Exhibit 99.1
CIPHERGEN REPORTS FINANCIAL RESULTS FOR THE FIRST QUARTER 2005
FREMONT, Calif., May 5 /PRNewswire-FirstCall/ -- Ciphergen Biosystems, Inc.
(Nasdaq: CIPH) today announced financial results for the first quarter ended
March 31, 2005. Ciphergen's total revenue was $6.6 million in the first quarter
of 2005 as compared to $13.3 million in the first quarter of 2004. Ciphergen's
net loss was $9.3 million in the first quarter of 2005 as compared to $7.5
million in the first quarter of 2004.
At March 31, 2005, the Company's cash and investments were $32.2 million.
Total long term debt totaled $28.4 million, of which $28.2 million was
convertible debt.
"We have made solid progress in 2005 in our Diagnostics Division, in
particular in optimizing ovarian cancer assay protocols and in establishing
agreements with the M.D. Anderson Cancer Center and the NCI Clinical Proteomics
Reference Laboratory. Also, our users continue to experience success as
indicated by strong growth in scientific publications. This progress and these
successes validate our powerful Pattern Track(TM) biomarker discovery to assay
process and Ciphergen's growing role in translational proteomics research,"
stated William E. Rich, President and CEO.
Dr. Rich further commented, "We were, however, disappointed with sales
results from our Biosystems Division in the first quarter, due primarily to
weakness in U.S. sales. We have taken concrete steps to improve near-term sales
effectiveness including the recent appointment of a new Vice President of Sales,
promotion of a significant number of our Field Scientists into sales, and the
hiring of a senior business development officer to increase our market
penetration to pharma. We remain enthusiastic about the future growth of the
company as we continue to successfully demonstrate the value of our technology
in the emerging biomarker proteomics markets."
Recent Highlights
* Diagnostics Progress. Ciphergen continues to pioneer efforts in
translating the discovery and validation of biomarkers into both research use
and commercial clinical diagnostic and theranostic assays. The Company believes
that continued progress in this area will further validate the unique value of
Ciphergen's ProteinChip technology and could produce new diagnostic business
opportunities.
Ovarian Cancer Program. In the first quarter of 2005, Ciphergen successfully
achieved another milestone in moving towards commercialization of an ovarian
cancer assay by completing the necessary reproducibility studies for detection
and quantitation of the three biomarkers that comprise the ovarian cancer assay
reported through our collaboration with the Johns Hopkins Medical Institutions.
We communicated these results at the Society for Gynecological Oncology in
March, showing data obtained using the ProteinChip System, Series 4000. In
addition, we have engaged with collaborators to develop prospective clinical
trials that may be used in support of an FDA submission.
Also, Ciphergen and the M.D. Anderson Cancer Center entered into a
collaboration agreement involving analysis of clinical samples provided by M. D.
Anderson for ovarian cancer using Ciphergen's Deep Proteome(TM) and PatternTrack
suite of new proteomics tools. This work is expected to address multiple
clinical questions, including validation of markers previously described in
Cancer Research in August 2004, discovery of markers that distinguish ovarian
cancer from other gynecologic masses and prediction of treatment response.
Ciphergen has exclusive rights to license discoveries made during the course of
this collaboration.
Ciphergen recently signed an agreement with the National Cancer Institute
whereby the NCI's Clinical Proteomics Reference Laboratory (CPRL) will evaluate
the ProteinChip System, Series 4000, arrays and software to study biomarker
patterns indicative of ovarian cancer. The CPRL intends to test archived ovarian
cancer samples on assays it has constructed on Ciphergen's proteomics platform.
* Milestones Demonstrating Utility of ProteinChip System as a Potential
Diagnostic Platform.
-- In January 2005, the NCI's Early Detection Research Network published a
paper in Clinical Chemistry demonstrating excellent reproducibility of
SELDI-TOF-MS in a multi-site NCI sponsored clinical study, a prerequisite
validation for a clinical diagnostic assay platform.
-- At the 2005 annual meeting of the Association for Laboratory Automation
(ALA), the NCI's Clinical Proteomics Research Laboratory presented results of a
study of ovarian cancer sera with total inter-day precision from 6-12%, based on
the use of the ProteinChip System, PBS IIc. Ciphergen scientists also presented
an independent study, which demonstrated precision of approximately 10% using
the ProteinChip System, Series 4000.
* Expanding Pipeline of Potential Diagnostic Assays. In collaboration with
leading translational researchers worldwide, Ciphergen's Biomarker Discovery
Center(R) scientists continue to use Ciphergen's Pattern Track Process to
discover disease-associated protein biomarkers. These biomarkers have the
potential to form the basis of multimarker assays designed to address a variety
of clinical questions in cancer, cardiovascular, neurological and infectious
diseases.
