34% Year to Year Growth drives Fourth Quarter Revenue to Record Level
- Conference call today at 4:30 p.m. ET -
SOUTH SAN FRANCISCO, Calif., Feb. 7 /PRNewswire-FirstCall/ -- Monogram
Biosciences, Inc. (Nasdaq: MGRM) today reported financial results for the
quarter and year ended December 31, 2007.
The Company had revenue of $13.7 million for the fourth quarter of
2007, 34% higher than $10.2 million in the fourth quarter of 2006. This
growth in revenue was driven primarily by revenue from Trofile(TM),
Monogram's proprietary tropism assay. Trofile is the only clinically
validated assay for selecting the appropriate HIV patients to be treated
with Selzentry(TM), Pfizer's recently FDA-approved CCR5 antagonist. For
U.S. patients, Monogram has performed over 3,800 Trofile tests to date, of
which over 2,600 tests were performed in the quarter ended December 31,
2007. Reflecting the portion of these tests for which reimbursement has
been established, revenue from Trofile in the quarter ended December 31,
2007 was $2.6 million.
"Fourth quarter revenues were at a record level," said Alfred
Merriweather, Monogram chief financial officer. "With this strong revenue
growth, the leverage provided by our existing laboratory infrastructure and
our established sales organization is clearly reflected in significantly
improved gross margin, operating loss and cash flow in the fourth quarter."
Gross margin on product revenues was 52% in the quarter ended December
31, 2007, substantially higher than the levels recorded in the first three
quarters of 2007. Operating loss was $4.7 million for the quarter ended
December 31, 2007, an improvement of 39% compared to $7.6 million in the
immediately preceding third quarter of 2007 and an improvement of 33%
compared to $7.0 million in the prior year's fourth quarter.
The Company had full year revenue of $43.2 million for 2007, compared
to revenue of $48.0 million for 2006. Prior year revenues, especially
during the first two quarters of 2006, included substantial revenues from
the use of the Company's assays in Pfizer's phase III trial of
Selzentry(TM), testing for which was largely completed in mid 2006, prior
to FDA review and approval of Selzentry in 2007.
The Company had approximately $30.6 million in cash resources
(comprised of cash, cash equivalents and short-term investments) at
December 31, 2007.
Monogram's Trofile Assay and Pfizer's maraviroc
"The first full quarter of Trofile commercialization has seen good
progress in testing volumes," said William Young, Monogram chief executive
officer. "Over 3,800 tests have been performed to date for U.S. patients
and weekly levels are now over 200. Coverage and reimbursement level are
established with Medicare and with most state ADAP programs. Fifteen state
Medicaid programs and Blue Cross have established coverage for Trofile and
we continue our discussions with these groups as well as many other public
and private payers to establish the level of reimbursement."
Trofile's role in clinical use of Selzentry was reaffirmed recently
with the issuance of treatment guidelines by the Department of Health and
Human Services. These guidelines recommend that a co-receptor tropism test
should be performed whenever the use of a CCR5 antagonist is being
considered and might also be considered for patients who fail therapy while
on a CCR5 antagonist. The guidelines acknowledged Trofile's role in the
clinical studies that formed the basis for approval of Selzentry, the only
approved CCR5 antagonist. "Monogram tests, particularly our Trofile Assay,
have been pivotal to CCR5 drug development programs," added Young. "Trofile
has been used in all phase II and phase III trials of CCR5 antagonists to
date, including those of Pfizer, Schering Plough and Incyte. We are
continuing our leadership in tropism testing with our enhanced tropism
assay, which sets an even higher standard of sensitivity for CCR5 positive
patients and which we expect to be commercially available soon."
Trofile is also now available outside of the U.S. where Pfizer is
taking the lead in commercializing Trofile. Arrangements are now in place
for processing samples from 12 countries, including Germany, the U.K. and
Canada. Monogram expects that access to Trofile will be established in
countries representing over 95% of the European market potential by the end
of June and in approximately 40 countries worldwide by the end of the year.
