Company Projects Year of Rapid Transformation Following Anticipated Late-March
Closing of Acquisitions of ESP Pharma and Retavase(R)
FREMONT, Calif., March 14 /PRNewswire-FirstCall/ -- Protein Design Labs,
Inc. (PDL) (Nasdaq: PDLI) today reported a net loss of $53.2 million, or $0.56
per basic and diluted share, for the year ended December 31, 2004, compared
with a net loss of $129.8 million, or $1.40 per basic and diluted share, for
the year ended December 31, 2003. Excluding certain non-cash charges
described in more detail below, the non-GAAP net loss for 2004 would have been
$49.4 million, or $0.52 per basic and diluted share, compared with a non-GAAP
net loss of $35.9 million, or $0.39 per basic and diluted share in 2003.
Total revenues in 2004 were $96.0 million, an increase of 44% over total
revenues of $66.7 million in 2003. The increase included a 59% increase in
royalties, which totaled $83.8 million in 2004, compared with royalty revenues
of $52.7 million in 2003. License and other revenues of $12.2 million in 2004
decreased from $14.0 million in the prior year.
As of December 31, 2004, PDL had cash, cash equivalents, marketable
securities and restricted investments totaling approximately $397.1 million,
compared with $505.0 million at December 31, 2003. The December 31, 2004
balances reflected approximately $95.7 million in capital expenditures made
during 2004, primarily related to planned ongoing construction and validation
of PDL's manufacturing plant at Brooklyn Park, Minn.
Total costs and expenses were $154.4 million in 2004, compared with $196.3
million in 2003. Excluding certain non-cash charges, which consist of
acquired in-process research and development charges and the amortization of
intangible assets associated with the Eos acquisition and the re-acquisition
of rights to manufacture and market Zenapax(R) (daclizumab) in 2003,
restructuring charges related to the closure of PDL's New Jersey facility in
the second quarter of 2004, as well as stock-based compensation charges, non-
GAAP total costs and expenses in 2004 would have been $150.5 million compared
to non-GAAP expenses of $109.1 million for 2003.
Research and development expenses increased 48% to $122.6 million in 2004,
compared with $82.7 million in 2003. The increase in research and development
expenses reflected additional headcount and associated costs required to
pursue research and clinical development programs, contract manufacturing and
direct scale-up and manufacturing expense, increased facility and equipment-
related costs, and in-licensing of technology. General and administrative
expenses increased to $31.8 million in 2004 from $27.6 million in 2003.
Total revenues during the fourth quarter of 2004 were $22.8 million,
compared with $13.6 million in the fourth quarter of 2003. Royalties in the
fourth quarter of 2004 were $19.9 million, or 124% higher than the $8.9
million of royalties reported in the 2003 fourth quarter. License and other
revenues were $2.9 million and $4.7 million in the 2004 and 2003 fourth
quarters, respectively. Research and development expenses were $30.2 million
in the fourth quarter of 2004, compared with $24.4 million in the comparable
three months of 2003. General and administrative expenses were $8.6 million
and $8.1 million in the fourth quarters of 2004 and 2003, respectively. PDL
reported a net loss of $14.6 million, or $0.15 per basic and diluted share,
for the fourth quarter of 2004, compared with a net loss of $72.9 million, or
$0.78 per basic and diluted share, in the same period in 2003, which included
an acquired in-process research and development expense of $48.2 million
related to the re-acquisition from Roche of rights to develop and market
Zenapax in indications other than transplantation as well as an option to re-
acquire rights in transplantation. Excluding certain non-cash charges, the
non-GAAP net loss in the fourth quarter of 2004 would have been $13.7 million,
or $0.14 per basic and diluted share, compared with a non-GAAP net loss of
$17.6 million, or $0.19 per basic and diluted share in the comparable period
of 2003.
Reconciliations of our GAAP results to our non-GAAP results are included
in the financial results accompanying this release.