-- In a special invited session at the AACR meeting in April, Dr. Judah
Folkman of the Children's Hospital Boston presented results of work done in his
laboratory and in collaboration with Ciphergen scientists using SELDI-TOF- MS,
suggesting proteomic analysis of circulating platelets can potentially be useful
for early cancer diagnosis; this was a follow-up presentation to data shown at
the American Society for Hematology 46th Annual Meeting in December.
-- The Johns Hopkins University School of Medicine and Ciphergen renewed
their agreement to discover and validate biomarkers for the detection of early
stage breast, ovarian, pancreatic and prostate cancer. The collaboration has
resulted in publications in journals such as Cancer Research, Clinical Cancer
Research, and Clinical Chemistry.
-- M.D. Anderson and Ciphergen are collaborating to discover and
characterize markers that can predict response to platinum therapy in lung
cancer patients. Only a subset of lung cancer patients responds to platinum
therapy, which is extremely costly and has negative side-effects.
-- Researchers at Stanford are collaborating with Ciphergen to discover
novel biomarkers that can be used to diagnose peripheral artery disease, a major
complication of diabetes. Preliminary results were presented at the Society for
Vascular Medicine and Biology meeting and were presented in the Young
Investigator Award competition at the American College of Cardiology meeting in
March 2005.
* Biosystems Progress and Plans.
-- Sales Organization and Plans. The Company recently appointed Paul Smith
as Vice President of North America and European Sales. Mr. Smith joined
Ciphergen in 2000, initially running Canadian sales and marketing efforts before
assuming responsibility for European sales last year. Consistent with field
sales organization changes Mr. Smith has successfully implemented in Europe, he
has recently expanded Field Scientists' responsibilities in the U.S. to include
ProteinChip System sales in addition to providing technical support for our
customers, which we believe will improve our sales effectiveness in the short
term.
-- Expanded Pharmaceutical Biomarker Collaboration Program. Pharmaceutical
companies are actively incorporating biomarker strategies in their clinical
development programs. In response to this trend, James P. Merryweather, Ph.D.,
joined Ciphergen during the quarter as Executive Vice President, Pharmaceutical
Corporate Development and will manage our Pharma Biomarker Discovery Center(R)
in Malvern, PA as well as expand pharma collaborations and market penetration
for biomarker proteomics.
-- Expanded Marketing Programs. The Company has also engaged a major
marketing communications firm to improve our market perception and
communications programs, with particular emphasis on publicizing the
considerable scientific progress being made by our installed base of users that
have generated over 375 scientific publications.
-- Major Presence at AACR. At the Annual American Association of Cancer
Research (AACR) conference in April, leading researchers presented 44 studies
across a wide variety of cancers and therapeutic strategies enabled by the use
of SELDI ProteinChip technology. Ciphergen's customers made presentations that
covered such fields as serum proteome profiling, metastasis prognosis, cancer
therapeutics and monitoring drug response. Biomarker discovery and
identification was described for a broad range of cancer types including breast,
colon, prostate, pancreatic, lung, head and neck, ovarian, and several other
cancers.
-- New Product Introductions. Ciphergen has advanced product development
efforts for our Deep Proteome(TM) technology and sample preparation family of
products including Equalizer Beads(TM). These products provide a potential
breakthrough for the detection of low abundant proteins, a major problem today
in proteomics. The Company anticipates commencing discovery projects using our
Deep Proteome products with selected collaborators during the second quarter of
2005.
-- Steps to Reduce Operating Expenses. Ciphergen has reduced its headcount
by approximately 15% since December 31, 2004 in order to reduce operating
expenses. The financial impact of this decrease in headcount was only partially
reflected in the first quarter. In addition, the Company has taken steps to
reduce various non-employee related operating expenses within the Biosystems
Division.
About Ciphergen
Ciphergen's Biosystems Division develops, manufactures and markets a family
of ProteinChip(R) Systems and services for clinical, research and process
proteomics applications. ProteinChip Systems enable protein discovery,
validation, identification and assay development to provide researchers with
predictive, multi-marker assay capabilities and a better understanding of
biological function at the protein level. Ciphergen's Diagnostics Division is
dedicated to the discovery of protein biomarkers and panels of biomarkers and
their development into protein molecular diagnostic tests that improve patient
care; and to providing collaborative R&D services through its Biomarker
Discovery Center(R) laboratories for biomarker discovery for new diagnostic
tests as well as pharmacoproteomic services for improved drug toxicology,
efficacy and theranostic assays. Additional information about Ciphergen can be
found at www.ciphergen.com.
