Exhibit 99.1
Ciphergen Biosystems, Inc.
6611 Dumbarton Circle
Fremont, California 94555
Toll-free: +1 888 864 3770
Tel: +1 510 505 2100
Fax: +1 510 505 2101
www.ciphergen.com
For Immediate Release:
Ciphergen Biosystems, Inc.
Sue Carruthers
Investor Relations
(510) 505 2297
CIPHERGEN REPORTS SECOND QUARTER 2006 FINANCIAL RESULTS AND SUBSTANTIAL
DEVELOPMENT PROGRESS
-Definitive Agreement Signed for Bio-Rad Laboratories to
Acquire Instrument Business-
-- Multiple Proteomic Diagnostic Programs Advancing --
-- Conference Call Today at 5:00 p.m. ET --
Fremont, CA, August 14, 2006 - Ciphergen Biosystems, Inc. (Nasdaq: CIPH) today
announced financial results for the second quarter ended June 30, 2006. In a
separate press release, Ciphergen also announced that it has signed a definitive
agreement for Bio-Rad Laboratories to acquire Ciphergen's proprietary proteomics
instrument business which includes Ciphergen's Surface Enhanced Laser
Desorption/Ionization (SELDI) technology, ProteinChip(R) Arrays and accompanying
software. Bio-Rad will purchase this business for approximately $20 million in
cash. In addition, Bio-Rad is making a $3 million equity investment in
Ciphergen.
"Today we announced a significant strategic milestone that accelerates our
transformation into a leading specialized diagnostics provider," stated Gail S.
Page, President and CEO of Ciphergen. "We have a dedicated management team and
the financial resources to build an exciting, attractive diagnostics business
for long-term growth and sustained shareholder value."
SECOND QUARTER AND SIX-MONTH 2006 FINANCIAL RESULTS
The Company reported net revenue of $5.3 million in the second quarter of 2006,
compared to $6.9 million in the second quarter of 2005. On a generally accepted
accounting principles (GAAP) basis, net loss declined 18 percent to $7.7 million
in the second quarter of 2006, compared to $9.4 million in the second quarter of
2005. Excluding the impact of FAS 123(R) which was adopted by Ciphergen on
January 1, 2006, Ciphergen's non-GAAP net loss declined 23 percent to $7.3
million in the second quarter of 2006.
Revenue for the first half of 2006 was $12.3 million compared to $13.6 million
in the first half of 2005. For the six months ended June 30, 2006, on a GAAP
basis the net loss was $13.2 million, compared to $18.7 million in the same
period in 2005. The net loss on a non-GAAP basis for the first half of 2006 was
$12.3 million.
At June 30, 2006, the Company's cash and investments were $20.6 million,
compared to $24.4 million at March 30, 2006.
RECENT HIGHLIGHTS
"In the second quarter, we obtained favorable clinical results supporting our
ovarian and prostate cancer diagnostics programs, and presented favorable study
results at the ASCO and AUA annual meetings. We also recruited and established a
Scientific Advisory Board to help direct and prioritize our other programs for
further development and commercialization," continued Ms. Page.
DEFINITIVE AGREEMENT WITH BIO-RAD LABORATORIES TO PURCHASE CIPHERGEN'S
INSTRUMENT BUSINESS.
o Bio-Rad will manufacture, sell and market the SELDI technology to the
life sciences marketplace for proteomics applications, such as
biomarker discovery, characterization and validation. Ciphergen will
retain exclusive rights to the diagnostics market. In addition,
Ciphergen will have a supply agreement with Bio-Rad to purchase SELDI
instruments and consumables for the continued development of its
diagnostics business. The companies will collaborate to identify SELDI
customers interested in partnering with Ciphergen to commercialize
biomarker discoveries.
OVARIAN CANCER DIAGNOSTIC PROGRESS.
o At the 2006 Annual Meeting of the American Society of Clinical
Oncology (ASCO) held in early June, Ciphergen announced results of the
first ever large-scale multi-institutional independent validation
study of biomarkers discovered through current clinical proteomics
efforts. As in previous studies, an index derived from the seven
markers tested demonstrated improved specificity for discriminating
ovarian cancer from benign pelvic masses, as well as for the detection
of early stage cancer.
o The biomarkers demonstrated statistically significant power to
differentiate ovarian cancer patients from women with benign disease
(p<.00001). This study is part of a comprehensive program being
conducted 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 developing assays designed to distinguish between benign
and malignant pelvic masses, studies are underway to predict
recurrence of ovarian cancer and to provide additional tools to aid
physicians in triaging women considered at high risk of ovarian
cancer.
