SUNNYVALE, Calif., Feb. 8 /PRNewswire/ -- Scios Inc. (Nasdaq: SCIO) today
announced financial results for the quarter and year ended December 31, 2000.
The Company also updated investors on its lead products in development,
Natrecor(R) (nesiritide) for the treatment of acute decompensated congestive
heart failure (CHF) and SCIO-469, its p38 MAP kinase inhibitor for the
treatment of Rheumatoid Arthritis (RA). Scios also provided an outlook for
2001.
"The progress we made in 2000 is a major step in transforming Scios," said
Richard B. Brewer, Scios' president and chief executive officer. "Most
importantly, the successful completion of the pivotal VMAC trial ahead of
schedule led to filing an amendment to our existing New Drug Application for
Natrecor earlier this year with the U.S. Food and Drug Administration (FDA).
If approved, Natrecor, which was shown in the VMAC trial to have distinct
advantages over IV nitroglycerin, the existing standard of care vasodilator,
would be the first new therapy for acute heart failure in more than a decade.
As a result, we believe the commercial prospects are excellent. We plan to
launch Natrecor in the U.S. through our agreement with Innovex, Quintiles
Transnational Corp.'s commercialization unit, in the third quarter of this
year, following FDA approval. We also considerably enhanced our pipeline by
putting SCIO-469 into clinical development. We plan to begin a Phase II trial
with this novel oral agent in the second half of this year."
Full Year 2000 Financial Results
Net revenues for the year ended December 31, 2000 were $12.7 million
compared to $28.4 million in 1999. The decrease in net revenues was primarily
attributed to $9.0 million in one-time milestone payments received in 1999
from corporate partners Chiron Corporation and Novo Nordisk A/S.
Assuming both FDA approval and launch by the middle of the third quarter,
Scios expect Natrecor revenues for fiscal 2001 to be in the range of
$10 - $12 million. The Company estimates that peak U.S. sales of Natrecor for
the acute decompensated CHF indication will be in the $200 - $300 million
range. In 2001, revenues, net of expenses, from the Psychiatric Sales and
Marketing Division (PSMD) are expected to be in the range of $4 - $5 million.
In 2000, net revenues for the PSMD were approximately $7.0 million.
Total costs and expenses for the year 2000 were $55.1 million versus
$52.7 million for the year ended December 31, 1999.
Scios expect costs and expenses for research, development, sales, general
and administrative to increase from $56.1 million in the year ended December
31, 2000, to between $100 - $112 million in 2001. This increase is for
funding the sales force and launch of Natrecor, continued development of
SCIO-469, additional clinical development of Natrecor, and advancement of a
new development candidate.
The Company reported a net loss of $42.6 million or $1.12 per diluted
share for the year ended December 31, 2000, compared to a net loss of
$20.1 million, or $0.53 per diluted share, for 1999. At December 31, 2000
Scios had approximately 39.1 million common shares outstanding, and
approximately 5,000 shares of preferred stock outstanding. If converted, the
preferred stock would convert into approximately 0.5 million common shares.
At December 31, 2000, the Company had $71.5 million in cash, cash
equivalents and marketable securities.
Fourth Quarter Financial Results
Net revenues for the quarter ended December 31, 2000 were $3.6 million
compared to $12.4 million in the fourth quarter of 1999. The decrease in net
revenues was primarily attributed to $9.0 million in one-time milestone
payments received in 1999 from corporate partners Chiron Corporation and
Novo Nordisk A/S.
Total costs and expenses for the fourth quarter of 2000 were $16.1 million
versus $11.7 million for the quarter ended December 31, 1999. The increase in
costs and expenses for the quarter was largely attributed to the clinical
development of Natrecor and SCIO-469.
The Company reported a net loss of $12.3 million or $0.32 per diluted
share for the quarter ended December 31, 2000, compared to a net loss of
$1.7 million, or $0.04 per diluted share, for the comparative quarter in 1999.
Natrecor Update
Scios submitted an amendment to its New Drug Application for Natrecor in
January 2001. Scios expects the FDA to review the application within 6 months
from the submission date. Marketing of Natrecor is expected to begin in the
third quarter of 2001 following FDA approval.
On January 11, 2001, Scios announced a marketing alliance with Quintiles
for the commercialization of Natrecor. Under the terms of the agreement,
Quintiles, through its corporate ventures group, PharmaBio Development, will
provide up to $35.0 million in funding for the commercialization of Natrecor.