Recent Corporate Developments
On January 25, 2005, PDL and ESP Pharma, a privately held, sales and
marketing-focused pharmaceutical company, announced a definitive agreement
under which PDL would acquire ESP Pharma and its pipeline of marketed products
and clinical candidates for $300 million in cash and approximately $175
million in PDL common stock, or an aggregate value of approximately $475
million, plus the assumption of net debt anticipated to be approximately $14
million at the time of closing. In February 2005, ESP Pharma agreed to acquire
from Centocor, Inc., a biopharmaceutical operating company of Johnson &
Johnson, rights to manufacture, develop, market and distribute Retavase(R)
(reteplase) in the United States and Canada for $110 million and milestone
payments of up to $45 million if additional conditions relating to ongoing
clinical trials and manufacturing arrangements are satisfied. As a result of
ESP Pharma's purchase of Retavase, PDL agreed to increase the purchase price
paid to ESP Pharma's shareholders by $25 million in cash payable at closing of
the ESP Pharma acquisition, and agreed to assume the purchase price
obligations to Centocor under the agreement.
"By adding marketed products and sales and distribution capabilities to
our antibody development and humanization technology platform, the ESP Pharma
acquisition is intended to establish PDL as a fully integrated, commercial
biopharmaceutical company with a diverse revenue base and a broad, proprietary
pipeline," said Mark McDade, Chief Executive Officer, PDL.
"The Retavase acquisition enhances the utilization of the sales force and
provides us with another point of entry into the emergency room. In addition,
the acquisition of this commercial infrastructure should put us in an
excellent position for the potential future launches of Nuvion and other
hospital products. Moreover, these combined acquisitions should enable us to
become cash-flow positive beginning in the second half of 2006," Mr. McDade
added.
PDL currently anticipates closing its pending acquisition of ESP Pharma
late in the first quarter or early in the second quarter of 2005, subject to
regulatory approvals and the satisfaction of closing conditions under the
agreement.
2005 Forward-looking Guidance
The following statements are based on expectations as of March 14, 2005.
These statements are forward-looking, and actual results may differ
materially. This guidance assumes closing of the ESP Pharma and Retavase
acquisitions on or about March 31, 2005. Except for those assumptions and as
expressly set forth below, these statements do not include the potential
impact of new collaborations, material licensing arrangements or other
strategic transactions.
For 2005 PDL anticipates that, on a non-GAAP basis, our total revenues
will be in the range of approximately $250 to $260 million. Royalty revenues
are expected to be in the range of approximately $112 to $115 million, and
license and other revenues are anticipated to be in the range of approximately
$20 to $25 million. Royalty revenue estimates do not include further
royalties based on sales of Tysabri(R) antibody product from Biogen Idec and
Elan, which is licensed under PDL's humanization patents but was withdrawn
from the market on February 28, 2005. PDL currently believes that royalty
revenues for each year from 2006 through 2008 should grow approximately 25%
per year.
Product revenues for Cardene IV, Retavase and IV Busulfex are expected to
total approximately $93 to $95 million for the anticipated nine-month period
of sales following the close of the acquisition of ESP Pharma on or about
March 31, 2005. Additionally, PDL anticipates compound annual growth rates of
approximately 25% for net product sales of these three marketed products for
each year from 2006 through 2008. For these same products, PDL currently
anticipates product operating margins of at least 80% over the 2005 through
2008 period.
During 2005 we anticipate research and development expenses in the range
of $184 to $186 million of which we expect to spend approximately $100 million
to advance our clinical development programs for Nuvion, daclizumab and M200.
We further anticipate sales and marketing expenses in the range of $42 to $44
million resulting primarily from the ESP Pharma acquisition. We anticipate
general and administrative expenses for the full year 2005 in the range of $31
to $33 million.
In addition, we expect interest income of approximately $7 million and
interest expense of approximately $8 million.
