57% Revenue Growth; New VeraTag Assays Available for Clinical Development
- Conference call today at 4:30 p.m. ET -
SOUTH SAN FRANCISCO, Calif., May 1 /PRNewswire-FirstCall/ -- Monogram
Biosciences, Inc. (Nasdaq: MGRM) today reported financial results for the
quarter ended March 31, 2008.
The Company had revenue of $14.8 million for the first quarter of 2008,
57% higher than $9.4 million in the first quarter of 2007. This growth in
revenue was driven primarily by revenue from Trofile(TM), Monogram's
proprietary tropism assay. Trofile is the only clinically validated assay
for selecting the appropriate HIV patients to be treated with
Selzentry(TM), Pfizer's CCR5 antagonist. For U.S. patients, Monogram has
performed over 6,000 Trofile tests to date, of which approximately 2,700
tests were performed in the quarter ended March 31, 2008. Reflecting the
portion of these tests for which reimbursement has been established,
revenue from Trofile in the quarter ended March 31, 2008 was $3.8 million.
"Revenues were again at a record level in the first quarter," said
Alfred Merriweather, Monogram's chief financial officer. "Gross margin on
product revenues was 55 percent in the quarter ended March 31, 2008,
continuing the advance seen since the initiation of sales of Trofile."
The Company had approximately $26.8 million in cash resources
(comprised of cash, cash equivalents and short-term investments) at March
31, 2008.
Monogram's Trofile Assay and Pfizer's Selzentry
"The recent establishment of coverage for Trofile by the New York
Medicaid program was an important benchmark for the commercialization of
Trofile and Selzentry," said William Young, Monogram's chief executive
officer. "Coverage is now established not only with Medicare and several
other federal agencies, but with the Medicaid and ADAP programs in states
accounting for over 80% of the HIV/AIDS patients in the U.S. Many private
payers, including Blue Cross, Blue Shield, Aetna, Cigna and United
Healthcare are processing claims for Trofile and we are working with these
payers to establish appropriate reimbursement levels."
Monogram plans to introduce its enhanced tropism assay, which sets an
even higher standard of sensitivity for CCR5 positive patients, in the
second quarter of 2008 and this will be capable of identifying X4 virus
present at a level as low as 0.3% of the total viral population. Data on
the clinical validation of the new assay format will be presented at the
Drug Resistance Workshop in Sitges, Spain in mid-June 2008.
Outside of the U.S., where Pfizer is taking the lead in commercializing
Trofile, the test is now available in 15 countries. Monogram expects that
access to Trofile will be established in countries representing over 95% of
the European market potential by the end of June and in approximately 30
countries worldwide by the end of the year.
HERmark(TM) Breast Cancer Assay
Additionally, Monogram continues to make progress on its HERmark
proprietary diagnostic that accurately quantifies HER2 expression and
dimerization in patients with breast cancer.
"We now have had the opportunity to assess HERmark in almost 2,000
breast cancer tissue samples in both the metastatic and adjuvant settings,"
commented Young. "From these studies, we believe we have amassed a
substantial body of data in support of HERmark as a superior and
substantially more sensitive tool for measuring HER2 protein than
conventional IHC and FISH technologies, in addition to providing unique
measurements of the HER2:HER2 homodimer." Less than 50% of metastatic
breast cancer patients selected for treatment with Herceptin(R) by
currently available IHC and FISH tests actually respond. There is growing
concern among clinicians that these tests may not be adequate and may miss
patients who can benefit from Herceptin. "This is the information
deficiency that we aim to address with HERmark," added Young.
Clinical studies in metastatic and adjuvant samples are continuing.
Clinical data from a metastatic cohort of patients will be the subject of
an oral presentation at the upcoming ASCO meeting. This third cohort of
metastatic breast cancer patients confirmed prior observations that HERmark
is capable of identifying subpopulations of Herceptin-treated metastatic
breast cancer patients with different clinical outcomes based on the
measured levels of HER2 expression and homodimers. Studies of HERmark in
two separate cohorts of patients treated with Herceptin in the adjuvant
setting are under way. These adjuvant studies involve up to 2,600 patients.
VeraTag(TM) Oncology Platform
Monogram separately announced today that two additional assays are now
available for supporting clinical development by biopharmaceutical
companies. These are the HER1 and HER3 Quantitative Protein Assays and
provide measurements of HER1 and HER3 protein that are highly quantitative
and more than five times as sensitive as routinely performed IHC testing.
These new assays join the HERmark Assay in Monogram's portfolio of
products available for use by biopharmaceutical companies in clinical
development programs. "There are over 25 compounds in clinical development
that target receptors or receptor dimers in the HER family," commented
Young. "This expanded range of assays is available to biopharmaceutical
companies to conduct more targeted clinical studies for drugs in their
pipeline."
While the HERmark Breast Cancer Assay, which measures the expression of
the HER2 protein and the HER2:HER2 homodimer, is the first product to be
developed based on Monogram's proprietary VeraTag technology, Monogram has
a growing portfolio of VeraTag assays that measure proteins, protein
complexes and post-translational modifications such as phosphorylation, in
FFPE tumor samples.