Of the $35.0 million, $10.0 million will be paid to Scios in 2001 following
the launch of Natrecor.
Innovex, Quintiles' commercialization unit, will deliver a wide range of
sales and marketing solutions for Scios. Scios will lead strategic and
tactical planning for sales and marketing, and also maintain control over the
clinical development for additional indications for Natrecor. Innovex will
identify, hire, train and deploy a dedicated cardiology and emergency medicine
sales force of approximately 180 people to launch Natrecor. Scios will create
a field support team of approximately 30 people. Twelve of these are
scientific affairs managers, who have already been hired and trained, and are
currently working in the field to build relationships with opinion leading
cardiologists. The remaining 18 will be area business managers and will
support the 180-person sales force. Scios has begun the recruitment efforts
to hire and train the 18 area business managers.
p38 Kinase Inhibitor Progress
Scios recently completed a Phase Ia trial of SCIO-469 in which single oral
doses were shown to be safe and well-tolerated.
Scios is now conducting a Phase Ib, double-blind, placebo-controlled,
multiple oral dose study of SCIO-469, its proprietary p38 kinase inhibitor for
the treatment of Rheumatoid Arthritis (RA). The purpose of the study is to
determine the safety and tolerability of multiple oral doses of SCIO-469. The
Phase Ib trial will enroll 20 healthy volunteers, and is expected to be
completed in the second quarter of 2001. A Phase II trial in Rheumatoid
Arthritis patients is scheduled to begin during the fourth quarter of 2001.
Today's Conference Call Details
Management from Scios will host a conference call today at 7:00 am PT /
10:00 am ET to discuss the results of the fourth quarter and year-end 2000.
The dial-in number is 888-850-2545. The call will also be broadcast live and
archived on Scios' web site at http://www.sciosinc.com until February 23, 2001. A
telephone replay of this conference call will be available until February
15, 2001 at 4:00 pm PT by calling 888-203-1112. The confirmation code is
422125.
New Accounting Pronouncements
Effective January 1, 2001, Scios adopted Staff Accounting Bulletin
No. 101 (SAB 101) "Revenue Recognition in Financial Statements". SAB
101 requires that license and other up front fees received from research
collaborators be recognized as earned over the term of the agreement unless
the fee is in exchange for products delivered or services performed that
represent the culmination of a separate earnings process.
The cumulative effect of adoption as of January 1, 2000 was immaterial to
the results of operations and financial position. However, certain revenue
recognized in periods prior to January 1, 2000 would have been recognized in
different periods in accordance with the provisions of SAB 101. In the year
ended December 31, 1998, Scios recorded a $20.0 million license fee in
connection with the Natrecor(R) commercialization agreement with Bayer AG.
Under SAB 101, $19.1 million of this license fee would have been reallocated
from 1998 to the year ended December 31, 1999, the year in which the Bayer AG
commercialization agreement was terminated. As a result, the loss for the
year ended December 31, 1998 would have increased by $19.1 million and the
loss for the year ended December 31, 1999 decreased by $19.1 million. In
accordance with the implementation provisions of SAB 101, the accompanying
financial data for periods prior to January 1, 2000, the date of adoption,
have not been restated.
Concurrent with the implementation of SAB 101, Scios has implemented the
consensus reached in EITF 99-19 "Reporting Revenue Gross as a Principal Versus
Net As an Agent". The effect of this EITF results in netting the revenues
received from the PSMD with related direct costs, as such it had no effect on
the previously reported operating results. All periods presented reflect
retroactive application of this EITF consensus.
The pro forma effects of implementing SAB 101 and EITF 99-19 on the
results previously reported for the year and three months ended December 31,
1999 are presented below:
Year ended December 31, 1999
Revenues Net Loss Basic and Diluted
($000's) ($000's) Loss per Share
As Reported 60,787 (20,064) $(0.53)
Pro-forma 28,355 (916) $(0.02)
Three months ended December 31, 1999
Revenues Net Loss Basic and Diluted
($000's) ($000's) Loss per Share
As Reported 19,092 (1,695) $(0.04)
Pro-forma 12,424 (1,695) $(0.04)
Scios Inc.
