Exhibit 99.1
Ciphergen Reports First Quarter 2004 Financial Results
Total Revenue Increased 21% vs. Year Prior Period; ProteinChip(R) Products
& Services Revenue Increased 50%
FREMONT, Calif., May 6 /PRNewswire-FirstCall/ -- Ciphergen Biosystems,
Inc. (Nasdaq: CIPH) reported financial results for the first quarter of 2004.
For the quarter ended March 31, 2004, total revenue increased 21% to $15.5
million, up from revenue of $12.8 million in the first quarter of 2003. The
increase in revenue was due to strong increased sales of ProteinChip(R)
Systems, arrays, accessories and service activities which grew approximately
50%, but was partially offset by a decrease in process chromatography sorbents
revenue. Ciphergen's gross profit increased 32% to $10.6 million for the
first quarter of 2004, up from $8.0 million for the comparable period in 2003;
gross margin was 68% in the first quarter of 2004 and 62% for the comparable
period of 2003. The Company reported a net loss of $7.5 million for the first
quarter of 2004, a decline of 19% compared to a net loss of $9.2 million for
the comparable period of 2003.
"We are pleased by the strong growth in ProteinChip products and services
revenue during the first quarter," commented William Rich, President and CEO
of Ciphergen. "In addition, the establishment of our Diagnostics Division has
accelerated certain of our key programs aimed at translating biomarker
discoveries into clinical use."
Summary Highlights for the Quarter:
Solid Growth in ProteinChip Products & Services Sales. Ciphergen sold 39
ProteinChip Systems and Interfaces in the quarter, contributing to
approximately a 50% growth in system, array, accessories and service revenue
versus Q1 2003. This growth resulted from strong competitive sales response
programs initiated during the quarter, the effects of launching additional
biomarker marketing programs, as well as sales and field scientist personnel
additions during the second half of last year. We are having considerable
success selling higher-end, automated systems as well as automation and
advanced software accessories, particularly in the clinical proteomics market
segment. Sales to the pharmaceutical and NIH funded market segments increased
during the quarter.
Growing Interest in Process Proteomics. While revenue from process
chromatography sorbents declined in Q1 2004 due to the recognition in Q4 2003
as other income the value of the cancellation of a committed sorbents contract
by a pharmaceutical customer which was originally scheduled for delivery in
the first half of 2004 as well as delays in the receipt of other sorbent
orders due to the timing required by those customers in their processes, the
interest in the use of ProteinChip Systems and sorbents (particularly MEP) by
pharmaceutical protein production facilities for improving protein production
and development is growing strongly. We expect acceleration of MEP and other
process chromatography sorbent sales in the second half of 2004 as compared to
the first half of 2004.
Established New Diagnostics Division. In order to convert the Company's
many biomarker discovery programs into commercially viable diagnostic tests,
Ciphergen recruited Gail Page to become President of a newly formed
Diagnostics Division. Gail has a 25 year career in the diagnostics industry,
covering all of the critical functions ranging from senior management to
sales/marketing and business development, technology assessment and
acquisitions, as well as operations. Beginning in 2000, Ciphergen established
the first of a series of Biomarker Discovery Center(R) (BDC) laboratories and
established a major BDC collaboration with The Johns Hopkins University School
of Medicine in order to utilize the latest Ciphergen technology to discover
biomarkers and develop assays based on panels of biomarkers which might have
greater predictive power to diagnose cancer and other diseases. These BDC's
now form the core of the new division. Also, Bill Sullivan has joined
Ciphergen as Vice President of Diagnostic Division Operations, bringing with
him 25 years of experience in diagnostic laboratory operations and
manufacturing.
Expanded Ciphergen's Prominence in Cancer Research. 49 scientific studies
highlighting the use of Ciphergen's SELDI ProteinChip platform in cancer
research were presented at the 2004 American Association for Cancer Research's
(AACR) Meeting. Many of these presentations describe new and exciting
progress in the discovery of biomarkers and development of multi-biomarker
assays that may improve early cancer detection and drug treatment decisions as
well as insights into mechanisms of disease and drug pharmacodynamics and
toxicity.
Novel Diagnostic Approach to Early Detection of Cancer and Other Diseases.
In conjunction with The Johns Hopkins University School of Medicine, we
presented data at AACR describing a novel approach to diagnostic testing based
on the detection of combinations of protein fragments associated with the
inflammatory response to disease for the detection of ovarian cancer. This
inflammatory response cascade, which is present in even early stage tumors,
may be amplified in the serum of cancer patients by disease specific enzymes
associated directly with the tumor itself. Ciphergen and its collaborators
reported that different cancers and other diseases generate unique host
response proteins and protein fragments that can be distinguished by
quantitative SELDI detection in serum, potentially opening up a novel approach
to "inflammation diagnostics" for a variety of cancers and other diseases.
Ciphergen has applied for patents on this concept, which we term the Host
Response Protein Amplification Cascade (HR-PAC), and its use in biomarker
discovery and diagnostic testing.
Pancreatic Cancer Diagnostic Development. As published in the Journal of
Clinical Cancer Research, a research team at The Johns Hopkins University
School of Medicine used the ProteinChip System to discover panels of novel
serum biomarkers that are able to differentiate patients with pancreatic
cancer. Ciphergen's Diagnostics Division and the Johns Hopkins research team
are currently recruiting additional patient samples in order to perform
follow-on validation studies. Pancreatic cancer is the fifth leading cause of
cancer death and has the poorest survival rate for any solid cancer. No serum
test currently exists for the initial diagnosis of pancreatic cancer.