Overall, for the full year 2005 we anticipate a GAAP net loss in the range
of approximately $1.43 to $1.64 per basic and diluted share, and a non-GAAP
net loss in the range of approximately $0.18 to $0.34 per basic and diluted
share.
At year-end 2005, PDL estimates that its cash balances will be
approximately $200 million. This estimate takes into account anticipated
capital expenditures of $38 to $42 million, approximately half of which
represents final validation and completion of our new Brooklyn Park, Minn.
manufacturing facility; cash payments during 2005 of $325 million and $110
million for the acquisitions of ESP Pharma and Retavase, respectively; the
receipt of approximately $240 million from the recent sale of convertible
notes, net of fees and expenses; and the assumption of up to $14 million in
ESP-related debt. By year-end 2005, we estimate that our headcount will be in
the range of 900 to 950, split approximately 70% in research and development,
15% in sales and marketing and 15% in general and administrative functions.
The 2005 non-GAAP operating expenses exclude the following: (a) stock
compensation expenses of approximately $10 to $15 million (noting that this is
a highly variable expense depending upon the valuation model selected and
related assumptions for stock price volatility); (b) acquired in-process
research and development expenses related to the purchase of ESP Pharma of
approximately $88 million; and (c) amortization of intangibles related to the
acquisitions of Eos, ESP Pharma and to our recent convertible offering of
approximately $31 million. We note that the stock compensation expense is a
preliminary estimate based on the new standard issued by the Financial
Accounting Standards Board, FAS 123R, to be adopted by us in the second half
of 2005. The actual expense may be materially different depending on the
assumptions and methodologies used in implementing the new standard.
Clinical Development Update
Dr. Steven Benner, Senior Vice President and Chief Medical Officer, PDL,
said, "PDL is committed to the development of new antibody-based treatments.
We have continued to make progress on our clinical programs and look forward
to exciting new antibody programs leading to future INDs coming from our
research efforts. Now, with the anticipated acquisition of ESP Pharma, we
expect to add additional clinical programs that we hope will expand our
product portfolio over the next few years."
Nuvion (visilizumab, anti-CD3). Nuvion remains PDL's highest development
priority. PDL expects to meet with the FDA in late March. At this end-of-
Phase I meeting, PDL will discuss its plans to move Nuvion into a Phase III
program. PDL hopes to move into registrational trials with Nuvion in
intravenous corticosteroid-refractory ulcerative colitis late this year. If
the discussions with the FDA are positive, PDL intends to use the FDA's
Special Protocol Assessment process to continue to develop the protocol and
plan the analysis of the Phase III program.
PDL expects to publicly update the status of its Nuvion program and the
outcome of the discussion with the FDA by early April. Additional data from
the Phase I / II study of Nuvion is expected to be presented during the
Digestive Disease Week meeting to be held in Chicago from May 14-19.
Daclizumab (Zenapax, anti-IL-2 receptor). PDL is on schedule to begin in
this quarter a single-dose Phase I study of PDL-manufactured daclizumab
administered subcutaneously for asthma. This trial will be followed by a
multiple-dose study in healthy volunteers expected to be initiated this
summer. A Phase II dose range-finding study of subcutaneously administered,
PDL-manufactured daclizumab in asthma patients remains on schedule for the
first quarter of 2006. PDL also continues to evaluate the opportunity to
develop daclizumab further in the setting of solid organ transplantation.
A randomized, placebo-controlled, Phase II study of daclizumab in patients
with multiple sclerosis is pending initiation. We anticipate the first
patient accrual in late March or early in the second quarter. In this study,
patients with active relapsing forms of MS will receive subcutaneous
daclizumab at one of two dosage levels, or placebo, for six months in addition
to their current beta-interferon treatment. The three-arm study is planned to
enroll a total of 270 patients.
