[LOGO KERYX BIOPHARMACEUTICALS] NEWS
For Immediate Release
KERYX CONTACT:
Ron Bentsur
Director of Investor Relations
Keryx Biopharmaceuticals, Inc.
Tel: +972 2 541 3500
E-mail: ron@keryx.com
KERYX BIOPHARMACEUTICALS, INC. ANNOUNCES FOURTH QUARTER AND YEAR END 2002
FINANCIAL RESULTS AND REPORTS ON SUCCESSFUL IMPLEMENTATION OF RESTRUCTURING
PROGRAM
NEW YORK, NEW YORK, March 31, 2003 - Keryx Biopharmaceuticals, Inc. (NASDAQ:
KERX; AIM: KRX), a biopharmaceutical company engaged in the acquisition,
development and commercialization of novel pharmaceutical products for the
treatment of serious, life-threatening diseases, including diabetes and cancer,
today released financial results for the fourth quarter and year ended December
31, 2002. Keryx also reported the successful implementation of its restructuring
program. This program has resulted in an approximate 70% reduction in staff and
a re-focus of the Company's efforts primarily towards the development of its
lead compound, KRX-101, which has successfully completed a Phase 2 trial for the
treatment of diabetic kidney disease (diabetic nephropathy), and is expected to
enable the Company to pursue potential acquisitions of additional clinical-stage
drug candidates.
At December 31, 2002, the Company reported cash, cash equivalents, interest
receivable and investment securities of $24.1 million compared to cash, cash
equivalents, interest receivable and investment securities of $37.9 million at
December 31, 2001.
The net loss for the quarter ended December 31, 2002 was $(2,797,000), or
$(0.14) per share, compared to a net loss of $(2,661,000), or $(0.13) per share,
for the quarter ended December 31, 2001, representing an increase of $136,000.
The increase in net loss in the forth quarter of 2002, as compared to the fourth
quarter of 2001, was primarily attributable to a $182,000 increase in research
and development expenses, specifically, increased pre-clinical formulation and
manufacturing costs associated with the KinAceTM technology and increased
facilities-related costs, partially offset by reduced personnel-related costs
and non-cash compensation. Further contributing to the increase in net loss was
a $120,000 decrease in net interest income, due to fewer funds available for
investment and significantly lower interest rates during the period. This was
partially offset by a $174,000 decline in general and administrative expenses.
Net loss for the year ended December 31, 2002 was $(11,783,000), or $(0.59) per
share, compared to a net loss of $(9,806,000), or $(0.50) per share, for the
year ended December 31, 2001, representing an increase of $1,997,000. The
increase in net loss in 2002, as compared to 2001, was primarily attributable to
a $742,000 increase in research and development expenses, specifically, costs
associated with the in-licensing of the Small Integrated Building-blocks (SIB)
technology, as
well as the in-licensing of the worldwide rights for the manufacturing process
of KRX-101, increased personnel and related costs, and increased
facilities-related costs, partially offset by a decline in non-cash
compensation. Further contributing to the increase in net loss was a $1,718,000
decrease in net interest income, due to fewer funds available for investment and
significantly lower interest rates during the period. This was partially offset
by a $337,000 decline in general and administrative expenses.
Commenting on the year, Michael S. Weiss, Keryx's newly appointed Chairman and
CEO, said, "2002 marked a year of change in our corporate strategy. In August
2002, Keryx implemented a significant restructuring plan designed to
substantially cut costs. I continued and expanded on this program upon assuming
the role of Chairman and CEO in December 2002. Pursuant to the implementation of
these cost cutting measures, we have dramatically decreased our early-stage
research expenditures. This enables us to focus on our lead product candidate,
KRX-101, as well as provides us with the necessary resources to potentially
in-license additional clinical-stage product candidates." Mr. Weiss added, "I
have made the decision to move Keryx away from early-stage research because I do
not believe that it is prudent for a company of our size to make significant
investments in preclinical discovery and development without partnership
support. As such, we continue to seek partners for our early-stage research
programs, however, our primary efforts are now on the development of
clinical-stage compounds. I believe this refocus will significantly benefit our
shareholders in the future."
Commenting on KRX-101, Mr. Weiss stated, "We believe that KRX-101 represents an
attractive, late-stage product opportunity. Because this drug has been primarily
developed in Europe, we believe that the U.S. marketplace has overlooked the
potential for this compound in the treatment of diabetic nephropathy. It is
recognized in the literature that heparinoids demonstrate beneficial effects in
in-vivo models of diabetic nephropathy. Additionally, members of this class of
compounds have been shown to decrease pathological albumin excretion in diabetic
nephropathy in man. However, their potential use in the long-term treatment of
diabetic nephropathy is limited by route of administration (I.V.) and their
anti-coagulant effects. KRX-101 is being developed as a novel heparinoid
compound to be given orally, without the anti-coagulant effects. Over 20
clinical trials have suggested that it has the potential to be safe and
effective in the treatment of diabetic nephropathy and other conditions,
including a randomized, placebo-controlled 223-patient Phase 2 trial (the DiNAS
study) conducted in Europe, which was published in the June 2002 issue of the
Journal of the American Society of Nephrology. In order to fully demonstrate the
value of KRX-101, Keryx intends to conduct a U.S.-based randomized
placebo-controlled clinical study of KRX-101 for the treatment of diabetic
nephropathy. We believe that this trial, which is currently being planned,
should confirm the efficacy of this drug previously seen in the DiNAS Phase 2
study." Mr. Weiss added, "We are excited to test KRX-101 in North America and
give U.S.-based physicians an opportunity to work with this promising new
compound. By acting through a novel mechanism that is different from the drugs
currently available to treat diabetic nephropathy, we believe that KRX-101
represents an exciting new drug for physicians treating this insidious disease.