PROSTATE CANCER PROGRAM PROGRESS.
o At the annual meeting of the American Urological Association (AUA)
held in late May, researchers from Johns Hopkins presented data on two
proprietary biomarkers that may aid in the management of prostate
cancer, including detection, staging and prediction of recurrence.
These markers, a fragment of protein C inhibitor (PCI) and complement
factor 4 (C4a), were identified in a multi-center study of 400 men and
a five-year longitudinal study following 104 patients after radical
prostatectomy. These studies demonstrated that PCI provides
information useful for the detection and staging of prostate cancer,
and the combined use of pre-surgery PCI, PSA, and C4a is predictive of
prostate cancer recurrence.
SCIENTIFIC ADVISORY BOARD (SAB).
o The SAB will meet regularly with Ciphergen's senior management to help
evaluate the Company's ongoing diagnostic programs and prioritize them
towards commercialization. Members include the following distinguished
members of academia and industry:
o Robert C. Bast, Jr. MD - Vice President for Translational
Research and the Harry Carothers Wiess Distinguished University
Professor for Cancer Research at the University of Texas M.D.
Anderson Cancer Center.
o Daniel W. Chan, PhD, DABCC, FACR - Professor of Pathology,
Oncology, Urology and Radiology, Director of Clinical Chemistry
Division, Department of Pathology, and the Director, Center for
Biomarker Discovery at the Johns Hopkins University School of
Medicine.
o Ian Jacobs, MD, FRCOG - Director of the Department of
Gynecological Oncology and of the Institute of Women's Health at
University College London.
o Joyce G. Schwartz, MD - Vice President and Chief Laboratory
Officer of Quest Diagnostics.
o William Wallen, PhD - Senior Vice President and Chief Scientific
Officer of Idexx Laboratories.
CONFERENCE CALL DETAILS
A conference call and webcast will be held today, Monday, August 14 at 5:00 p.m.
ET to discuss the contents of this press release. To listen to the live webcast
of the conference call, please visit the "Investors" section of the
www.ciphergen.com web site. 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
August 28, 2006. The replay number for domestic callers is 800-633-8284 and for
international callers + 1 402-977-9140. The reservation number for both domestic
and international callers is 21300833. 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 Biosystems, Inc. is focused on the discovery, development and
commercialization of high-value, molecular diagnostic products to improve
patient care. Ciphergen, along with its prestigious scientific collaborators,
has ongoing diagnostic programs primarily in oncology with an initial focus in
ovarian and prostate cancer. Based in Fremont, California, more information
about Ciphergen can be found on the Web 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 our efforts to build a
specialty diagnostics business, the discovery of proteomic biomarkers that may
have diagnostic value; translating any proteomic biomarkers that may be
discovered into highly predictive research and clinical diagnostic assays; and
the potential for our ProteinChip technology to yield useful protein biomarkers
for clinical questions associated with ovarian cancer, prostate cancer and/or
other diseases. 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 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; the risk that pharmaceutical companies will not expand their use of our
products and services; 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 filed May 15,
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.
For Immediate Release:
Ciphergen Biosystems, Inc.