SFDA Medical Device Certification in China. During the quarter, the SELDI
ProteinChip System was certified by the State Food and Drug Administration
(SFDA) in China as a Medical Device, a result of demonstrating that the
ProteinChip System has met the quality control requirements of the SFDA. This
is the first step required to deliver diagnostic tests in China using the
ProteinChip System and it is the first time that a mass spectrometer has been
approved as a medical device in China. Future individual diagnostic tests will
have to be individually cleared by the SFDA based on their performance in
specific clinical trials, but the core ProteinChip System itself will not have
to be re-certified for each diagnostic test.
Significant Progress in Japan. Ciphergen Biosystems K.K. has been
designated as one of the official technology suppliers of a major Japanese
national project known as the "Drug Discovery Proteome Factory" which was
organized by The Japan Health Science Foundation to carry out a national
project named "Analysis of Disease-related Proteins." About 20 leading
Japanese pharmaceutical companies are involved in this 5-year project as
members of this consortium with the promised support of 4.5 billion Japanese
Yen. Ciphergen's ProteinChip System was recognized as one of the core
technologies for clinical proteomics in Japan and has been selected as one of
the technologies for the high-throughput proteome analysis for discovery and
characterization of disease-related proteins.
During the quarter, Ciphergen also purchased complete ownership of
Ciphergen Biosystems K.K., originally a joint venture with SC BioSciences (a
unit of Sumitomo Corporation), giving the Company greater flexibility to
expand operations in Japan, in particular relating to the opportunities
created by the Diagnostics Division.
Patent Issued Covering Pattern Recognition Software. Ciphergen received a
U.S. patent directed to finding protein patterns in mass spectrometry data.
The patent covers software and methods that use a pattern recognition
algorithm, called "classification and regression tree analysis" or CART, to
identify diagnostic patterns of proteins derived from mass spectrometry data.
This method is used in Ciphergen's Biomarker Patterns(TM) Software and
ProteinChip Biomarker System for biomarker discovery, validation and assay
development.
Biomarker Patterns Software 5.0 Launched. Biomarker Patterns Software
(BPS) is the only commercially available clinical proteomics software that,
when combined with SELDI protein profiling data, addresses both discovery of
protein multi-markers and their translation to assays with high predictive
accuracy. BPS 5.0 incorporates a major analytical advance in which a boosting
algorithm (TreeNet) is used to identify the proteins that are relevant to a
particular disease and then the CART algorithm is used to summarize and
display the best multi-biomarker protein sets or patterns in a clear and
concise manner, allowing the development of diagnostic assays with high
predictive accuracy.
About Ciphergen
Ciphergen's Biosystems Division 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 and large scale production. ProteinChip
Systems enable protein discovery, characterization, identification and assay
development to provide researchers with predictive, multi-marker assay
capabilities and a better understanding of biological function at the protein
level. Ciphergen's Diagnostics Division is dedicated to the discovery of
protein biomarkers and panels of biomarkers and their development into protein
molecular diagnostic tests that improve patient care; and to providing
collaborative R&D services through its Biomarker Discovery Center(R)
laboratories for biomarker discovery for new diagnostic tests as well as
pharmacoproteomic services for improved drug toxicology, efficacy and
theranostic assays. 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 ProteinChip technology to discover protein biomarkers,
our Diagnostic Division's initiatives to translate biomarker discoveries into
commercially viable diagnostic tests and predictive assays, including those
based on our Host Response Amplification Cascade and our pancreatic cancer
biomarkers described in the Journal of Clinical Cancer Research, and the
expected acceleration of MEP and other process chromatography sorbent sales in
the second half of 2004 as compared to the first half of 2004. Actual results
may differ materially from those projected in such forward-looking statements
due to various factors, including the ProteinChip technology's ability to
validate and/or develop these protein biomarkers as diagnostic or toxicology
assays, and the Company's ability to successfully commercialize such tests,
our ability to protect and promote our proprietary technologies and continued
growth in interest in process proteomics, in general, and specifically the use
of our products, by pharmaceutical protein production facilities. Investors
should consult Ciphergen's filings with the Securities and Exchange
Commission, including its Form 10-K dated March 15, 2004, for further
information regarding these and other risks of the Company's business.
NOTE: Ciphergen, ProteinChip and Biomarker Discovery Center are
registered trademarks of Ciphergen Biosystems, Inc.
Ciphergen Biosystems, Inc.
Summary Financial Information
(unaudited)
(in thousands, except per share data)
Three Months Ended
March 31,
-----------------------
2003 2004
Revenue $12,841 $15,538
Cost of revenue 4,823 4,931
Gross profit 8,018 10,607
Operating expenses:
Research and development 6,381 6,195
Sales and marketing 5,849 7,020
General and administrative 4,708 3,881
Amortization of intangible assets 207 207
Total operating expenses 17,145 17,303
Loss from operations (9,127) (6,696)
Interest and other income (expense), net 175 (525)
Loss attributable to minority interest 157 --
Loss before provision for income taxes (8,795) (7,221)
Provision for income taxes 401 260
Net loss $(9,196) $(7,481)
Basic and diluted net loss per share $(0.34) $(0.26)
Shares used in computing basic and diluted
net loss per share 27,211 29,039
December 31, March 31,
2003 2004
Cash, cash equivalents and investments
in marketable securities $47,316 $39,649
Total assets 102,026 94,311
Long term debt, net of current portion 30,879 30,707
Stockholders' equity 47,892 40,275
SOURCE Ciphergen Biosystems, Inc.
-0- 05/06/2004
/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