Exhibit 99.1
ZymoGenetics Reports First Quarter 2005 Financial Results;
Momentum Continues with Three Product Candidates in Clinical Development
SEATTLE--(BUSINESS WIRE)--May 5, 2005--ZymoGenetics, Inc.
(Nasdaq:ZGEN) today reported its financial results for the first
quarter ended March 31, 2005. The company reported a net loss for the
quarter of $18.8 million, or $0.33 per share, reflecting continuing
investment in the development of its pipeline of product candidates.
For the first quarter of 2004, ZymoGenetics had a net loss of $18.9
million, or $0.36 per share. The company ended the quarter in a strong
financial position, with $300.3 million of cash and investments.
"ZymoGenetics continues to build clinical momentum," stated Bruce
L.A. Carter, president and CEO. "We reported initial results of the
rhThrombin Phase 2 clinical trials and plan to start the pivotal Phase
3 study later this year. Clinical studies for TACI-Ig in four
indications are moving at a good pace, and we will report interim
results of the IL-21 Phase 1 study at the American Society of Clinical
Oncology annual meeting later this month," added Dr. Carter.
Revenues for the quarter increased to $12.0 million, compared to
$5.7 million for the same period in the prior year. The increase
resulted from higher option and license fee revenues. In the first
quarter of 2005, the company completed a license agreement with Eli
Lilly and Company related to certain human Protein C patents and
received a one-time lump sum payment. Additionally, approximately $3.5
million of deferred revenue was recognized related to two major
transactions completed in the fourth quarter of 2004: the strategic
alliance with Serono S.A. and the license of recombinant Factor XIII
to Novo Nordisk A/S.
Operating expenses for the quarter increased, as expected.
Expenses increased by 24% to $30.5 million, compared to $24.6 million
for the first quarter of 2004. The increase largely resulted from
higher costs related to the company's product development programs.
The company has continued to ramp-up its development efforts over the
past year, with the start of clinical trials for Interleukin-21 in
metastatic melanoma and renal cell carcinoma and the expansion of the
TACI-Ig program into four ongoing clinical trials in systemic lupus
erythematosus, rheumatoid arthritis, multiple myeloma and
non-Hodgkin's lymphoma. Additionally, costs have increased related to
rhThrombin market research and pre-launch planning, and start-up of
operations in the company's new pilot-scale protein manufacturing
facility.
Company Highlights
The company's clinical development programs continued to advance
in 2005, demonstrated by the following highlights:
rhThrombin
-- Presented summary results of four Phase 2 clinical studies in
130 patients undergoing peripheral artery bypass surgery,
spinal surgery, arteriovenous graft construction or liver
resection surgery. Study results showed that rhThrombin
appeared to be safe and well tolerated, there was no evidence
of increased incidence of antibody formation relative to
placebo, and the anticipated hemostatic effect was
demonstrated.
-- Completed manufacture and release of rhThrombin drug product,
using the commercial manufacturing process, for use in the
Phase 3 pivotal study.
-- Completed Phase 2 data analysis and developed proposed pivotal
study design to support an End of Phase 2 meeting with FDA,
which has been scheduled in late June.
TACI-Ig
-- Together with its collaborator Serono, continued to treat
patients in four Phase 1b clinical studies in systemic lupus
erythematosus, rheumatoid arthritis, multiple myeloma and
Non-Hodgkin's lymphoma.
-- Completed enrollment in the "proof of concept" part of the
rheumatoid arthritis study, in which 24 patients will receive
bi-weekly doses of TACI-Ig or placebo.
IL-21
-- Completed treatment and follow-up of the first 12 patients in
the Phase 1 study of IL-21 in metastatic melanoma and
metastatic renal cell carcinoma.
-- Interim Phase 1 study results accepted for oral presentation
at the American Society of Clinical Oncology (ASCO) 2005
annual meeting, May 13-17 in Orlando, Florida.
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.
Forward-Looking Statements
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 ZymoGenetics' public filings with the Securities and Exchange
Commission, including ZymoGenetics' Annual Report on Form 10-K for the
year ended December 31, 2004. 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,
------------------
2005 2004
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Revenues:
Royalties $ 2,381 $ 2,410
Option fees 2,659 1,875
License fees and milestone payments 6,915 1,404
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Total revenues 11,955 5,689
Operating expenses:
Research and development, excluding noncash
stock-based compensation 23,595 19,063
General and administrative, excluding noncash
stock-based compensation 5,674 3,935
Noncash stock-based compensation expense 1,245 1,572
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Total operating expenses 30,514 24,570
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Loss from operations (18,559) (18,881)
Other expense, net (228) (15)
-------- --------
Net loss $(18,787)$(18,896)
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Basic and diluted net loss per share $ (0.33)$ (0.36)
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Weighted-average number of shares used in
computing net loss per share 57,672 52,701
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BALANCE SHEETS
(in thousands)
March 31, December 31,
2005 2004
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(unaudited)
Cash, cash equivalents and short-term
investments $ 300,288 $ 324,998
Other current assets 10,039 9,512
Property and equipment, net 72,103 71,960
Other assets 5,563 5,714
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Total assets $ 387,993 $ 412,184
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Current liabilities $ 33,712 $ 37,149
Lease obligations 66,225 66,085
Other non-current liabilities 26,604 30,400
Shareholders' equity 261,452 278,550
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Total liabilities and shareholders'
equity $ 387,993 $ 412,184
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CONTACT: ZymoGenetics, Inc.
John Calhoun, 206-442-6744 (Investor Relations)
Susan W. Specht, 206-442-6592 (Media Relations)