PRINCETON, N.J., Feb. 26 /PRNewswire-FirstCall/ -- Medarex, Inc.
(Nasdaq: MEDX) announced today its financial results for the quarter and
year ended December 31, 2007.
Including a gain of $152.1 million, or $1.20 per share, from Medarex's
sale of approximately 2.6 million shares of Genmab A/S stock in February
2007, Medarex's net loss for the year ended December 31, 2007 was $27.1
million, or ($0.21) per share as compared to a net loss of $181.7 million,
or ($1.50) per share for 2006. Medarex's net loss for 2007 also includes
$10.5 million, or ($0.08) per share representing Medarex's share of the
2007 net loss of Celldex Therapeutics, Inc. (a 60% owned subsidiary of
Medarex), a non-cash charge of $18.6 million, or ($0.15) per share for
stock based compensation recorded in accordance with FAS 123(R), an
acquisition of in-process technology charge of $6.9 million, or ($0.05) per
share related to the acquisition of Ability Biomedical Corporation and a
non-cash impairment charge of $2.1 million, or ($0.02) per share related to
a write-down of Medarex's investment in two of its corporate partners.
Excluding the impact of these items, Medarex's net loss on a non-GAAP basis
for 2007 was $141.1 million, or ($1.11) per share.
Total revenues for the year ended December 31, 2007 were $56.3 million
as compared to $48.6 million for 2006.
Research and development (R&D) expenses for the year ended December 31,
2007 increased by $3.8 million, from $194.5 million in 2006 to $198.3
million in 2007. The increase relates primarily to the following: (i)
approximately $1.3 million attributable to Celldex's 2007 R&D activities,
(ii) approximately $0.5 million of non-cash stock based compensation
expense recorded in accordance with FAS 123(R), and (iii) approximately
$2.7 million of increased costs associated with the development of
ipilimumab (MDX-010). General and administrative expenses decreased by $5.0
million for the year ended December 31, 2007, from $51.9 million in 2006 to
$46.9 million in 2007. The 2007 decrease is primarily attributable to lower
legal and other professional fees.
Medarex ended 2007 with approximately $348.8 million in cash, cash
equivalents and marketable securities. Approximately $4.9 million of this
balance relates to Celldex. In addition, the fair market value of Medarex's
equity interest in Genmab was approximately $291.2 million as of December
31, 2007.
For the three-month period ended December 31, 2007, Medarex reported a
net loss of $44.8 million, or ($0.35) per share. This compares to a net
loss of $57.7 million, or ($0.46) per share for the three-month period
ended December 31, 2006. Included in the consolidated net loss for the
three-month period ended December 31, 2007 is a net loss of $3.7 million,
or ($0.03) per share representing Medarex's share of the net loss of
Celldex for the period and a non-cash charge of $4.8 million, or ($0.04)
per share for stock based compensation expense recorded in accordance with
FAS 123(R). Excluding the impact of these items, Medarex's net loss on a
non-GAAP basis for the three- month period ended December 31, 2007 was
$36.3 million, or ($0.29) per share.
Non-GAAP Financial Measurements
This press release and the accompanying tables include non-GAAP
financial measures. Please see the section of the accompanying tables
titled "Reconciliation of GAAP Net Loss to Non-GAAP Net Loss" for a
description of these non-GAAP financial measures, including reasons for
Medarex management's decision to use each measure, and reconciliations of
these non-GAAP financial measures to the most directly comparable financial
measures prepared in accordance with Generally Accepted Accounting
Principles.
Medarex's product development and business activities during the fourth
quarter of 2007 include the following:
-- Announcing the receipt of a milestone payment from our licensing
partner, Centocor, Inc., in connection with Centocor's submission of
regulatory applications requesting approval of ustekinumab (CNTO 1275),
an anti-IL-12/IL-23 human antibody for the treatment of chronic
moderate to severe plaque psoriasis that was generated using Medarex's
UltiMAb(R) technology;
-- Announcing top-line data from the three registrational trials
evaluating ipilimumab as a monotherapy for the treatment of second-line
(previously treated) metastatic melanoma, with a goal to file a
Biologics License Application (BLA) in the first-half of 2008;
-- Filing an investigational new drug (IND) application with the U.S. Food
and Drug Administration (FDA) for MDX-1411, a fully human anti-CD70
antibody in development for the treatment of clear cell renal cancer;
-- Filing two separate INDs with the FDA for MDX-1342, a fully human anti-
CD19 antibody in development for the treatment of chronic lymphocytic
leukemia and for rheumatoid arthritis;
-- Filing an IND with the FDA for MDX-1106, a fully human anti-PD-1
antibody in development with Ono Pharmaceutical Co., Ltd, being
investigated for the treatment of chronic viral infections, with the
first trial to target hepatitis C; and
-- Receiving a milestone payment from Amgen, Inc., for the advancement of
Amgen's fifth UltiMAb(R)-derived antibody into clinical development.