M200 (volociximab, anti-alpha5beta1 integrin antibody). Currently, M200
is being developed as an anti-angiogenic therapy for the treatment of solid
tumors in open-label pilot Phase II studies. These trials, each of up to 40
patients, will further assess the tolerability of prolonged administration of
M200 and look for evidence of clinical activity. Two clinical trials are now
open. Two additional pilot Phase II studies will open in the first and second
quarters, respectively. Data from at least two of the initial Phase II
studies is expected to be available for presentation during the ASCO meeting
in June 2006.
In addition, PDL is planning a pilot trial of M200 administered
intravenously in patients with age-related macular degeneration (AMD). M200
administered intravenously has shown activity in animal models and this
approach reflects PDL's belief that the treatment of this disease will evolve
to systemic therapies. Consequently, given the attractiveness of this
approach relative to intra-vitreal injections, we intend to proceed with
development of M200 in place of F200 in this indication. F200 is a fragment
of the M200 antibody and was a pre-IND candidate for the intra-vitreal
treatment of AMD. We are planning a Phase II trial of M200 administered
intravenously in patients with AMD, expected to begin during the second half
of 2005.
ESP Pharma Products and Pipeline
ESP Pharma's two leading marketed products are Cardene IV and IV Busulfex,
and it is under contract to acquire an additional marketed product, Retavase,
from Centocor. The 75 sales professionals at ESP Pharma currently detail to
hospital-based physicians the following products:
Cardene IV(R) (nicardipine hydrochloride). Cardene IV is indicated for
the short-term treatment of hypertension when oral therapy is not feasible or
desirable. Cardene IV is used in the hospital as an option for control of
hypertension. Currently, it is used most often by neurologists,
neurosurgeons, anesthesiologists, cardiologists and cardiothoracic surgeons.
Increasingly, it also is used in emergency departments. We believe that given
the known safety profile and efficacy of Cardene IV, the use of this agent
will continue to increase as new prescribers gain experience with the agent.
We will be evaluating additional opportunities to further develop Cardene IV.
IV Busulfex(R) (busulfan injection). IV Busulfex is an intravenous
formulation of busulfan and is indicated for use in combination with
cyclophosphamide as a conditioning regimen prior to allogeneic hematopoietic
progenitor cell transplantation for chronic myelogenous leukemia. When used
in this regimen, IV Busulfex is administered four times per day and replaces
oral busulfan, for which a patient must take over 100 pills per day. Oral
busulfan is associated with nausea and vomiting that may lead to lower drug
levels than was intended. We believe that additional opportunities for the
development of IV Busulfex exist. We may explore other potential uses of the
drug, such as a once per day regimen and expanding the use of the drug into
other conditioning regimens for the treatment of other malignancies. We
expect that the major use of IV Busulfex will be in conditioning regimens
associated with bone marrow transplantations.
Retavase(R) (reteplase). Retavase is indicated for use in the management
of acute myocardial infarction (AMI) in adults for the improvement of
ventricular function following AMI, the reduction of the incidence of
congestive heart failure and the reduction of mortality associated with AMI.
Retavase is used predominantly by cardiologists, cardiothoracic surgeons and
emergency room physicians. PDL believes that the two bolus, fixed-dosing
regimen of Retavase is an advantage in the acute setting of myocardial
infarction. We believe that Retavase will be an excellent fit with Cardene
IV, as there is significant overlap in the hospitals and physicians that could
use both products. With respect to further development opportunities for
Retavase, an ongoing clinical trial being conducted by Centocor and Eli Lilly
and Company, called the FINESSE trial, is exploring the use of Retavase in
combination with Reopro(R) (abciximab) in the setting of facilitated
percutaneous coronary intervention (PCI).
ESP Pharma has marketing rights for three compounds in development, as
well as Phase III development and marketing rights for a fourth compound. PDL
has prioritized the pipeline to focus immediately on two of these
opportunities: terlipressin, a potential treatment for hepato-renal syndrome
(HRS); and ESP-305, a potential treatment for congestive heart failure.
