Exhibit 99.1
Interleukin Genetics Reports Third Quarter Financial Results
Conference Call Scheduled for 4:30 PM EST - November 8, 2006
WALTHAM, Mass.--(BUSINESS WIRE)--Nov. 8, 2006--Interleukin Genetics, Inc.
(AMEX: ILI) today reported financial results for its third quarter ended
September 30, 2006.
The Company reported revenue of $1.3 million and a net loss of $1.8
million, or $(0.07) per basic and diluted common share, for the quarter.
Interleukin Genetics' reported revenues resulted from the processing of genetic
assessment tests for cardiovascular health risk and general nutrition and, for
the period from the August 17, 2006 acquisition of the Alan James Group through
the end of the quarter, from the sale of nutritional supplement products in
food, drug, and mass retail outlets.
"These revenue results demonstrate continued consumer interest in our
predictive genetic tests for heart health and general nutrition," said Tim
Richerson, Interleukin Genetics' CEO. "In addition, since August 17, 2006, we
have been recognizing revenues from the sale of consumer-directed nutritional
supplements by the Alan James Group business. Interleukin's DNA laboratory and
genetics testing service are now firmly in place, and we are developing new
opportunities to build that part of the business. As for our nutritional
products line, the business is solid across our retail customers, and we look
forward to expanding our retail revenue stream in the coming quarters."
Operating highlights for the quarter ended September 30, 2006, included:
-- On August 17, 2006, the Company acquired the business and assets of
the Alan James Group, a privately held, healthcare-focused consumer
products company for initial consideration of approximately $7.0
million in cash and $0.5 million in stock.
-- Concurrent with the Alan James Group acquisition, the Company secured
$30.0 million in equity and debt financing through its majority
stockholder, Alticor.
-- The Company continued preparations for a $14 million rights offering
expected to be initiated during the fourth quarter of 2006 to
stockholders of record as of August 17, 2006.
-- The Company initiated a study with Yonsei University in Seoul, Korea
to study the link between interleukin-1 (IL-1) gene variations and
vertebral fractures in post-menopausal Korean women. The study results
will augment data from a similar study in Caucasian women that the
Company previously conducted, and is intended for use in the
development of new genetic tests.
-- The Company entered into a one-year research agreement with Alticor to
develop its technology in dermagenomics.
Revenue for the three months ended September 30, 2006, was $1.3 million
compared to $6,000 in the same period of 2005. The increase was due to revenues
of $660,000 received from the processing of genetic testing products launched in
the first quarter of 2006 (specifically the cardiovascular health and general
nutrition genetic tests) and $675,000 from branded nutritional supplements sold
to large retail outlets by the Alan James Group. Interleukin continues to
anticipate variability of sales from its genetic testing services business due
to the uncertainty inherent in the introduction of new genetic tests.
Cost of genetic testing revenue, including fixed overhead costs associated
with laboratory operations, was $332,000 for the quarter, resulting in a gross
profit from genetic testing of $328,000, or 50% of revenue. Cost of nutritional
supplement products revenue was $675,000 (from the August 17, 2006 acquisition
of that business until the end of the quarter), resulting in no gross profit
from the sale of these products. This was due to the acquisition of such
inventory at fair value. The Company expects there to be little to no gross
profit on these products until the acquired inventory is sold. Thereafter, gross
margins of the nutritional supplement products are expected to return to
historical levels of between 45% and 50%.
Research and development expenses were $686,000 for the quarter ended
September 30, 2006, compared to $739,000 for the quarter ended September 30,
2005, a decrease of approximately 7%. This decrease was due to cost reductions
offset by expenses related to the recording of $73,000 for stock-based
compensation, classified as research and development expense, as a result of new
accounting rules.
General and administrative expenses were $1.2 million for the three months
ended September 30, 2006, compared to $641,000 during the same period in the
prior year, an increase of approximately 94%. This increase was primarily
attributable to costs associated with the operation of the Alan James Group
business acquired August 17, 2006, as well as recording $265,000 for stock-based
compensation, classified as selling, general and administrative expense, as a
result of new accounting rules.
Amortization of intangible assets was $132,000 for the three months ended
September 30, 2006, compared to $8,000 during the same period in the prior year.
This increase was primarily attributable to amortization expense associated with
acquisition-related intangible assets. The Company reported a net loss of $1.8
million, or $(.07) per basic and diluted common share, for the third quarter of
2006 compared to a net loss of $1.5 million, or $(.06) per basic and diluted
common share, for the third quarter of 2005.