Moreover, we believe that, if successfully concluded, this trial will
demonstrate the capabilities of KRX-101 in the treatment of diabetic nephropathy
and will add significant value to the program and to Keryx shareholders. At the
same time, we continue to opportunistically pursue partnership relationships for
KRX-101."
ABOUT KERYX BIOPHARMACEUTICALS, INC.
Keryx Biopharmaceuticals is a drug development company focused on innovative
therapies for cancer and diabetes. Keryx is developing KRX-101 (sulodexide), a
novel treatment for diabetic nephropathy, for which the Company is in the
process of planning its U.S.-based clinical program. Keryx is also seeking
in-licensing opportunities of additional clinical-stage drug candidates. In
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addition, Keryx is seeking partners for its novel KinAceTM drug discovery
technology, which allows for rapid and rational development of drug candidates
that target a vast range of protein kinases, and its associated product
candidates. Keryx is traded on NASDAQ (KERX) and the London AIM (KRX).
Cautionary Statement
Statements contained or referenced in this news release that are not historical
facts, including, but not limited to, statements concerning the clinical status,
possible approval and market potential of Keryx's drug candidates, Keryx's
ability to enter into pharmaceutical partnerships and its growth and future
operating results, including the availability of cash to meet its expected
operational requirements, may be forward-looking statements, as the term is
defined in the Private Litigation Reform Act of 1995. In some cases, you can
identify forward-looking statements by terminology such as "anticipate",
"estimate", "expect", "project", "hope", "should', "intend", "plan", "believe",
"scheduled", will" and other words and terms of similar meaning in connection
with any discussion of future operating or financial performance. Important
factors may cause Keryx's actual results to differ materially, including:
adverse results in its drug discovery and clinical development processes;
failure to obtain patent protection for its discoveries; commercial limitations
imposed by patents owned or controlled by third parties; difficulties or delays
in obtaining regulatory approvals to market products resulting from its
development efforts; the requirement for substantial funding to conduct research
and development, and to expand commercialization activities. Important factors
that might cause or contribute to such a discrepancy include, but are not
limited to, the risks discussed under the heading "Risk Factors" in our Annual
Report or Form 10-K, which has been filed with the Securities and Exchange
Commission. Any forward-looking statements set forth in or incorporated into
this news release speak only as of the date of this news release. Keryx does not
intend to update any of these forward-looking statements to reflect events or
circumstances that occur after the date hereof. This press release and prior
releases are available at www.keryx.com.
(Tables to Follow)
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Keryx Biopharmaceuticals, Inc.
Selected Consolidated Financial Data
(Thousands of US Dollars, Except Share and Per Share Data)
Statement of Operations:
Three Months Ended December 31, Year Ended December 31,
(unaudited) (audited)
2002 2001 2002 2001
---- ---- ---- ----
OPERATING EXPENSE:
Research and Development
Non-cash compensation $ 157 $ 269 $ (1,382) $ (17)
Other research and development 1,958 1,664 9,523 7,416
------------------------------------------------------------
Total research and development 2,115 1,933 8,141 7,399
------------------------------------------------------------
General and administrative
Non-cash compensation $ 2 $ 33 $ (4) $ 139
Other general and administrative 764 907 4,108 4,302
------------------------------------------------------------
Total general and administrative 766 940 4,104 4,441
------------------------------------------------------------
LOSS FROM OPERATIONS (2,881) (2,873) (12,245) (11,840)
OTHER INCOME (EXPENSE):
Financing income, net 110 230 513 2,231
Taxes on income (26) (18) (51) (197)
------------------------------------------------------------
NET LOSS $ (2,797) $ (2,661) $ (11,783) $ (9,806)
============================================================
NET LOSS PER COMMON SHARE
Basic and diluted $ (0.14) $ (0.13) $ (0.59) $ (0.50)
============================================================
SHARES USED IN COMPUTING NET LOSS PER COMMON
SHARE
Basic and diluted 19,897,025 19,744,303 19,897,939 19,699,542
============================================================
Balance Sheet:
December 31, 2002 December 31, 2001
----------------- -----------------
(audited) (audited)
Cash, cash equivalents, interest
receivable and investment securities $ 24,131 $ 37,856
Total assets 29,103 43,067
Accumulated deficit (45,502) (33,719)
Stockholders' equity 26,330 39,215
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