EXHIBIT 99.1
PRESS RELEASE
GENELABS TECHNOLOGIES, INC. REPORTS
2004 FIRST QUARTER FINANCIAL RESULTS
REDWOOD CITY, Calif. - May 10, 2004 - Genelabs Technologies, Inc. (Nasdaq:GNLB)
today reported revenues of $0.7 million and a net loss of $4.8 million, or $0.05
per share for the first quarter 2004. This compares to revenues of $0.7 million
and a net loss of $4.2 million, or $0.08 per share for the first quarter 2003.
At March 31, 2004, Genelabs had $25.8 million in cash and short-term
investments.
"During the first quarter of 2004 Genelabs made important progress in all facets
of our business," stated James A.D. Smith, president and chief executive
officer. "We completed enrollment into our confirmatory clinical trial of
Prestara(TM) for lupus, entered into a license agreement with Tanabe Seiyaku for
the development and marketing rights to Prestara in Japan and also entered into
an agreement for the sale of our diagnostics business. In research, we made the
significant step of advancing our hepatitis C virus (HCV) drug discovery program
into preclinical development status and initiating preclinical development
studies. I am very excited about the prospects for our research and also for the
near-term opportunity we have with Prestara in the United States."
Outlook for second quarter of 2004
Contract revenues for the second quarter 2004 are estimated to be approximately
$0.6 million. Operating expenses are estimated to be approximately $5.8 million
to $6.3 million, with approximately 75% of the operating expenses related to
research and development. The second quarter net loss, which will include a
nonrecurring gain of approximately $2.0 million on the sale of our diagnostics
business, is estimated to be approximately $3.1 million to $3.6 million, or
$0.04 per share. We estimate our cash and cash equivalents at the end of the
second quarter of 2004 to be approximately $23.5 million.
About Genelabs
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 prospects of our hepatitis C virus drug discovery
program, the near-term opportunity Genelabs has with Prestara(TM) in the United
States and the outlook for the second 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)
<Table>
<Caption>
March 31, December 31,
2004 2003
------- -------
(Unaudited)
ASSETS
Cash and cash equivalents $25,844 $26,530
Other current assets 1,572 1,456
Property and equipment, net 836 920
Long-term investments 960 960
------- -------
$29,212 $29,866
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Total liabilities $ 8,146 $ 7,051
Shareholders' equity 21,066 22,815
------- -------
$29,212 $29,866
======= =======
</Table>
GENELABS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<Table>
<Caption>
For the three months ended
March 31,
----------------------
2004 2003
-------- --------
Contract revenue $ 689 $ 727
-------- --------
Operating expenses:
Research and development 4,345 3,557
General and administrative 1,442 1,391
-------- --------
Total operating expenses 5,787 4,948
-------- --------
Operating loss (5,098) (4,221)
Interest income 53 21
-------- --------
Loss from continuing operations (5,045) (4,200)
Income from discontinued operations
of diagnostics subsidiary 262 --
-------- --------
Net loss $ (4,783) $ (4,200)
======== ========
Loss per share from continuing operations $ (0.06) $ (0.08)
======== ========
Net loss per share $ (0.05) $ (0.08)
======== ========
Weighted average shares outstanding 87,690 53,393
======== ========
</Table>