Natrecor Sales Exceed $100 Million in First Full Year; Company Increases 2003
Sales Forecast
SUNNYVALE, Calif., Feb. 13 /PRNewswire-FirstCall/ --
Scios Inc. (Nasdaq: SCIO) today announced financial results for the fourth
quarter and full-year ended December 31, 2002.
The company reported total revenues of $44.6 million in the fourth quarter
of 2002 compared to $10.5 million in the fourth quarter of 2001. Total
revenues for the year ended December 31, 2002 were $111.2 million compared to
$47.3 million in 2001. Most of the revenues came from sales of the company's
flagship product, Natrecor(R) (nesiritide), which were $43.3 million in the
fourth quarter of 2002, a 66 percent increase over the prior quarter. This
increase was largely driven by demand in the hospital setting. For the
full-year 2002, Natrecor net sales were $107.3 million versus $14.1 million in
2001. With nearly 100,000 patients treated with Natrecor in 2002, this makes
Natrecor one of the most successful intravenous cardiovascular drug launches
ever.
"Physician demand and usage continue to drive sales of Natrecor at
increasing levels all over the country," said Richard B. Brewer, president and
chief executive officer of Scios. "Looking forward in 2003, we expect demand
for Natrecor to continue to increase as penetration of the primary and
secondary acute heart failure markets increases. We therefore are raising our
Natrecor net sales forecast from our previously stated range of $160 to
$170 million in 2003 to $180 to $185 million."
"The success of Natrecor is positioning the company for full-year
profitability in 2004, which will put Scios among a rare group of profitable
and successful biotech companies. It also is enabling us to invest in our
targeted and efficient product pipeline, led by our p38 MAP kinase inhibitor
program. This versatile program has candidates progressing along in Phase II,
Phase I and preclinical studies that could be applicable across multiple
indications. Finally, our TGF-beta program also is rapidly advancing product
candidates toward the clinic and we hope to initiate Phase I studies out of
this program by the end of this year."
Product and Pipeline Highlights
Natrecor
-- Approximately 88 percent of the targeted hospitals have now stocked
Natrecor. Of those that stocked the drug in the third quarter of 2002,
87 percent reordered it in the fourth quarter.
-- The FUSION (Follow Up Serial Infusions of Nesiritide) pilot study,
which is evaluating the safety and feasibility of follow-up serial
infusions of Natrecor, is nearing completion.
-- The ADHERE (Acute Decompensated Heart Failure National Registry)
Registry has enrolled over 35,000 patients to date. Over 350 clinicians
and staff attended the second annual 2003 ADHERE National Meeting in
Palm Springs earlier this year.
-- Enrollment continued in the longitudinal study module of the ADHERE
Registry that will follow patients with advanced heart failure for up
to two years to assess change in quality of life as a function of
medical management and disease progression.
-- Data will be presented from six abstracts related to Natrecor and acute
congestive heart failure at the American College of Cardiology Annual
Meeting in Chicago (March 30 - April 2).
SCIO-469 and p38 MAP Kinase Inhibitor Programs
-- SCIO-469, the company's first-generation oral p38 MAP kinase inhibitor,
continues to be evaluated in the fifth dose group of a total six doses
in a Phase II clinical trial in patients with rheumatoid arthritis
already receiving methotrexate.
-- SCIO-323, a second-generation p38 MAP kinase inhibitor, continues to
progress in a Phase I clinical trial, which began in December 2002.
Fourth Quarter and Year-End Financial Results
Total costs and expenses for the fourth quarter of 2002 were $57.4 million
compared to $40.7 million for the fourth quarter of 2001. Total costs and
expenses for the year ended December 31, 2002 were $187.5 million compared to
$112.5 million for the year ended December 31, 2001.
Research and development (R&D) expenses for the fourth quarter of 2002
were $15.8 million, a decrease of approximately 18 percent versus the third
quarter of 2002, primarily due to the reduction in expenses relating to
preclinical, R&D programs and the redeployment of quality control personnel to
the manufacturing area. For the full year of 2002, R&D expenses were
$66.8 million, an increase of approximately 39 percent versus the prior year,
primarily due to increased spending on the Natrecor and p38 MAP kinase
development programs.
Selling, general and administrative (SG&A) expenses were $38.9 million in
the fourth quarter of 2002, an increase of 59 percent over the prior quarter
due to higher sales and marketing expenses, commissions and promotions. For
the full year of 2002, SG&A expenses were $114.2 million, an increase of
83 percent over the prior year, reflecting costs associated with the Natrecor
launch and associated sales and marketing programs. Toward the end of the
fourth quarter of 2002, the Company ended the sales support portion of its
agreement with Innovex/Quintiles, resulting in an additional expense of
$2.4 million in the fourth quarter of 2002. This termination is ahead of the
previously agreed termination date of May 2003.
Net loss for the fourth quarter of 2002 was $18.5 million, or $0.40 per
share, compared to a net loss of $28.8 million, or $0.63 per share, for the
fourth quarter of 2001. Net loss for the year ended December 31, 2002 was
$88.1 million, or $1.90 per share, compared to a net loss of $62.5 million, or
$1.47 per share, for the comparable period in 2001.
Cash, cash equivalents and marketable securities (both current and
non-current) at December 31, 2002 were $172.0 million, excluding $24.2 million
of restricted marketable securities.