Scios is a biopharmaceutical company developing novel treatments for heart
failure and rheumatoid arthritis. The Company's disease-based technology
platform integrates expertise in protein biology with combinatorial and
medicinal chemistry to identify novel targets and rationally design
protein-based and small-molecule compounds to treat cardiovascular and
inflammatory diseases. Additional information about Scios is available at its
web site located at http://www.sciosinc.com and in the Company's various filings with
the Securities and Exchange Commission (SEC).
The statements in this press release that are not historical facts are
forward-looking statements that involve risks and uncertainties. These
include uncertainties associated with the regulatory approval of Natrecor, the
sales penetration and success of Natrecor, the successful completion of
additional studies with SCIO-469, the results of competing companies
attempting to develop or improve other treatments for RA, and the PSMD's sales
results, as well as other risks detailed from time to time in the reports
filed by Scios with the SEC, including the company's annual report on form
10-K for the year ended December 31, 1999 and subsequent reports on form 10-Q.
SCIOS INC.
AND SUBSIDIARY
Consolidated Balance Sheets
(In thousands, except share data)
ASSETS December 31,
2000 1999
Current assets:
Cash and cash equivalents $3,291 $11,582
Marketable securities 34,886 18,776
Accounts receivable 4,656 3,068
Prepaid expenses 722 899
Total current assets 43,555 34,325
Marketable securities, non-current 33,354 70,354
Property and equipment, net 8,910 11,534
Other assets 2,007 2,059
TOTAL ASSETS $87,826 $118,272
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $4,587 $1,572
Other accrued liabilities 10,749 11,157
Deferred contract revenue 16,193 17,890
Current portion of long term debt -- 2,000
Total current liabilities 31,529 32,619
Long-term debt 39,095 42,866
Total liabilities 70,624 75,485
Stockholders' equity:
Preferred stock; $.001 par value; 20,050,000
shares authorized; issued and outstanding
4,991 shares and none, respectively -- --
Common stock; $.001 par value; 150,000,000
shares authorized; issued and outstanding
39,096,149 and 38,468,652 shares, respectively 39 38
Additional paid-in capital 428,338 416,600
Treasury stock; none and 735,506
shares, respectively -- (3,458)
Notes receivable from stockholders (594) (108)
Deferred compensation, net (417) (340)
Accumulated other comprehensive income (loss) 1,195 (1,060)
Accumulated deficit (411,359) (368,885)
Total stockholders' equity 17,202 42,787
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $87,826 $118,272
SCIOS INC.
AND SUBSIDIARY
Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and per share data)
Three months ended Year ended
December 31, December 31,
2000 1999 2000 1999
(Unaudited)
Revenues:
Product sales and
co-promotion commissions,
net of expenses $2,420 $1,151 $6,960 $9,953
Research
& development contracts 1,143 11,273 5,710 18,402
Net revenues 3,563 12,424 12,670 28,355
Costs and expenses:
Research and development 9,029 8,591 39,252 34,305
Marketing, general
and administration 7,059 3,423 16,830 11,983
Restructuring
charges (credits) -- (270) (993) 6,400
Total costs and expenses 16,088 11,744 55,089 52,688
Income (loss) from operations (12,525) 680 (42,419) (24,333)
Other income and expenses:
Investment income 965 1,402 4,774 4,828
Interest expense (868) (740) (3,796) (2,793)
Realized gains
(losses) on securities 35 (66) (152) 4,933
Other income (expense), net 139 (2,957) (973) (2,685)
Other income and expenses 271 (2,361) (147) 4,283
Loss before provision
for income taxes (12,254) (1,681) (42,566) (20,050)
Provision for income taxes (3) (14) (3) (14)
Net loss ($12,257) ($1,695) ($42,569) ($20,064)
Loss per common share:
Basic and diluted ($0.32) ($0.04) ($1.12) ($0.53)
Weighted average
number of common
shares outstanding
used in calculation of:
Basic and diluted 38,617,475 37,733,616 37,997,872 37,730,048
SOURCE Scios, Inc.
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Related links:
http://www.sciosinc.com
CONTACT:
Wendy Carhart of Scios Inc., 408-616 8325, or
media, Jim Weiss of WeissComm, 415-203 0328, for Scios Inc.; or
investors, Julie Huang, of Edelman Public Relations,
212-704-8114, for Scios Inc.
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