EXHIBIT 99.1
[LOGO OF CIPHERGEN] 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
PRESS RELEASE
CIPHERGEN REPORTS THIRD QUARTER 2006 FINANCIAL RESULTS AND
PROVIDES UPDATE ON BUSINESS PROGRESS
-- Conference Call Today at 10 a.m. EST --
FREMONT, CALIF., NOVEMBER 7, 2006 -- Ciphergen Biosystems, Inc. (Nasdaq: CIPH)
today announced financial results for its third quarter and nine months ended
September 30, 2006.
THIRD QUARTER AND NINE-MONTH 2006 FINANCIAL RESULTS
The Company reported net revenue of $4.7 million in the third quarter of 2006,
compared to $7.1 million in the third quarter of 2005. Total operating expenses
for the third quarter of 2006 were $8.7 million compared to $10.7 million in the
same period last year. Net loss declined to $7.0 million in the third quarter of
2006, compared to $7.5 million in the third quarter of 2005.
Revenue for the first nine months of 2006 was $17.0 million compared to $20.6
million in the first nine months of 2005. For the nine months ended September
30, 2006, the net loss was $20.2 million, compared to $26.2 million in the same
period in 2005.
At September 30, 2006, the Company's cash and investments were $15.0 million,
compared to $20.6 million at June 30, 2006.
Ciphergen believes that its third quarter financials will reflect the last full
quarter of revenue from the life science research business which included sales
of the ProteinChip(R) arrays and SELDI instruments as well as biomarker
development services. Going forward the Company does not anticipate having
significant revenue until its diagnostic tests are commercialized. Operating
expenses are expected to be substantially reduced in the fourth quarter of 2006
given the reduction of employees to approximately 50 persons. After the sale of
the assets comprising its life science research business to Bio-Rad
Laboratories, Inc. is completed, Ciphergen estimates that cash used for
operations will be approximately $4 million to $5 million per quarter, and
believes that there are sufficient cash resources to fund operations.
"We are intent on building a molecular diagnostics business that can change how
physicians determine the best treatment for their patients. We believe that this
business model will provide long-term growth and sustained value to our
shareholders," said Gail S. Page, President and CEO of Ciphergen.
UPCOMING MILESTONES AND RECENT ACCOMPLISHMENTS
"Over the next twelve months we look forward to accomplishing several milestones
that will establish Ciphergen as a leader in personalized medicine. Our
diagnostic program in ovarian cancer continues to make excellent progress, and
we anticipate our first test will be used as an adjunct to other diagnostic
methods to help physicians in the differential diagnosis of a persistent pelvic
mass. Our strategy includes multiple pathways to commercialization. We are
optimistic that the medical community will have access to a version of our
diagnostic as a laboratory developed test from Quest Diagnostics. Concurrently,
we anticipate submitting the results of our prospective clinical trial to the
U.S. Food and Drug Administration (FDA) by the second half of 2007. In addition,
we plan to commercialize this test internationally," continued Ms. Page.
o Corporate Transformation
- Received stockholder approval to sell the life science research
business to Bio-Rad Laboratories for up to $20 million. Bio-Rad
also will make a $3 million equity investment in Ciphergen.
- Entered agreements to exchange $27.5 million of outstanding
4.50% Convertible Senior Notes for new Convertible Senior Notes
and $11.0 million cash. These transactions are contingent on the
completion of the sale of the life science research business to
Bio-Rad Laboratories, Inc.
o Ovarian Cancer Diagnostic Progress
- Presented data at the International Gynecologic Cancer Society
(IGCS) Biennial Meeting in October, supporting the use of our
protein biomarker panel to discriminate women with ovarian
cancer from women with benign pelvic disease. Data were also
presented describing the use of protein biomarkers to help
predict survival in patients with ovarian cancer.
- Published a study in the September issue of Cancer,
Epidemiology, Biomarkers & Prevention validating the use of
Ciphergen's protein biomarkers to discriminate women with
ovarian cancer from women with benign ovarian tumors and other
non-gynecologic diseases.
o Management Appointment
- Debra A. Young was appointed Vice President and Chief Financial
Officer of the Company.
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o New Collaboration
- Signed a collaboration agreement with Ohio State University for
an enzymatic assay to diagnose thrombotic thrombocytopenic
purpura (TTP), a hematologic disorder which causes abnormal
clotting and a decrease in platelets.
