers and other tools for proteomics researchers."
Revenue Guidance. Ciphergen currently expects that fourth quarter revenue
will be approximately $19 million, which would result in full year 2003
revenue of approximately $62 million, or revenue growth of approximately 58%
on a year-over-year basis. The Company expects revenue for 2004 to increase
approximately 45-55% over 2003, driven by improvements in the R&D capital
spending climate, increased sales and marketing activities, recent and planned
new product introductions, and new business activities.
Summary Highlights for the Quarter:
Completion of Financing. In August, Ciphergen completed the sale of $30
million of convertible notes due 2008. The notes bear interest at 4.50% and
are convertible under certain circumstances at the equivalent of $9.19 per
share. This transaction provides Ciphergen with additional financial
resources and the Company intends to use the proceeds for general corporate
purposes, which may include working capital, capital expenditures, research
and development, and potential acquisitions. At the end of the quarter,
Ciphergen had $49.3 million in cash, cash equivalents and investments in
marketable securities.
Expanded Biomarker Marketing & Promotion Program. Late in the third
quarter, Ciphergen commenced its first-ever worldwide marketing promotion
program -- a 14 city seminar tour in North America and Europe, which is also
being extended to Japan in the fourth quarter at selected major cities and
institutions. Nearly 1,000 individuals attended these half-day seminars, of
which approximately 25% were current customers of Ciphergen learning about new
applications and 75% were new prospects. The seminar series included detailed
presentations and case studies, by customers, on the use of the ProteinChip
Biomarker System for clinical and basic research biomarker applications.
Successes in a number of disease areas were presented along with specific
methodologies for applying our technology to rapid protein biomarker
expression, purification, identification, interaction studies and assay
development. The program also introduced customers and prospects to our
newest products and further enhanced Ciphergen's leadership in biomarker
discovery.
New Product Introductions.
-- Ciphergen's Interaction Discovery Mapping(TM) (IDM) platform enables
rapid protein interaction studies and complements our proven Expression
Difference Mapping(TM) (EDM) capability for biomarker discovery while
providing significant improvements in functional proteomics applications. The
IDM platform enables:
-- Rapid discovery of new protein interaction-related biomarkers;
-- Elucidation of disease pathways and function; and
-- Development of rapid, quantitative multi-marker assays for disease
diagnosis, prognosis and treatment monitoring, as well as improved clinical
sensitivity and specificity.
-- Improvements in ProteinChip Technology Automation. During the quarter,
Ciphergen introduced several new software tools. In combination with the
Ciphergen AutoLoader and customized Biomek(R) 2000 robotic workstation,
Ciphergen now offers its customers a fully automated system for protein
biomarker discovery, validation and assay on a single platform. The new
software tools include:
-- The CiphergenExpress(TM) Data Manager 2.0, a robust, client-server
relational database system, improves the efficiency of the ProteinChip System
workflow by organizing raw spectral data collection and helping to track
samples, arrays and reagents, refine results, generate reports and publish
findings.
-- The Biomarker Analysis and Biomarker Patterns(TM) Modules provide the
basis for determination of high performance multi-biomarker assays. These
software tools enable a powerful, automated data mining capability for
multiple experiments over multiple conditions to identify potential biomarkers
and biomarker patterns. The algorithms in these modules identify peaks of
similar molecular weight across samples, and then statistically and visually
display differences in expression levels and report optimal biomarker patterns
for clinically relevant assays.
Further Progress Toward Potential Diagnostics.
-- Publication of Ovarian Cancer Study. In the October 14 issue of the
Proceedings of the National Academy of Sciences (PNAS), a group at UCLA led by
Dr. Robin Farias-Eisner published the results of a study in which they used
the ProteinChip technology to discover three panels of multiple biomarkers for
the detection of ovarian cancer using serum from a discovery set of 184
samples. The three panels then correctly diagnosed 41 of 44 samples in a
blinded independent validation set. The biomarker panels not only
distinguished patients with benign or malignant ovarian neoplasia from normal
subjects, but they also allowed the identification of patients with early
stage (stage I/II) ovarian cancer from those patients with benign ovarian
tumors or normal individuals.
