EXHIBIT 99.1
ZymoGenetics Reports First Quarter 2004 Financial Results
SEATTLE--(BUSINESS WIRE)--May 6, 2004--ZymoGenetics, Inc.
(Nasdaq:ZGEN) today reported its financial results for the first
quarter ended March 31, 2004. The company reported a net loss for the
quarter of $18.9 million, or $0.36 per share, reflecting continuing
investment in its pipeline of product candidates. For the first
quarter of 2003, ZymoGenetics had a net loss of $13.5 million, or
$0.29 per share. The company ended the quarter in a strong financial
position, with $285.0 million of cash and investments.
"ZymoGenetics is off to a good start in 2004," stated Bruce L.A.
Carter, president and CEO. "We have made significant progress with the
start of rhThrombin Phase 2 clinical trials, completion of a Phase 1
trial of TACI-Ig in healthy volunteers, the filing and clearance of
our IND application for IL-21, and the completion of an important
licensing agreement for IL-20," added Dr. Carter.
Revenues for the quarter decreased by 9% to $5.7 million, compared
to $6.2 million for the same period in the prior year. The decrease
resulted from lower license fees and milestone payments. Revenues
recorded in the 2003 quarter included a milestone payment from Novo
Nordisk related to development of IL-21 outside North America. In the
2004 quarter, the company received a $4 million upfront payment
related to an IL-20 license, but $3.6 million of this amount has been
deferred and will be recognized as revenue over the remainder of 2004.
Operating expenses for the quarter increased, as expected.
Expenses increased by 20% to $24.6 million, compared to $20.5 million
for the first quarter of 2003. The increase largely resulted from
higher costs related to the company's product development programs.
ZymoGenetics is developing a broad pipeline of proprietary therapeutic
protein product candidates and expects shortly to begin clinical
trials of its fourth product candidate, IL-21. The company has ramped
up its development efforts significantly over the past year, both
through the addition of experienced personnel and the expansion of
outsourced development work, such as process development,
manufacturing and preclinical testing.
Company Highlights
To date in 2004, ZymoGenetics has taken a number of important
steps in support of its business plan, including the following:
-- Completed patient treatment in a Phase 1 rhThrombin clinical
trial and began Phase 2 clinical studies of rhThrombin, which
will address the control of bleeding in four different
surgical settings: liver resection, lumbar spine surgery,
lower extremity peripheral artery bypass surgery, and
formation of vascular access grafts for dialysis.
-- Together with its collaborator Serono, completed treatment of
subjects in a Phase 1 clinical trial of TACI-Ig, examining the
effects of treatment in healthy volunteers.
-- Filed an IND application for Interleukin 21 (IL-21) and
received agreement from the Food and Drug Administration to
begin a Phase 1 clinical study examining the effects of IL-21
in treating metastatic melanoma and renal cell carcinoma
patients.
-- Completed a license agreement with Novo Nordisk A/S, granting
exclusive rights in North America to ZymoGenetics' patents
covering Interleukin 20 (IL-20) for which the company received
a $4 million initial license fee, along with potential
milestone and royalty payments.
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. The Company is
developing a diverse pipeline of potential proprietary product
candidates that are moving into and through clinical development.
These span a wide array of clinical opportunities that include
bleeding, autoimmune diseases and cancer. 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, 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
March 31,
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2004 2003
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Revenues:
Royalty revenue $2,410 $2,396
Option fee 1,875 1,875
License fees and milestone payments 1,404 1,962
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Total revenues 5,689 6,233
Operating expenses:
Research and development, excluding noncash
stock-based compensation 20,033 15,675
General and administrative, excluding noncash
stock-based compensation 2,965 3,094
Noncash stock-based compensation expense 1,572 1,766
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Total operating expenses 24,570 20,535
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Loss from operations (18,881) (14,302)
Other income (expense), net (15) 831
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Net loss $(18,896)$(13,471)
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Basic and diluted net loss per share $(0.36) $(0.29)
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Weighted-average number of shares used in
computing net loss per share 52,701 45,871
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BALANCE SHEETS
(in thousands)
(Unaudited)
March 31, December 31,
2004 2003
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Cash, cash equivalents and short-term
investments $284,998 $299,892
Other current assets 8,834 8,652
Property and equipment, net 65,756 62,341
Other assets 5,218 5,024
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Total assets $364,806 $375,909
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Current liabilities $22,212 $21,131
Lease obligation 50,666 50,570
Construction advance from landlord 11,793 7,918
Other non-current liabilities 8,405 8,375
Shareholders' equity 271,730 287,915
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Total liabilities and shareholders'
equity $364,806 $375,909
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CONTACT: ZymoGenetics, Inc.
Susan W. Specht, 206-442-6592