Company reports improvement in cash flow and expenses
Company sees progress in business development
RESEARCH TRIANGLE PARK, NC, April 30 /PRNewswire-FirstCall/ --
Paradigm Genetics, Inc. (Nasdaq: PDGM), a biotechnology company, today
reported financial results for the first quarter ended March 31, 2003.
The company reported a first quarter 2003 net loss attributable to common
stockholders of $4.1 million, or $0.13 per common share, compared to earlier
guidance provided by the company of $0.15 to $0.17 loss per common share. This
compares to a net loss attributable to common stockholders of $5.2 million, or
$0.16 per common share for the first quarter 2002. The reduced loss compared
to guidance was due to better than anticipated revenues from Bayer CropScience
and the National Institute of Environmental Health Sciences (NIEHS) contract,
greater throughput for the Monsanto contract, and continued cost savings
within the company.
Total revenues for the first quarter 2003 decreased to $4.1 million
compared to $5.6 million for the same period in 2002. This anticipated
decrease was due to the contract with Bayer entering later stages with less
associated revenue; and lower throughput than in 2002 with respect to the
Monsanto contract, offset in part by revenue recognized from the NIEHS
contract and Advanced Technology Program grant.
Offsetting this revenue decline, total operating expenses for the three
months ended March 31, 2003 decreased to $8.1 million compared to $10.6
million for the first quarter 2002. The reduction in operating expenses is
primarily attributable to reduced payroll expenses and other internal cost
control measures.
Paradigm reported income from discontinued operations in the first quarter
2003 of $25,000 compared to a loss of $226,000 in the first quarter 2002. Due
to the discontinuation in December 2002 and subsequent sale in February 2003
of its ParaGen plant genotyping business, the company is reporting all
operations related to the unit as discontinued operations, in accordance with
generally accepted accounting principles.
For the three months ended March 31, 2003, cash utilization decreased to
$4 million compared to $10.6 million in the same period in 2002. This decrease
was due to improved cash flow from operations, lower capital expenditures and
lower debt payments.
"I am very pleased to report that we have done what we said we were going
to do in terms of controlling our expenses and improving cash flow," said
Heinrich Gugger, Ph.D., President and CEO of Paradigm Genetics. "As
importantly, we are trending in the right direction. If you compare fourth
quarter 2002 to this quarter, our revenues increased from $1.9 million to
$4.1 million while our overall expense base decreased from $8.5 million to
$8.1 million. Further our SG&A expenses declined while we kept investing in
our human health platform."
Gugger continued, "We're on track with our business development activities
and see near-term revenue opportunities, as evidenced by the recently signed
$8.4 million addition to our $23.8 million contract, for a total of up to
$32.3 million, with the National Institute of Environmental Health Sciences
for additional toxicogenomic studies. We continue to see growing acceptance in
the marketplace of our expertise and offerings."
About Paradigm Genetics
Paradigm is a biotechnology company aiming to increase R&D productivity by
focusing its integrated suite of technologies on the product development
cycle, from target discovery to subsequent enhancement of the safety and
efficacy profiles of development candidates in agriculture and human health.
Paradigm chooses a systems biology approach to understand gene function in the
context of biological pathways, to develop assays and biomarkers for molecular
diagnostic solutions tailored to the needs of our partners. Paradigm's
proprietary Gene to Cell to System(TM) approach has three major components:
gene expression profiling, biochemical profiling (also known as metabolomics)
and data integration and coherence. For more information, visit
http://www.paradigmgenetics.com.
Quarterly Conference Call
Paradigm will host a conference call at 8:30 a.m. ET on Thursday, May 1,
2003 to review financial results for the three months ended March 31, 2003 and
update 2003 guidance. 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 through May 15, 2003. Contact Investor
Relations at (919) 425-3000 for information on accessing a taped replay via
telephone.
Financial Charts Follow
PARADIGM GENETICS, INC.
CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended
March 31,
(unaudited)
2003 2002
Revenues:
Commercial partnerships $3,839,000 $5,643,000
Grant revenues 228,000 --
Total revenues 4,067,000 5,643,000
Operating expenses:
Research and development (includes
$71,000 and $105,000 of stock based
compensation expense for the three months
ended March 31, 2003 and March
31, 2002, respectively) 5,832,000 7,633,000
Selling, general and administrative
(includes $41,000 and $159,000 of stock based
compensation expense for the three months
ended March 31, 2003 and
March 31, 2002 respectively) 2,252,000 2,945,000
Total operating expenses 8,084,000 10,578,000
Loss from operations (4,017,000) (4,935,000)
Other Interest income (expense), net (125,000) (56,000)
Net loss from continuing operations (4,142,000) (4,991,000)
Discontinued operations 25,000 (226,000)
Net loss attributable to common
stockholders (4,117,000) (5,217,000)
Net loss per share _ basic and diluted
Loss for continuing operations $(0.13) $(0.16)
Loss from discontinued operations -- $(0.01)
Net loss per share $(0.13) $(0.16)
Weighted average common shares
outstanding -
basic and diluted 32,041,000 31,938,000
Paradigm Genetics, Inc.
2003 First-Quarter Results
Condensed Balance Sheet Data
March 31, December 31,
2003 2002
(unaudited)
Assets:
Cash, cash equivalents, short-term
investments $11,039,000 $10,909,000
Other current assets 6,522,000 6,500,000
Total Current Assets 17,561,000 17,409,000
Long term investments 6,182,000 10,323,000
Property plant & equipment net 21,199,000 22,431,000
Other noncurrent assets 1,783,000 2,459,000
Total Assets $46,725,000 $52,622,000
Liabilities and Stockholders' Equity:
Current liabilities 17,684,000 18,557,000
Long-term obligations 2,368,000 3,378,000
Stockholders' equity 26,673,000 30,687,000
Total Liabilities and Stockholders'
Equity $46,725,000 $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)
Q1 Q1 Increase/
2003 2002 Decrease
Cash flows from operating activities:
Net loss attributable to common
stockholders $(4,117,000) $(5,217,000) $1,100,000
Adjustments to reconcile net loss to net
cash used in operating activities 1,630,000 (1,057,000) 2,687,000
Net cash provided by (used in)
operating activities (2,487,000) (6,274,000) 3,787,000
Net cash (used in) investing activities,
excluding purchases and maturities of
short-term and long-term investments (57,000) (356,000) 299,000
Net cash provided by (used in)
financing activities (1,466,000) (3,947,000) 2,481,000
Cash, cash equivalents, short-term
investments and long term investments,
beginning of period 21,232,000 42,992,000 (21,760,000)
Cash, cash equivalents, short-term
investments and long term investments,
end of period 17,222,000 32,415,000 (15,193,000)
Net (decrease) increase in cash, cash
equivalents, short-term investments
and long term investments $(4,010,000) $(10,577,000) 6,567,000
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, or
superior to, cash flows, prepared in accordance with generally accepted
accounting principles.
Under GAAP, cash flows from investing activities above would improve by
net maturities of investment securities in the amount of $6.1 million and
$7.3 million in Q1 2003 and 2002, respectively, and, 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 $15.3 million and $9.3
million, and $36.8 million and $29.2 million for Q1 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 Form 10-K for the year
ended December 31, 2002, 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
media, Prateek Patnaik, or investors, Amy Garay, both of Noonan
Russo Presence Euro RSCG, +1-212-845-4200, for Paradigm Genetics,
Inc.
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