Terlipressin. Terlipressin is a synthetic 12 amino acid peptide derived
from the naturally occurring lysine-vasopressin. Terlipressin causes
constrictive activity in vascular and extra-vascular smooth muscle. As a
consequence, it reduces blood flow in the splanchnic area and thereby lowers
portal blood pressure. Terlipressin is approved in many European and Asian
countries for the treatment of esophageal variceal hemorrhage. These varices
develop as a complication of portal hypertension in patients with liver
cirrhosis.
Results from early clinical trials suggest that terlipressin may have
activity in patients with hepato-renal syndrome (HRS). Patients with end-
stage liver disease may develop progressive deterioration of renal function,
without a primary abnormality of the kidney. Patients who have a rapid
decline of renal function, characterized as HRS type I, have a median survival
of less than two weeks. The treatment of choice for these patients is liver
transplantation, but this option is not always available to all patients.
ESP Pharma acquired exclusive marketing rights for terlipressin in the
United States and Canada from a private U.S. company, Orphan Therapeutics,
which is developing the compound in HRS. Orphan Therapeutics holds the IND
and is conducting a Phase III trial in patients with type I HRS in the United
States and Europe.
Orphan Therapeutics has obtained Orphan Drug Status for this program. We
estimate that there are 4,000 to 6,000 patients in the United States each year
that could be candidates for this therapy. There are no approved medical
treatments for type I HRS.
ESP-305 (ularitide). ESP-305 is an agent for the potential treatment of
congestive heart failure. This compound is a natriuretic peptide, urodilatin
(INN: ularitide). Ularitide is a recombinant form of this naturally occurring
peptide, originally isolated from human urine. Ularitide is formed from the
cleavage of the same prohormone that produces atrial natriuretic peptide.
Ularitide enhanced natriuresis and diuresis and decreased central venous
pressure in a previous small study of patients with CHF. The peptide was
first isolated by scientists affiliated with the University of Hanover,
Institute of Peptide Research and has been developed by a German company,
CardioPep Pharma GmbH.
Recently, CardioPep has been conducting clinical studies of ularitide in
hospitalized patients with decompensated congestive heart failure. The first
of their two studies, the SIRIUS I trial, was a double-blind, placebo-
controlled, ascending dose study in patients with decompensated chronic heart
failure. This trial enrolled 24 patients. The study was primarily intended
to assess safety, but evidence of hemodynamic activity was observed at two
higher dose levels when assessed at six hours. There was no apparent
difference in adverse events across the four treatment groups. The results of
this study, SIRIUS I, are now in press in the American Heart Journal.
Currently, CardioPep is conducting SIRIUS II, a larger, double-blind, placebo-
controlled Phase II study of ularitide. A total of 221 patients have been
enrolled. Results of this trial should become available in the second quarter
of this year.
ESP Pharma acquired from CardioPep exclusive rights to conduct all
subsequent Phase III development and exclusive marketing rights for ularitide
for all indications in the United States, Canada, the European Union and
Switzerland. To date, all clinical development of ularitide has taken place
in Europe. PDL anticipates filing a U.S. IND for ESP-305 this year. In the
United States alone, there are approximately one million hospitalizations per
year for decompensated congestive heart failure.
Dr. Benner added, "We are pleased that the ESP Pharma projects will enter
our pipeline at the end of Phase II or later and that the combined pipeline
will maintain a focus on hospital products, while expanding PDL into
cardiology. We are very excited about not only becoming a fully integrated
company, but about the broader potential of our commercial portfolio with new
products that are currently in development."
