CAMBRIDGE, Mass., March 11 /PRNewswire-FirstCall/ -- Transkaryotic
Therapies, Inc. (Nasdaq: TKTX) announced today its consolidated financial
results for the fourth quarter and full year 2003.
2003 Financial Highlights at a Glance
-- Product sales increased 65% in comparison with 2002
-- Operating expenses decreased 21% in comparison with 2002
-- Net loss per share decreased 42% in comparison with 2002
-- Cash and marketable securities amounted to $181 million
"During the past year, we advanced our lead program for Hunter syndrome
into a pivotal clinical trial and controlled expenses to end the year in a
better cash position than we anticipated. As a result, we believe we are
progressing toward our goals of reaching breakeven in late 2006 and becoming a
preeminent rare disease company," said Michael J. Astrue, President and Chief
Executive Officer of TKT.
Financial Summary
For the three months ended December 31, 2003, product sales of
Replagal(TM) (agalsidase alfa), TKT's product for the treatment of Fabry
disease, were approximately $15.5 million. For the year ended December 31,
2003, Replagal product sales were approximately $57.2 million. These results
compare with Replagal product sales of approximately $12.0 million and $34.7
million at the three and twelve months ended December 31, 2002, respectively.
The net loss for the fourth quarter of 2003 was approximately $14.7
million, or $0.43 per share. As a result of the company's restructuring
efforts in 2003, TKT recorded a charge of approximately $1.1 million, or $0.03
per share, in the fourth quarter of 2003 associated with facility
consolidation. The net loss for the three months ended December 31, 2002
was approximately $47.5 million, or $1.36 per share. Included in the loss for
the quarter ended December 31, 2002 were an intellectual property license fee
expense of $8.7 million and an asset impairment charge of $16.1 million, which
contributed $0.25 and $0.46, respectively, to basic and diluted net loss per
share.
The net loss for the year ended December 31, 2003 was approximately $75.2
million, or $2.18 basic and diluted net loss per share. This compares with a
net loss of $129.8 million, or $3.75 basic and diluted net loss per share, for
the year ended December 31, 2002. Included in the net loss for the year ended
December 31, 2003 is a restructuring charge of $12.5 million and intellectual
property license fee expense of $1.4 million, which together contributed $0.36
and $0.04, respectively, to basic and diluted net loss per share. Included in
the net loss for the year ended December 31, 2002 were an intellectual
property license fee expense of $34.7 million and an asset impairment charge
of $16.1 million, which contributed $1.00 and $0.46, respectively, to basic
and diluted net loss per share.
As of December 31, 2003, TKT had approximately $180.9 million in cash and
marketable securities, which exceeded its original guidance of $150 to $170
million.
COMPANY HIGHLIGHTS
The following highlights include events of the fourth quarter 2003 as well
as events which occurred in the first quarter of 2004.
Commercial Highlights
Replagal for Fabry Disease
-- In February 2004, Health Canada approved Replagal for the treatment of
Fabry disease. Replagal is now approved in 28 countries worldwide.
-- TKT withdrew its Biologics License Application for Replagal in the
United States in January 2004, where orphan drug regulations exclude
it from the market.
-- The United States Court of Appeals for the Federal Circuit denied Mount
Sinai School of Medicine's request for an en banc hearing relating to
the Replagal patent appeal brought against TKT by Genzyme Corporation
and Mt. Sinai. As part of an October 2003 agreement between TKT and
Genzyme, Genzyme agreed to withdraw from this suit.
Clinical Development Highlights
I2S for Hunter Syndrome
-- TKT completed enrollment in its pivotal study evaluating iduronate-2-
sulfatase (I2S) for Hunter syndrome. TKT expects preliminary results
from the 96 patient clinical study in the second quarter of 2005 and,
if positive, the company expects to submit applications for market
approval in both the United States and Europe in the second half of
2005.
-- In October 2003, TKT and Genzyme formed a collaboration under which
Genzyme will commercialize I2S in certain Asia/Pacific territories.
-- At the 53rd Annual Meeting of the American Society of Human Genetics,
TKT's lead investigator reported long-term results from its I2S Phase
I/II study, in which I2S was shown to be clinically active and
generally well-tolerated in patients with Hunter syndrome. All 12
patients in the study continue to receive treatment with I2S, and many
have transitioned to home therapy.
GA-GCB for Gaucher Disease
-- In December 2003, TKT filed an Investigational New Drug Application
(IND) with the FDA to initiate clinical testing of Gene-Activated(R)
glucocerebrosidase (GA-GCB) for the treatment of Gaucher disease. The
IND is in effect and TKT plans to initiate testing during the second
quarter of 2004 while continuing to seek a partner for this program.
Business Activities
-- In January 2004, TKT expanded its operations into Canada and opened a
headquarters in Toronto.
-- TKT and Paladin Labs entered into an agreement under which Paladin will
coordinate activities for Replagal in Canada, including distribution
and patient support.
-- TKT and Orphan Australia entered into an agreement to market and
distribute Replagal in Australia and New Zealand. Under the terms of
the agreement, Orphan Australia will have exclusive marketing and
distribution rights to Replagal in those countries.
Conference Call
TKT invites the public to participate on a conference call and live
webcast with investment analysts beginning today, March 11, 2004 at 10:00 a.m.
