Exhibit 99.1
VaxGen Reports Final Financial Results
for Fourth Quarter and 2003
BRISBANE, Calif. - March 30, 2004 - VaxGen, Inc. (Nasdaq: VXGN) today
announced substantial increases in revenues and significantly lower losses for
the fourth quarter and year ended December 31, 2003. The revenue results, which
were filed today in a Form 10-K with the U.S. Securities and Exchange
Commission, are virtually identical to preliminary revenues that VaxGen reported
on February 17, 2004.
Fourth Quarter Results
VaxGen recognized revenues for the fourth quarter ended December 31, 2003
of $4.6 million, compared to $1.2 million in the same period a year ago. The net
loss applicable to common stockholders for the quarter ended December 31, 2003
was $8.8 million, or $0.41 per share, compared with a net loss applicable to
common stockholders of $25.9 million, or $1.71 per share, in the fourth quarter
of 2002.
2003 Results
For the year ended December 31, 2003, VaxGen recognized $14.3 million in
revenues, an 804% increase compared to revenues of $1.6 million in 2002. The net
loss applicable to common stockholders for the year ended December 31, 2003 was
$28.7 million, or $1.52 per share, compared with a net loss applicable to common
stockholders of $49.8 million, or $3.42 per share, in 2002.
More than half of the increase in revenues for the year was associated
with contract revenue from the National Institute of Allergy and Infectious
Diseases (NIAID) for the development of VaxGen's recombinant anthrax vaccine
candidate. Of the $14.3 million recognized as revenue in 2003, $8.8 million came
from the first of two anthrax vaccine contracts that VaxGen has received from
NIAID.
Cash Position and Liquidity
VaxGen ended the year with $28.7 million in cash and investment securities
and approximately $5.0 million in accounts receivable, which consists primarily
of outstanding invoices associated with its various contracts with NIAID and
other U.S. government agencies. VaxGen's year-end cash and investment securities
balance includes proceeds from the equity financing that the company completed
in December 2003.
Third-Quarter Restatement
In the Form 10-K filed today, VaxGen restated its previously reported
results for the three months ended September 30, 2003. Property and Equipment
decreased by $856,000 and operating expenses increased by the same amount. As a
result, the net loss applicable to common stockholders increased by
approximately $469,000, net of minority interest, or $0.03 per share. The
restatement is the result of an adjustment to reduce the capitalization of
internal labor costs and associated overhead.
VaxGen will hold a conference call and web cast at noon, EST, Wednesday,
March 31, 2004 to review this press release. Participants are asked to dial in
to the live call five minutes before the start of the presentation. The
following phone numbers will provide access to the call or a taped version,
which will be available until the announcement of VaxGen's next quarterly
financial call.
Live Call: Domestic: (800) 404-1354
International: (706) 643-0825
No passcode required.
Replay: Domestic: (800) 642-1687
International: (706) 645-9291
Passcode: 6421801
The webcast can be found by clicking on "Fourth-Quarter Conference Call
and Webcast" under "Webcasts" 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.
About VaxGen
VaxGen, Inc. is a biopharmaceutical company engaged in the development,
manufacture and commercialization of biologic products for the prevention and
treatment of human infectious disease. Based in Brisbane, Calif., the company is
developing preventive vaccines against anthrax, smallpox and plague and an
anthrax monoclonal antibody through an alliance with Avanir Pharmaceuticals.
VaxGen is also the largest stockholder in Celltrion, Inc., a joint venture
formed to build manufacturing operations for the production of biopharmaceutical
products. 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, the timing and progress of completion of development efforts
for VaxGen's anthrax or smallpox vaccine candidates; future uses of its
manufacturing subsidiary; the Company's ability to obtain future government
contracts; and the timing and progress of U.S. government spending on biodefense
vaccines. 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 Item 1 of the company's Annual Report on Form 10-K
filed by VaxGen on March 30, 2004, under the heading "Additional Business Risks"
for a more detailed description of such risks. 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.
Contact: Lance Ignon
Vice President, Corporate Affairs
(650) 624-1041
VaxGen, Inc.
Condensed Consolidated Statements of Operations (unaudited)
(In thousands, except for share data)
Quarter Quarter Year Year
Ended Ended Ended Ended
December 31, 2003 December 31, 2002 December 31, 2003 December 31, 2002
----------------- ----------------- ----------------- -----------------
Revenues:
Research grant and contract revenue $ 4,317 $ 685 $ 13,606 $ 1,055
Related party services revenue 253 527 692 527
-------- -------- -------- --------
Total revenues 4,570 1,212 14,298 1,582
Operating expenses:
Research and development 7,137 7,077 22,407 20,975
General and administrative 8,802 4,696 22,454 14,373
-------- -------- -------- --------
Loss from operations (11,369) (10,561) (30,563) (33,766)
Other income (expense), net 1,834 (3,718) 3,333 (1,987)
-------- -------- -------- --------
Net loss before minority interest (9,535) (14,279) (27,230) (35,753)
Minority interest in subsidiary losses 691 -- 1,703 --
-------- -------- -------- --------
Net loss (8,844) (14,279) (25,527) (35,753)
-------- -------- -------- --------
Charges related to redeemable convertible
preferred stock -- (11,625) (3,187) (14,045)
-------- -------- -------- --------
Net loss applicable to common stockholders $ (8,844) $(25,904) $(28,714) $(49,798)
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Basic and diluted net loss per share applicable
to common stockholders $ (0.41) $ (1.71) $ (1.52) $ (3.42)
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Weighted average shares used in computing basic
and diluted loss per share 21,815 15,127 18,916 14,567
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VaxGen, Inc.
Condensed Consolidated Balance Sheets (unaudited)
(In thousands)
December 31, December 31,
2003 2002
------------ ------------
Assets:
Cash and investment securities $28,685 $18,021
Accounts receivable (including related party) 4,969 1,742
Deferred costs 4,061 1,379
Property and equipment, net 18,503 3,309
Other assets 2,699 3,586
------- -------
Total Assets $58,917 $28,037
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Liabilities and Stockholders' Equity:
Current liabilities (excluding deferred revenues) $12,139 $14,450
Deferred revenues 14,378 917
Other liabilities 779 606
Minority interest of subsidiary 4,972 --
Redeemable convertible preferred stock -- 1,497
Stockholders' equity 26,649 10,567
------- -------
Total Liabilities and Stockholders' Equity $58,917 $28,037
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