Webcast Information
PDL will webcast a conference call live at 4:30 p.m. Eastern time today to
review its financial results for the fourth quarter and year ended December
31, 2004, the status of its clinical development programs, the status of its
pending acquisition of ESP Pharma, and its forward-looking information and
guidance with respect to future results. Financial and statistical
information to be discussed in the call will be available on the PDL website
immediately prior to the commencement of the call. A link to the conference
call webcast will be available through the PDL website: http://www.pdl.com. Please
connect to this website at least 15 minutes prior to the conference call to
ensure adequate time for any software download that may be needed to hear the
webcast. The webcast will be archived at http://www.pdl.com starting approximately
one hour after completion of the webcast. A replay of the conference call
will also be available by telephone from approximately 7 p.m. Eastern time on
March 14 through 7 p.m. Eastern time on March 20, 2005. To access the replay,
dial 800-633-8284 from inside the United States and 402-977-9140 from outside
the United States and enter conference ID number 21233659.
The foregoing contains forward-looking statements involving risks and
uncertainties and PDL's actual results may differ materially from those,
express or implied, in the forward-looking statements. The forward-looking
statements include our expectations regarding financial results and the timing
of clinical developments as well as other statements regarding our
expectations. Factors that may cause differences between current expectations
and actual results include, but are not limited to, the following: The
completion, timing of completion and successful integration of ESP Pharma and
Retavase as part of PDL; fluctuations in sales that may result from our
integration of newly acquired operations, from changes in the market due to
alternative treatments or other actions by competitors, variability in
expenses particularly on a quarterly basis, due, in principal part, to total
headcount of the organization and the timing of expenses. In addition, PDL
revenues depend on the success and timing of sales of our licensees and
partners, including in particular the continued successful launch of
Avastin(TM) antibody product by Genentech as well as the seasonality of sales
of Synagis(R) from MedImmune, Inc. In addition, quarterly revenues may be
impacted by our ability to maintain and increase our revenues from
collaborative arrangements such as our co-development agreement with Roche.
Our revenues and expenses would also be affected by new collaborations,
material patent licensing arrangements or other strategic transactions.
Further, there can be no assurance that results from completed and ongoing
clinical studies, described above, will be successful or that ongoing or
planned clinical studies will be completed or initiated on the anticipated
schedules. In particular, there can be no assurance that our scheduled meeting
with the FDA regarding Nuvion later in this quarter will result in our ability
to initiate potentially pivotal studies prior to year end, if ever. Other
factors that may cause our actual results to differ materially from those,
express or implied, in the forward-looking statements in this press release
are discussed in our filings with the Securities and Exchange Commission. PDL
expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained herein to
reflect any change in our expectations with regard thereto or any change in
events, conditions or circumstances on which any such statements are based.
About PDL
Protein Design Labs is a leader in the development of humanized antibodies
to prevent or treat various disease conditions. PDL currently has antibodies
under development for autoimmune and inflammatory conditions, asthma and
cancer. PDL holds fundamental patents for its antibody humanization
technology. Further information on PDL is available at http://www.pdl.com or by
contacting James R. Goff, Senior Director, PDL Corporate Communications, 510-
574-1421 or jgoff@pdl.com.
NOTE: Protein Design Labs, the PDL logo and Nuvion are registered U.S.
trademarks of Protein Design Labs, Inc. Zenapax is a registered trademark of
Roche. Synagis is a registered U.S. trademark of MedImmune, Inc. Avastin is
a trademark of Genentech, Inc. Cardene IV and IV Busulfex are registered
trademarks of ESP Pharma, Inc. Retavase is a registered trademark of
Centocor. Tysabri is a trademark of Elan.
