Exhibit 99.1
CIPHERGEN REPORTS FINANCIAL RESULTS FOR THE SECOND QUARTER 2005
SHARPENS BUSINESS FOCUS AND INTEGRATES DIVISIONS TO LEVERAGE QUEST DIAGNOSTICS
ALLIANCE; GAIL S. PAGE PROMOTED TO PRESIDENT AND COO
FREMONT, Calif., Aug. 8 /PRNewswire-FirstCall/ -- Ciphergen Biosystems,
Inc. (Nasdaq: CIPH) today announced financial results for the second quarter
ended June 30, 2005. Ciphergen's total revenue was $7.5 million in the second
quarter of 2005 as compared to $8.3 million in the second quarter of 2004.
Ciphergen's net loss was $9.0 million in the second quarter of 2005 as compared
to $13.1 million in the second quarter of 2004.
As of June 30, 2005, the Company's cash and investments were $23.5 million.
Total long term debt totaled $28.4 million, of which $28.3 million was
convertible debt. On July 22, Ciphergen entered into a strategic alliance with
Quest Diagnostics whereby Quest Diagnostics made a $15 million equity investment
in Ciphergen and has agreed to lend Ciphergen $10 million to fund certain
development activities; this loan will be forgiven if certain milestones are
made.
The Company also announced an increased focus on its emerging proteomic
biomarker-based clinical diagnostic business, for which a strategic alliance was
recently formed with Quest Diagnostics. The Company believes that it has unique
capabilities to discover proteomic biomarkers that can be translated into highly
predictive research and clinical diagnostic assays that enable improved
understanding of disease pathology, faster pharmacoproteomic-based drug
development and the improvement of patient care.
"The recently announced alliance with Quest Diagnostics is an important
step towards translating our proprietary biomarker discovery and assay
capabilities into commercial clinical diagnostic tests to address unmet medical
needs and improve patient care," stated William E. Rich, CEO. "I am pleased to
announce the promotion of Gail S. Page to President and COO. Under her
leadership, we are integrating and streamlining our operating divisions to focus
our resources on biomarker discovery partnerships with key academic and
pharmaceutical customers to speed development of diagnostic and theranostic
assays and better leverage the Quest alliance."
Ciphergen also announced that it intends to focus its sales efforts on
collaborative BDC service projects with key translational research customers in
academia and pharma. The Company believes that this increased emphasis on
project-scale, collaborative services will expedite the success of its customers
with the technology, increase ProteinChip(R) product and service revenues, while
also enabling the Company to reduce its operating expenses. In line with this
strategy, a number of organizational changes were implemented at the Company,
including steps to reduce headcount by approximately 20% by the fourth quarter.
In addition Ciphergen is integrating its divisions into one organization and has
promoted Gail S. Page to President and Chief Operating Officer of Ciphergen.
Other Recent Highlights
* Major presence at AACR Annual Meeting. At the American Association of
Cancer Research (AACR) annual conference, there were a total of 44
studies presented that utilized Ciphergen's ProteinChip technology for
biomarker discovery, validation, identification and assay development
across a wide varieties of cancers and therapeutic strategies. At a
special invited session, 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
that proteomic analysis of circulating platelets can potentially be
useful for early cancer diagnosis.
* Promising results presented at AUA Annual Meeting. Dr. Daniel W. Chan
and Dr. Zhen Zhang of the Johns Hopkins Medical School, working in
collaboration with Ciphergen scientists, presented results at the
American Urological Association Annual Meeting suggesting that two
protein markers, in combination with PSA levels, may be useful in
predicting risk of recurrence within five years of treatment.
* Agreement signed with National Cancer Institute. In April, Ciphergen
signed a material transfer agreement with the NCI Clinical Proteomics
Reference Laboratory (CPRL) which allows CPRL to 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 platform.
* Novel Approach Reported to Detect Cancer by Measuring Host Response
Proteins. A Ciphergen study performed in collaboration with scientists
at the Johns Hopkins University School of Medicine was published in
the International Journal of Cancer which suggested a novel
alternative to searching for highly specific classical markers coming
directly from tumors. This approach utilizes SELDI-TOF-MS to detect
and quantitatively assay for post-translationally modified proteins
formed by the host response to the tumor.
* Introduction of Deep Proteome(TM) Research Services. At the American
Society of Mass Spectrometry Annual Meeting, Ciphergen announced the
introduction of Deep Proteome Research Services through our Biomarker
Discovery Center(R) (BDC) scientists, making proprietary Equalizer(TM)
protein biomarker discovery technology available to scientists for the
first time. Deep Proteome Research Services enable scientists to look
at low abundance proteins in various biological samples and
significantly improve their biomarker discovery power. These services
are preferentially provided to Ciphergen's ProteinChip System
customers and BDC collaboration partnerships.
* Biomarker Research Collaboration with Bayer Pharmaceuticals. Ciphergen
will analyze patient samples from one of Bayer's compounds in a Phase
II clinical trial in cancer, with a goal of delivering to Bayer a
biomarker assay that is predictive of drug response. This agreement
expands Ciphergen's business initiative to form pharmacoproteomic
collaborations with pharmaceutical companies to accelerate and
streamline clinical development of new drugs through the
identification of important biomarkers of drug response.
* Patent Issuances. Ciphergen has had seven patents issue in the U.S.
during the first half of 2005; of particular interest, one issued
patent is directed to the detection of multiple diagnostic markers by
SELDI-TOF-MS for the diagnosis of disease, and another is directed
toward methods of using SELDI-TOF-MS to rapidly purify proteins for
applications including protein identification. Ciphergen currently has
28 issued patents and 109 active patent families.
