Exhibit 99.1
Contact
- -------
INVESTOR RELATIONS MEDIA RELATIONS
John Calhoun, MD, MBA Susan W. Specht, MBA
Director, Corporate Communications & Corporate Communications Manager
Investor Relations (206) 442-6592
(206) 442-6744
FOR IMMEDIATE RELEASE
- ---------------------
ZYMOGENETICS REPORTS THIRD QUARTER 2005 FINANCIAL RESULTS
Product Candidates continue progress in clinical trials
Seattle, WA, November 3, 2005 - ZymoGenetics, Inc. (Nasdaq: ZGEN) today reported
its financial results for the third quarter and nine months ended September 30,
2005. The company reported a net loss of $20.4 million, or $0.33 per share, for
the quarter ended September 30, 2005, slightly less than the net loss of $22.0
million, or $0.41 per share, reported for the comparable 2004 period. For the
nine months ended September 30, 2005, the company's net loss also declined to
$62.9 million, or $1.06 per share, from a net loss of $65.4 million, or $1.23
per share, in the comparable 2004 period.
The company's financial condition remained strong as of September 30, 2005, with
cash, cash equivalents and short-term investments totaling $378.1 million. The
reported amount includes $126.6 million of net proceeds from a follow-on
offering of 7.5 million shares of common stock completed in August 2005.
"These are exciting times for our company," said Bruce L.A. Carter, Ph.D.,
President and Chief Executive Officer of ZymoGenetics. "rhThrombin has entered
the final phase of clinical testing, our other product candidates are
progressing according to plan and, with the completion of our recent follow-on
stock offering, our financial resources enable us to continue to move forward
aggressively."
Revenues for the quarter decreased to $7.5 million versus $11.9 million for the
same period in the prior year. The decrease was primarily attributable to a
decline in milestone payment revenue, which is earned upon the occurrence of
discrete events that tend to fluctuate from period to period. Royalty revenues
also decreased in the 2005 quarter due to the expiration of insulin patents in
certain European countries.
Research and development expenses for the quarter decreased to $22.5 million,
compared to $27.0 million for the comparable quarter of 2004. The decrease was
attributable to a significant reduction in rhThrombin contract manufacturing
costs.
ZymoGenetics Third Quarter 2005 Results
November 3, 2005
Page 2 of 4
General and administrative expenses for the quarter increased to $5.6 million,
compared to $4.8 million for the comparable 2004 quarter, reflecting costs
associated with the company's planning for product commercialization.
Specifically, costs associated with rhThrombin market research and pre-launch
planning have increased.
Other income and expense shifted from net expense in the prior year quarter to
net other income in the 2005 quarter. This change reflects higher investment
income, driven by both higher interest rates and a higher cash and investment
balance.
DEVELOPMENT PROGRAMS
The company continued to advance its pipeline of product candidates during the
quarter. Following are status updates on clinical-stage development programs.
rhThrombin
After holding an End of Phase 2 meeting in late June, the company's efforts
during the quarter shifted to addressing all questions from the FDA reviewers,
finalizing the Phase 3 clinical protocol and statistical design, and finalizing
site preparations. The first patients in the Phase 3 pivotal study were enrolled
and treated in October. The company expects to complete the study in 2006.
TACI-Ig
The company, together with Serono, its collaborative partner, continued to
enroll and treat patients with systemic lupus erythematosus (SLE), rheumatoid
arthritis (RA) and B cell malignancies in Phase 1b studies. Patient treatment
and monitoring in the RA study were completed in September and data analysis is
ongoing. The SLE program continues to advance. The company expects to start one
or more Phase 2 studies in 2006 based on the cumulative body of data generated
from the ongoing Phase 1b studies.
IL-21
Enrollment began in July in Part B of a Phase 1 study in patients with
metastatic melanoma or renal cell carcinoma. Treatment is expected to be
completed by the end of the year, and data from the study will be used in the
design of a Phase 2 study expected to begin in 2006. The company and Novo
Nordisk completed a collaborative agreement in August 2005, providing the
framework for data and cost sharing as well as development of a single product
worldwide. Novo Nordisk has licensed the rights to IL-21 outside North America.
