Exhibit 99.1
CIPHERGEN REPORTS FOURTH QUARTER AND YEAR-END 2006 FINANCIAL RESULTS AND
PROVIDES MILESTONES FOR 2007
- Conference Call Today at 9 a.m. Eastern -
FREMONT, Calif., Feb. 23 /PRNewswire-FirstCall/ -- Ciphergen Biosystems,
Inc. (Nasdaq: CIPH) today announced financial results for its fourth quarter
and year ended December 31, 2006.
"In 2006, we successfully restructured and repositioned Ciphergen. With the
completion of the sale of our research life sciences business, we are focused on
leveraging our investment in proteomics and biomarkers to build a leading
diagnostics company," said Gail S. Page President and Chief Executive Officer of
Ciphergen. "We have three tests in validation and clinical studies, an excellent
strategic partner in Quest Diagnostics Inc. that provides both financial and
market resources, and a robust pipeline of potential novel diagnostics."
"We enter 2007 well positioned to execute this strategy. Since the close of
the Bio-Rad transaction, we have made significant progress in a number of areas.
We have restructured our balance sheet, advanced our ovarian triage test into a
prospective clinical trial for FDA submission, and moved two other diagnostic
programs forward into development. Quest Diagnostics, our strategic partner for
our ovarian diagnostic, also has accepted the peripheral arterial disease
program as the second of three tests they have access to under our agreement,"
continued Page.
Fourth Quarter and Year-end 2006 Financial Results
On November 13, 2006, Ciphergen sold its life science research business to
Bio-Rad Laboratories. Accordingly, the only revenue in the fourth quarter of
2006 was derived from sales of instruments and tools during the first 6 weeks of
the quarter before the sale of the life science business was complete. The
Company reported net revenue of $1.2 million in the fourth quarter of 2006,
compared to $6.6 million in the fourth quarter of 2005.
Total operating expenses for the fourth quarter of 2006 were $7.7 million
compared to $12.9 million in the same period last year. Included in total
operating expenses for the fourth quarter of 2005 was a $2.5 million goodwill
impairment charge. The loss from continuing operations for the fourth quarter of
2006 was $0.1 million, compared to $9.9 million in the fourth quarter of 2005.
Included in the loss from continuing operations for the fourth quarter of 2006
was a $6.9 million net gain on the sale of the life science research business to
Bio-Rad. The net loss for the fourth quarter of 2006 was $1.9 million which
included a $1.5 million loss on extinguishment of debt compared to $9.2 million
for the same period in 2005. Basic and diluted net loss for the fourth quarter
of 2006 was $0.05 per share compared to a basic and diluted net loss per share
of $0.26 per share for the same period in 2005. The Company has 39.2 million
shares outstanding as of December 31, 2006.
Revenue for the full-year of 2006 was $18.2 million compared to $27.2
million for 2005. For the full-year of 2006, the net loss was $22.1 million or
$0.61 per share, compared to $35.4 million or $1.10 per share in the same period
in 2005.
At December 31, 2006, the Company's cash and investments were $17.7 million,
compared to $15.0 million at September 30, 2006 and $28.0 million at December
31, 2005. In addition, Ciphergen has $3.0 million remaining to draw from a loan
facility from Quest Diagnostics, which indebtedness is forgivable upon
accomplishment of certain milestones.
Recent Accomplishments
* Corporate Transformation
- Completed the sale of the life science research business to Bio-Rad
Laboratories. Ciphergen received $19 million from Bio-Rad, including a
$3 million equity investment in Ciphergen. An additional $2.0 million is
receivable upon the successful resolution of a patent matter and a final
$2.0 million is in escrow and subject to potential claims.
- Completed the exchange of its outstanding 4.50% Convertible Senior Notes
due 2008 (Outstanding Notes). $27.5 million aggregate principal amount
of Outstanding Notes were exchanged for $16.5 million of a new series of
7.00% Convertible Senior Notes due 2011 and $11.0 million of cash.
* Ovarian Cancer Diagnostic Progress
- Initiated a prospective clinical trial to evaluate its ovarian cancer
triage test to differentiate women with ovarian cancer from women with
benign pelvic masses.
- Selected PrecisionMed, Inc., a contract research organization with
expertise in the collection and management of human biological samples.
PrecisionMed is supporting Ciphergen in its clinical trial for its
ovarian tumor triage test.
- Engaged Emergo Group, Inc. to help gain regulatory clearance of
Ciphergen's ovarian test in various European countries.
- Teamed with Mosaic Health Care Consultants to develop and implement
reimbursement strategies and programs.
* Other Diagnostic Programs
- Quest Diagnostics accepted the second of its three tests from Ciphergen
pursuant to the parties' existing strategic alliance agreement. In
addition to the ovarian tumor triage test, Quest Diagnostics will assist
Ciphergen in the development and commercialization of a blood-based
assay for the detection of peripheral arterial disease (PAD).
- Formed collaboration with Ohio State University Research Foundation to
develop and clinically validate a diagnostic test to detect thrombotic
thrombocytopenic purpura (TTP), a hematologic disease, which causes
abnormal clotting and a decrease in platelets.