-- Ovarian Cancer Validation Study. In an independent effort which
Ciphergen is conducting in collaboration with Johns Hopkins University School
of Medicine, Ciphergen has commenced a validation study using over 1,000
samples obtained from multiple sites around the world. This study is a
follow-on to an earlier multi-site study employing over 500 samples in which
Ciphergen identified a multi-marker panel that may have utility in the
detection of ovarian cancer, particularly focusing on early stage cancer where
the impact of detection dramatically alters patient survivability. This study
also led to the discovery of several interacting proteins that may provide
additional diagnostic information, allowing us to pursue new avenues for assay
improvement, and further understanding of the biological pathways in ovarian
cancer.
-- Johns Hopkins Collaboration Renewal. Ciphergen is renewing its
biomarker discovery and development collaboration with Johns Hopkins for a
fourth year. During the upcoming year, Ciphergen and a team at Johns Hopkins
led by Dr. Dan Chan will focus on studies in ovarian, breast, prostate and
pancreatic cancers. The collaboration has already produced encouraging
results, and descriptions of the discovery of diagnostic multi-marker panels
for prostate cancer and pancreatic cancer have been accepted for publication
in leading scientific journals. A multi-marker panel for breast cancer that
was previously published is currently undergoing a 500 patient, multi-center
validation. The goal of the program in the coming year is to advance several
of these programs through prototype and final assay development and then into
clinical trials.
-- Alzheimer's Disease. During the quarter, scientists at Ciphergen's
Copenhagen Biomarker Discovery Center(R), in collaboration with a team led by
Dr. Kaj Blennow at Sahlgren's University Hospital, completed a diagnostic
biomarker study of Alzheimer's Disease (AD). This study will be presented on
November 9 at the Society for Neuroscience 33rd Annual Meeting in New Orleans.
Alzheimer's Disease is the most common form of dementia worldwide, yet can
only be detected conclusively by examining the brain after death to determine
the levels of plaques and tangles in certain brain regions. In this discovery
study, a four biomarker panel obtained from cerebral spinal fluid samples
correctly grouped 29 out of 30 AD samples and 33 out of 35 age-matched normal
individuals. Further studies analyzing over 200 additional samples are
underway to validate these markers for their utility in diagnosing early stage
Alzheimer's Disease as well as to differentiate AD from other dementias using
the Ciphergen platform.
Biodefense Applications of ProteinChip Technology. The University of
Texas Medical Branch-Galveston (UTMB) and Ciphergen have received funding from
the National Institute of Health (NIAID) to develop new strategies for early
diagnosis of viral infections caused by exposure to bioterrorism agents. This
research project will combine UTMB's proprietary thioaptamer technology with
Ciphergen's SELDI ProteinChip technology to study the inflammatory response of
cytokines and key transcription factors when challenged with pathogens. This
collaboration seeks to identify and characterize novel protein interactions
associated with viral infection, enhancing innate immunity, and controlling
cytopathological immune reactions. Ultimately, this could result in
protein-based diagnostics and therapeutics. The long-term objective of this
collaborative effort is to develop real-time, chip-based identification and
assays of host factors associated with viral infections.
Enhanced Board of Directors. During the third quarter, Judy Bruner,
Senior Vice President and Chief Financial Officer of palmOne, Inc. joined
Ciphergen's Board of Directors and assumed the role of Chairman of Ciphergen's
Audit Committee.
About Ciphergen
Ciphergen develops, manufactures and markets a family of ProteinChip(R)
Systems and services for clinical, research and process proteomics
applications, as well as a broad range of bioseparations media for protein
purification through its BioSepra(R) process chromatography division.