HERmark(TM) Breast Cancer Assay
"We have continued to advance our HERmark clinical development
programs," commented Young. "Less than 50% of metastatic breast cancer
patients selected for treatment with Herceptin by currently available tests
actually respond and there is growing concern that currently available IHC
and FISH tests may not be adequate and may miss some patients who can
benefit from Herceptin. The HERmark Assay provides quantitative and more
precise measurements of HER2 expression than current tests and also
provides a unique and quantitative measure of HER2's activated form -- the
HER2:HER2 homodimer. HERmark has the potential to enhance physicians'
ability to accurately select patients for Herceptin therapy and to
subdivide them into groups with different clinical outcomes following
treatment with the drug. Our separate programs are directed at clinical
validation of HERmark as a tool to identify the appropriate patients for
Herceptin(R) in the metastatic and adjuvant settings, respectively."
Data presented at the San Antonio Breast Cancer Symposium in December
2007, from a third cohort of metastatic breast cancer patients, confirmed
prior observations that HERmark is capable of identifying subpopulations of
Herceptin-treated metastatic breast cancer patients with different clinical
outcomes based on the measured levels of HER2 expression and homodimers.
More extensive analyses of clinical data from this latest test cohort of
metastatic breast cancer patients will be presented at a future scientific
forum. Programs to confirm and validate these results in additional cohorts
are ongoing.
In parallel with these programs in metastatic breast cancer, HERmark
measurements are also being correlated with clinical outcomes in two large
cohorts of patients treated with Herceptin in the adjuvant setting,
involving as many as 2,600 patients. The first of these studies, in up to
1,600 patient samples, was initiated in late 2007 and is ongoing. A second
study, involving a large European study of up to 1,000 patients in the
adjuvant setting, has recently been initiated.
In December 2007, Monogram received confirmation from the College of
American Pathologists (CAP) that the HERmark assays are approved for
routine patient testing in Monogram's CLIA certified clinical reference
laboratory. "Commercialization of HERmark will be based on the clinical
utility established by our ongoing studies in metastatic and adjuvant use
of Herceptin," commented Young. "We believe that the unique measurements
available from HERmark will represent new and valuable information for
physicians, especially when supplemented with specific clinical utility
expected to be derived from our ongoing studies."
VeraTag(TM) Oncology Platform
Monogram's first product based on the VeraTag technology platform is
the HERmark Breast Cancer Assay, which measures the expression of the HER2
protein and the HER2:HER2 homodimer. Looking beyond this, the Company is
continuing its programs to develop assays that measure the HER1 and HER3
proteins as well as dimers involving HER1 and HER3. These additional
assays, which are still in development, are intended to broaden the
applications for the VeraTag technology to the identification of resistance
pathways for Herceptin in breast cancer as well as the identification of
signaling pathways relevant to drug response and resistance in other cancer
types.
GAAP and Non-GAAP Proforma Results
Net Loss and Net Loss Per Share is shown below in accordance with GAAP
and also on a Non-GAAP Proforma Basis. The Company is reporting Non-GAAP
Proforma results which exclude certain items to provide a clearer view of
ongoing results without the impact of non-cash valuation adjustments
related to our convertible debt in 2007 and to our CVRs in 2006. A
reconciliation of these Non-GAAP Proforma results to GAAP results is
included with the Statement of Operations data attached to this release.