* Other Management Changes. James S. Burns, President and CEO of
EntreMed, Inc. has joined Ciphergen's Board of Directors. Mr. Burns
brings to Ciphergen significant experience and accomplishments in both
the pharmaceutical and laboratory products industries, particularly
important to the Company's initiatives to further penetrate the
pharmaceutical industry. Matthew Hogan, the Company's Chief Financial
Officer, has informed the Company that he is considering pursuing
potential alternative career opportunities in the investment
management field. He currently remains as the Chief Financial Officer
of the Company and has made no decision to leave the Company at this
time. In addition, Michael Acosta recently joined Ciphergen as Vice
President, Quality Assurance/Regulatory Affairs. Mr. Acosta has a long
record of ensuring compliance with regulatory requirements and his
primary initial focus at the Company will in the area of cGMP
compliance to facilitate the Company's biomarker diagnostic
development program.
About Ciphergen
Ciphergen 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. Ciphergen 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. 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 the discovery of proteomic biomarkers that
can be translated into highly predictive research and clinical diagnostic assays
that enable improved understanding of disease pathology, faster
pharmacoproteomic-based drug development and the improvement of patient care;
translating any proteomic biomarkers that may be discovered into highly
predictive research and clinical diagnostic assays; increasing the emphasis on
project-scale, collaborative services will expedite the success of our customers
with our technology, increase ProteinChip product and service revenues, while
also enabling the Company to reduce its operating expenses; commencement of
discovery projects using our Deep Proteome products and their ability to detect
low abundant proteins; the potential for our ProteinChip technology to yield
useful protein biomarkers; and our goals of delivering to Bayer a biomarker
assay that is predictive of drug response. Actual results may differ materially
from those projected in such forward-looking statements due to various factors,
including the risk that our ProteinChip technology is unable to discover,
validate and/or develop protein biomarkers as diagnostic or toxicology assays;
the risk that we do not achieve clinical diagnostic 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; the risk that pharmaceutical companies will not expand their use of our
products and services; 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 rare or in the amounts we anticipate; and
the risk that we are unable to protect and promote our proprietary technologies.
Investors should consult Ciphergen's filings with the Securities and Exchange
Commission, including its Form 10-Q dated May 10, 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 data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
2004 2005 2004 2005
---------- ---------- ---------- ----------
Revenue $ 8,336 $ 7,493 $ 21,588 $ 14,141
Cost of revenue 4,300 3,783 8,270 6,918
Gross profit 4,036 3,710 13,318 7,223
Operating expenses:
Research and development 5,535 3,626 11,292 7,133
Sales and marketing 7,361 4,792 13,297 10,065
General and administrative 3,554 3,742 7,229 7,246
Total operating expenses 16,450 12,160 31,818 24,444
Loss from operations (12,414) (8,450) (18,500) (17,221)
Interest and other income
(expense), net (442) (535) (969) (946)
Loss from continuing operations
before income taxes (12,856) (8,985) (19,469) (18,167)
Income tax provision (benefit)
for continuing operations 140 (11) 192 139
Net loss from continuing
operations (12,996) (8,974) (19,661) (18,306)
Loss from discontinued
operations, net of tax (1) (146) (67) (962) (67)
Net loss $ (13,142) $ (9,041) $ (20,623) $ (18,373)
Basic and diluted loss
per share information:
Loss from continuing operations $ (0.45) $ (0.31) $ (0.68) $ (0.62)
Loss from discontinued operations (0.00) (0.00) (0.03) (0.00)
Net loss $ (0.45) $ (0.31) $ (0.71) $ (0.62)
Shares used in computing basic
and diluted loss per share 29,205 29,575 29,121 29,524
(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, June 30,
2004 (1) 2005
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 35,392 $ 21,256
Short term investments 2,175 2,206
Accounts receivable, net 10,811 6,746
Notes receivable from related parties 126 12
Prepaid expenses and other current assets 1,847 1,462
Inventories 6,919 6,542
Total current assets 57,270 38,224
Property, plant and equipment, net 9,315 8,216
Goodwill 2,529 2,529
Other intangible assets, net 3,040 2,760
Other long term assets 2,223 2,056
Total assets $ 74,377 $ 53,785
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,369 $ 3,593
Accrued liabilities 7,499 6,197
Current portion of deferred revenue 5,529 4,865
Current portion of capital lease
obligations 16 26
Current portion of long term debt 925 740
Total current liabilities 17,338 15,421
Deferred revenue, net of current portion 855 676
Capital lease obligations, net of
current portion 28 50
Long term debt, net of current portion 377 --
Convertible senior notes, net of discount 28,051 28,317
Other long term liabilities 1,013 756
Total liabilities 47,662 45,220
Stockholders' equity:
Common stock 29 30
Additional paid in capital 187,133 187,334
Notes receivable from stockholders (349) (36)
Accumulated other comprehensive
income (loss) 263 (29)
Accumulated deficit (160,361) (178,734)
Total stockholders' equity 26,715 8,565
Total liabilities and
stockholders' equity $ 74,377 $ 53,785
(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- 08/08/2005
/CONTACT: Sue Carruthers, Investor Relations of Ciphergen Biosystems,
Inc., +1-510-505 2297/
/Web site: http://www.ciphergen.com /