PROTEIN DESIGN LABS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except
per share data )
Three months ended Years ended
December 31, December 31,
2004 2003 2004 2003
Revenues:
Royalties $19,935 $8,896 $83,807 $52,704
License and other 2,894 4,717 12,217 13,982
Total revenues 22,829 13,613 96,024 66,686
Costs and expenses:
Research and development 30,199 24,409 122,563 82,732
General and administrative 8,624 8,148 31,806 27,613
Acquired in-process research
and development -- 48,159 -- 85,993
Total costs and expenses 38,823 80,716 154,369 196,338
Operating loss (15,994) (67,103) (58,345) (129,652)
Interest and other income, net 2,523 (3,320) 10,212 9,831
Interest expense (1,099) (2,424) (5,028) (9,770)
Impairment loss on investment -- -- -- (150)
Loss before income taxes (14,570) (72,847) (53,161) (129,741)
Provision for income taxes 12 12 80 73
Net loss $(14,582) $(72,859) $(53,241) $(129,814)
Basic and diluted net loss per
share $(0.15) $(0.78) $(0.56) $(1.40)
Shares used in computation of
basic and diluted net loss per
share 95,613 93,764 94,982 92,478
CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
Dec. 31, Dec. 31,
2004 2003*
(In thousands) (unaudited)
Cash, cash equivalents,
marketable securities, and
restricted investments $397,080 $504,993
Total assets 713,732 742,030
Total stockholders' equity 412,510 448,331
* Derived from the December 31, 2003 audited consolidated financial
statements.
PROTEIN DESIGN LABS, INC.
NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
We use non-GAAP amounts that exclude charges related to acquired in-
process research and development and certain other non-cash charges,
including amortization of intangible assets, and stock-based
compensation, as well as other non-recurring charges, such as costs
incurred in connection with the extinguishment of our debt and
restructuring charges. Management believes that these non-GAAP measures
enhance an investor's overall understanding of our financial performance
and future prospects by reconciling more closely to the actual cash
expenses of the company in its operations, as well as excluding expenses
that, in management's view, are unrelated to our core operations, the
inclusion of which may make it more difficult for investors and financial
analysts reporting on the company to compare our results from period to
period. Our management uses these non-GAAP financial measures along with
the most directly comparable GAAP financial measures in evaluating the
company's operating performance and for budgeting and planning purposes.
(In thousands, except
per share data )
Three months ended December 31,
2004
GAAP Adjustment Non-GAAP
Revenues:
Royalties $19,935 $19,935
License and other 2,894 2,894
Total revenues 22,829 22,829
Costs and expenses:
Research and development 30,199 $(598)(1) 29,601
General and administrative 8,624 (303)(1) 8,321
Acquired in-process research and
development -- -- --
Total costs and expenses 38,823 (901) 37,922
Operating loss (15,994) 901 (15,093)
Interest and other income, net 2,523 -- 2,523
Interest expense (1,099) -- (1,099)
Impairment loss on investment -- -- --
Loss before income taxes (14,570) 901 (13,669)
Provision for income taxes 12 -- 12
Net loss $(14,582) $901 $(13,681)
Basic and diluted net loss per share $(0.15) $(0.14)
Shares used in computation of basic
and diluted net loss per share 95,613 95,613
Three months ended December 31,
2003
GAAP Adjustment Non-GAAP
Revenues:
Royalties $8,896 $8,896
License and other 4,717 4,717
Total revenues 13,613 13,613
Costs and expenses:
Research and development 24,409 $(595)(1) 23,814
General and administrative 8,148 (14)(1) 8,134
Acquired in-process research and
development 48,159 (48,159)(2) --
Total costs and expenses 80,716 (48,768) 31,948
Operating loss (67,103) 48,768 (18,335)
Interest and other income, net (3,320) 6,538 (3) 3,218
Interest expense (2,424) -- (2,424)
Impairment loss on investment -- -- --
Loss before income taxes (72,847) 55,306 (17,541)
Provision for income taxes 12 -- 12
Net loss $(72,859) $55,306 $(17,553)
Basic and diluted net loss per share $(0.78) $(0.19)
Shares used in computation of basic
and diluted net loss per share 93,764 93,764
(1) To exclude (i) the ongoing, non-cash amortization of acquired
intangible assets, including workforce, related to the Eos acquisition,
and core technology, related to the purchase of certain patent rights
from Roche, (ii) stock-based compensation charges related to
modifications of stock options and stock options issued to non-employees
and (iii) adjustments to restructuring charges related to the closure of
our New Jersey facility.