Eastern Time to the discuss its fourth quarter and full year 2003 financial
results and financial outlook for 2004. To participate by telephone, dial
(973) 317-5319. A live audio webcast can be accessed on the TKT web site at
http://www.tktx.com within the Investor Information section. A replay of the call
will be available for two weeks beginning at 1:00 p.m. Eastern Time on March
11, 2004 by dialing (973) 709-2089 and using the access code: 342423. A
replay of the webcast will be archived on the TKT web site under Events in the
Investor Information section.
About TKT
Transkaryotic Therapies, Inc. is a biopharmaceutical company committed to
developing treatments for rare diseases caused by protein deficiencies with a
core focus on lysosomal storage diseases. The company markets one product,
Replagal(TM), an enzyme replacement therapy for Fabry disease, and is
developing treatments for Hunter syndrome and Gaucher disease. TKT's research
pipeline focuses on rare diseases where a significant unmet medical need
exists. TKT was founded in 1988 and is headquartered in Cambridge,
Massachusetts, with additional operations in Europe, Canada and Latin America.
Additional information about TKT is available on the company's website at
http://www.tktx.com.
This press release contains forward-looking statements regarding TKT's
development of certain products, including Replagal, I2S, GA-GCB, and the
timing of clinical trials, clinical trial results and regulatory filings, and
statements regarding TKT's financial outlook, as well as statements containing
the words "believes," "anticipates," "plans," "expects," "estimates,"
"intends," "should," "could," "will," "may," and similar expressions. There
are a number of important factors that could cause the company's actual
results to differ materially from those indicated by such forward-looking
statements, including: whether any of the company's products will achieve the
commercial success anticipated by the company; whether competing products will
reduce the market opportunity for such products; whether I2S will be safe and
effective as a treatment for Hunter syndrome; whether GA-GCB will be safe and
effective as a treatment for Gaucher disease; whether TKT is able to
successfully complete clinical trials of its products; enrollment rates for
clinical trials; whether the results of clinical trials such as the results of
the I2S trial, referred to above will be indicative of results obtained in
later clinical trials; whether future clinical trials will be conducted and
conducted on a timely basis; the ability of TKT and its partners to
successfully complete development of its products; the ability to manufacture
sufficient quantities of its products to satisfy both clinical trial
requirements and commercial demand, if approved; the timing of submissions to
and decisions by regulatory authorities in the United States, Europe, Japan
and other countries regarding clinical trials and marketing and other
applications; whether the FDA and equivalent regulatory authorities grant
marketing approval for the company's products on a timeline consistent with
TKT's expectations or at all; the availability and extent of coverage from
third party payors and the receipt of reimbursement approvals for the
company's products; whether competing products will reduce any market
opportunity that may exist; whether TKT will be successful in finding a
partner for GA-GCB; results of litigation; and other factors set forth under
the caption "Certain Factors That May Affect Future Results" in the company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 2003, which
is on file with the Securities and Exchange Commission and which factors are
incorporated herein by reference. While the company may elect to update
forward-looking statements at some point in the future, the company
specifically disclaims any obligation to do so, even if its expectations
change.
Gene-Activated(R) is a registered trademark and Replagal(TM) is a
trademark of Transkaryotic Therapies, Inc.
- Consolidated Financial Table To Follow -
Condensed Consolidated Statements of Operations (unaudited)
For the three For the year ended
months ended
December 31, December 31,
(In thousands, except per share amounts)
2003 2002 2003 2002
Product sales $15,487 $11,969 $57,225 $34,682
License and research
revenues 87 1,166 1,664 1,818
15,574 13,135 58,889 36,500
Operating expenses:
Cost of goods sold 1,439 5,570 12,484 10,511
Research and
development 18,332 21,582 74,062 81,309
Intellectual property
license expense - 8,660 1,350 34,660
Selling, general and
administrative 10,694 10,026 36,557 31,229
Restructuring charge 1,137 - 12,461 -
Impairment charge - 16,069 - 16,069
31,602 61,907 136,914 173,778
Operating loss (16,028) (48,772) (78,025) (137,278)
Litigation settlement 500 - 500 -
Interest income 920 1,260 2,704 7,516
Minority interest (108) - (413) -
Net loss $(14,716) $(47,512) $(75,234) $ (129,762)
Basic and diluted
net loss per share $(0.43) $(1.36) $(2.18) $(3.75)
Shares used to compute
basic and diluted net
loss per share 34,585 34,843 34,559 34,616
Condensed Consolidated Balance Sheets (unaudited)
(In thousands) December 31, December 31,
2003 2002
Cash and marketable securities $180,947 $256,708
Other current assets 44,392 41,784
Property and equipment, net 61,908 59,372
Other assets 1,922 1,942
Total assets $289,169 $359,806
Total liabilities $30,434 $35,939
Minority interest 413 -
Total stockholders' equity 258,322 323,867
Total liabilities and stockholders' equity $289,169 $359,806
CONTACT
Justine E. Koenigsberg
Director, Corporate Communications
(617) 349-0271
Daniella M. Lutz
Corporate Communications Specialist
(617) 349-0205
SOURCE Transkaryotic Therapies, Inc.
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Communications Specialist, +1-617-349-0205
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