Exhibit 99.1
ZYMOGENETICS REPORTS SECOND QUARTER 2006 FINANCIAL RESULTS
Important Clinical Progress and Data Presentations Highlight Quarter
SEATTLE, Aug. 3 /PRNewswire-FirstCall/ -- ZymoGenetics, Inc. (Nasdaq: ZGEN)
today reported its financial results for the quarter ended June 30, 2006. The
company reported a net loss for the quarter of $30.0 million, or $0.45 per
share, which was higher than the net loss reported for the comparable 2005
period of $23.8 million, or $0.41 per share. The increased loss was consistent
with the company's plans, which call for increasing investment in its portfolio
of therapeutic product candidates as they advance through clinical development.
The company continued to maintain a strong financial position, with $310 million
of cash and investments as of June 30, 2006.
"With the completion of patient enrollment in our Phase 3 rhThrombin clinical
trial, our company achieved a major milestone this quarter," stated Bruce L.A.
Carter, President and Chief Executive Officer. "In addition, promising clinical
data was presented during the quarter for both atacicept and IL-21. Things have
continued to progress according to plan," added Dr. Carter.
Revenues for the quarter ended June 30, 2006 were $8.1 million, comparable to
the $8.0 million revenues reported for the second quarter of 2005.
Operating expenses for the quarter increased, as anticipated. Research and
development expenses increased by 21% to $31.4 million, compared to $25.9
million for the second quarter of 2005. A substantial amount of the increase was
attributable to stock-based compensation expense recorded pursuant to new stock
option accounting rules. Other significant factors driving the increase included
the costs of ongoing clinical trials and increased staffing to support the
expanding product development activities.
General and administrative expenses increased by 42% to $8.3 million, compared
to $5.9 million for the second 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 staffing costs, including marketing and
sales, also contributed to the increase.
Non-operating items shifted to net other income in the second 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.
Recent Highlights
The company continues to advance its pipeline of product candidates. Highlights
of the second quarter and anticipated near-term developments for each clinical
program are described below.
rhThrombin
ZymoGenetics announced the completion of enrollment in its Phase 3 pivotal
clinical trial of recombinant human thrombin on June 20, 2006. The company plans
to disclose trial findings in September and is on track to file a Biologics
License Application with the FDA in late 2006.
The company will soon begin enrolling subjects in a Phase 2 clinical trial using
rhThrombin in a spray applicator as an adjunct to hemostasis in autologous skin
grafting for burns and other traumatic skin injuries. ZymoGenetics plans to
enroll up to forty patients, ages 2 to 65 years, in this open-label study, which
is expected to finish near the end of 2006.
Atacicept (TACI-Ig)
Results of the company's rheumatoid arthritis Phase 1b clinical study were
presented at the European League Against Rheumatism (EULAR) annual congress in
Amsterdam on June 23, 2006. Data supported ZymoGenetics' earlier announced
findings that atacicept was well tolerated, with clear biologic responses that
appeared to correlate with clinical benefit. The company expects to present
results from its Phase 1b clinical studies in systemic lupus erythematosus (SLE)
and B-cell malignancies at medical meetings during the second half of 2006.
Together with its partner Serono S.A., the company expects to initiate Phase 2
clinical testing of atacicept in patients with rheumatoid arthritis during the
second half of 2006.
IL-21
Results from the Phase 1 monotherapy trial of Interleukin 21 (IL-21) in patients
with metastatic melanoma or metastatic renal cell carcinoma (RCC) were presented
at the American Society of Clinical Oncology 2006 annual meeting. Findings from
this trial showed that IL-21 can be administered in an outpatient setting with a
satisfactory toxicity profile and evidence of anti-tumor activity. ZymoGenetics
also plans to start Phase 1/2 testing of IL-21 for RCC in combination with
tyrosine kinase inhibitors during the second half of 2006. The company's
development partner Novo Nordisk continues to examine IL-21 monotherapy in
metastatic melanoma and has started the Phase 2 portion of their Phase 1/2
clinical trial. ZymoGenetics recently announced the initiation of a Phase 1
trial combining IL-21 with rituximab in patients with non-Hodgkin's lymphoma.
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.
CONTACT: investors, John Calhoun, M.D., MBA, Director, Corporate Communications
& Investor Relations, +1-206-442-6744, or Media Relations, Susan W. Specht, MBA,
Associate Director, Corporate Communications, +1-206-442-6592
ZYMOGENETICS, INC.
STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
Revenues:
Royalties $ 1,734 $ 1,837 $ 3,587 $ 4,218
Option fees 2,673 2,659 5,333 5,319
License fees and milestone
payments 3,660 3,519 6,539 10,433
Total revenues 8,067 8,015 15,459 19,970
Operating expenses:
Research and development 31,375 25,888 64,325 50,419
General and
administrative 8,297 5,861 16,104 11,845
Total operating
expenses 39,672 31,749 80,429 62,264
Loss from operations (31,605) (23,734) (64,970) (42,294)
Net other income
(expense) 1,634 (69) 3,342 (297)
Net loss $ (29,971) $ (23,803) $ (61,628) $ (42,591)
Basic and diluted net
loss per share $ (0.45) $ (0.41) $ (0.93) $ (0.74)
Weighted-average number
of shares used in
computing net loss
per share 66,832 57,855 66,564 57,764
BALANCE SHEETS
(in thousands)
(Unaudited)
June 30, December 31,
2006 2005
------------ ------------
Cash, cash equivalents and short-term
investments $ 310,279 $ 366,311
Other current assets 8,776 8,884
Property and equipment, net 71,849 71,803
Other assets 6,414 6,355
Total assets $ 397,318 $ 453,353
Current liabilities $ 23,231 $ 31,736
Lease obligations 66,982 66,754
Other non-current liabilities 18,746 21,200
Shareholders' equity 288,359 333,663
Total liabilities and
shareholders' equity $ 397,318 $ 453,353
SOURCE ZymoGenetics, Inc.
-0- 08/03/2006
/CONTACT: investors, John Calhoun, M.D., MBA, Director, Corporate
Communications & Investor Relations, +1-206-442-6744, or Media Relations,
Susan W. Specht, MBA, Associate Director, Corporate Communications,
+1-206-442-6592/
/Web site: http://www.zymogenetics.com/