Twelve Months
Three Months Ended Ended
December 31, December 31,
2007 2006 2007 2006
Net Loss ($ Millions)
GAAP Net Loss $(5.0) $(7.0) $(23.5) $(38.7)
Non-GAAP Proforma Net Loss $(4.6) $(7.0) $(30.2) $(22.3)
Net Loss Per Share ($)
GAAP Net Loss Per Share $(0.04) $(0.05) $(0.18) $(0.30)
Non-GAAP Proforma Net Loss Per Share $(0.03) $(0.05) $(0.23) $(0.17)
The following non-cash items that were reflected in non-operating
income and expense for the periods ended December 31, 2007 and 2006 are
excluded from proforma net loss:
-- "Mark-to-market" adjustments to the 3% Senior Secured Convertible Note
and the 0% Convertible Senior Unsecured Debt. An unfavorable adjustment
of $0.4 million and a favorable adjustment of $4.2 million were
recorded in the three and twelve months ending December 31, 2007,
respectively. There were no such adjustments in the prior year,
although a favorable adjustment of $2.2 million was recorded at January
1, 2007 for the cumulative effect of the change in accounting principle
at that date. Such adjustments could be significant and unpredictable
in future quarters depending on several factors, including the level of
the Company's common stock price.
-- "Mark-to-market" adjustments in 2006 to the liability established for
the payment on the CVRs issued as part of the merger consideration for
ACLARA. As the outstanding CVR's were settled in the second quarter of
2006, adjustments are not significant for third and fourth quarters of
2006 or for 2007. An unfavorable adjustment of $16.5 million was
recorded in the twelve months ended December 31, 2006.
Stock-based compensation in accordance with SFAS123(R) is recorded as
expense for purposes of both GAAP and our Non-GAAP Proforma results. Such
costs were $1.2 million in the fourth quarter of 2007, compared to $1.4
million in the prior year's fourth quarter.
Capital Structure
At December 31, 2007, a total of 134 million shares of common stock
were outstanding. Stock options and warrants were outstanding on 20.3
million shares and 0.1 million shares of common stock, respectively. The
principal amount of Pfizer's $25 million convertible note, issued in May
2006, is convertible into approximately 9.2 million shares of common stock.
The $30 million principal amount of our 0% Convertible Senior Unsecured
Notes, issued in January 2007, is convertible into approximately 11.9
million shares of common stock.
Conference Call Details
Monogram will host a conference call today at 4:30 p.m. Eastern Time.
To participate in the live teleconference please call (877) 548-7912, or
(719) 325-4878 for international callers, fifteen minutes before the
conference begins. Live audio of the call will be simultaneously broadcast
over the Internet and will be available to members of the news media,
investors and the general public. Access to live and archived audio of the
conference call will be available by following the appropriate links at
http://www.monogrambio.com and clicking on the Investor Relations link. Following
the live broadcast, a replay of the call will also be available at (888)
203-1112, or (719) 457-0820 for international callers. The replay passcode
is 4277521.
The information provided on the teleconference is only accurate at the
time of the conference call, and Monogram assumes no obligation to provide
updated information except as required by law.
About Monogram
Monogram is advancing individualized medicine by discovering,
developing and marketing innovative products to guide and improve treatment
of serious infectious diseases and cancer. The Company's products are
designed to help doctors optimize treatment regimens for their patients
that lead to better outcomes and reduced costs. The Company's technology is
also being used by numerous biopharmaceutical companies to develop new and
improved anti-viral therapeutics and vaccines as well as targeted cancer
therapeutics. More information about the Company and its technology can be
found on its web site at http://www.monogrambio.com.
