Exhibit 99.1
[LOGO OF ZYMOGENETICS]
Contact
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INVESTOR RELATIONS MEDIA RELATIONS
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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
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ZYMOGENETICS REPORTS FIRST QUARTER 2006 FINANCIAL RESULTS
- Enrollment on schedule for rhThrombin Phase 3 pivotal trial -
SEATTLE, MAY 4, 2006 -- ZymoGenetics, Inc. (NASDAQ: ZGEN) today reported its
financial results for the first quarter ended March 31, 2006. The company
reported a net loss for the quarter of $31.7 million, or $0.48 per share,
reflecting increasing investment in the development of its pipeline of product
candidates. For the first quarter of 2005, ZymoGenetics had a net loss of $18.8
million, or $0.33 per share. The company ended the quarter in a strong financial
position, with $337.0 million of cash and investments.
"We're off to a strong start in 2006," stated Bruce L.A. Carter, President and
CEO. "Our rhThrombin Phase 3 study is moving forward on schedule, and we remain
focused on our goal of filing a biologics license application (BLA) with the FDA
by year end. We are planning for the initiation of Phase 2 testing of TACI-Ig
and IL-21 in 2006," added Dr. Carter.
Revenues for the quarter decreased to $7.4 million, compared to $12.0 million
for the same period in the prior year. The decrease resulted primarily from
reduced option and license fee revenues. In the first quarter of 2005, the
company earned a lump sum payment under a license agreement with Eli Lilly and
Company related to certain human Protein C patents and a milestone payment under
a license agreement with Novo Nordisk A/S related to IL-20. No comparable
payments were earned in the first quarter of 2006.
Operating expenses for the quarter increased, as planned. Research and
development expenses increased by 34% to $32.9 million, compared to $24.5
million for the first quarter of 2005. A majority of the increase was
attributable to costs associated with the manufacture of rhThrombin, which are
necessary to support the filing of a BLA with the FDA. Other significant factors
driving the increase included: costs of the rhThrombin Phase 3 study; increased
staffing to support product development activities; and stock-based compensation
expense recorded pursuant to new stock option accounting rules.
General and administrative expenses increased by 30% to $7.8 million, compared
to $6.0 million for the first quarter of 2005. Most of the increase in 2006 was
attributable to stock-based compensation expense recorded pursuant to new stock
option accounting rules. Increased patent costs also contributed to the
increase.
ZymoGenetics First Quarter 2005 Results
May 4, 2006
Page 2 of 4
Non-operating items shifted to net other income in the first quarter of 2006
from net other expense in 2005 due to higher investment income, driven primarily
by higher interest rates and secondarily by higher investment balances.
DEVELOPMENT PROGRAMS
The company's clinical development programs continued to advance in 2006.
Following are status updates on each program.
rhThrombin
The Phase 3 pivotal clinical trial, which began in late October 2005, has
continued to enroll patients as planned. The Independent Data Monitoring
Committee (IDMC) for the study met in March, with the committee recommending the
clinical trial proceed according to plan. The last patient visit for the trial
is expected to occur in the third quarter of this year. Based on this time
schedule, the company plans to disclose initial findings in the second half of
the year and file a BLA with the FDA in late 2006.
TACI-Ig
In January, preliminary results from the rheumatoid arthritis Phase 1b clinical
study were released, showing that TACI-Ig appeared to be safe and well
tolerated, with clear biologic responses that appeared to correlate with
clinical benefit. Data from the study will be presented at the European League
Against Rheumatism (EULAR) in Amsterdam, June 21-24. Patient treatment in the
Phase 1b clinical study in systemic lupus erythematosus (SLE) has been
completed, and the company expects to present results in the second half of
2006. Three Phase 1b studies in B-cell malignancies are proceeding toward
completion. Together with its collaborator Serono S.A., the company expects to
initiate Phase 2 clinical testing of TACI-Ig in at least one autoimmune disease
indication in the second half of 2006.
IL-21
The Phase 1 monotherapy trial of IL-21 in patients with metastatic melanoma or
metastatic renal cell carcinoma was completed. Data from this study will be
presented at the American Society of Clinical Oncology (ASCO) 2006 annual
meeting, June 2-6 in Atlanta. The Phase 1 trial of the combination of IL-21 and
rituximab in patients with non-Hodgkin's lymphoma is expected to commence within
the next several months.
EXECUTIVE MANAGEMENT AND BOARD OF DIRECTORS
The Company has made two recent additions to its executive management team.
Michael J. Dwyer joined the company, effective May 1, 2006, as Senior Vice
President of Marketing & Sales. Mr. Dwyer will be responsible for continuing to
build ZymoGenetics' sales, marketing and operations/logistics team in
preparation for anticipated launch of rhThrombin in late 2007. Also, Vaughn B.
Himes, Ph.D. was appointed Senior Vice President of Technical Operations, with
responsibility for all aspects of the Company's manufacturing and process
development activities. Dr. Himes replaces Mark D. Young, Ph.D., who retired
from the company effective April 30, 2006.
ZymoGenetics First Quarter 2005 Results
May 4, 2006
Page 3 of 4
In March 2006, Judith A. Hemberger, Ph.D. was added to the Company's board of
directors. Dr. Hemberger is an experienced biotech industry executive with over
25 years of global pharmaceutical and biotech industry experience, most recently
as a founder, Executive Vice President and Chief Operating Officer and a
director of Pharmion Corporation. Dr. Hemberger filled a seat vacated by George
B. Rathmann, who retired from the Company's board for personal health reasons in
February 2006. Dr. Rathmann is continuing his relationship with the Company as
Chairman Emeritus, an honorary position.
ABOUT ZYMOGENETICS
ZymoGenetics creates novel protein drugs with the potential to significantly
help patients fight their 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.
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 the company's public filings with the Securities and
Exchange Commission, including the company's Annual Report on Form 10-K for the
year ended December 31, 2005. 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.
-more-
ZymoGenetics First Quarter 2005 Results
May 4, 2006
Page 4 of 4
ZYMOGENETICS, INC.
STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
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2006 2005
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Revenues:
Royalties $ 1,853 $ 2,381
Option fees 2,659 2,659
License fees and milestone payments 2,879 6,915
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Total revenues 7,391 11,955
Operating expenses:
Research and development, including stock-based
compensation of $2,899 and $936, respectively 32,950 24,531
General and administrative, including stock-based
compensation of $1,619 and $309, respectively 7,807 5,983
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Total operating expenses 40,757 30,514
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Loss from operations (33,366) (18,559)
Other expense, net 1,709 (228)
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Net loss $ (31,657) $ (18,787)
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Basic and diluted net loss per share $ (0.48) $ (0.33)
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Weighted-average number of shares used in
computing net loss per share 66,292 57,672
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BALANCE SHEETS
(in thousands)
March 31, December 31,
2006 2005
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(unaudited)
Cash, cash equivalents and short-term investments $ 337,024 $ 366,311
Other current assets 9,956 8,884
Property and equipment, net 70,994 71,803
Other assets 6,625 6,355
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Total assets $ 424,599 $ 453,353
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Current liabilities $ 27,534 $ 31,736
Lease obligations 66,832 66,754
Other non-current liabilities 20,054 21,200
Shareholders' equity 310,179 333,663
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Total liabilities and shareholders' equity $ 424,599 $ 453,353
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