EXHIBIT 99.1
NEOSE TECHNOLOGIES REPORTS THIRD QUARTER FINANCIAL RESULTS
AUGUST RESTRUCTURING LEADS TO NON-CASH CHARGES OF $13.2 MILLION
HORSHAM, PA, November 2, 2005 -- Neose Technologies, Inc. (NasdaqNM: NTEC) today
announced financial results for the third quarter and nine months ended
September 30, 2005.
For the quarter ended September 30, 2005, the Company reported a net loss of
$22,621,000, or $0.69 per basic and diluted share, compared to a net loss of
$10,824,000, or $0.44 per basic and diluted share, for the same period in 2004.
The Company's net loss for the quarter ended September 30, 2005 included charges
related to the restructuring announced in August 2005 of $14,002,000, of which
$13,187,000 represented non-cash property and equipment impairment charges and
$815,000 represented expected payments for employee severance. The impairment
charge for the 2005 period was partially offset by reductions in research and
development expenses of $1,784,000, decreases in general and administrative
expenses of $176,000, and increased interest income of $220,000.
In August 2005, the Company announced it would evaluate alternatives relative to
the Company's current headquarters and clinical manufacturing facility (the
"Witmer Road Facility"), which it owns subject to a mortgage, including the
potential disposition of the facility. As a result of the announcement, the
Company calculated and recorded during the third quarter of 2005 a non-cash
impairment charge of $13,000,000, which was included in restructuring charges
on the Company's statements of operations, on the Witmer Road Facility and
related equipment. As part of the restructuring announced in August 2005, the
Company decided to centralize research activities in Horsham, Pennsylvania by
ending operations in its leased facility in San Diego, California. During the
three months ended September 30, 2005, the Company recorded a non-cash
impairment charge of approximately $187,000, which was included in
restructuring charges on the Company's statements of operations, related to
property and equipment located in the San Diego facility.
The decrease in research and development expenses during the third quarter of
2005 resulted primarily from reduced purchases of laboratory supplies and raw
materials, as well as lower recruiting, relocation and discretionary personnel
costs. The decrease in research and development expenses during the 2005 period
was also caused by a decrease in depreciation expense related to the Company's
Witmer Road Facility. General and administrative costs decreased by $176,000
during the 2005 period primarily due to decreased payroll, consulting
NEOSE TECHNOLOGIES, INC. Page 2
and depreciation expenses, partially offset by higher patent legal fees. The
$220,000 increase in interest income during the 2005 period was due to higher
interest rates.
For the nine months ended September 30, 2005, the Company reported a net loss of
$44,173,000, or $1.42 per basic and diluted share, compared to a net loss of
$30,653,000, or $1.38 per basic and diluted share, for the same period in 2004.
The increased net loss during the 2005 period was primarily due to the
restructuring charges described above.
The Company reported revenues of $4,271,000 for the first nine months of 2005,
compared to $3,592,000 for the same period in 2004. The increase in revenues for
the 2005 period was primarily due to revenues recognized under the Company's
collaboration with BioGeneriX, which collaboration began late in the second
quarter of 2004.
For the nine months ended September 30, 2005, the Company's research and
development expenses were $26,133,000, compared to $24,971,000 for the
comparable 2004 period. The increased research and development expenses during
the 2005 period were primarily due to higher personnel costs, as well as
increased purchases of outside services, including preclinical studies and
consulting. Partially offsetting these increases during the 2005 period were
decreased recruiting and relocation costs, reduced laboratory supplies and
maintenance costs, and lower depreciation expense.
The Company's marketing, general, and administrative expenses were $8,469,000
for the nine months ended September 30, 2005, compared to $9,047,000 for the
comparable 2004 period. The decrease for the 2005 period was primarily due to
reduced salaries, consulting, and depreciation expenses, which were partially
offset by higher accounting and patent legal expenses.
For the nine months ended September 30, 2005, the Company's interest income was
$1,138,000, compared to $431,000 for the comparable 2004 period. The increase
during the 2005 period was due to higher interest rates.
