EXHIBIT 99.1 - PRESS RELEASE
Genelabs Technologies Reports 2003 Year-End and
Fourth Quarter Financial Results
REDWOOD CITY, Calif., March 15, 2004 -- Genelabs Technologies, Inc.
(Nasdaq:GNLB) today reported financial results for the fourth quarter and year
ended December 31, 2003. For the year, Genelabs reported 2003 revenues of $2.9
million, compared to $3.6 million for 2002. Operating expenses for 2003 were
$23.3 million compared to $20.1 million for 2002. The company reported a net
loss of $19.8 million, or $0.31 per share, for 2003 compared with $16.0 million,
or $0.31 per share, for 2002.
The company also reported financial results for the fourth quarter of 2003.
Revenues for the three months ended December 31, 2003 were $0.7 million,
compared to $0.8 million for the fourth quarter 2002. Operating expenses for the
fourth quarter of 2003 were $7.4 million compared to $4.7 million for the fourth
quarter 2002. The net loss was $6.5 million for the three months ended December
31, 2003, or $0.08 per share, compared to $3.9 million for the three months
ended December 31 2002, or $0.07 per share.
Genelabs had approximately $26.5 million in cash and short-term investments at
December 31, 2003.
During the fourth quarter of 2003 operating expenses increased by $2.7 million
compared to the fourth quarter of 2002. The largest portion of this increase,
$2.0 million, relates to additional operating expenses that the board of
directors made contingent upon securing additional financing, and this financing
closed in October 2003. In addition, higher costs were incurred for the
confirmatory clinical trial of Prestara(TM), measuring its effect on the bone
mineral density in women with systemic lupus erythematosus (SLE or lupus) on
glucocorticoids.
"We ended 2003 in a strong position," stated James A.D. Smith, president and
chief executive officer. "In the fourth quarter, we secured sufficient
additional funding that will allow us to complete the confirmatory Phase III
clinical trial measuring the effect of Prestara(TM) on bone mineral density in
women with lupus. I am very pleased with the support shown by our existing
investors, and am delighted to welcome the new investors who participated this
financing. More recently, to date in 2004 we have completed a license agreement
with Tanabe Seiyaku for the Japanese development and marketing rights to
Prestara and also have completed the enrollment of patients into our
confirmatory clinical trial. Our team continues to work hard to accrue value for
our shareholders, and I look forward to providing you with more updates as we
make additional progress."
Outlook for first quarter of 2004
Contract revenues for the first quarter 2004 are estimated to be approximately
$0.6 million. We expect to amortize the $2.0 million up-front license fee
received from Tanabe over time, and are accordingly planning to defer the
majority of this payment for recognition as revenue over the term we have
significant obligations to Tanabe. Operating expenses for the first quarter of
2004 are estimated to be approximately $5.8 million to $6.4 million, with
approximately 75% to 80% of the operating expenses related to research and
development. We estimate that we will end the first quarter of 2004 with cash
and short-term investments between $25.5 million and $26 million.
Genelabs Technologies, Inc. is a biopharmaceutical company pioneering the
discovery and development of novel pharmaceutical products to improve human
health. We are concentrating our clinical development capabilities on
Prestara(TM), an investigational drug for women with systemic lupus
erythematosus and have received an approvable letter for our Prestara New Drug
Application from the U.S. Food and Drug Administration. We are concentrating our
drug discovery capabilities on novel antiviral compounds for treatment of
hepatitis C virus infections.
NOTE: This press release contains forward-looking statements including
statements regarding the sufficiency of our cash balance to complete the Phase
III clinical trial of Prestara(TM) and the outlook for the first quarter of
2004. These forward-looking statements are based on Genelabs' current
expectations and are subject to uncertainties and risks that could cause actual
results to differ materially from the statements made. Uncertainties and risks
include, without limitation, the company's capital requirements and history of
operating losses; whether the results of the company's clinical trials of
Prestara(TM) and other supporting information will be sufficient to support the
approval of Prestara(TM) by the FDA, the European Agency for Evaluation of
Medicinal Products and other regulatory authorities; delays regarding the
regulatory approval process including the timing and scope of approval received,
if any; uncertainties and risks regarding market acceptance of Prestara(TM) as a
treatment for SLE; uncertainties and risks regarding the company's ability to
consummate strategic or corporate partner transactions on favorable terms or at
all; the early stage of Genelabs' research programs and uncertainties associated
with the preclinical development of compounds, including whether a compound will
advance to preclinical testing, clinical trials, or ultimately become a product,
and the uncertainty of the timing of any of these; and the validity, scope and
enforceability of patents related to the company's technologies. The active
ingredient in Prestara(TM) is prasterone, the synthetic equivalent of the
androgenic hormone dehydroepiandrosterone (DHEA). Products containing DHEA are
currently being marketed by others as dietary supplements. The company has not
submitted applications for regulatory review of Prestara(TM) outside the U.S.
and Europe. In addition, neither U.S. nor other regulatory authorities have made
a determination as to the safety or efficacy of Prestara(TM) for SLE. Please see
the information appearing in the company's filings with the Securities and
Exchange Commission, including the most recent Quarterly Report on Form 10-Q and
Annual Report on Form 10-K, under the captions "Risk Factors," "Business Risks"
and "Forward-Looking Statements" for more discussion regarding these
uncertainties and risks and others associated with the company's research
programs, early stage of development and other risks which may affect the
company or cause actual results to differ from those included in the
forward-looking statements. Genelabs does not undertake any obligation to update
these forward-looking statements or risks to reflect events or circumstances
after the date of this release.
GENELABS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
December 31, December 31,
2003 2002
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ASSETS
Cash, cash equivalents and short-term investments .......... $ 26,530 $ 6,570
Property and equipment, net ................................ 920 1,306
Long-term investments ...................................... 960 960
Net assets of diagnostic subsidiary ........................ 582 417
Other current and non-current assets ....................... 874 512
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$ 29,866 $ 9,765
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LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities ................................................ $ 7,051 $ 7,051
Shareholders' equity ....................................... 22,815 2,714
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$ 29,866 $ 9,765
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GENELABS TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
For the three months ended For the year ended
December 31 (unaudited), December 31,
-------------------------- -------------------------
2003 2002 2003 2002
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Contract revenue ................................. $ 715 $ 849 $ 2,916 $ 3,645
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Operating expenses:
Research and development .................... 5,518 3,450 17,427 14,537
General and administrative .................. 1,924 1,294 5,895 5,529
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Total operating expenses ................ 7,442 4,744 23,322 20,066
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Operating loss ................................... (6,727) (3,895) (20,406) (16,421)
Interest income, net ............................. 49 33 84 341
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Loss from continuing operations .................. (6,678) (3,862) (20,322) (16,080)
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Income from discontinued operations
of diagnostics subsidiary ...................... 188 2 515 130
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Net loss ......................................... $ (6,490) $ (3,860) $(19,807) $(15,950)
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Loss per share - continuing operations ........... $ (0.08) $ (0.07) $ (0.32) $ (0.31)
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Net loss per share ............................... $ (0.08) $ (0.07) $ (0.31) $ (0.31)
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Weighted average shares outstanding .............. 80,796 53,206 63,888 51,443
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