Today's Conference Call Details
Scios will host its quarterly conference call today, February 13, 2003, at
7:00 a.m. PT / 10:00 a.m. ET to discuss the results of the quarter. The call
will be broadcast live and archived on Scios' web site at
http://www.sciosinc.com until February 20, 2003.
Scios Inc.
Scios is a biopharmaceutical company developing novel treatments for
cardiovascular and inflammatory disease. The company's disease-based
technology platform integrates expertise in protein biology with computational
and medicinal chemistry to identify novel targets and rationally design small
molecule compounds for large markets with unmet medical needs.
Forward-Looking Safe Harbor Statement
This news release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, which may include statements concerning the proposed
merger with Johnson & Johnson and strategic plans, expectations, and
objectives for future operations. We generally identify such forward-looking
statements using words like "estimate," "believe," "intend," "expect," "may,"
"should," "plan," "project," "contemplate," "anticipate" or similar
statements. Statements that are not historical facts are forward-looking
statements based on current assumptions that involve risks and uncertainties.
These risks and uncertainties may include the sales penetration and success of
Natrecor, the success of clinical trials of Natrecor and our pipeline
products, the failure to complete the proposed merger in a timely manner, the
inability to obtain Scios shareholder or regulatory approvals or to satisfy
other conditions to the merger, actions of governmental entities, and costs
related to the merger, as well as other risks detailed from time to time in
the reports filed by Scios with the SEC, including the Company's quarterly
reports and annual report on Form 10-K. Actual results, performance or
achievements of Scios may differ significantly from those described in these
forward-looking statements. Scios disclaims any intention or obligation to
update or revise any financial projections or forward-looking statements,
whether as a result of new information, future events or otherwise.
SCIOS INC.
Consolidated Balance Sheets
(in thousands, except share data)
December 31, December 31,
2002 2001
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $32,174 $58,296
Marketable securities 18,504 7,351
Restricted marketable securities 8,435 --
Accounts receivable, net 16,395 6,943
Inventory 8,179 1,158
Prepaid expenses and other assets 6,569 4,214
Total current assets 90,256 77,962
Marketable securities, non-current 121,340 63,669
Restricted marketable securities, non-current 15,791 --
Property and equipment, net 10,089 10,424
Other assets 7,843 4,123
Total assets $245,319 $156,178
Liabilities and stockholder's equity
Current liabilities:
Accounts payable $11,150 $9,625
Accrued employee compensation 20,731 9,685
Other accrued liabilities 11,807 7,206
Deferred contract revenue 1,166 --
Accrued interest payable 3,323 3,035
Current portion of long-term debt 25,561 30,000
Total current liabilities 73,738 59,551
Deferred contract revenue 3,116 --
Long-term debt 159,624 15,479
Other long-term liabilities 2,245 --
Total liabilities 238,723 75,030
Stockholders' equity:
Preferred stock; $.001 par value; 20,000,000
shares authorized; 4,991 issued and outstanding -- --
Common stock; $.001 par value; 150,000,000 shares
authorized; 47,200,660 and 46,015,167 shares issued,
respectively; 46,938,860 and 45,985,167 shares
outstanding, respectively 47 46
Additional paid-in capital 575,935 561,352
Treasury stock; 261,800 and 30,000 shares,
respectively (6,014) (445)
Deferred warrant costs (2,194) (6,794)
Deferred compensation -- (106)
Accumulated other comprehensive income 832 999
Accumulated deficit (562,010) (473,904)
Total stockholders' equity 6,596 81,148
Total liabilities and stockholders' equity $245,319 $ 156,178
SCIOS INC.
Consolidated Statements of Operations
(in thousands, except share and per share data)
Three months ended Twelve months ended
December 31, December 31,
2002 2001 2002 2001
(Unaudited) (Unaudited)
Revenues:
Product sales $43,270 $9,624 $107,293 $30,052
Research and development
contracts and royalties 1,344 923 3,949 4,788
Psychiatric product sales
and co-promotion commissions,
net of expenses -- -- -- 3,142
Gain on sale of marketing
rights -- -- -- 9,363
44,614 10,547 111,242 47,345
Costs and expenses
Cost of product sales 2,644 (119) 6,446 1,916
Research and development 15,841 13,465 66,796 48,130
Selling, general
and administration 38,935 27,370 114,235 62,475
57,420 40,716 187,477 112,521
Loss from operations (12,806) (30,169) (76,235) (65,176)
Other income (expense)
Interest income 1,216 1,386 4,040 4,869
Interest expense (7,011) (562) (16,365) (2,818)
Realized gains
on securities, net 195 255 657 849
Other income (expense), net (141) 256 (203) (221)
(5,741) 1,335 (11,871) 2,679
Net loss $(18,547) $(28,834) $(88,106) $(62,497)
Net loss per common share:
Basic and diluted $(0.40) $(0.63) $(1.90) $(1.47)
Weighted average number
of common shares
outstanding used
in calculation of:
Basic and diluted 46,712,776 45,730,836 46,442,681 42,623,093
SOURCE Scios Inc.
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Related links:
http://www.sciosinc.com
CONTACT:
Suzanne Beveridge of Scios Inc.,
+1-408-616-2947; or Jim Weiss of WeissCom Partners, Inc.,
+1-415-260-1274, for Scios Inc.
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