-- Year 2003 revenues up 23%, expenses down 12%, cash burn down 77% --
RESEARCH TRIANGLE PARK, N.C., Feb. 19 /PRNewswire-FirstCall/ -- Paradigm
Genetics, Inc. (Nasdaq: PDGM), a biotechnology company, today reported
financial results for the quarter and year ended December 31, 2003. The
Company reported improved revenues, reduced expenses and reduced cash burn for
the fourth quarter and year 2003, as compared to the same periods in 2002.
Paradigm Genetics reported a fourth quarter 2003 net loss of $2.2 million,
or $0.07 per common share, which was in line with earlier guidance provided by
the company of $0.04 to $0.07 loss per common share. This represents an
improvement over the fourth quarter 2002 net loss of $9.3 million, or $0.29
per common share. The fourth quarter 2002 results included losses from
discontinued operations of $2.7 million, or $0.09 per common share, resulting
from the Company's 2002 divestiture of its ParaGen plant genotyping business.
Total revenues for the fourth quarter 2003 increased to $5.5 million
compared to $1.9 million in the fourth quarter 2002, a quarter during which
the Company worked with the Monsanto Company to refocus the scope of its
research collaboration, resulting in delayed revenue recognition for Paradigm.
Fourth quarter 2003 revenue improvements were primarily due to increases in
revenue from its National Institute of Environmental Health Sciences (NIEHS)
and Monsanto contracts and an Advanced Technology Program (ATP) grant,
partially offset by previously completed commercial agreements.
Total operating expenses for the fourth quarter 2003 decreased to
$7.7 million compared to $8.5 million in fourth quarter 2002, due primarily to
continued cost controls and productivity gains. Some of the savings from
productivity gains have been reinvested to accelerate current R&D programs in
agriculture and human health.
As of December 31, 2003, the Company reported unrestricted cash and
investments in the amount of $16.3 million, in the form of cash, cash
equivalents, short- and long-term investments. This balance compares favorably
to its guidance of $13 to 15 million and reflects the benefits of the
Company's ongoing cost control and cash management activities.
The Company reported that for the year 2003, revenues increased 23% to
$21.1 million compared to $17.2 million for the same period in 2002. Expenses
for the year decreased 12% to $32.8 million compared to $37.3 million, and the
net decrease in cash, cash equivalents and investments ("cash burn") was
reduced by 77% to $4.9 million from $21.8 million.
"I view 2003 as the year in which we achieved a critical transformation of
our company - financially, commercially and strategically," said Heinrich
Gugger, Ph.D., President and CEO of Paradigm Genetics. "We significantly
improved our financial health. We reinvigorated our agricultural endeavors not
only by signing significant profit generating commercial contracts with
Pioneer/Dupont and Bayer CropScience, but also by launching promising internal
research projects targeting proprietary product concepts in the area of
chemical genetics. And we made excellent progress in our human health program.
The acquisition of TissueInformatics, which we expect to close during the
first quarter, will further propel us toward the creation of a truly unique
integrated systems biology offering."
Gugger continued, "Looking into 2004, we want to build on this new
momentum. In agriculture, we will continue to broaden and deepen our customer
base using the foundation of our enhanced platform capabilities. In human
health, we should see significant impact of our acquisition of
TissueInformatics, which brings us not only powerful technology and an
emerging product and sales pipeline but also key people with the extensive
medical, business development and sales experience in the pharmaceutical
sector that Paradigm has been seeking. I am truly excited for our
shareholders, employees, partners and customers as we build the leading
systems biology company."
Fourth Quarter 2003 Commercial Contracts
Paradigm Genetics reported the following commercial contracts in
agriculture during the fourth quarter 2003:
- Extension of its collaboration with Bayer CropScience taking the
partnership through September 2006. This extension underscores the
vital role Paradigm Genetics plays in Bayer CropScience herbicide
discovery program.
- Fungicide evaluation agreement with Bayer CropScience, whereby Bayer
will test several fungicidal compounds validated by Paradigm Genetics.
This agreement represents a first step in commercializing the Company's
proprietary fungicide assets.
- Three-year, $9 million collaboration with Pioneer/Dupont to
identify genes that influence crop traits. The company will leverage
its high-throughput GeneFunction Factory(R) for this work.
