Exhibit 99.1
ZymoGenetics Reports First Quarter 2003 Financial Results;
Initiation of Clinical Trials with rFactor XIII
Leads Product Development Activities
SEATTLE--(BUSINESS WIRE)--May 8, 2003--ZymoGenetics, Inc.
(Nasdaq:ZGEN) today reported its financial results for the first
quarter ended March 31, 2003.
The company reported a net loss for the quarter of $13.1 million,
or $0.29 per share, reflecting continuing investment in its portfolio
of clinical and preclinical stage product candidates. For the first
quarter of 2002, ZymoGenetics had a net loss of $11.8 million, or
$0.41 per share. The decrease in loss per share for 2003 reflects
increased shares outstanding following the company's initial public
offering completed in February 2002. The company ended the quarter in
a strong financial position, with $267.5 million of cash and
investments.
"The first quarter, and indeed the full year, of 2003 is one of
important transition for ZymoGenetics," stated Bruce L.A. Carter,
president and CEO. "We moved our first product candidate, recombinant
human Factor XIII, into clinical testing during the quarter. We intend
to advance TACI-Ig, which we are developing in partnership with
Serono, and recombinant human Thrombin into the clinic in the second
half of this year. We are focused on making steady progress,
delivering on our promises and producing what we believe will be a
rich pipeline of proprietary, clinical-stage therapeutic protein
product candidates."
Revenues for the quarter increased 7% to $6.2 million, compared to
$5.8 million for the same period in the prior year. The increase
resulted from both higher royalty revenue and higher revenue from
license fees and milestone payments. Revenues recorded in the 2003
quarter included a milestone payment earned upon designation of
Interleukin 21 (IL-21) as a development project by Novo Nordisk, which
is developing IL-21 outside North America under a license from
ZymoGenetics.
Operating expenses for the quarter increased 13% to $21.8 million,
compared to $19.3 million for the first quarter of 2002. The increase
largely resulted from increased product development costs and
increased rent expense resulting from the sale and leaseback of the
company's facilities in October 2002, which netted the Company
approximately $50 million.
ZymoGenetics is developing a broad pipeline of proprietary
therapeutic protein product candidates and intends to initiate
clinical development of three of these in 2003. These include rFactor
XIII for the treatment of congenital and acquired Factor XIII
deficiencies, recombinant human Thrombin (rhThrombin) as a topical
hemostat to control surgical bleeding and TACI-Ig for the treatment of
autoimmune diseases including Systemic Lupus Erythematosus.
Additionally, the Company is developing IL-21, its second product
candidate derived from its genomics research efforts, for the
treatment of cancer and intends to begin clinical studies with this
protein in the first half of 2004.
Company Highlights
To date in 2003, ZymoGenetics has made a number of important steps
in support of its business plan, including the following:
-- Initiated Phase I single-dose escalation studies in the United
States to evaluate the safety and pharmacokinetics of rFactor
XIII in patients with congenital Factor XIII deficiency, and
in the United Kingdom to evaluate the safety and
pharmacokinetics in healthy volunteers.
-- Completed enrollment for the Phase I rFactor XIII healthy
volunteer study being conducted in the UK.
-- Obtained an exclusive worldwide license under Aventis Behring
GmbH patents for the development of rFactor XIII as a
therapeutic protein, strengthening the company's proprietary
position with respect to rFactor XIII commercialization.
-- Progressed with manufacturing and preclinical studies for
rhThrombin as planned to support initiation of clinical
studies in the second half of 2003.
-- Progressed with preclinical toxicology studies and
manufacturing of TACI-Ig, being developed in collaboration
with Serono, to support initiation of clinical studies in the
second half of 2003 according to plan.
-- Signed a collaborative agreement with Novo Nordisk for the
preclinical development of IL-21, under which Novo Nordisk
reimbursed ZymoGenetics for a portion of its IL-21 development
costs incurred prior to the agreement, and agreed to equally
share all costs of the program going forward through the
filing of an IND by ZymoGenetics.
-- Began construction of a facility expansion that will provide
approximately 45,000 square feet of additional laboratory and
office space, including dedicated manufacturing suites
suitable for the production of clinical materials under GMP
conditions.
-- Signed a second license agreement with BioMimetics
Pharmaceuticals for the clinical development and
commercialization of recombinant human platelet-derived growth
factor (rhPDGF) for the regeneration and repair of hard
tissues, under ZymoGenetics' broad patent portfolio for PDGF.
About ZymoGenetics
ZymoGenetics is a biopharmaceutical company focused on the
discovery, development and commercialization of therapeutic proteins
for the prevention or treatment of human diseases. Using a product
discovery engine, comprising genomics, bioinformatics, protein
chemistry and preclinical biology, ZymoGenetics has generated a broad
pipeline of proprietary product candidates. ZymoGenetics intends to
commercialize these product candidates through internal development,
collaborations with biopharmaceutical partners, and out-licensing of
its extensive patent portfolio. For further information, visit
www.zymogenetics.com.
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are based on the current intent and
expectations of the management of ZymoGenetics. These statements are
not guarantees of future performance and involve risks and
uncertainties that are difficult to predict. ZymoGenetics' actual
results and the timing and outcome of events may differ materially
from those expressed in or implied by the forward-looking statements
because of risks associated with our unproven discovery strategy,
preclinical and clinical development, regulatory oversight,
intellectual property claims and litigation and other risks detailed
in the company's public filings with the Securities and Exchange
Commission, including the company's Annual Report on Form 10-K for the
year ended December 31, 2002.
ZYMOGENETICS, INC.
STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
------------------------
2003 2002
----------- ----------
Revenues:
Royalty revenue $2,396 $2,151
Option fee 1,875 1,875
License fees and milestone payments 1,962 1,773
----------- ----------
Total revenues 6,233 5,799
Operating expenses:
Research and development, excluding noncash
stock-based compensation 16,676 14,272
General and administrative, excluding
noncash stock-based compensation 3,344 3,201
Noncash stock-based compensation expense 1,767 1,806
----------- ----------
Total operating expenses 21,787 19,279
----------- ----------
Loss from operations (15,554) (13,480)
Interest and other income, net 2,417 1,677
----------- ----------
Net loss (13,137) (11,803)
Preferred stock dividend and accretion -- (1,718)
----------- ----------
Net loss attributable to common shareholders $(13,137) $(13,521)
=========== ==========
Basic and diluted net loss per share $(0.29) $(0.41)
=========== ==========
Weighted-average number of shares used in
computing basic and diluted net loss per
share 45,871 32,897
=========== ==========
BALANCE SHEETS
(in thousands)
(Unaudited)
March 31, December 31,
2003 2002
------------- -------------
Cash, cash equivalents and short-term
investments $267,543 $285,438
Other current assets 8,975 5,970
Property and equipment, net 17,088 17,253
Other assets 3,592 3,572
------------- -------------
Total assets $297,198 $312,233
============= =============
Current liabilities $17,484 $20,131
Non-current deferred revenue 5,529 6,524
Non-current deferred gain on sale of assets 12,966 13,206
Other non-current liabilities 3,496 3,104
Shareholders' equity 257,723 269,268
------------- -------------
Total liabilities and shareholders'
equity $297,198 $312,233
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CONTACT: ZymoGenetics
Investor Relations - Charles E. Hart, 206/442-6744
Media Relations - Susan W. Specht, 206/442-6592