CONFERENCE CALL
A conference call and webcast will be held on today at 10:00 a.m. EST to discuss
the third 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 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
Tuesday, November 21, 2006. The replay number for domestic callers is
1-800-633-8284 and for international callers + 1 402-977-9140. The reservation
number for both domestic and international callers is 21308074. 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 dedicated to the discovery, development and
commercialization of novel high-value diagnostic tests that help physicians
diagnose, treat and improve outcomes for patients. Ciphergen, along with its
prestigious scientific collaborators, has ongoing diagnostic programs in
oncology/hematology, cardiology and women's health with an initial focus in
ovarian cancer. Based in Fremont, California, more information about Ciphergen
can be found on the Web at http://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 Ciphergen's plans to
build a molecular diagnostics company that will provide long-term growth and
shareholder value, the Company's expectations regarding its ovarian cancer
diagnostics test, including the expected timing of FDA submissions and its
international commercialization plans, the closing of the Bio-Rad transaction
and the expected revenues, expenses and cash usage of the Company following the
closing of the Bio-Rad transaction. Actual results may differ materially from
those projected in such forward-looking statements due to various factors,
including the risk that Ciphergen is unable to successfully utilize resources
and execute plans for its molecular diagnostics business. Investors should
consult Ciphergen's filings with the Securities and Exchange Commission,
including its Form 10-Q filed August 16, 2006 and proxy statement filed
September 28, 2006, for further information regarding these and other risks
related to the Company's business.
NOTE: Ciphergen is a registered trademark of Ciphergen Biosystems, Inc.
~financials to follow~
# # #
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Ciphergen Biosystems, Inc.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30
------------------------ ------------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
Revenue $ 4,662 $ 7,056 $ 16,999 $ 20,645
Cost of revenue 2,480 3,349 8,832 10,067
---------- ---------- ---------- ----------
Gross profit 2,182 3,707 8,167 10,578
---------- ---------- ---------- ----------
Operating expenses:
Research and development 2,914 3,098 8,780 10,231
Sales and marketing 3,203 4,136 10,651 14,201
General and administrative 2,542 3,482 7,550 10,728
---------- ---------- ---------- ----------
Total operating expenses 8,659 10,716 26,981 35,160
---------- ---------- ---------- ----------
Loss from continuing operations (6,477) (7,009) (18,814) (24,582)
Interest and other income (expense), net (519) (503) (1,211) (1,451)
---------- ---------- ---------- ----------
Loss from continuing operations before income taxes (6,996) (7,512) (20,025) (26,033)
Income tax provision (benefit) from continuing operations 20 (36) 190 103
---------- ---------- ---------- ----------
Net loss from continuing operations (7,016) (7,476) (20,215) (26,136)
---------- ---------- ---------- ----------
Loss from sale of discontinued operations, net of tax - (67)
---------- ---------- ---------- ----------
Net loss $ (7,016) $ (7,476) $ (20,215) $ (26,203)
========== ========== ========== ==========
Basic and diluted net loss per share $ (0.19) $ (0.23) $ (0.56) $ (0.84)
========== ========== ========== ==========
Shares used in computing basic and diluted
net loss per share 36,075 32,282 36,042 31,328
========== ========== ========== ==========
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Ciphergen Biosystems, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
September 30, December 31,
2006 2005 (1)
------------- -------------
ASSETS
Currents assets:
Cash and cash equivalents $ 15,024 $ 25,738
Short term investment - 2,240
Accounts receivable 3,985 5,828
Inventory 4,255 5,594
Prepaids and other current assets 2,526 1,746
------------- -------------
Total current assets 25,790 41,146
Property, plant and equipment, net 5,435 7,320
Goodwill and other intabgible assets, net 1,932 2,493
Other long term assets 1,486 1,852
------------- -------------
Total assets $ 34,643 $ 52,811
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,223 $ 3,188
Accrued liabilities 4,934 6,298
Current portion of deferred revenue 3,569 4,132
Current portion of capital lease obligations 12 21
Current portion of long term debt - 377
------------- -------------
Total current liabilities 10,738 14,016
Deferred revenue, net of current portion 320 508
Capital lease obligations, net of current portion 3 28
Long term debt owed to related party 6,250 2,500
Convertible senior notes, net of discount 28,986 28,586
Other long term liabilities 470 650
------------- -------------
Total liabilities 46,767 46,288
------------- -------------
Stockholders equity:
Common stock 36 36
Additional paid in capital 203,925 202,485
Accumulated other comprehensive loss (76) (204)
Accumulated deficit (216,009) (195,794)
------------- -------------
Total stockholders' equity (12,124) 6,523
------------- -------------
Total liabilities and stockholders' equity $ 34,643 $ 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.
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