Sue Carruthers
Investor Relations
(510) 505 2297
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 June 30,
---------------------------------------------------------
2006 2005
------------------------------------------ ------------
GAAP Adjustments Non-GAAP GAAP
------------ ------------ ------------ ------------
Revenue $ 5,273 $ - $ 5,273 $ 6,941
Cost of revenue 2,948 (49) 2,899 3,583
------------ ------------ ------------ ------------
Gross profit 2,325 49 2,374 3,358
------------ ------------ ------------ ------------
Operating expenses:
Research and development 2,874 (94) 2,780 3,626
Sales and marketing 3,945 (83) 3,862 4,792
General and administrative 2,729 (238) 2,491 3,742
------------ ------------ ------------ ------------
Total operating expenses 9,548 (415) 9,133 12,160
------------ ------------ ------------ ------------
Loss from continuing operations (7,223) 464 (6,759) (8,802)
Interest and other income (expense), net (456) - (456) (537)
------------ ------------ ------------ ------------
Loss from continuing operations before income taxes (7,679) 464 (7,215) (9,339)
Income tax provision (benefit) from continuing operations 56 - 56 (11)
------------ ------------ ------------ ------------
Net loss from continuing operations (7,735) 464 (7,271) (9,328)
------------ ------------ ------------ ------------
Loss from sale of discontinued operations, net of tax (67)
------------ ------------ ------------ ------------
Net loss $ (7,735) $ 464 $ (7,271) $ (9,395)
============ ============ ============ ============
Basic and diluted net loss per share $ (0.21) $ (0.20) $ (0.32)
============ ============ ============
Shares used in computing basic and diluted
net loss per share 36,048 36,048 29,575
============ ============ ============
(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 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 Statements of Operations
Reconciliation of GAAP to NON-GAAP Operating Results (1)
(in thousands, except per share data)
Six Months Ended June 30,
---------------------------------------------------------
2006 2005
------------------------------------------ ------------
GAAP Adjustments Non-GAAP GAAP
------------ ------------ ------------ ------------
Revenue $ 12,337 $ - $ 12,337 $ 13,589
Cost of revenue 6,352 (94) 6,258 6,718
------------ ------------ ------------ ------------
Gross profit 5,985 94 6,079 6,871
------------ ------------ ------------ ------------
Operating expenses:
Research and development 5,866 (194) 5,672 7,133
Sales and marketing 7,448 (186) 7,262 10,065
General and administrative 5,008 (450) 4,558 7,246
------------ ------------ ------------ ------------
Total operating expenses 18,322 (830) 17,492 24,444
------------ ------------ ------------ ------------
Loss from continuing operations (12,337) 924 (11,413) (17,573)
Interest and other income (expense), net (692) - (692) (948)
------------ ------------ ------------ ------------
Loss from continuing operations before income taxes (13,029) 924 (12,105) (18,521)
Income tax provision (benefit) from continuing operations 170 - 170 139
------------ ------------ ------------ ------------
Net loss from continuing operations (13,199) 924 (12,275) (18,660)
------------ ------------ ------------ ------------
Loss from sale of discontinued operations, net of tax - - - (67)
------------ ------------ ------------ ------------
Net loss $ (13,199) $ 924 $ (12,275) $ (18,727)
============ ============ ============ ============
Basic and diluted net loss per share $ 0.37 $ (0.34) $ (0.63)
============ ============ ============
Shares used in computing basic and diluted
net loss per share 36,024 36,024 29,524
============ ============ ============
(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 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)
June 30, December 31,
2006 2005 (1)
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 20,576 $ 25,738
Short term investment - 2,240
Accounts receivable, net 4,185 5,828
Inventories 4,661 5,594
Prepaid expenses and other current assets 1,798 1,746
------------ ------------
Total current assets 31,220 41,146
Property, plant and equipment, net 5,910 7,320
Goodwill and other intangible assets, net 2,131 2,493
Other long term assets 1,691 1,852
------------ ------------
Total assets $ 40,952 $ 52,811
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,647 $ 3,188
Accrued liabilities 6,212 6,298
Current portion of deferred revenue 3,753 4,132
Current portion of capital lease obligations 22 21
Current portion of long term debt - 377
------------ ------------
Total current liabilities 11,634 14,016
Deferred revenue, net of current portion 439 508
Capital lease obligations, net of current portion 16 28
Long term debt owed to related party 5,000 2,500
Convertible senior notes, net of discount 28,851 28,586
Other long term liabilities 539 650
------------ ------------
Total liabilities 46,479 46,288
------------ ------------
Stockholders' equity:
Common stock 36 36
Additional paid in capital 203,509 202,485
Accumulated other comprehensive loss (79) (204)
Accumulated deficit (208,993) (195,794)
------------ ------------
Total stockholders' equity (5,527) 6,523
------------ ------------
Total liabilities and stockholders' equity $ 40,952 $ 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.