In addition to fourth quarter events, other activities in 2007 include:
-- Presenting encouraging Phase 2 and Phase 1 clinical data from multiple
ipilimumab trials for the treatment of metastatic melanoma and prostate
cancer at the annual meeting of the American Society of Clinical
Oncology (ASCO);
-- Announcing the receipt of a milestone payment from our licensing
partner, Novartis Pharma AG, in connection with the progress of ACZ885,
a fully human anti-IL-1beta antibody in Phase 3 development for the
treatment of Muckle Wells' Syndrome that was generated using Medarex's
UltiMAb(R) technology;
-- Announcing the receipt of a milestone payment from our licensing
partner, Amgen, Inc., for the advancement of an antibody into a Phase 2
clinical trial;
-- Filing the IND with the FDA for MDX-1401, a fully human second-
generation anti-CD30 antibody, in development for the treatment of
CD30-positive lymphomas;
-- Announcing the IND filing by licensing partner ImClone Systems
Incorporated for IMC-3G3, a fully human antibody that targets platelet-
derived growth factor receptor alpha for the treatment of cancer;
-- Announcing the initiation of a Phase 1 clinical trial of MEDI-545, a
fully human antibody targeting interferon-alpha, for the treatment of
psoriasis by Medarex's partner, MedImmune, Inc.;
-- Entering into separate collaboration agreements with Mitsubishi Pharma
Corporation (a subsidiary of Mitsubishi Chemical Holdings Corporation),
Organon (now part of Schering-Plough), and Compugen Ltd. to develop
fully human antibodies for the treatment of cancer and/or autoimmune
diseases;
-- Announcing the award of up to an additional $13.9 million of government
funding to Medarex's partner, PharmAthene, Inc., towards the
development of Valortim(TM) for use as an anti-toxin therapeutic to
prevent and treat inhalation anthrax infections; and
-- Adding approximately $152 million to our cash resources in 2007 through
the sale of approximately 2.6 million shares of Genmab A/S common
stock.
"We enter 2008 with great enthusiasm from the significant advancements
achieved across our product pipeline in 2007," said Howard H. Pien,
President and CEO of Medarex. "In addition to the clinical progress of the
ipilimumab program, we currently have six proprietary programs in Phase 2
or Phase 1 clinical development. Furthermore, our licensing partners made
great strides in 2007, and we look forward to further clinical and
regulatory progress in 2008. We will continue to emphasize our strong
technology and execute on a business strategy to build a broad pipeline of
important products, which is the foundation for sustained growth, value and
success."
Subsequent activities in 2008 include the addition of approximately
$151.8 million to our cash resources through the sale of 2.5 million shares
of Genmab common stock, reducing our ownership in Genmab to approximately
5.1 percent.
Conference Call and Webcast Details
Medarex will hold a public conference call and webcast today, February
26, 2008, at 4:30 p.m. Eastern Time to review its financial and business
results. To access the call live, please dial 1-866-510-0710 (U.S./Canada)
or 1-617- 597-5378 (international) and enter passcode number 151-760-24.
The webcast can be accessed through the Investor Relations section of
Medarex's website at http://www.medarex.com and will be archived for 14 days
following the webcast. A telephonic replay of the conference call will be
available following the event until midnight Eastern Time, March 4, 2008.
Access numbers for this replay are 1-888-286-8010 (U.S./Canada) or
1-617-801-6888 (international); passcode number 758-360-84.
