EXHIBIT 99.1 - PRESS RELEASE
GENELABS TECHNOLOGIES, INC. REPORTS FINANCIAL RESULTS
FOR THE SECOND QUARTER AND FIRST HALF OF 2004
REDWOOD CITY, Calif. - August 3, 2004 - Genelabs Technologies, Inc.
(Nasdaq:GNLB) today reported contract revenues of $0.7 million and a net loss of
$2.9 million, or $0.03 per share, for the second quarter 2004. This compares to
revenues of $0.8 million and a net loss of $4.3 million, or $0.07 per share, for
the second quarter 2003. Revenues for the six month period ended June 30, 2004
were $1.4 million and the net loss was $7.6 million, or $0.09 per share,
compared to revenues of $1.5 million and a net loss of $8.5 million, or $0.15
per share, for the same period in 2003. During the second quarter of 2004, the
company recorded a gain of $2.0 million upon completion of the sale of its
diagnostics business, which had been accounted for as a discontinued operation.
This gain reduced the net loss for the second quarter of 2004 and the six months
ended June 30, 2004 by $2.0 million.
At June 30, 2004, Genelabs had $24.0 million in cash and cash equivalents.
"I am very pleased with the continued progress in all key areas of our
business," stated James A.D. Smith, president and chief executive officer. "The
last patients enrolled into our confirmatory clinical trial of Prestara(TM) for
lupus are scheduled to complete their final visits this month. Our drug
development team is working hard to complete this study and we are on track to
report data in the fourth quarter this year, as previously indicated.
Separately, our research team continues to make significant progress in our
programs to discover new treatments for hepatitis C virus infections. I am as
excited as I have ever been about the prospects for each of these important
programs."
Outlook for third quarter of 2004
Contract revenues for the third quarter of 2004 are currently estimated to be
approximately $0.6 million. Operating expenses are estimated to be approximately
$5.6 million to $6.1 million, with approximately 70% of the operating expenses
related to research and development. The third quarter net loss is estimated to
be approximately $5.0 million to $5.5 million, or $0.06 per share. We estimate
our cash and cash equivalents at September 30, 2004 to be approximately $19.5
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 Prestara and hepatitis C virus drug
discovery programs and the outlook for the third 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;
errors, omissions or adverse events in the current Prestara(TM) clinical trials;
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 currently
does not have regulatory applications submitted for review of Prestara(TM)
outside the U.S. 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)
June 30, December 31,
2004 2003
------------ ------------
(Unaudited) Note 1
ASSETS
Cash and cash equivalents $ 24,013 $ 26,530
Other current assets 747 1,456
Property and equipment, net 980 920
Long-term investments 960 960
------------ ------------
$ 26,700 $ 29,866
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Total liabilities $ 8,101 $ 7,051
Shareholders' equity 18,599 22,815
------------ ------------
$ 26,700 $ 29,866
============ ============
Note 1: Derived from audited financial statements
GENELABS TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
For the three months ended For the six months ended
June 30, June 30,
-------------------------- --------------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Contract revenue $ 667 $ 776 $ 1,356 $ 1,503
---------- ---------- ---------- ----------
Operating expenses:
Research and development 3,923 3,645 8,127 7,037
General and administrative 1,669 1,615 3,252 3,171
---------- ---------- ---------- ----------
Total operating expenses 5,592 5,260 11,379 10,208
---------- ---------- ---------- ----------
Operating loss (4,925) (4,484) (10,023) (8,705)
Interest income, net 51 10 104 31
---------- ---------- ---------- ----------
Loss from continuing operations (4,874) (4,474) (9,919) (8,674)
Discontinued operations:
Income from diagnostics business -- 194 262 194
Gain on sale of diagnostics business 2,020 -- 2,020 --
---------- ---------- ---------- ----------
Net loss $ (2,854) $ (4,280) $ (7,637) $ (8,480)
========== ========== ========== ==========
Loss per share from continuing operations
$ (0.06) $ (0.08) $ (0.11) $ (0.15)
========== ========== ========== ==========
Net loss per share - basic and diluted $ (0.03) $ (0.07) $ (0.09) $ (0.15)
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Weighted average shares outstanding 88,018 58,617 87,854 56,005
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