Forward Looking Statements
Certain statements in this press release are forward-looking. These
forward-looking statements include references to the demand for our Trofile
Assay, the outlook for Selzentry and our Trofile Assay, reimbursement that
may be available for Trofile, guidelines regarding the use of co-receptor
tropism tests, the anticipated availability of Trofile internationally, the
ability of VeraTag technology, including HERmark, to significantly improve
the information available to physicians, results of studies intended to
demonstrate clinical utility of our VeraTag technology and HERmark products
and anticipated clinical and laboratory validation of these products in a
CLIA setting and activities expected to occur in connection with the Pfizer
collaboration. These forward-looking statements are subject to risks and
uncertainties and other factors, which may cause actual results to differ
materially from the anticipated results or other expectations expressed in
such forward-looking statements. These risks and uncertainties include, but
are not limited to: the risk that physicians may not use a molecular
diagnostic for patient selection for maraviroc or other HIV drugs; risks
related to the implementation of the collaboration with Pfizer; risks
related to our ability to recognize revenue from activities under the
collaboration with Pfizer; risks and uncertainties relating to the
performance of our products; the growth in revenues; the size, timing and
success or failure of any clinical trials for CCR5 inhibitors, entry
inhibitors or integrase inhibitors; the risk that our Trofile Assay may not
be utilized for patient use with maraviroc and other CCR5 inhibitors; the
risk that our VeraTag assays may not predict response to particular
therapeutic agents; the risk that we may not be able to obtain additional
cohorts of patient samples for additional VeraTag studies, our ability to
successfully conduct clinical studies and the results obtained from those
studies; whether larger confirmatory clinical studies will confirm the
results of initial studies; our ability to establish reliable, high-volume
operations at commercially reasonable costs; expected reliance on a few
customers for the majority of our revenues; the annual renewal of certain
customer agreements; actual market acceptance of our products and adoption
of our technological approach and products by pharmaceutical and
biotechnology companies; our estimate of the size of our markets; our
estimates of the levels of demand for our products; the impact of
competition; the timing and ultimate size of pharmaceutical company
clinical trials; whether payers will authorize reimbursement for our
products and services and the amount of such reimbursement that may be
allowed; whether the FDA or any other agency will decide to further
regulate our products or services, including Trofile; whether the draft
guidance on Multivariate Index Assays issued by FDA will be subsequently
determined to apply to our current or planned products; whether we will
encounter problems or delays in automating our processes; the ultimate
validity and enforceability of our patent applications and patents; the
possible infringement of the intellectual property of others; whether
licenses to third party technology will be available; whether we are able
to build brand loyalty and expand revenues; restrictions on the conduct of
our business imposed by the Pfizer, Merrill Lynch and other debt
agreements; the impact of additional dilution if our convertible debt is
converted to equity; and whether we will be able to raise sufficient
capital in the future, if required. For a discussion of other factors that
may cause actual events to differ from those projected, please refer to our
most recent annual report on Form 10-K and quarterly reports on Form 10-Q,
as well as other subsequent filings with the Securities and Exchange
Commission. We do not undertake, and specifically disclaim any obligation,
to revise any forward-looking statements to reflect the occurrence of
anticipated or unanticipated events or circumstances after the date of such
statements.
PhenoSense, PhenoSenseGT, Trofile, HERmark and VeraTag are trademarks of
Monogram Biosciences, Inc. Heceptin is a registered trademark of Genentech,
Inc. Selzentry is a trademark and Celsentri is a registered trademark of
Pfizer Inc.
MONOGRAM BIOSCIENCES, INC.
SELECTED STATEMENT OF OPERATIONS DATA
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2007 2006 2007 2006
Revenue:
Product revenue $12,731 $9,732 $39,482 $45,150
Contract revenue 798 498 2,064 2,808
License revenue 197 -- 1,683 --
Total revenue 13,726 10,230 43,229 47,958
Operating costs and expenses:
Cost of product revenue 6,120 5,396 22,926 22,703
Research and development 5,090 4,560 19,385 18,981