About Medarex
Medarex is a biopharmaceutical company focused on the discovery,
development and potential commercialization of fully human antibody-based
therapeutics to treat life-threatening and debilitating diseases, including
cancer, inflammation, autoimmune disorders and infectious diseases. Medarex
applies its UltiMAb(R) technology and product development and clinical
manufacturing experience to generate, support and potentially commercialize
a broad range of fully human antibody product candidates for itself and its
partners. Over forty of these therapeutic product candidates derived from
Medarex technology are in human clinical testing or have had INDs submitted
for such trials, with seven of the most advanced product candidates
currently in Phase 3 clinical trials or the subject of regulatory
applications for marketing authorization. Medarex is committed to building
value by developing a diverse pipeline of antibody products to address the
world's unmet healthcare needs. For more information about Medarex, visit
its website at http://www.medarex.com.
Statement on Cautionary Factors
Except for the historical information presented herein, matters
discussed herein may constitute forward-looking statements that are subject
to certain risks and uncertainties that could cause actual results to
differ materially from any future results, performance or achievements
expressed or implied by such statements. Statements that are not historical
facts, including statements preceded by, followed by, or that include the
words "potential"; "believe"; or similar statements are forward-looking
statements. Medarex disclaims, however, any intent or obligation to update
these forward-looking statements. Risks and uncertainties include risks
associated with product discovery and development, uncertainties related to
the outcome of clinical trials, slower than expected rates of patient
recruitment, unforeseen safety issues resulting from the administration of
antibody products in patients, uncertainties related to product
manufacturing, compliance with regulatory requirements, risks associated
with the use of hazardous substances and risks associated with the
enforceability of our patents as well as risks detailed from time to time
in Medarex's public disclosure filings with the U.S. Securities and
Exchange Commission (SEC), including its Annual Report on Form 10-K for the
fiscal year ended December 31, 2006. There can be no assurance that such
development efforts will succeed or that developed products will receive
required regulatory clearance or that, even if such regulatory clearance
were received, such products would ultimately achieve commercial success.
Copies of Medarex's public disclosure filings are available from its
investor relations department.
Medarex(R), the Medarex logo and UltiMAb(R) are registered trademarks
of Medarex, Inc. All rights are reserved.
MEDAREX, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Year Ended Three Months Ended
December 31, December 31,
(unaudited)
2007 2006 2007 2006
Contract and license
revenues $35,906 $28,289 $15,135 $6,769
Reimbursement of
developments costs 20,352 20,357 5,362 4,557
Total revenues 56,258 48,646 20,497 11,326
Costs and expenses:
Research and development 198,317 194,512 56,857 52,187
General and administrative 46,925 51,928 11,905 16,801
Acquisition of in-process
technology 6,900 - - -
Operating loss (195,884) (197,794) (48,265) (7,662)
Equity in net loss of
affiliate - (1,037) - -
Interest income, net 14,128 12,643 3,290 3,132
Gain on sale of Genmab stock 152,143 - - -
Impairment loss on
investments in partners (2,141) (5,170) - (5,170)
Minority interest - Celldex 4,699 6,891 157 2,110
Non-cash gain on loss of
significant influence
in Genmab - 3,202 - -
Loss before provision for
income taxes (27,055) (181,265) (44,818) (57,590)
Provision for income taxes 12 436 5 115
Net loss $(27,067) $(181,701) $(44,823) $(57,705)
Basic and diluted net
loss per share $(0.21) $(1.50) $(0.35) $(0.46)
Weighted average number of
common shares outstanding
during the year - basic and
diluted 126,665 121,126 127,409 124,593
Condensed Consolidated Balance Sheet
(In thousands)
December 31, December 31,
2007 2006
(1)
Cash, cash equivalents and marketable
securities - Medarex $343,862 $325,494
Cash and cash equivalents - Celldex 4,910 14,000
Marketable securities - Genmab 152,000 150,000
Other current assets 29,013 22,271
Property, buildings and equipment, net 79,925 84,341
Marketable securities - Genmab non-current 139,165 -
Investment in Genmab - 344,382
Other assets 10,985 14,205
$759,860 $954,693
Current liabilities $81,645 $70,436
Other liabilities 89,454 97,804
Convertible notes 143,505 141,581
Minority interest - 4,699
Shareholders' equity 445,256 640,173
$759,860 $954,693
(1) Derived from the December 31, 2006 audited financial statements. For
further information, refer to consolidated financial statements and
footnotes thereto included in Medarex's Annual the Report on Form 10-K
for the year ended December 31, 2006.