2007 Milestones
Over the next twelve months Ciphergen anticipates accomplishing the
following milestones:
* Complete the prospective clinical trial of its ovarian tumor triage test
and submit the results to the U.S. Food and Drug Administration for
clearance as the first test for use as an adjunct to other diagnostic
methods to help physicians in the differential diagnosis of a persistent
pelvic mass;
* Continue to move the program in PAD forward through clinical validation
studies; and,
* Prepare for market launch of the TTP assay.
Going forward the Company does not anticipate having revenue until its
diagnostic tests are commercialized. Operating expenses are expected to be
substantially reduced in 2007 given the reduction of employees to approximately
40 persons. Ciphergen estimates that cash used for operations in the first
quarter of 2007 will be approximately $5.0 million. The Company expects
operating expenses to continue to decrease.
Conference Call
A conference call and webcast will be held on today at 9:00 a.m. Eastern to
discuss these results and provide an update on business developments. To access
the live conference call via phone, dial (877) 325-7371 from the United States
and Canada or (706) 634-0768 internationally. The conference ID is 21329140.
Please dial-in approximately ten minutes prior to the start of the call.
Additionally, you may access the live and subsequently archived webcast of the
conference call from the Investor Relations section of the Company's website at
http://www.ciphergen.com. Please connect to the web site at least 15 minutes
prior to the call to allow for any software download that may be necessary.
A telephone replay will be available beginning approximately one hour after
the call through February 27 and may be accessed by dialing (800) 633-8284 from
the United States and Canada or (+1 402) 977-9140 internationally. The replay
passcode is 21329140. An archived replay of the call will be available until the
next quarterly call.
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 expectations
for the timing of completion of its ovarian tumor triage test clinical trial and
the related submission to the U.S. Food and Drug Administration, its TTP and PAD
program plans, expected decreases in operating expenses and projected cash usage
in the first quarter of 2007. 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 its resources and
execute plans for its diagnostics business. Investors should consult Ciphergen's
filings with the Securities and Exchange Commission, including its Form 10-Q
filed November 20, 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.
Ciphergen Biosystems, Inc.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Twelve Months
Ending December 31 Ending December 31
---------------------- ----------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
Revenue $ 1,218 $ 6,601 $ 18,215 $ 27,246
Cost of Revenue 505 3,626 9,338 13,693
Gross Profit 713 2,975 8,877 13,553
Operating expenses:
Research and development 2,695 2,965 11,474 13,196
Sales and marketing 1,917 3,808 12,568 18,009
General and administrative 3,112 3,676 10,661 14,404
Goodwill Impairment - 2,453 - 2,453
Total operating expenses 7,724 12,902 34,703 48,062
Gain on sale of life science
research business (6,929) - (6,929) -
Loss from continuing operations (82) (9,927) (18,897) (34,509)
Loss on extinguishment of debt (1,481) - (1,481) -
Interest and other income (expense),
net (327) (399) (1,536) (1,871)
Loss from continuing operations
before income taxes (1,890) (10,326) (21,914) (36,380)
Income tax provision (benefit) from
continuing operations (38) (96) 152 7
Net loss from continuing operations (1,852) (10,230) (22,066) (36,387)
Gain from sale of discontinued
operations, net of tax - 1,000 - 954
Net loss $ (1,852) $ (9,230) $ (22,066) $ (35,433)
Basic and diluted net loss per
share $ (0.05) $ (0.26) $ (0.61) $ (1.10)
Shares used in computing basic and
diluted net loss per share 37,718 35,961 36,465 32,321
Ciphergen Biosystems, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
December 31, December 31,
2006 2005 (1)
------------ ------------
ASSETS
Currents assets:
Cash and cash equivalents $ 17,711 $ 25,738
Short term investment - 2,240
Accounts receivable 29 5,828
Inventory - 5,594
Prepaids and other current assets 2,300 1,746
Total current assets 20,040 41,146
Property, plant and equipment, net 2,260 7,320
Goodwill and other intangible assets,
net - 2,493
Other long term assets 716 1,852
Total assets $ 23,016 $ 52,811
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,401 $ 3,188
Accrued liabilities 4,601 6,298
Current portion of deferred
revenue 45 4,132
Current portion of capital lease
obligations - 21
Current portion of long term debt - 377
Total current liabilities 7,047 14,016
Deferred revenue, net of current
portion - 508
Capital lease obligations, net of
current portion - 28
Long term debt owed to related party 7,083 2,500
Convertible senior notes, net of
discount 18,427 28,586
Other long term liabilities 360 650
Total liabilities 32,917 46,288
Stockholders equity:
Common stock 39 36
Additional paid in capital 207,991 202,485
Accumulated other comprehensive
loss (71) (204)
Accumulated deficit (217,860) (195,794)
Total stockholders' equity (9,901) 6,523
Total liabilities and
stockholders' equity $ 23,016 $ 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.
SOURCE Ciphergen Biosystems, Inc.
-0- 02/23/2007
/CONTACT: Ciphergen Biosystems, Inc., (toll-free) 1-888-864-3770, or
+1-510-505-2100, or fax - +1-510-505-2101/
/Web site: http://www.ciphergen.com /