Safe Harbor Statement
Note Regarding Forward-Looking Statements: This press release contains
forward-looking statements. For purposes of the Private Securities Litigation
Reform Act of 1995 (the "Act") Ciphergen disclaims any intent or obligation to
update these forward-looking statements, and claims the protection of the Safe
Harbor for forward-looking statements contained in the Act. Examples of such
forward-looking statements include improved near term sales effectiveness,
increased penetration of the pharmaceutical industry, future growth prospects of
the company, market validation of our biomarker discovery process, anticipated
reductions in operating expenses, anticipated results of customers and
collaborators employing our products and services, commencement of discovery
projects using our Deep Proteome products in the second quarter of 2005 and
their ability to detect low abundant proteins, the potential for our ProteinChip
technology to yield useful protein biomarkers, our ability to develop and
commercialize protein molecular diagnostics that improve patient care, the
achievement of major milestones by our Diagnostics Division and its ability to
provide services that lead to improved toxicology assays and diagnostic assays.
Actual results may differ materially from those projected in such
forward-looking statements due to various factors, including the risk that the
Company is unable to generate significant growth in unit sales while maintaining
pricing, the risk that pharmaceutical companies will not expand their use of our
products and services, the risk that our ProteinChip technology is unable to
discover, validate and/or develop protein biomarkers as diagnostic or toxicology
assays, Ciphergen's ability to successfully commercialize any such tests, and
our ability to protect and promote our proprietary technologies, the risk that
we do not successfully launch our new product introductions and that such new
products do not receive market acceptance or generate revenue at a rate or in
the amounts we anticipate, and the risk that our Diagnostics Division does not
achieve commercial partnerships due to an inability to come to mutually
acceptable business terms or does not achieve clinical test launch milestones
due to a failure to validate the performance of potential clinical assays in
larger studies, an inability to translate research assays into highly
reproducible commercially acceptable assays, a failure to achieve cGMP status
and other factors. Investors should consult Ciphergen's filings with the
Securities and Exchange Commission, including its Form 10-K dated March 22,
2005, for further information regarding these and other risks of the Company's
business.
NOTE: Ciphergen, ProteinChip and Biomarker Discovery Center are
registered trademarks of Ciphergen Biosystems, Inc.
Ciphergen Biosystems, Inc.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share)
Three Months Ended
March 31,
---------------------------
2004 2005
------------ ------------
Revenue $ 13,252 $ 6,648
Cost of revenue 3,970 3,135
Gross profit 9,282 3,513
Operating expenses:
Research and development 5,757 3,507
Sales and marketing 6,021 5,273
General and administrative 3,675 3,504
Total operating expenses 15,453 12,284
Loss from operations (6,171) (8,771)
Interest and other income (expense), net (527) (411)
Loss from continuing operations
before income taxes (6,698) (9,182)
Income tax provision (benefit) for
continuing operations 52 150
Net loss from continuing operations (6,750) (9,332)
Loss from discontinued operations,
net of tax (1) (731) --
Net income (loss) $ (7,481) $ (9,332)
Basic and diluted loss per share information:
Loss from continuing operations $ (0.23) $ (0.32)
Loss from discontinued operations (0.03) --
Net loss $ (0.26) $ (0.32)
Shares used in computing basic and diluted
loss per share 29,039 29,472
(1) Amounts attributable to our BioSepra business, which was sold on
November 30, 2004, have been reclassified to loss from discontinued
operations.
Ciphergen Biosystems, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
December 31,
2004 March 31,
(note 1) 2005
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 35,392 $ 30,058
Short term investments 2,175 2,190
Accounts receivable, net 10,811 4,746
Inventories 6,919 7,028
Notes receivable from related parties 126 12
Prepaid expenses and other current assets 1,847 1,626
Total current assets 57,270 45,660
Property, plant and equipment, net 9,315 9,044
Goodwill and other intangible assets, net 5,569 5,440
Other long term assets 2,223 2,167
Total assets $ 74,377 $ 62,311
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,369 $ 2,536
Accrued liabilities 7,499 6,791
Current portion of deferred revenue 5,529 4,732
Current portion of capital lease obligations 16 15
Current portion of long term debt 925 811
Total current liabilities 17,338 14,885
Deferred revenue, net of current portion 855 695
Capital lease obligations, net of current
portion 28 23
Long term debt, net of current portion 377 191
Convertible senior notes, net of discount 28,051 28,183
Other long term liabilities 1,013 882
Total liabilities 47,662 44,859
Stockholders' equity:
Common stock 29 29
Additional paid in capital 187,133 187,136
Notes receivable from stockholders (349) (39)
Accumulated other comprehensive income 263 19
Accumulated deficit (160,361) (169,693)
Total stockholders' equity 26,715 17,452
Total liabilities and stockholders'
equity $ 74,377 $ 62,311
(1) The condensed consolidated balance sheet at December 31, 2004 has been
derived from the audited consolidated financial statements at that date
included in the Company's Form 10-K for the fiscal year ended December
31, 2004.
SOURCE Ciphergen Biosystems, Inc.
-0- 05/05/2005
/CONTACT: Sue Carruthers, Investor Relations of Ciphergen Biosystems,
Inc., +1-510-505 2297/
/Web site: http://www.ciphergen.com /