Exhibit 99.1
ZymoGenetics Reports Second Quarter 2003 Financial Results; rFactor
XIII Development Progress Highlights Quarter
SEATTLE--(BUSINESS WIRE)--Aug. 7, 2003--ZymoGenetics, Inc.
(Nasdaq:ZGEN) today reported its financial results for the second
quarter and six months ended June 30, 2003. For the three months ended
June 30, 2003, the company reported a net loss of $13.4 million, or
$0.29 per share, reflecting ongoing investment in the advancement of
its pipeline of therapeutic protein product candidates. This compares
to a net loss of $15.1 million, or $0.33 per share, in the comparable
2002 period. For the six months ended June 30, 2003, the company's net
loss was $26.6 million, or $0.58 per share, versus a net loss of $26.9
million, or $0.73 per share, in the prior-year period.
The company ended the quarter in a strong financial position, with
$253 million of cash and investments.
"This past quarter we continued to make timely progress on our
development programs," commented Bruce L. A. Carter, Ph.D., President
and Chief Executive Officer of ZymoGenetics. "In addition to the
recently reported results with rFactor XIII which showed that it
appeared to be safe and well tolerated, we are advancing two other
rFactor XIII studies which we expect to be completed by year-end. We
also intend to initiate clinical studies with two additional product
candidates this year, recombinant human Thrombin, for the treatment of
bleeding in surgical settings, and TACI-Ig, for the treatment of
autoimmune disease. Our goal remains the initiation of six clinical
studies in total in 2003 involving three different product
candidates."
Revenues for the quarter decreased to $5.7 million, from $7.0
million for the same period in the prior year. For the six-month
year-to-date period, revenues decreased to $12.0 million in 2003, from
$12.8 million in 2002. For both the three-month and six-month periods,
the decrease resulted from reduced revenues from license fees and
milestone payments, which are transaction-based. This decrease was
partially offset by increased royalties earned on sales of licensed
products, primarily insulin.
Operating expenses for the quarter decreased to $21.1 million,
compared to $24.0 million for the second quarter of 2002. For the six
months ended June 30, 2003, operating expenses decreased to $42.9
million in 2003, from $43.3 million in 2002. The company experienced
cost increases in 2003 related to personnel supporting its product
development programs and occupancy costs resulting from the sale and
leaseback of the company's facilities in October 2002. These
increases, however, were more than offset by cost reductions related
to contracted services and legal fees, and a write-off of construction
design costs in 2002 related to a discontinued construction project.
ZymoGenetics is developing a broad pipeline of proprietary
therapeutic protein product candidates, including: 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, in collaboration with Serono
S.A., for the treatment of autoimmune diseases, including Systemic
Lupus Erythematosus. Additionally, the Company is developing IL-21 for
the treatment of cancer and intends to begin clinical development with
this protein in the first half of 2004.
Recent Highlights
-- Completed a Phase 1 single-dose escalation study in the United
Kingdom to evaluate the safety and pharmacokinetics of rFactor
XIII in healthy volunteers. The results of this study,
reported at the International Society on Thrombosis and
Haemostasis, showed that rFactor XIII appeared to be safe with
no serious adverse events reported.
-- Initiated a Phase 1 multi-dose escalation study in the United
Kingdom to test the safety and pharmacokinetics of repeat
doses of rFactor XIII in healthy volunteers. The results of
this study are expected to be available by the end of the
year.
-- Continued enrollment in a Phase 1 study designed to evaluate
the safety and pharmacokinetics of rFactor XIII in subjects
who are genetically deficient for Factor XIII. The results of
this study, taking place at Children's Hospital of Orange
County (CHOC), in California, are expected to be available by
the end of the year.
-- Announced that the U.S. Food and Drug Administration has
granted orphan drug designation for rFactor XIII for the
treatment of Factor XIII congenital deficiency.
-- Filed a shelf registration statement with the Securities and
Exchange Commission in July to offer and sell up to $150
million of the Company's common stock. The terms of any stock
offerings will be established at the time of the offering.
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 potential proprietary product candidates. ZymoGenetics
intends to commercialize these product candidates through internal
development, collaborations with partners, and out-licensing of
patents from 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 Six Months Ended
June 30, June 30,
------------------- -----------------
2003 2002 2003 2002
-------- -------- -------- --------
Revenues:
Royalties $ 2,364 $ 1,878 $ 4,760 $ 4,029
Option fee 1,875 1,875 3,750 3,750
License fees and milestone
payments 1,482 3,207 3,444 4,980
-------- -------- -------- --------
Total revenues 5,721 6,960 11,954 12,759
Operating expenses:
Research and development,
excluding noncash
stock-based compensation 15,893 16,430 32,569 30,702
General and administrative,
excluding noncash
stock-based compensation 3,329 5,739 6,673 8,939
Noncash stock-based
compensation expense 1,898 1,820 3,664 3,626
-------- -------- -------- --------
Total operating expenses 21,120 23,989 42,906 43,267
-------- -------- -------- --------
Loss from operations (15,399) (17,029) (30,952) (30,508)
Interest and other income, net 1,971 1,896 4,388 3,573
-------- -------- -------- --------
Net loss (13,428) (15,133) (26,564) (26,935)
Preferred stock dividends and
accretion - - - (1,718)
-------- -------- -------- --------
Net loss attributable to
common shareholders $(13,428) $(15,133) $(26,564) $(28,653)
======== ======== ======== ========
Basic and diluted net loss per
share $ (0.29) $ (0.33) $ (0.58) $ (0.73)
======== ======== ======== ========
Weighted-average number of
shares used in computing
basic and diluted net loss
per share 46,016 45,751 45,944 39,325
======== ======== ======== ========
BALANCE SHEETS
(in thousands)
(Unaudited)
June 30, December 31,
2003 2002
-------- ---------
Cash, cash equivalents and short-term
investments $253,089 $285,438
Other current assets 8,116 5,970
Property and equipment, net 18,890 17,253
Other assets 4,641 3,572
-------- --------
Total assets $284,736 $312,233
======== ========
Current liabilities $ 16,123 $ 20,131
Non-current deferred revenue 5,338 6,524
Non-current deferred gain on sale of assets 12,726 13,206
Other non-current liabilities 4,266 3,104
Shareholders' equity 246,283 269,268
-------- --------
Total liabilities and shareholders' equity $284,736 $312,233
======== ========
CONTACT: ZymoGenetics, Inc., Seattle
Investor Relations:
Charles E. Hart, 206-442-6744
Media Relations:
Susan W. Specht, 206-442-6592