Exhibit 99.1
FOR IMMEDIATE RELEASE:
Ciphergen Biosystems, Inc.
Sue Carruthers
Investor Relations
(510) 505 2297
CIPHERGEN REPORTS FIRST QUARTER 2006 FINANCIAL RESULTS
REVENUE GROWS 6% AND NET LOSS DECLINES 41% ON A GAAP BASIS AND 46% ON A NON-GAAP
BASIS
Fremont, CA, May 4, 2006 - Ciphergen Biosystems, Inc. (Nasdaq: CIPH) today
announced financial results for its first quarter ended March 31, 2006. The
Company reported net revenue growth of 6.3% to $7.1 million in the first quarter
of 2006 as compared to $6.6 million in the first quarter of 2005. On a GAAP
basis, net loss declined 41% to $5.5 million in the first quarter of 2006 as
compared to $9.3 million in the first quarter of 2005. On January 1, 2006, the
Company adopted FAS 123(R) and is reporting employee stock-based compensation
expense in its GAAP results for the first quarter of 2006. Excluding the impact
of FAS 123(R), the Company's non-GAAP net loss declined 46% to $5.0 million in
the first quarter of 2006.
On March 31, 2006, the Company's cash and investments totaled $24.4 million. An
additional $6.25 million is available under our loan facility with Quest
Diagnostics. Long term debt totaled $32.5 million, of which $28.7 million was
convertible debt.
"We are pleased with this improvement in our financial results," stated Gail S.
Page, President and CEO. "Our efforts at achieving increased operational
efficiencies while growing our sales have resulted in this improved financial
performance. Concurrently, working closely with our alliance partner Quest
Diagnostics, we made substantial progress in both assay development and clinical
development in our ovarian cancer program. The pivotal data presented at the
Society of Gynecologic Oncologists (SGO) meeting in March indicated a
significant benefit for our markers' potential utilization as an aid in the
treatment triage for women with an ovarian mass."
Recent Highlights
o Ovarian Cancer Diagnostic Progress. At the 37th Annual Meeting of the SGO
held in late March, Ciphergen announced results of a prospective clinical
study evaluating the performance of a multi-marker panel that is designed
to help triage women being evaluated for a persistent pelvic mass or with
pelvic pain. This study was performed in conjunction with Professor Claus
Hogdall at Rigshospitalet, University of Copenhagen. The study evaluated
202 consecutive patients with suspicion of a primary ovarian tumor,
endometriosis or with pelvic pain. Data from 126 women were used for
training, and data from the remaining 76 women were used for blinded
testing. The marker panel, which consists of seven markers previously
identified in studies with The Johns Hopkins School of Medicine, the
University of Texas M. D. Anderson Cancer Center, and the University of
Kentucky, provided substantial benefit beyond that previously reported.
Ciphergen and its collaborators demonstrated that this panel provides a
significant improvement in positive predictive value (the percentage of
time a positive test result is actually positive), from 59% to 80%, in
distinguishing benign from malignant pelvic masses.
The particular study presented at the SGO Annual Meeting is part of a
comprehensive ovarian cancer program being conducted by Ciphergen in
conjunction with several leading collaborators at The Johns Hopkins School
of Medicine, the University of Texas M.D. Anderson Cancer Center,
University College London, and the University of Kentucky. In addition to
the ongoing work aimed at developing assays that are designed to
distinguish between benign and malignant pelvic mass, Ciphergen has studies
underway to target the prediction of recurrence of ovarian cancer as well
as to provide additional tools to aid the physician in triaging women
considered at high risk of ovarian cancer.
Additional data will be presented at the annual meeting of the American
Society of Clinical Oncology in June.
o Shareholder securities class action suit. We were pleased to learn that the
court ordered the action dismissed on March 29, 2006.
o Addition to Board of Directors. Ciphergen is pleased that Kenneth J. Conway
has recently joined its Board of Directors. "As an innovator and visionary
leader of both start-up and established businesses in his 35 years of
working in clinical diagnostics and pharmaceuticals, Ken will provide
seasoned guidance as Ciphergen moves forward with its commercialization
activities," stated Ms. Page.
CONFERENCE CALL
A conference call and webcast will be held on Thursday, May 4 at 5:00 p.m. EST
to discuss the first quarter results and provide an update on business
developments. To listen to the live webcast of the conference call, please visit
the "Investors" section of the Company's website at www.ciphergen.com. A
telephonic replay of the conference call will be available two hours after the
call and will be available until 7:00 p.m. on May 18, 2006. The replay number
for domestic callers is 800-633-8284 and for international callers is 1 +
402-977-9140. The reservation number for both domestic and international callers
is 21291031. In addition, an archived webcast of the conference call will be
available under the "Investors" section of the Company's website at
www.ciphergen.com.
