Exhibit 99.1
CONTACT: GalaGen Inc. Padilla Speer Beardsley
Gregg A. Waldon Marian Briggs/Diane Rose
Chief Financial Officer (612) 871-8877
Robert A. Hoerr e-mail: mbriggs@psbpr.com
President and Chief Executive Officer e-mail: drose@psbpr.com
(612) 481-2105
www.galagen.com
FOR IMMEDIATE RELEASE
GALAGEN INC. ANNOUNCES FIRST QUARTER RESULTS
NUTRITIONAL PRODUCTS COMPANY LAUNCHES BASICS PLUS-TM- DIETARY SUPPLEMENT
IN TWIN CITIES SUPERMARKETS
ARDEN HILLS, MINN., MAY 13, 1998 -- GalaGen Inc. (Nasdaq: GGEN), a development
stage nutritional products company, today announced financial results for the
first quarter ended March 31, 1998.
As anticipated, the Company reported a net loss for the first quarter of 1998.
The loss narrowed to $1,217,095, or $0.16 per share, compared to a net loss of
$1,576,928, or $0.22 per share, in the first quarter of 1997. GalaGen has begun
to sell its Proventra-TM- Brand Natural Immune Components for use in Basics
Plus-TM-, the first refrigerated, dairy-based dietary supplement to enter the
grocery store market. The Company ended the quarter with $6,672,576 in cash,
cash equivalents and available-for-sale securities.
GalaGen's president and CEO, Robert A. Hoerr, M.D., Ph.D., said: "We continue to
make great progress in our nutritional product development, as the recent
collaboration with Land O'Lakes to develop yogurt products containing GalaGen's
immune-enhancing Proventra-TM- demonstrates. We are focusing our efforts and
resources on launching two additional nutritional products, including a yogurt
product with Land O'Lakes, in late 1998 or early 1999." For fiscal year 1997,
the dairy foods unit of Land O'Lakes posted $2.2 billion in sales and record
profits.
THE YOGURT PRODUCT
Last week, GalaGen announced that it is entering into a consumer product
development agreement with Land O'Lakes, Inc., the large food and agricultural
cooperative from which GalaGen was spun-out in 1992. Under terms of the
agreement, the two companies will collaborate to develop yogurt products
containing GalaGen's Proventra-TM- and potentially other functional components.
"Land O'Lakes' recent acquisition of a private label yogurt production company
provides capacity and expertise needed to succeed in the $3.7 billion U.S.
yogurt market," said Hoerr. This collaboration initially will develop a yogurt
product with unique benefits for women, who make the majority of yogurt
purchases. The Company plans to be in regional test markets with this yogurt in
late 1998 or early 1999, with Land O'Lakes handling the product development,
manufacturing, sales, distribution and marketing.
-more-
GALAGEN INC.
PAGE TWO
BASICS PLUS EXPANSION INTO THE TWIN CITIES
The first nutritional product to be launched from the Chicago-based Lifeway
Foods, Inc. (Nasdaq: LWAY) and GalaGen collaboration is Basics Plus-TM-, which
is a dairy beverage being manufactured and test marketed in selected cities by
Lifeway. Basics Plus containing GalaGen's Proventra-TM- was recently
introduced in the Minneapolis and St. Paul area in selected Byerly's and other
supermarkets. The product, featured in the February 1998 issue of DAIRY FOODS,
targets the rapidly growing healthy beverage market, estimated to exceed $20
billion annually.
The Company also announced that it would limit further spending on development
of pharmaceutical products this year, believing that applying its technology and
resources toward nutritional product development will provide superior
shareholder value. The Phase II dose ranging study for Diffistat-G, a
pharmaceutical treatment for antibiotic-associated diarrhea, has now provided
sufficient data for the design of future studies necessary for approval by the
U.S. Food and Drug Administration. As previously announced, subsequent studies
will only be implemented in collaboration with a corporate partner. The Company
remains positive about the long-term value of its pharmaceutical program and
products, but believes that pharmaceutical development can be best supported
from corporate alliances. The Company will continue to seek partners for all of
its pharmaceutical development products.
GalaGen Inc. is utilizing its expertise in its antibody platform technology to
develop a portfolio of proprietary nutritional products, including dietary
supplements and medical foods, which incorporate its Proventra-TM- Brand Natural
Immune Components. These products will target the needs of both consumers and
healthcare professionals. The Company currently has its first dietary
supplement product, Basics Plus, in test markets in conjunction with its
marketing and manufacturing partner, Lifeway Foods, and has several other
projects under way in various stages of development.
EXCEPT FOR HISTORICAL INFORMATION, MATTERS DISCUSSED IN THIS PRESS RELEASE ARE
FORWARD-LOOKING STATEMENTS THAT INVOLVE RISK AND UNCERTAINTIES, INCLUDING, BUT
NOT LIMITED TO, RISKS ASSOCIATED WITH ENTERING NEW MARKETS, CONSUMER ACCEPTANCE,
REGULATION OF DIETARY SUPPLEMENTS, COMPETITIVE PRESSURES AND OTHER IMPORTANT
FACTORS DETAILED IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR FISCAL 1997
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
(see attached tables)
GALAGEN INC.
(A Development Stage Company)
FINANCIAL HIGHLIGHTS
CONDENSED STATEMENT OF OPERATIONS
(unaudited)
Three Months Ended
March 31,
1998 1997
----------- -----------
Revenues $ 3,050 $ --
Cost of goods sold 1,525 --
Research and development expense 608,368 1,119,214
General and administrative expense 514,911 573,996
----------- -----------
Loss from operations (1,121,754) (1,693,210)
Interest income 124,549 116,282
Interest expense (219,890) --
----------- -----------
Net loss $(1,217,095) $(1,576,928)
Net loss per share, basic and diluted $ (0.16) $ (0.22)
Shares used in computing net loss per share,
basic and diluted 7,560,438 7,163,769
BALANCE SHEET DATA
MARCH 31, 1998
(Unaudited)
ASSETS:
Cash and cash equivalents and available-for-sale
securities $ 6,672,576
Other current assets 45,519
-----------
Total current assets 6,718,095
Property and equipment, net 1,423,266
Other assets 153,427
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities $ 666,301
Convertible promissory notes, net of discount 722,908
Note payable, long-term portion 858,218
Other long-term obligations 45,000
Stockholders' equity 6,002,361
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