Exhibit 99.1
Interleukin Genetics Reports Second Quarter Financial Results
WALTHAM, Mass.--(BUSINESS WIRE)--Aug. 11, 2003--Interleukin
Genetics, Inc. (OTCBB: ILGN) a leader in the development of DNA
testing products to help identify risk for and prevent diseases in
which inflamation plays a key role today reported financial results
for the quarter ended June 30, 2003.
Second Quarter 2003 Highlights:
-- Commenced a research project with Alticor Inc. to develop
genetic susceptibility and other clinical tests and screening
tools to validate the efficacy of nutritional supplements for
sale within Alticor's distribution network.
-- Received an additional $595,000 loan from an affiliate of
Alticor Inc. bearing interest at a variable rate equal to
Prime rate + 1% to retire notes issued in August 2002 with a
fixed 15% interest rate.
-- Awarded a patent for the discovery that certain common
variations in the Interleukin-1 (IL-1) genes are associated
with an increased risk for osteoporosis.
"Our strategic alliance with Alticor represents a significant new
chapter in the life of this company," stated Dr. Philip Reilly, Chief
Executive Officer of the company. "This alliance has provided us with
resources that are necessary for our success, and has given us access
to a world-wide distribution network through which to sell our
predictive testing products."
Second Quarter Financial Results:
Revenues for the quarter were $633,000 compared to $14,000 in the
second quarter of 2002. In 2003 the revenue included $625,000 in
research revenue and approximately $5,000 from test revenue.
Approximately $8,000 of the 2002 revenue was test revenue. The
increase in revenue was due to $625,000 in revenue from our research
agreement with Alticor. This research agreement is expected to produce
a total of $5,000,000 in revenue over the 24-month period ending March
2005. Costs of revenue increased to $382,000 for the quarter from $185
for the same quarter last year. The increased cost of revenue was due
to the increased costs associated with providing the research to
Alticor.
Selling, general and administrative expenses increased
approximately 6% to $603,000 for the quarter from $569,000 during the
same period last year. This increase was primarily the result of an
increase in legal expenses related to SEC compliance issues. Research
and development expense decreased to $476,000 during the three months
ended June 30, 2003 from $850,000 for the same quarter in 2002. This
decrease was primarily the result of a re-allocation of resources from
internally-funded research projects to the research projects funded by
Alticor that are included in costs of revenue.
For the quarter, the company reported a net loss of $948,000 or
$.04 per basic and diluted share as compared to a net loss of
$1,402,000 or $.07 per basic and diluted share for the same period
last year.
As of June 30, 2003, the company reported cash and cash
equivalents of $6,477,000 as compared with $734,000 at December 31,
2002. On July 1, 2003, the company repaid $595,000 principal and
interest to the holders of short-term promissory notes.
For the six months ended June 30, 2003, the Company reported
revenues of $662,000 and net loss of $2,614,000 or $0.11 per share
compared to revenues of $23,000 and net loss of $2,854,000 or $0.13
per share for the same period last year.
About Interleukin
Interleukin Genetics is a biotechnology company focused on
inflammation. The company uses functional genomics to develop
diagnostic, personalized nutritional and therapeutic products based on
the genetic variations in people to help prevent or treat diseases of
inflammation. Interleukin's TARxGET (Translating Advanced Research in
Genomics into more Effective Therapeutics) programs focus on the areas
of cardiovascular disease, rheumatoid arthritis and osteoporosis and
include the development of tests to assess a person's risk for heart
disease and osteoporosis as well as a test to help doctors and
patients choose the best course of therapy for rheumatoid arthritis.
These products will enable the managed care industry to improve
patient care and better allocate resources. In addition to its
research partnerships with numerous academic centers in the U.S. and
Europe, Interleukin's corporate collaborators include the leading
healthcare organizations, Kaiser Permanente and UnitedHealth Group.
For more information about Interleukin and its ongoing programs,
please visit http://www.ilgenetics.com
Certain statements contained herein are "forward-looking"
statements including statements regarding research revenues, royalties
and an equity milestone payments that we may receive, the availability
of credit facilities, the sufficiency of current and anticipated
resources to conduct planned operations into 2005, our ability to sell
our products through Alticor's world-wide distribution network, and
our ability to develop diagnostic, personalized nutritional and
therapeutic products to prevent or treat diseases of inflammation and
to enable the managed care industry to improve patient care and better
allocate resources. Because such statements include risks and
uncertainties, actual results may differ materially from those
expressed or implied by such forward-looking statements. Factors that
could cause actual results to differ materially from those expressed
or implied by such forward-looking statements include, but are not
limited to, our ability to develop diagnostic, personalized
nutritional and therapeutic products to prevent or treat diseases of
inflammation and to enable the managed care industry to improve
patient care and better allocate resources, our ability to market
products, our ability to receive $5.0 million in revenue over the
24-month period ending March 2005, our ability to achieve the
milestone that would result in an additional $2.0 million equity
milestone payment, our ability to receive advances against the $1.5
million working capital credit line, the actions of Alticor and
affiliates, which have voting control of our common stock on most
matters, including the efforts and success of Alticor and its
affiliates in developing and marketing products for which we would
receive a royalty, our ability to conduct planned operations into
2005, our ability to complete clinical research and data analysis,
meeting our clinical studies' endpoints, risk of market acceptance of
our products, risk of technology and products obsolescence, delays in
development of products, reliance on partners, competitive risks and
those risks and uncertainties described in our Form 10-Q for the three
months ended June 30, 2003, as filed on August 11, 2003, and in other
filings made by us with the Securities and Exchange Commission. We
disclaim any obligation or intention to update these forward-looking
statements.
Interleukin Genetics, Inc.
Financial Highlights
(Unaudited)
Balance sheet data June 30, 2003 December 31, 2002
Cash, cash equivalents and
marketable securities $ 6,477,270 $ 733,848
Total current assets 6,559,349 836,988
Total assets $ 6,997,522 $1,249,779
Total current liabilities 1,306,830 1,116,017
Total liabilities 3,933,091 2,634,339
Total shareholders' equity 3,064,431 (1,384,560)
Total liabilities and
shareholders' equity $ 6,997,522 $1,249,779
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
Statement of June 30, June 30, June 30, June 30,
operations data 2003 2002 2003 2002
Sales $632,909 $13,540 $661,647 $22,552
Gross profit 250,454 13,355 262,310 22,217
Research and
development 475,875 850,179 1,348,314 1,778,195
Selling, general,
and administrative
expense 603,441 569,240 1,296,153 1,111,707
Total operating
expenses 1,079,316 1,419,419 2,644,467 2,889,902
Loss from
operations (828,862) (1,406,064) (2,382,157) (2,867,685)
Total other income
and expense (119,274) 3,738 (231,588) 14,185
Net loss $(948,136) $(1,402,326) $(2,613,745) $(2,853,500)
Basic and diluted
loss per share $(0.04) $(0.07) $(0.11) $(0.13)
Weighted average
common shares
outstanding 23,161,926 21,434,403 23,140,230 21,431,380
CONTACT: Interleukin Genetics:
Fenel M. Eloi, 781-398-0700