ProteinChip Systems and Biomarker Discovery Center(R) collaborative services
enable protein discovery, profiling, characterization and assay development to
provide researchers with predictive analysis capabilities and a better
understanding of biological functions at the protein level. ProteinChip
Systems are enabling tools in the emerging field of protein-based biology
research, known as proteomics. Proteomics provides a direct approach to
understanding the role of proteins in the biology of disease, monitoring
disease progression and evaluating the therapeutic effects and side effects of
drugs. Ciphergen believes proteomics will be a major focus of biological
research by enhancing the understanding of gene function and the molecular
basis of disease. Additional information about Ciphergen can be found at
www.ciphergen.com.
Safe Harbor Statement
Note Regarding Forward-Looking Statements: For purposes of the Private
Securities Litigation Reform Act of 1995 (the "Act"), Ciphergen disclaims any
intent or obligation to update these forward-looking statements, and claims
the protection of the Safe Harbor for forward-looking statements contained in
the Act. Examples of such forward-looking statements include statements
regarding the use of the proceeds from our recent sale of convertible notes,
the use of ProteinChip technology to discover useful protein biomarkers that
can be used for diagnostic, theranostic and/or therapeutic purposes, our
expected revenue for 2003 and 2004, as well as a trend toward profitability,
the development of diagnostic tests for various cancers including ovarian,
breast, prostate and pancreatic cancer as well as for Alzheimer's Disease, the
successful applications of our IDM platform, and future growth in the field of
proteomics. Actual results may differ materially from those projected in such
forward-looking statements due to various factors, including the ProteinChip
technology's ability to discover protein biomarkers that have diagnostic,
theranostic and/or therapeutic utility, the Company's ability to generate
significant growth in unit sales while maintaining pricing, the IDM platform's
ability to rapidly discover protein interactors, elucidate disease pathways
and functions, and to develop useful assays, and the continued emergence of
proteomics as a major focus of biological research and drug discovery.
Investors should consult Ciphergen's filings with the Securities and Exchange
Commission, including its Registration Statement on Form S-3 dated October 8,
2003, for further information regarding these and other risks of the Company's
business.
NOTE: Ciphergen, ProteinChip, Biomarker Discovery Center and BioSepra are
registered trademarks of Ciphergen Biosystems, Inc.
Ciphergen Biosystems, Inc.
Summary Financial Information
(Unaudited)
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2003 2002 2003
Revenue $10,241 $16,072 $25,708 $43,177
Cost of revenue (1) 3,532 5,749 8,882 22,534
Gross profit 6,709 10,323 16,826 20,643
Operating expenses:
Research and development 6,071 5,400 14,692 18,792
Sales and marketing 4,714 5,971 14,642 17,917
General and administrative 3,973 3,332 10,277 12,286
Amortization of intangible
assets 207 207 621 621
Total operating expenses 14,965 14,910 40,232 49,616
Loss from operations (8,256) (4,587) (23,406) (28,973)
Interest and other income
(expense), net 301 (124) 1,100 164
Loss before income taxes (7,955) (4,711) (22,306) (28,809)
Income tax provision (benefit) (48) 526 61 1,229
Net loss $(7,907) $(5,237) $(22,367) $(30,038)
Net loss per share, basic and
diluted $(0.29) $(0.18) $(0.83) $(1.08)
Shares used in computing net loss
per share 27,027 28,730 26,906 27,902
December September
31, 30,
2002 2003
Cash, cash equivalents and
investments
in securities $42,541 $49,322
Total assets 87,615 103,669
Long-term debt 2,313 30,815
Stockholders' equity 68,354 52,384
(1) In the nine months ended September 30, 2003, cost of revenue included
a non-recurring expense of $7,257 related to our litigation
settlement.
SOURCE Ciphergen Biosystems, Inc.
-0- 10/30/2003
/CONTACT: Sue Carruthers, Investor Relations of Ciphergen Biosystems,
Inc., +1-510-505 2297/
/Web site: http://www.ciphergen.com /
(CIPH)
CO: Ciphergen Biosystems, Inc.
ST: California
IN: MTC BIO HEA
SU: ERN ERP