ABOUT CIPHERGEN
Ciphergen is dedicated to translating protein biomarkers and panels of
biomarkers into protein molecular diagnostic tests that improve patient care. We
are also focused on providing collaborative R&D services through our 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 statements regarding increasing operational
efficiencies and growing sales and assay and clinical development. Actual
results may differ materially from those projected in such forward-looking
statements due to various factors, including the risk that Ciphergen may not be
able to continue to increase operational efficiencies or expand sales at a
sufficient rate and the risk that assay and clinical development may be
negatively impacted by future events. Investors should consult Ciphergen's
filings with the Securities and Exchange Commission, including its Form 10-K
filed March 17, 2006, for further information regarding these and other risks
related to the Company's business.
Ciphergen, ProteinChip and Biomarker Discovery Center are registered trademarks
of Ciphergen Biosystems, Inc.
Ciphergen Biosystems, Inc.
Unaudited Condensed Consolidated Statements of Operations
Reconciliation of GAAP to NON-GAAP Operating Results (1)
(in thousands, except per share data)
Three Months Ended March 31,
------------------------------------------------------------
2006 2005
-------------------------------------------- ------------
GAAP Adjustments Non-GAAP GAAP
------------ ------------ ------------ ------------
Revenue $ 7,064 $ - $ 7,064 $ 6,648
Cost of revenue 3,404 (45) 3,359 3,135
------------ ------------ ------------ ------------
Gross profit 3,660 45 3,705 3,513
------------ ------------ ------------ ------------
Operating expenses:
Research and development 2,992 (100) 2,892 3,507
Sales and marketing 3,503 (103) 3,400 5,273
General and administrative 2,279 (212) 2,067 3,504
------------ ------------ ------------ ------------
Total operating expenses 8,774 (415) 8,359 12,284
------------ ------------ ------------ ------------
Loss from operations (5,114) 460 (4,654) (8,771)
Interest and other income (expense), net (236) - (236) (411)
------------ ------------ ------------ ------------
Loss before income taxes (5,350) 460 (4,890) (9,182)
Income tax provision 114 - 114 150
------------ ------------ ------------ ------------
Net loss $ (5,464) $ 460 $ (5,004) $ (9,332)
============ ============ ============ ============
Basic and diluted net loss per share $ (0.15) $ (0.14) $ (0.32)
============ ============ ============
Shares used in computing basic and diluted
net loss per share 35,999 35,999 29,472
============ ============ ============
(1) To supplement our consolidated financial statements in accordance with
generally accepted accounting principles (GAAP), we use non-GAAP measures
of operating results, net loss and net loss per share, which are adjusted
from results based on GAAP to exclude FAS 123(R) stock-based compensation
expenses. This non-GAAP financial presentation is given in part to enhance
the understanding of the Company's historical financial performance and
comparability between periods in light of a change in accounting standards,
particularly since the Company has not included stock-based compensation
under FAS 123(R) as an expense in financial statements before. In addition,
the Company believes that the non-GAAP presentation to exclude stock-based
compensation is relevant and useful information that will be widely used by
analysts, investors and other interested parties. Further, these non-GAAP
results are one of the primary indicators management uses for assessing our
performance, allocating resources and planning and forecasting future
periods. Accordingly, the Company is disclosing this information to permit
additional analysis of the Company's performance. These measures should be
considered in addition to results prepared in accordance with GAAP, but
should not be considered a substitute for or superior to GAAP results.
Ciphergen Biosystems, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
March 31, December 31,
2006 2005 (1)
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 24,384 $ 25,738
Short term investment - 2,240
Accounts receivable, net 5,070 5,828
Prepaid expenses and other current assets 1,442 1,746
Inventories 5,006 5,594
------------ ------------
Total current assets 35,902 41,146
Property, plant and equipment, net 6,755 7,320
Goodwill and other intangible assets, net 2,328 2,493
Other long term assets 1,760 1,852
------------ ------------
Total assets $ 46,745 $ 52,811
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,390 $ 3,188
Accrued liabilities 5,123 6,298
Current portion of deferred revenue 3,857 4,132
Current portion of capital lease obligations 22 21
Current portion of long term debt 190 377
------------ ------------
Total current liabilities 11,582 14,016
Deferred revenue, net of current portion 524 508
Capital lease obligations, net of current portion 22 28
Long term debt owed to related party 3,750 2,500
Convertible senior notes, net of discount 28,718 28,586
Other long term liabilities 597 650
------------ ------------
Total liabilities 45,193 46,288
------------ ------------
Stockholders' equity:
Common stock 36 36
Additional paid in capital 202,946 202,485
Accumulated other comprehensive loss (172) (204)
Accumulated deficit (201,258) (195,794)
------------ ------------
Total stockholders' equity 1,552 6,523
------------ ------------
Total liabilities and stockholders' equity $ 46,745 $ 52,811
============ ============
(1) The condensed consolidated balance sheet at December 31, 2005 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,
2005.