The accompanying press release dated February 26, 2008 contains
non-GAAP financial measures. The following table reconciles the non-GAAP
financial measures contained in the press release to the most directly
comparable financial measures prepared in accordance with GAAP. These
non-GAAP financial measures include non-GAAP net loss and non-GAAP net loss
per share. Non-GAAP financial measures should be considered in addition to,
and not as a substitute for, or superior to, financial measures prepared in
accordance with GAAP.
The following reconciliation of GAAP net loss to non-GAAP net loss and
GAAP net loss per share to non-GAAP net loss per share is provided as a
complement to results presented in accordance with GAAP because Medarex's
management believes these non-GAAP financial measures provide better
insight into Medarex's performance by focusing on results generated by its
ongoing operations and are important in comparing current results with
prior period results. Non-GAAP net loss and non-GAAP net loss per share are
intended to illustrate Medarex's results of operations for the periods
presented excluding the items discuss below. Medarex's management believes
investors' understanding of Medarex's financial performance is enhanced as
a result of our disclosing these non-GAAP financial measures. Non-GAAP net
loss and non- GAAP net loss per share should not be viewed in isolation or
as a substitute for GAAP net loss or GAAP net loss per share.
MEDAREX, INC.
Reconciliation of GAAP Net Loss to Non-GAAP Net Loss
(In thousands, except per share data)
(unaudited)
Year Ended Three Months Ended
December 31, December 31,
(unaudited) (unaudited)
2007 2006 2007 2006
GAAP Net loss $(27,067) $(181,701) $(44,823) $(57,705)
Celldex Net loss (1) 15,231 17,227 3,876 5,276
Minority interest -
Celldex (1) (4,699) (6,891) (157) (2,110)
Stock-based compensation
expense (2) 18,551 19,177 4,775 7,121
Acquisition of in-process
technology related
to Ability Biomedical 6,900 - - -
Impairment loss on
investments in partners 2,141 5,170 - 5,170
Non-cash gain on loss
of significant influence
in Genmab - (3,202) - -
Gain on sale of Genmab
stock (152,143) - - -
Non-GAAP Net loss $(141,086) $(150,220) $(36,329) $(42,248)
GAAP Net loss per share,
basic and diluted $(0.21) $(1.50) $(0.35) $(0.46)
Non-GAAP Net loss
per share, basic and
diluted $(1.11) $(1.24) $(0.29) $(0.34)
Shares used in computing
basic and diluted
Non-GAAP net loss per
share 126,665 121,126 127,409 124,593
(1) In management's view, the operations of Celldex are not necessarily
indicative of, or directly attributable to, Medarex's continuing
operations. Celldex's operations relate primarily to the research,
development and commercialization of therapeutic vaccines, which is
outside the scope of Medarex's core business operations.
(2) For the twelve and three months ended December 31, 2007, Medarex
incurred $18.6 million and $4.8 million in non-cash stock compensation
expense, of which $8.9 million and $2.1 million is included in
research and development expense and $9.7 million and $2.7 million is
included in general and administrative expenses. Stock compensation
expense includes costs associated with stock awards, including stock
options which were recorded in accordance with the provisions of FAS
123(R). FAS 123(R) requires companies to record stock-based payments
in the financial statements using a fair value method. Medarex adopted
FAS 123(R) on a modified prospective basis beginning on January 1,
2006.
In addition to excluding the items described in footnotes 1 and 2
above, items have been excluded based upon management's evaluation (on an
individual basis) of both quantitative and qualitative aspects of the item,
including, (i) size and nature, (ii) whether it relates to our ongoing
business operations, and (iii) whether management expects it to occur as
part of our normal business on a regular basis. Those additional items
excluded for purposes of determining non-GAAP net loss and non-GAAP net
loss per share are acquisition of in-process technology, impairment loss on
investments in partners, gain on sales of Genmab stock and a non-cash gain
on loss of significant influence in Genmab.
SOURCE Medarex, Inc.
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Related links:
http://www.medarex.com
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CONTACT:
Christian S. Schade, Senior VP and CFO,
+1-609-430-2880, or Laura S. Choi, Investor Relations,
+1-609-430-2880, ext. 2216, or Jean Mantuano, Corporate
Communications (media), +1-609-430-2880, ext. 2221, all of
Medarex, Inc.
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