On the healthcare side, Paradigm Genetics entered into two proof-of-
concept agreements, one with a major pharmaceutical company and one with a
leading biotechnology company. These agreements highlight the company's
initial success in penetrating the pharmaceutical industry and lay the
groundwork for significant future healthcare collaborations.
About Paradigm Genetics
Paradigm Genetics is a biotechnology company applying a unique systems
biology approach to life sciences discovery. The Company is focused on the
discovery and validation of genes, targets and biomarkers for product
development in the pharmaceutical and agricultural industries, with an
internal focus on metabolic disorders, pathway engineering and chemical
genetics. The Company also provides value-added services in microarray
processing (Paradigm Array Labs(TM)), gene-based discovery
(GeneFunctionFactory(R)) and high throughput assay development. Paradigm
Genetics has five major customers: Bayer CropScience, Monsanto Company, the
National Institute of Environmental Health Sciences, the National Institute of
Standards & Technology's Advanced Technology Program and Pioneer Hi-Bred
International. For more information, visit http://www.paradigmgenetics.com .
Quarterly Conference Call
Paradigm will host a conference call at 8:30 a.m. ET on Friday,
February 20, 2004 to review financial results for the three months and year
ended December 31, 2003. This call will be webcast via the Internet
at http://www.paradigmgenetics.com , where any supplemental financial information
will be available, and will be accessible through the investor relations
section and homepage of Paradigm's web site. To listen to the call via
telephone, dial 800-478-6251 (U.S. and Canadian callers) or 913-981-5558
(international callers) and enter conference ID #778329. A taped replay will
be available at the same number from 11:30 a.m. on February 20, 2004 through
midnight on February 23, 2004.
Financial Charts Follow
PARADIGM GENETICS, INC.
CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended Year Ended
December 31, December 31,
(Unaudited)
2003 2002 2003 2002
Revenues:
Revenues from commercial
and government
contracts $4,872,000 $1,632,000 $19,128,000 $16,823,000
Grant revenues 594,000 284,000 2,003,000 360,000
Total revenue 5,466,000 1,916,000 21,131,000 17,183,000
Operating expenses:
Research and development
(includes $42,000 and
$74,000 of stock based
compensation expense
for the three months
ended December 31, 2003
and 2002, respectively,
and includes $420,000 and
$346,000 of stock based
compensation expense for
the twelve months ended
December 31, 2003 and
2002, respectively) 5,971,000 5,674,000 24,489,000 26,386,000
Selling, general and
administrative (includes
$39,000 and $46,000 of
stock based compensation
expense for the three
months ended December 31,
2003 and 2002, respectively,
and includes $473,000 and
$317,000 of stock
based compensation expense
for the twelve months
ended December 31,
2003 and 2002,
respectively) 1,690,000 2,851,000 8,268,000 10,909,000
Total operating
expenses 7,661,000 8,525,000 32,757,000 37,295,000
Loss from operations (2,195,000) (6,609,000) (11,626,000) (20,112,000)
Other interest income
(expense), net (36,000) 31,000 (492,000) (184,000)
Net loss from
continuing
operations (2,231,000) (6,578,000) (12,118,000) (20,296,000)
Discontinued operations 23,000 (2,734,000) (37,000) (3,174,000)
Net loss attributable
to common
stockholders $(2,208,000) $(9,312,000) $(12,155,000) $(23,470,000)
Net loss per share -
basic and diluted
Loss from continuing
operations $(0.07) $(0.21) $ (0.38) $(0.63)
Income (loss) from
discontinued operations 0.00 (0.09) (0.00) (0.10)
Net loss per common
share $(0.07) $(0.29) $(0.38) $(0.73)
Weighted average
common shares
outstanding -
basic and diluted 32,557,000 32,019,000 32,313,000 31,974,000
Paradigm Genetics, Inc.
2002 Year End Results
Condensed Balance Sheet Data
December 31, December 31,
2003 2002
Assets:
Cash, cash equivalents,
short-term investments $10,215,000 $10,909,000
Other current assets 4,006,000 6,500,000
Total Current Assets 14,221,000 17,409,000
Long term investments in
marketable securities 6,069,000 10,323,000
Property plant & equipment net 17,337,000 22,431,000
Other noncurrent assets 1,827,000 2,459,000
Total Assets $39,454,000 $52,622,000
Liabilities and Stockholders' Equity:
Current liabilities 16,093,000 18,557,000
Long-term obligations 3,847,000 3,378,000
Stockholders' equity 19,514,000 30,687,000
Total Liabilities and Stockholders' Equity $39,454,000 $52,622,000
Paradigm Genetics, Inc.