Sales and marketing 3,647 3,471 15,927 14,735
General and administrative 3,537 3,802 15,686 15,042
Total operating costs and expenses 18,394 17,229 73,924 71,461
Operating loss (4,668) (6,999) (30,695) (23,503)
Convertible debt valuation adjustment
and interest income/(expense), net (370) 17 4,687 1,250
CVR valuation adjustment -- -- 218 (16,450)
Net loss before cumulative effect of
change in accounting principle (5,038) (6,982) (25,790) (38,703)
Cumulative effect of change in
accounting principle -- -- 2,242 --
Net loss after cumulative effect of
change in accounting principle $(5,038) $(6,982) $(23,548) $(38,703)
Basic and diluted net loss per common
share before cumulative effect of
change in accounting principle $(0.04) $(0.05) $(0.19) $(0.30)
Cumulative effect per share of
change in accounting principle $ -- $ -- $0.01 $ --
Basic and diluted net loss per common
share after cumulative effect of
change in accounting principle $(0.04) $(0.05) $(0.18) $(0.30)
Weighted-average shares used in
computing basic net loss per
common share 133,110 130,694 132,282 130,447
Reconciliation of Non-GAAP Proforma
Results to GAAP
Net loss after cumulative effect of
change in accounting principle $(5,038) $(6,982) $(23,548) $(38,703)
Adjustments for certain non-cash
items:
Cumulative effect of change in
accounting principle -- -- (2,242) --
CVR valuation adjustment -- -- (218) 16,450
Convertible debt valuation adjustment 447 -- (4,205) --
Non-GAAP Proforma net loss (4,591) (6,982) (30,213) (22,253)
Non-GAAP Proforma net loss per
common share, basic $(0.03) $(0.05) $(0.23) $(0.17)
Management believes that this non-GAAP proforma financial data
supplements the Company's GAAP financial statements by providing investors
with additional information which allows them to have a clearer picture of
the Company's operations, financial performance and the comparability of
the Company's operating results from period to period as they exclude the
effects in 2007 of revaluation of the Company's convertible debt and the
effects in 2006 of revaluation of the contingent value rights issued in
connection with the Company's merger with ACLARA that management believes
are not indicative of the Company's ongoing operations. The presentation of
this additional information is not meant to be considered in isolation or
as a substitute for results prepared in accordance with GAAP. Above,
management has provided a reconciliation of the non-GAAP proforma financial
information with the comparable financial information reported in
accordance with GAAP.
MONOGRAM BIOSCIENCES, INC.
SELECTED BALANCE SHEET DATA
(In thousands)
(Unaudited)
December 31, December 31,
2007 2006
ASSETS (Note 1)
Current assets:
Cash and cash equivalents $18,762 $8,263
Short-term investments 11,828 22,867
Accounts receivable, net 9,100 6,849
Prepaid expenses 1,279 1,234
Inventory 1,250 961
Other current assets 917 378
Total current assets 43,136 40,552
Property and equipment, net 7,665 7,463
Goodwill 9,927 9,927
Deferred costs 7,906 1,783
Other assets 677 1,120
Total assets $69,311 $60,845
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,116 $1,271
Accrued compensation 3,324 2,258
Accrued liabilities 3,818 4,720
Current portion of restructuring costs 610 1,128
Deferred revenue, current portion 605 404
Current portion of loans payable and
capital lease obligations 4,469 6,355
Contingent value rights 2,119 2,813
Total current liabilities 17,061 18,949
Long-term 3% convertible promissory note 20,786 25,000
Long-term 0% convertible promissory note 18,511 --
Long-term portion of restructuring costs 289 868
Long-term deferred revenue 13,622 1,783
Other long-term liabilities 282 337
Total liabilities 70,551 46,937
Stockholders' equity:
Common stock 134 131
Additional paid-in capital 286,196 277,892
Accumulated other comprehensive loss (31) (124)
Accumulated deficit (287,539) (263,991)
Total stockholders' equity (1,240) 13,908
Total liabilities and stockholders'
equity $69,311 $60,845
(1) The balance sheet data at December 31, 2006 is derived from audited
financial statements included in the Company's Annual Report on Form
10-K for the year ended December 31, 2006 filed with the Securities
and Exchange Commission.
contacts: Alfred G. Merriweather Jeremiah Hall
Chief Financial Officer Feinstein Kean Healthcare
Tel: 650 624 4576 Tel: 415 677 2700
amerriweather@monogrambio.com jeremiah.hall@fkhealth.com
SOURCE Monogram Biosciences, Inc.
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Related links:
http://www.monogrambio.com
CONTACT:
Alfred G. Merriweather, Chief Financial
Officer of Monogram Biosciences, Inc., +1-650-624-4576,
amerriweather@monogrambio.com; or Jeremiah Hall of Feinstein Kean
Healthcare, +1-415-677-2700, jeremiah.hall@fkhealth.com
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