On September 30, 2006, the Company reported cash and cash equivalents of
$9.9 million compared to $3.4 million of cash and cash equivalents on December
31, 2005. In addition, on September 30, 2006, the Company had access to $17.9
million under credit facilities with Alticor.
Conference Call Details
To access the live call on November 8, 2006, at 4:30 PM EST, dial (800)
819-9193 (domestic) or (913) 981-4911 (international). The call will also be
available live via webcast at www.ilgenetics.com.
Replay access of the teleconference will be available for two weeks
following the call by calling (888) 203-1112 (domestic) or (719) 457-0820
(international). The passcode for the replay will be 5825472. The webcast will
be archived following the call at www.ilgenetics.com.
About Interleukin
Interleukin Genetics is a biotechnology company focused on developing,
acquiring, and commercializing personalized health products. The company uses
functional genomics to help in the development of risk assessment tests,
pharmacogenetic tests, nutritional and therapeutic products based on the genetic
variations in people. Interleukin Genetics has commercialized genetic tests for
periodontal disease risk assessment, cardiovascular risk assessment, and general
nutrition assessment. In addition, Intereleukin's Alan James Group subsidiary
sells nutraceutical brands, including Ginkoba(R), Ginsana(R), and Venastat(R)
through the nation's largest food, drug and mass retailers. Interleukin's
current development programs focus on osteoporosis and weight management genetic
risk assessment tests, as well as its new proprietary OTCeutical(TM) products
for distribution through the Alan James Group. Interleukin expects that these
programs will also lead to the personalized selection of nutritional and
therapeutic products, and provide consumers and healthcare professionals with
better preventative product alternatives. 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 our ability to develop diagnostic, personalized
nutritional and therapeutic products to prevent or treat diseases of
inflammation and other genetic variations, our ability to screen nutritional
compounds for their effects on inflammatory responses and other genetic
variations, given specific genetic patterns, our ability to make progress in
advancing our core technologies, and our expectations regarding fiscal year 2006
revenues and gross profit margins of our nutritional supplement products.
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, the risk of market acceptance of our products, the risk of
technology and product obsolescence, delays in product development, the
performance of our commercial partners, the availability of adequate capital,
the actions of our competitors and other competitive risks, our ability to
integrate acquired businesses, our ability to maintain relationships with our
important customers, and those risks and uncertainties described in our annual
report on Form 10-K for the year ended December 31, 2005 filed with the
Securities and Exchange Commission, our quarterly reports on Form 10-Q and 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
Balance sheet data September December
30, 2006 31, 2005
(Unaudited) (Audited)
- -------------------------------------------- ------------ -----------
Cash and cash equivalents $9,884,140 $3,415,174
Total current assets 13,992,514 3,589,656
Total assets $25,043,076 $4,970,075
Total current liabilities $2,632,527 $3,014,742
Total liabilities 9,249,115 4,686,330
Total shareholders' equity 15,793,961 283,745
Total liabilities and shareholders' equity $25,043,076 $4,970,075
Three Months Ended Nine Months Ended
Statement of
operations data September September September September
(Unaudited) 30, 2006 30, 2005 30, 2006 30, 2005
- ----------------- ------------ ------------ ------------ ------------
Revenue $1,334,931 $5,690 $2,911,845 $20,743
Gross profit 327,994 5,690 1,298,974 20,743
Research and
development
expenses 685,814 738,865 2,254,284 2,031,727
Selling, general
and
administrative
expenses 1,245,918 641,384 2,868,615 2,392,584
Amortization of
intangible
assets 131,584 8,380 155,838 24,822
------------ ------------ ------------ ------------
Total operating
expenses 2,063,316 1,388,629 5,278,737 4,449,133
------------ ------------ ------------ ------------
Loss from
operations (1,735,322) (1,382,939) (3,979,763) (4,428,390)
Total other
income and
expense (98,327) (124,582) (366,546) (387,886)
------------ ------------ ------------ ------------
Net loss $(1,833,649) $(1,507,521) $(4,346,309) $(4,816,276)
============ ============ ============ ============
Basic and diluted
loss per share $(0.07) $(0.06) $(0.18) $(0.20)
Weighted average
common shares
outstanding 25,745,809 23,689,490 24,658,213 23,649,365
CONTACT: For Interleukin Genetics:
Janet Perry, 781-398-0700