Exhibit 99.1
ZymoGenetics Reports Third Quarter 2003 Financial Results;
Product Development Advancement is Supported by Enhanced Cash Reserves
SEATTLE--(BUSINESS WIRE)--Nov. 6, 2003--ZymoGenetics, Inc.
(Nasdaq:ZGEN) today reported its financial results for the third
quarter and nine months ended September 30, 2003. For the quarter
ended September 30, 2003, the company reported a net loss of $14.7
million, or $0.32 per share, compared to a net loss of $14.5 million,
or $0.32 per share, in the prior year period. For the nine months
ended September 30, 2003, the company's net loss was $41.2 million, or
$0.90 per share, versus a net loss of $41.4 million, or $1.04 per
share, in the comparable 2002 period.
The company's financial condition remained strong, with cash, cash
equivalents and short-term investments totaling approximately $235
million as of September 30, 2003. This reported amount does not
reflect approximately $71 million of net proceeds from a follow-on
offering of 6.1 million shares of common stock, which was completed in
October, further strengthening the company's financial condition.
"Our product development pipeline continues to advance on schedule
as demonstrated by the initiation of clinical trials with TACI-Ig this
past quarter," commented Bruce L. A. Carter, Ph.D., President and
Chief Executive Officer of ZymoGenetics. "With rFactor XIII and
TACI-Ig in the clinic now, and rhThrombin projected to begin clinical
development by year end, the company has become highly focused on
product development. As a result of the money raised from the
follow-on offering, we've strengthened our ability to move our lead
product candidates through development while continuing to advance our
pipeline of novel proteins that are at the preclinical stage."
Revenues for the quarter increased to $8.2 million versus $5.9
million for the same period in the prior year. The increase was
primarily attributable to a milestone payment earned related to the
initiation of TACI-Ig clinical trials.
Research and development expenses for the quarter increased to
$19.8 million, compared to $16.4 million for the comparable quarter of
2002. The increase was primarily attributable to increased product
development costs, including those resulting from higher development
staffing levels and external contracts for process development and
manufacturing of the company's product candidates. Additionally,
greater occupancy costs resulting from the sale and leaseback of the
company's facilities in October 2002 contributed to the increase.
Partially offsetting these increases were cost reimbursements earned
from Novo Nordisk related to the preclinical development of IL-21.
General and administrative expenses for the quarter declined to
$2.9 million, compared to $3.8 million for the comparable 2002
quarter. The decrease resulted largely from lower legal expenses and
general cost reduction initiatives undertaken by the company.
ZymoGenetics is developing a pipeline of proprietary therapeutic
protein product candidates including recombinant human Factor XIII
(rFactor XIII) for the treatment of bleeding complications associated
with 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 follow-on public offering of 6,100,000 shares of
common stock in October, including the purchase of 100,000
shares of common stock by the underwriters to cover
over-allotments, raising approximately $71 million.
-- Completed randomized placebo-controlled Phase 1 multi-dose
study with rFactor XIII in healthy volunteers. Results from
this study will be reported at the American Society of
Hematology (ASH) Meeting in December.
-- Completed Phase 1 rFactor XIII clinical trial in subjects who
are genetically deficient of Factor XIII. Data will be
presented at the ASH Meeting in December.
-- Announced manufacturing agreement with Abbott Laboratories in
early October to produce rhThrombin for late-stage clinical
studies and commercial supply.
-- Initiated human clinical trials with TACI-Ig in healthy
volunteers in late September, resulting in a milestone payment
to ZymoGenetics. TACI-Ig, being developed in partnership with
Serono, has the potential to be an important treatment for a
variety of immunological diseases, such as lupus and
rheumatoid arthritis, as well as other indications such as
B-cell cancers.
-- Strengthened business development efforts with the hiring of
Fredrik Henell as Senior Vice President of Business
Development.
Upcoming Event
ZymoGenetics senior management will hold an Analyst & Investor
Briefing on Thursday, December 11, from 9:30am to 1:00pm, at the Four
Seasons Hotel in New York City. To attend this session, contact Susan
Specht, phone # 206-442-6592.
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 that combines ZymoGenetics' strengths in biology,
protein chemistry, molecular and cellular biology and bioinformatics,
ZymoGenetics is developing a pipeline of potential proprietary product
candidates. These span a wide array of clinical opportunities,
including cardiovascular disease, autoimmune disease, cancer and
tissue repair. 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.
This Act provides a "safe harbor" for forward-looking statements to
encourage companies to provide prospective information about
themselves so long as they identify these statements as
forward-looking and provide meaningful cautionary statements
identifying important factors that could cause actual results to
differ from the projected results. In some cases, you can identify
forward-looking statements by terminology such as "anticipate,"
"believe," "continue," "could," "estimate," "expect," "intend," "may,"
"might," "plan," "potential," "predict," "should" or "will" or the
negative of those terms or comparable terminology. The forward-looking
statements in this press release 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, and its prospectus supplement filed with
the Commission on October 16, 2003. Except as required by law,
ZymoGenetics undertakes no obligation to update any forward-looking or
other statements in this press release, whether as a result of new
information, future events or otherwise.
ZYMOGENETICS, INC.
STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Revenues:
Royalties $ 2,325 $ 2,354 $ 7,085 $ 6,382
Option fee 1,875 1,875 5,625 5,625
License fees and milestone
payments 4,012 1,697 7,456 6,677
--------- --------- --------- ---------
Total revenues 8,212 5,926 20,166 18,684
Operating expenses:
Research and development,
excluding noncash
stock-based compensation 19,767 16,425 52,336 47,127
General and administrative,
excluding noncash
stock-based compensation 2,888 3,835 9,561 12,774
Noncash stock-based
compensation expense 1,707 1,816 5,371 5,441
--------- --------- --------- ---------
Total operating expenses 24,362 22,076 67,268 65,342
--------- --------- --------- ---------
Loss from operations (16,150) (16,150) (47,102) (46,658)
Interest and other income, net 1,479 1,684 5,867 5,257
--------- --------- --------- ---------
Net loss (14,671) (14,466) (41,235) (41,401)
Preferred stock dividends and
accretion - - - (1,718)
--------- --------- --------- ---------
Net loss attributable to
common shareholders $(14,671) $(14,466) $(41,235) $(43,119)
========= ========= ========= =========
Basic and diluted net loss per
share $ (0.32) $ (0.32) $ (0.90) $ (1.04)
========= ========= ========= =========
Weighted-average number of
shares used in computing
basic and diluted net loss
per share 46,221 45,770 46,037 41,477
========= ========= ========= =========
BALANCE SHEETS
(in thousands)
(Unaudited)
September 30, December 31,
2003 2002
------------- ------------
Cash, cash equivalents and short-term
investments $234,795 $285,438
Other current assets 12,584 5,970
Property and equipment, net 21,965 17,253
Other assets 4,602 3,572
--------- ---------
Total assets $273,946 $312,233
========= =========
Current liabilities $ 18,213 $ 20,131
Non-current deferred revenue 5,148 6,524
Non-current deferred gain on sale of assets 12,486 13,206
Other non-current liabilities 4,555 3,104
Shareholders' equity 233,544 269,268
--------- ---------
Total liabilities and shareholders' equity $273,946 $312,233
========= =========
CONTACT: ZymoGenetics, Inc.
Charles E. Hart, 206-442-6744 (Investor Relations)
Susan W. Specht, 206-442-6592 (Media Relations)