(2) To exclude the non-cash charges of acquired in-process research and
development, which relate to the Eos acquisition and the purchase of
certain technology that has not achieved technological feasibility.
(3) To exclude the charges associated with the extinguishment of our $150
million convertible debt due February 2007.
PROTEIN DESIGN LABS, INC.
NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
We use non-GAAP amounts that exclude charges related to acquired
in-process research and development and certain other non-cash charges,
including amortization of intangible assets, and stock-based
compensation, as well as other non-recurring charges, such as costs
incurred in connection with the extinguishment of our debt, impairment
losses and restructuring charges. Management believes that these
non-GAAP measures enhance an investor's overall understanding of our
financial performance and future prospects by reconciling more closely to
the actual cash expenses of the company in its operations, as well as
excluding expenses that, in management's view, are unrelated to our core
operations, the inclusion of which may make it more difficult for
investors and financial analysts reporting on the company to compare our
results from period to period. Our management uses these non-GAAP
financial measures along with the most directly comparable GAAP financial
measures in evaluating the company's operating performance and for
budgeting and planning purposes.
(In thousands, except
per share data )
Years ended December 31,
2004
GAAP Adjustment Non-GAAP
Revenues:
Royalties $83,807 $83,807
License and other 12,217 12,217
Total revenues 96,024 96,024
Costs and expenses:
Research and development 122,563 $(3,217)(1) 119,346
General and administrative 31,806 (655)(1) 31,151
Acquired in-process research and
development -- -- --
Total costs and expenses 154,369 (3,872) 150,497
Operating loss (58,345) 3,872 (54,473)
Interest and other income, net 10,212 -- 10,212
Interest expense (5,028) -- (5,028)
Impairment loss on investment -- -- --
Loss before income taxes (53,161) 3,872 (49,289)
Provision for income taxes 80 -- 80
Net loss $(53,241) $3,872 $(49,369)
Basic and diluted net loss per share $(0.56) $(0.52)
Shares used in computation of basic
and diluted net loss per share 94,982 94,982
Years ended December 31,
2003
GAAP Adjustment Non-GAAP
Revenues:
Royalties $52,704 $52,704
License and other 13,982 13,982
Total revenues 66,686 66,686
Costs and expenses:
Research and development 82,732 $(939)(1) 81,793
General and administrative 27,613 (278)(1) 27,335
Acquired in-process research and
development 85,993 (85,993)(2) --
Total costs and expenses 196,338 (87,210) 109,128
Operating loss (129,652) 87,210 (42,442)
Interest and other income, net 9,831 6,538 (3) 16,369
Interest expense (9,770) -- (9,770)
Impairment loss on investment (150) 150 (4) --
Loss before income taxes (129,741) 93,898 (35,843)
Provision for income taxes 73 -- 73
Net loss $(129,814) $93,898 $(35,916)
Basic and diluted net loss per share $(1.40) $(0.39)
Shares used in computation of basic
and diluted net loss per share 92,478 92,478
(1) To exclude (i) the ongoing, non-cash amortization of acquired
intangible assets, including workforce, related to the Eos acquisition,
and core technology, related to the purchase of certain patent rights
from Roche, (ii) stock-based compensation charges related to
modifications of stock options and stock options issued to non-employees
and (iii) restructuring charges related to the closure of our New Jersey
facility.
(2) To exclude the non-cash charges of acquired in-process research and
development, which relate to the Eos acquisition and the purchase of
certain technology that has not achieved technological feasibility.
(3) To exclude the charges associated with the extinguishment of our $150
million convertible debt due February 2007.
(4) To exclude the impairment loss related to an equity investment.
SOURCE Protein Design Labs, Inc.
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Related links:
http://www.pdl.com
CONTACT:
James R. Goff, Senior Director, Corporate
Communications of Protein Design Labs, Inc., +1-510-574-1421, or
jgoff@pdl.com
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