BUSINESS DEVELOPMENT
In October 2005, ZymoGenetics earned a milestone payment under a worldwide
exclusive license for rFactor XIII (rFXIII) granted to Novo Nordisk A/S in late
2004. This payment was triggered as Novo Nordisk initiated a Phase 1 study
designed primarily to investigate the safety of rFXIII in patients undergoing
cardiac surgery. The Phase 1 study in cardiac surgery is the first of several
rFXIII studies planned by Novo Nordisk.
ZymoGenetics Third Quarter 2005 Results
November 3, 2005
Page 3 of 4
UPCOMING EVENT
ZymoGenetics senior management will hold an Analyst & Investor Briefing on
Thursday, December 8 from 9:30 a.m. to 1:00 p.m., at the Four Seasons Hotel in
New York City. To attend this session, please contact Susan Specht at (206)
442-6592 or spechts@zgi.com.
ABOUT ZYMOGENETICS
ZymoGenetics is a biopharmaceutical company focused on the discovery,
development and commercialization of therapeutic proteins for the prevention or
treatment of human diseases. The Company is developing a diverse pipeline of
potential proprietary product candidates that are moving into and through
clinical development. These candidates span a wide array of clinical
opportunities that include bleeding, autoimmune diseases and cancer.
ZymoGenetics intends to commercialize these product candidates through internal
development, collaborations with partners and out-licensing of patents from its
extensive patent portfolio. For further information, visit www.zymogenetics.com.
FORWARD LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements are based on the current intent and expectations of the management of
ZymoGenetics. These statements are not guarantees of future performance and
involve risks and uncertainties that are difficult to predict. ZymoGenetics'
actual results and the timing and outcome of events may differ materially from
those expressed in or implied by the forward-looking statements because of risks
associated with our unproven discovery strategy, preclinical and clinical
development, regulatory oversight, intellectual property claims and litigation
and other risks detailed in ZymoGenetics' public filings with the Securities and
Exchange Commission, including ZymoGenetics' Annual Report on Form 10-K for the
year ended December 31, 2004. Except as required by law, ZymoGenetics undertakes
no obligation to update any forward-looking or other statements in this press
release, whether as a result of new information, future events or otherwise.
-Financial Tables Follow-
ZymoGenetics Third Quarter 2005 Results
November 3, 2005
Page 4 of 4
ZYMOGENETICS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Revenues:
Royalties $ 1,664 $ 3,408 $ 5,882 $ 8,181
Option fees 2,659 1,875 7,978 5,625
License fees and milestone payments 3,175 6,653 13,607 12,171
------------ ------------ ------------ ------------
Total revenues 7,498 11,936 27,467 25,977
Operating expenses:
Research and development, excluding noncash
stock-based compensation 22,502 26,963 71,174 68,871
General and administrative, excluding noncash
stock-based compensation 5,596 4,758 16,988 13,153
Noncash stock-based compensation expense 527 1,490 2,726 7,822
------------ ------------ ------------ ------------
Total operating expenses 28,625 33,211 90,888 89,846
------------ ------------ ------------ ------------
Loss from operations (21,127) (21,275) (63,421) (63,869)
Other income (expense), net 776 (727) 479 (1,496)
------------ ------------ ------------ ------------
Net loss $ (20,351) $ (22,002) $ (62,942) $ (65,365)
============ ============ ============ ============
Basic and diluted net loss per share $ (0.33) $ (0.41) $ (1.06) $ (1.23)
============ ============ ============ ============
Weighted-average number of shares used in
computing net loss per share 62,371 53,762 59,317 53,225
============ ============ ============ ============
CONDENSED BALANCE SHEETS
(in thousands)
(unaudited)
September 30, December 31,
2005 2004
------------- ------------
Cash, cash equivalents and short-term investments $ 378,059 $ 324,998
Other current assets 6,075 9,512
Property and equipment, net 71,099 71,960
Other assets 6,135 5,714
------------- ------------
Total assets $ 461,368 $ 412,184
============= ============
Current liabilities $ 25,195 $ 37,149
Lease obligations 66,504 66,085
Other non-current liabilities 22,452 30,400
Shareholders' equity 347,217 278,550
------------- ------------
Total liabilities and shareholders' equity $ 461,368 $ 412,184
============= ============
###