The Company ended the third quarter with $45,453,000 in cash, cash equivalents,
and marketable securities.
CONFERENCE CALL
The Company will host a conference call at 5:00 p.m. (ET) on November 2, 2005,
to discuss the third quarter financial results and update investors on company
developments. The dial-in number for domestic callers is (800) 946-0705. The
dial-in number for international callers is (719) 457-2637. A replay of the call
will be available for 7 days beginning approximately three hours after the
conclusion of the call. The replay number for domestic callers is (888) 203-1112
using the passcode 1159649. The replay number for international callers is (719)
457-0820, also using the passcode 1159649. The call will also be webcast live
through the Company's website via the following link:
http://phx.corporate-ir.net/phoenix.zhtml?c=60494&p=irol-calendar
NEOSE TECHNOLOGIES, INC. Page 3
To listen to the live call, please go to the web site at least fifteen minutes
early to register, download, and install any necessary audio software. For those
who cannot listen to the live broadcast, a replay will be available shortly
after the call.
ABOUT NEOSE
Neose is a biopharmaceutical company using its proprietary enzymatic
technologies to develop improved drugs, focusing primarily on therapeutic
proteins. Neose uses its GlycoAdvance(R) and GlycoPEGylation(TM) technologies to
develop improved versions of drugs with proven safety and efficacy. Neose
intends to apply its technologies to products it is developing on its own and to
products it co-develops and co-owns with others. It also expects to make its
technologies available, through strategic partnerships, to improve the products
of other parties. Neose's first two proprietary candidates are NE-180
(GlycoPEG-EPO), a long-acting version of erythropoietin, and GlycoPEG-GCSF, a
long-acting version of granulocyte colony stimulating factor (G-CSF).
NEOSE TECHNOLOGIES, INC. Page 4
STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three months Nine months
ended September 30, ended September 30,
2005 2004 2005 2004
-------- -------- -------- --------
Revenue from collaborative agreements $ 1,503 $ 1,451 $ 4,271 $ 3,592
-------- -------- -------- --------
Operating expenses:
Research and development 7,521 9,305 26,133 24,971
General and administrative 2,685 2,861 8,469 9,047
Restructuring charges 14,002 - 14,002 -
-------- -------- -------- --------
Total operating expenses 24,208 12,166 48,604 34,018
-------- -------- -------- --------
Operating loss (22,705) (10,715) (44,333) (30,426)
Other income - - 22 -
Interest income 415 195 1,138 431
Interest expense (331) (304) (1,000) (658)
-------- -------- -------- --------
Net loss $(22,621) $(10,824) $(44,173) $(30,653)
======== ======== ======== ========
Basic and diluted net loss per share $ (0.69) $ (0.44) $ (1.42) $ (1.38)
======== ======== ======== ========
Weighted-average shares outstanding used in
computing basic and diluted net loss per share 32,782 24,712 31,188 22,284
======== ======== ======== ========
NEOSE TECHNOLOGIES, INC. Page 5
CONDENSED BALANCE SHEETS
(in thousands)
(unaudited)
ASSETS September 30, 2005 December 31, 2004
------------------ -----------------
Cash, cash equivalents and marketable securities $45,453 $45,048
Accounts receivable and other current assets 2,045 2,768
------- -------
Total current assets 47,498 47,816
Property and equipment, net 25,010 41,133
Intangible and other assets, net 1,103 1,782
------- -------
Total assets $73,611 $90,731
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $10,886 $11,897
Long-term debt and capital lease obligations 11,284 13,759
Deferred revenue, net of current portion 3,316 3,688
Other liabilities 486 533
------- -------
Total liabilities 25,972 29,877
Stockholders' equity 47,639 60,854
------- -------
Total liabilities and stockholders' equity $73,611 $90,731
======= =======
CONTACTS:
Neose Technologies, Inc.
A. Brian Davis
Sr. Vice President and Chief Financial Officer
(215) 315-9000
Barbara Krauter
Manager, Investor Relations
(215) 315-9004
For more information, please visit www.neose.com.
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