EXHIBIT 99.01
Contact: Matthew M. Loar
Chief Financial Officer
Phone: 650-562-1424
FOR IMMEDIATE RELEASE:
GENELABS TECHNOLOGIES, INC. REPORTS FINANCIAL RESULTS
FOR THE SECOND QUARTER AND FIRST HALF OF 2006
REDWOOD CITY, Calif. - August 3, 2006 - Genelabs Technologies, Inc.
(Nasdaq:GNLB) today reported revenues of $2.3 million and a net loss of $4.3
million, or $0.24 per share, for the second quarter of 2006. This compares to
revenues of $1.7 million and a net loss of $2.9 million, or $0.16 per share,
for the second quarter of 2005. Revenues for the first half of 2006 were $4.0
million, and the net loss was $7.7 million, or $0.43 per share, compared to
revenues of $3.4 million and a net loss of $5.7 million, or $0.32 per share,
for the same period in 2005.
At June 30, 2006, Genelabs had $23.4 million in cash and cash equivalents.
"We accomplished several strategically important milestones during the second
quarter of 2006," stated James A.D. Smith, President and Chief Executive
Officer. "In June, our expertise in HCV drug discovery was highlighted as we
entered into a collaboration with Novartis for non-nucleoside compounds
targeting the NS5b polymerase, which included an up-front payment of $12.5
million. Subsequently, we received net proceeds of $8.3 million from the sale
of common stock and warrants to a group of experienced healthcare institutional
investors. Having established premier partnerships with Novartis and Gilead for
our non-nucleoside and nucleoside HCV programs, respectively, and having
retained a third HCV program targeted at NS5a for ourselves, we believe we are
exceptionally well situated to continue to make significant contributions to
the discovery and advancement of potential new antivirals for this very
important public health concern."
"Separately, for Prestara we have sent a protocol to the FDA for a phase III
clinical trial designed to support an indication for the treatment of lupus,
while we also continue discussions with potential funding sources for the
trial," concluded Mr. Smith.
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
-more-
Genelabs Technologies, Inc. Reports Financial Results for the Second Quarter
and First Half of 2006
Page 2
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.
Note: 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 advancement of
the Company's HCV drug discovery programs, the protocol for a new clinical
trial of Prestara for lupus and the funding sources for a new clinical trial of
Prestara. 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, delisting of Genelabs common stock from the Nasdaq
Capital Market; potential development failures or setbacks in our HCV research
programs or in our collaborations with Novartis and/or 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; expiration of our
facility lease; and increases in expenses and Genelabs' capital requirements.
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)
June 30, December 31,
2006 2005
------------------ -------------------
(Unaudited) Note 1
ASSETS
Cash and cash equivalents $23,417 $10,061
Other current assets 757 689
Property and equipment 788 951
Long-term investments and other assets 1,110 960
------------------ -------------------
$26,072 $12,661
================== ===================
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued liabilities $2,753 $ 2,356
Unearned contract revenue 19,713 7,958
Shareholders' equity 3,606 2,347
------------------ -------------------
$26,072 $12,661
================== ===================
Note 1: Derived from audited financial statements
GENELABS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
For the three months ended For the six months ended
June 30, June 30,
------------------------------- --------------------------------
2006 2005 2006 2005
-------------- -------------- --------------- ----------------
Revenue:
Contract $ 2,156 $ 1,553 $ 3,711 $ 3,108
Royalty 163 157 313 324
-------------- -------------- --------------- ----------------
Total revenue 2,319 1,710 4,024 3,432
-------------- -------------- --------------- ----------------
Operating expenses:
Research and development 4,058 3,219 7,647 6,481
General and administrative 2,656 1,499 4,253 2,920
-------------- -------------- --------------- ----------------
Total operating expenses 6,714 4,718 11,900 9,401
-------------- -------------- --------------- ----------------
Operating loss (4,395) (3,008) (7,876) (5,969)
Interest income, net 98 123 189 243
-------------- -------------- --------------- ----------------
Net loss $ (4,297) $ (2,885) $ (7,687) $ (5,726)
============== ============== =============== ================
Net loss per common share -
basic and diluted $ (0.24) $ (0.16) $ (0.43) $ (0.32)
============== ============== =============== ================
Weighted average shares outstanding to calculate
basic and diluted net loss per common share 17,886 17,702 17,852 17,701
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