Exhibit 99.1
Contact: Matthew M. Loar
Chief Financial Officer
650-562-1424
GENELABS TECHNOLOGIES REPORTS 2005 YEAR-END
AND FOURTH QUARTER FINANCIAL RESULTS
REDWOOD CITY, Calif., April 3, 2006 -- Genelabs Technologies, Inc.
(Nasdaq:GNLB) today reported financial results for the year ended December 31,
2005. Genelabs reported 2005 revenues of $6.8 million, compared to $5.6 million
for 2004. Operating expenses were $18.2 million in 2005 compared to $21.6
million in 2004. For 2005, the company reported a net loss of $10.8 million, or
$0.61 per share, compared to a net loss of $13.5 million, or $0.77 per share,
in 2004.
The company also reported financial results for the fourth quarter of 2005.
Revenues for the three months ended December 31, 2005 were $1.7 million,
compared to revenues of $3.8 million for the three months ended December 31,
2004. Operating expenses for the fourth quarter of 2005 were $4.1 million,
compared to $5.4 million for the fourth quarter of 2004. The net loss for the
three months ended December 31, 2005 was $2.3 million, or $0.13 per share,
compared to a net loss of $1.5 million, or $0.09 per share, for the three
months ended December 31, 2004.
Genelabs had $10.2 million in cash, cash equivalents and restricted cash at
December 31, 2005.
"During 2005 we made significant advances in our hepatitis C virus drug
discovery research programs. We advanced two distinct classes of non-nucleoside
compounds with potent activity against the HCV polymerase in preclinical
development. Recently we entered into an agreement for the potential
manufacture of GMP (Good Manufacturing Practices) material to enable us to
conduct studies that would be necessary to file a U.S. IND (Investigational New
Drug Application). Early in 2005 we initiated a new HCV drug discovery program
targeting the NS5a region of the virus, and already have identified compounds
with low nanomolar level potency that we are in the process of optimizing for
DMPK (drug metabolism and pharmacokinetic) properties. We also continued
synthesis and optimization of additional compounds for our collaboration with
Gilead Sciences, Inc. covering nucleoside compounds that target the HCV
polymerase," stated James A.D. Smith, President and Chief Executive Officer.
"Our Prestara development team has met with the FDA (U.S. Food and Drug
Administration) to discuss the path forward for our potential lupus drug,
Prestara(TM). We are in the final stages of designing a phase III clinical
trial to support an indication for the treatment of lupus, and we are working
with the FDA as we complete this process. We only plan to conduct an additional
phase III study if we secure a source of funding for the trial."
Genelabs cash and cash equivalents are sufficient to fund the company's regular
operations into the beginning of the fourth quarter of 2006. Because this is
less than one year's expected funding, in compliance with Nasdaq Marketplace
Rule 4350(b)(1)(B), Genelabs also announced today that its independent
registered public accounting firm has issued a "going concern" qualification to
their opinion on Genelabs' audited financial statements for the year ended
December 31, 2005.
-more-
Genelabs Technologies Reports 2005 Year-End and Fourth Quarter Financial Results
Page 2
About Genelabs Technologies
- ---------------------------
Genelabs Technologies, Inc. is a biopharmaceutical company focused on the
discovery and development of pharmaceutical products to improve human health.
We have built drug discovery capabilities that can support various research and
development projects. Genelabs is currently concentrating these capabilities on
discovering novel compounds that selectively inhibit replication of the
hepatitis C virus and advancing preclinical development of compounds from this
hepatitis C virus drug discovery program, while also developing a late-stage
product for lupus. We believe that these high-risk, potentially high reward
programs focus our research and development expertise in areas where we have
the opportunity to generate either first-in-class or best-in-class products
that will address diseases for which current therapies are inadequate. For more
information, please visit www.genelabs.com.
Genelabs(R) and the Genelabs logo are registered trademarks and Prestara(TM) is
a trademark of Genelabs Technologies, Inc.
NOTE ON FORWARD LOOKING STATEMENTS AND RISKS: This press release contains
forward-looking statements including statements regarding the progress of the
Company's HCV drug discovery programs, the design of a phase III clinical trial
for Prestara and the future of the company's research and development programs.
These forward-looking statements are based on Genelabs' current expectations
and are subject to uncertainties and risks that could cause actual results to
differ materially from the statements made. Uncertainties and risks include,
without limitation, that Genelabs may not be able to raise sufficient funds to
continue operations; delisting of Genelabs common stock from the Nasdaq Capital
Market; fluctuations in Genelabs' stock price; failures or setbacks in our HCV
research programs or in our collaboration with Gilead; progress and
announcements by competitors regarding their HCV programs; regulatory problems
or delays regarding Prestara(TM), including an adverse response from the FDA or
a determination to discontinue development of Prestara; increases in expenses
and Genelabs' capital requirements and history of operating losses. Please see
the information appearing in Genelabs' filings with the Securities and Exchange
Commission, including our most recent Annual Report on Form 10-K, under the
captions "Risk Factors" and "Forward-Looking Statements" for more discussion
regarding these uncertainties and risks and others associated with the
company's research programs, early stage of development and other risks which
may affect the company or cause actual results to differ from those included in
the forward-looking statements. Genelabs does not undertake any obligation to
update these forward-looking statements or risks to reflect events or
circumstances after the date of this release.
-Financials to Follow-
GENELABS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, December 31,
2005 2004
------------------ -------------------
ASSETS
Cash, cash equivalents and restricted cash $ 10,211 $ 26,508
Other current assets 539 824
Property and equipment, net 951 1,091
Long-term investments 960 960
------------------ -------------------
$ 12,661 $ 29,383
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LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities, including deferred revenue $ 10,314 $ 16,436
Shareholders' equity 2,347 12,947
------------------ -------------------
$ 12,661 $ 29,383
================== ===================
Note: Balances are derived from the audited financial statements.
GENELABS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
For the three months ended For the year ended
December 31, December 31,
------------------------------- -------------------------------
2005 2004 2005 2004
------------------------------- -------------------------------
(Unaudited) Note 1
Revenue $ 1,719 $ 3,801 $ 6,849 $ 5,556
--------------- -------------- -------------- --------------
Operating expenses:
Research and development 2,780 3,702 12,205 15,113
General and administrative 1,318 1,708 5,958 6,505
--------------- -------------- -------------- --------------
Total operating expenses 4,098 5,410 18,163 21,618
--------------- -------------- -------------- --------------
Operating loss (2,379) (1,609) (11,314) (16,062)
Interest income, net 108 106 472 269
--------------- -------------- -------------- --------------
Loss from continuing operations (2,271) (1,503) (10,842) (15,793)
Discontinued operations - income from
diagnostics business and gain on sale - - - 2,282
--------------- -------------- -------------- --------------
Net loss $ (2,271) $ (1,503) $(10,842) $(13,511)
=============== ============== ============== ==============
Loss per common share from continuing
Operations, basic and diluted $ (0.13) $ (0.09) $ (0.61) $ (0.90)
=============== ============== ============== ==============
Net loss per common share, basic and
diluted $ (0.13) $ (0.09) $ (0.61) $ (0.77)
=============== ============== ============== ==============
Weighted average shares outstanding to
calculate basic and diluted net loss per
common share 17,775 17,664 17,738 17,618
=============== ============== ============== ==============
Note 1: Derived from audited financial statements.