Exhibit 99.1
VaxGen Announces Fourth-Quarter and Full-Year Financial Results
Results to be Reviewed on Conference Call and Webcast Today
BRISBANE, Calif., Feb. 11 -- VaxGen, Inc. today announced financial
results for the fourth quarter and the year ended December 31, 2002.
For the fourth quarter ended December 31, 2002, VaxGen reported revenue of $1.2
million and a net loss of $10.4 million, or 68 cents per share, before non-cash
charges attributable to a redeemable convertible preferred stock financing that
closed in May 2001. For the fourth quarter of 2001, VaxGen reported revenue of
$474,000 and a net loss of $6.4 million, or 45 cents per share, before non-cash
charges attributable to the 2001 financing.
Including non-cash charges associated with the 2001 financing, the net loss
applicable to common stockholders for the fourth quarter of 2002 was $22.0
million, or $1.46 per share. The majority of the non-cash charge was associated
with the contingent beneficial conversion feature related to VaxGen's
outstanding preferred stock, which was triggered in the fourth quarter. These
results compare to a net loss applicable to common stockholders of $7.1 million,
or 50 cents per share, in the fourth quarter of 2001.
During the fourth quarter of 2002, 16,200 of the original 20,000 preferred
shares issued in conjunction with 2001 financing were converted into 1,172,436
shares of VaxGen common stock. The converted shares included shares issued for
accrued but unpaid dividends. The conversion eliminated $16.2 million of
redeemable convertible preferred debt from VaxGen's balance sheet.
VaxGen ended the year with $18 million in available cash and investment
securities.
Carter A. Lee, VaxGen's senior vice president of Finance and Administration,
said: "We are pleased with our operating results for the most recent quarter.
Contract revenue increased 77%, and our cash reserves and operating expenses
were in line with our expectations. The increase in R&D and G&A expenses reflect
investments in our new manufacturing facility and the hiring of manufacturing
and regulatory personnel, all of which will be needed to commercialize our
vaccine candidates, if they prove effective and are licensed. Lastly, we are
particularly pleased that so much of the potential mezzanine debt on our balance
sheet was eliminated with the conversion of most of the preferred stock."
For the year ended December 31, 2002, VaxGen reported revenue of $1.6 million
and a net loss of $31.7 million, or $2.18 per share, before non-cash charges
attributable to the 2001 financing. That compares with revenue of $895,000 and a
net loss of $24.4 million, or $1.72 per share, for the year ended December 31,
2001.
Including non-cash charges associated with the 2001 financing, the net
loss applicable to common stockholders for 2002 was $45.7 million, or $3.13 per
share, compared with a net loss of $26.9 million, or $1.90 per share, for 2001.
VaxGen will hold a conference call and webcast today at noon, EST, to discuss
its 4th quarter and full year financial results and 2003 business outlook. The
company will not comment on its Phase III clinical trial in North America and
Europe, results from which are expected to be announced before the end of March.
Participants are asked to dial in to the live call five minutes before the start
of the presentation. The following information will provide access to the
webcast, conference call and replay, which will be available for 72 hours after
the live call.
Live Call: Domestic: 1-800-915-4836
International: 1-973-317-5319
No passcode required
Replay: Domestic: 1-800-428-6051
International: 1-973-709-2089
Passcode 282828
The webcast can be found by clicking on "Fourth Quarter Conference Call and
Webcast" under "Company Presentations" in the Investor Relations section of
VaxGen's web site at www.vaxgen.com/invest. This will bring up a window from
CCBN. Then click on the webcast link to view the accompanying slide
presentation.
VaxGen is focused on the commercial development of biologic products for the
prevention and treatment of human infectious diseases and is currently
developing vaccine candidates against HIV/AIDS, anthrax and smallpox. VaxGen is
testing its HIV/AIDS vaccine candidates in two Phase III trials, one in the
U.S., Canada, the Netherlands and Puerto Rico, and a second one in Thailand. The
company plans to announce results from the trial in North America and Europe in
the first quarter of 2003, and results from the Thailand trial in the second
half of 2003. The results from the trials are not yet known to VaxGen. VaxGen is
also the largest shareholder of Celltrion, Inc., a joint venture formed to
provide manufacturing services, principally for products produced in mammalian
cell culture, including VaxGen's HIV/AIDS vaccine candidate if it proves
effective. VaxGen is located in Brisbane, Calif. For more information, please
visit the company's web site at: www.vaxgen.com.
NOTE: This press release contains "forward-looking statements" within the
meaning of the federal securities laws. These forward-looking statements include
without limitation statements regarding the progress, timing, and possible
results of clinical trials or development efforts for AIDSVAX or our smallpox
and anthrax vaccine candidates, including the commencement or completion of any
clinical trials and the announcement of data from our AIDSVAX Phase III clinical
trials; our plans as to the expected use of the Celltrion facility; estimates of
the future demand and competition for mammalian cell fermentation capabilities
and our beliefs as to the business opportunities and future competitive strength
of Celltrion. These statements are subject to risks and uncertainties that could
cause actual results and events to differ materially from those anticipated.
Reference should be made to VaxGen's Quarterly Report on Form 10-Q, filed with
the Securities and Exchange Commission on November 14, 2002, under the heading
"Risk Factors" and to VaxGen's Annual Report on Form 10-K, filed with the
Securities and Exchange Commission on April 1, 2002, under the heading
"Business" for a more detailed description of such factors. Readers are
cautioned not to place undue reliance on these forward-looking statements that
speak only as of the date of this release. VaxGen undertakes no obligation to
update publicly any forward-looking statements to reflect new information,
events, or circumstances after the date of this release except as required by
law.
VaxGen, Inc.
Condensed Statements of Operations (unaudited)
(In thousands, except for per share data)
Quarter Quarter Year Year
Ended Ended Ended Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2002 2001 2002 2001
Revenues:
Contract revenue $ 685 $ 474 $ 1,055 $ 895
Related party revenue 527 -- 527 --
Total revenue 1,212 474 1,582 895
Operating Expenses:
Research and development (7,077) (3,988) (20,975) (16,701)
General and administrative (4,695) (3,611) (14,373) (11,823)
Loss from operations (10,560) (7,125) (33,766) (27,629)
Other income, net 205 728 2,022 3,255
Net loss (10,355) (6,397) (31,744) (24,374)
Charges attributable to redeemable
convertible preferred stock (11,673) (751) (13,909) (2,484)
Net loss applicable to common
shareholders $(22,028) $ (7,148) $(45,653) $(26,858)
Net loss per share, basic and
diluted $ (0.68) $ (0.45) $ (2.18) $ (1.72)
Net loss per share applicable to
common shareholders, basic and
diluted $ (1.46) $ (0.50) $ (3.13) $ (1.90)
Weighted average shares used in
computing basic and diluted loss
per share 15,127 14,226 14,567 14,145
VaxGen, Inc
Condensed Balance Sheets (unaudited)
(In thousands)
December 31, December 31,
2002 2001
Assets:
Cash and investment securities $19,054 $48,410
Accounts receivable (contracts and
related party) 1,408 436
Property and equipment, net 3,309 2,987
Other assets 4,276 1,539
Total Assets $28,047 $53,372
Liabilities and Stockholders' Equity:
Current liabilities $10,202 $ 4,944
Other liabilities -- 22
Redeemable convertible preferred stock 3,349 15,845
Stockholders' equity 14,496 32,561
Total Liabilities and Stockholders'
Equity $28,047 $53,372