Supplemental Information Re: Increase/(Decrease) in Cash, Cash Equivalents,
Short-Term and Long-Term Investments (See Note Below)
(Unaudited)
Three Months Ended Year Ended
Dec. 31, 2003 Dec. 31, 2003
2003 2002 2003 2002
Net cash provided
by (used in)
operating activities $64,000 $(524,000) $(5,441,000) $(13,330,000)
Net cash (used in)
provided by investing
activities, excluding
purchases and
maturities of short-
term and long-term
investments (83,000) (533,000) (325,000) (1,064,000)
Net cash provided by
(used in) financing
activities 275,000 (1,171,000) 819,000 (7,366,000)
Net increase
(decrease) in cash,
cash equivalents,
short-term
investments and
long-term
investments 256,000 (2,228,000) (4,947,000) (21,760,000)
Cash, cash
equivalents,
short-term
investments
and long term
investments,
beginning of
period 16,029,000 23,460,000 21,232,000 42,992,000
Cash, cash
equivalents,
short-term
investments
and long term
investments,
end of period $16,285,000 $21,232,000 $16,285,000 $21,232,000
Note: The above presentation of the change in cash and investments is not
meant to be in accordance with generally accepted accounting principles
("GAAP") in the U.S. GAAP requires the presentation of a statement of
cash flows only (i.e., excluding changes in short and long-term
investments). In order to fully assess the Company's liquidity position,
management believes that the cash flow measure presented above, which
includes Short-Term and Long-Term Investments, is an appropriate measure
for evaluating the Company's liquidity, because this reflects all liquid
resources available for strategic opportunities including, among others,
to invest in the business and continue operating activities. However this
measure should be considered in addition to, and not as a substitute for,
or superior to, cash flows, prepared in accordance with generally accepted
accounting principles in the U.S.
Under GAAP, cash flows from investing activities above would improve by
net maturities of investment securities and unrealized gains and losses on
investments in the amount of $0.07 million and $3.8 million for the three
months ended December 31, 2003 and 2002, respectively, and by $6.2 million and
$21.5 million for the twelve months ended December 31, 2003 and 2002,
respectively. Also under GAAP, cash and cash equivalents at the beginning and
end of the period would be less, as they would exclude short and long-term
investments of $9.2 million and $9.1 million, and $19.2 million and
$15.3 million for the three months ended December 31, 2003 and 2002,
respectively and by $15.3 million and $9.1 million, and $36.8 million and
$15.3 million for the twelve months ended December 31, 2003 and 2002,
respectively. Cash, cash equivalents, short-term and long-term investments
exclude restricted cash.
This press release contains forward-looking statements, including
statements regarding the Company's expectations regarding business development
activities and near-term revenue opportunities; the financial statement impact
of the significant reduction in SG&A expense and increase in R&D investment;
and the Company's ability to hit its milestones and execute on its strategy.
Such forward-looking statements are based on management's current expectations
and are subject to a number of risks, factors and uncertainties that may cause
actual results, events and performance to differ materially from those
referred to in the forward-looking statements. These risks, factors and
uncertainties include, but are not limited to, Paradigm's early stage of
development, history of net losses, technological and product development
uncertainties, reliance on research collaborations, uncertainty of additional
funding and ability to protect its patents and proprietary rights. Certain of
these and other risks are identified in Paradigm's annual report on Form 10-K
for the year ended December 31, 2002 and in its quarterly report on Form 10-Q
for the quarter ended September 30, 2003, each filed with the Securities and
Exchange Commission. The Company does not intend to update any of the forward-
looking statements after the date of this release to conform these statements
to actual results or to changes in our expectations, except as may be required
by law.
SOURCE Paradigm Genetics, Inc.
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Related links:
http://www.paradigmgenetics.com
CONTACT:
Melissa Matson, Director, Corporate
Communications of Paradigm Genetics, Inc., +1-919-425-3000; or
Brian Ritchie, or Mark Vincent, +1-212-845-4200, of Noonan Russo
Presence Euro RSCG
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