In addition to the HER1, HER2 and HER3 assays and the HER2:HER2
homodimer assay, Monogram has assays in advanced development for the
measurement of heterodimers of HER1 and HER2 (HER1:HER2), for the
measurement of heterodimers of HER2 and HER3 (HER2:HER3), and for the
measurement of a truncated form of HER2, known as p95. These activated
proteins are believed to mediate resistance to Herceptin in patients with
breast cancer and are targets of other cancer drugs in development. This
extended range of assays will expand the clinical reach of Monogram's
assays to lung, colorectal and other cancers. Understanding these protein
markers is expected to inform the rational design of combination therapies,
such as those for patients with resistance to Herceptin.
GAAP and Non-GAAP Proforma Results
Net Loss and Net Loss Per Share is shown below in accordance with GAAP
and also on a Non-GAAP Proforma Basis. The Company is reporting Non-GAAP
Proforma results which exclude certain items to provide a clearer view of
ongoing results without the impact of non-cash valuation adjustments
related to our convertible debt. A reconciliation of these Non-GAAP
Proforma results to GAAP results is included with the Statement of
Operations data attached to this release.
Three Months Ended
March 31,
2008 2007
Net Loss ($ Millions)
GAAP Net Loss $(1.7) $(11.6)
Non-GAAP Proforma Net Loss $(6.5) (9.7)
Net Loss Per Share ($)
GAAP Net Loss Per Share $(0.01) $(0.09)
Non-GAAP Proforma Net Loss Per Share $(0.05) $(0.07)
Non-cash "mark-to-market" adjustments to the 3% Senior Secured
Convertible Note and the 0% Convertible Senior Unsecured Debt that were
reflected in non-operating income and expense for the periods ended March
31, 2008 and 2007 are excluded from proforma net loss. A favorable
adjustment of $4.7 million and an unfavorable adjustment of $4.1 million
were recorded in the three months ending March 31, 2008 and 2007,
respectively. In addition, a favorable adjustment of $2.2 million was
recorded at January 1, 2007 for the cumulative effect of the change in
accounting principle at that date. Such adjustments could be significant
and unpredictable in future quarters depending on several factors,
including the level of the Company's common stock price.
Stock-based compensation in accordance with SFAS123(R ) is recorded as
expense for purposes of both GAAP and our Non-GAAP Proforma results. Such
costs were $1.0 million in the first quarter of 2008, compared to $1.2
million in the prior year's first quarter.
Capital Structure
At March 31, 2008, a total of 134.2 million shares of common stock were
outstanding. Stock options and warrants were outstanding on 24.2 million
shares and 27,000 shares of common stock, respectively. The principal
amount of Pfizer's $25 million convertible note, issued in May 2006, is
convertible into approximately 9.2 million shares of common stock. The $30
million principal amount of Monogram's 0% Convertible Senior Unsecured
Notes, issued in January 2007, is convertible into approximately 11.9
million shares of common stock.
Conference Call Details
Monogram will host a conference call today at 4:30 p.m. Eastern Time.
To participate in the live teleconference please call (877) 545-1402, or
(719) 325-4903 for international callers, fifteen minutes before the
conference begins. Live audio of the call will be simultaneously broadcast
over the Internet and will be available to members of the news media,
investors and the general public. Access to live and archived audio of the
conference call will be available by following the appropriate links at
http://www.monogrambio.com and clicking on the Investors/Media link.
Following the live broadcast, a replay of the call will also be available
at (888) 203-1112, or (719) 457-0820 for international callers. The replay
passcode is 4170582.
The information provided on the teleconference is only accurate at the
time of the conference call, and Monogram assumes no obligation to provide
updated information except as required by law.
About Monogram
Monogram is advancing individualized medicine by discovering,
developing and marketing innovative products to guide and improve treatment
of serious infectious diseases and cancer. The Company's products are
designed to help doctors optimize treatment regimens for their patients
that lead to better outcomes and reduced costs. The Company's technology is
also being used by numerous biopharmaceutical companies to develop new and
improved anti-viral therapeutics and vaccines as well as targeted cancer
therapeutics. More information about the Company and its technology can be
found on its web site at http://www.monogrambio.com.
Forward Looking Statements
Certain statements in this press release are forward-looking. These
forward-looking statements include references to the demand for our Trofile
Assay, the outlook for Selzentry and our Trofile Assay, reimbursement that
may be available for Trofile, guidelines regarding the use of co-receptor
tropism tests, the anticipated availability of Trofile internationally, the
ability of VeraTag technology, including HERmark, to significantly improve
the information available to physicians, results of studies intended to
demonstrate clinical utility of our VeraTag technology and HERmark products
and anticipated clinical and laboratory validation of these products in a
CLIA setting and activities expected to occur in connection with the Pfizer
collaboration. These forward-looking statements are subject to risks and
uncertainties and other factors, which may cause actual results to differ
materially from the anticipated results or other expectations expressed in
such forward-looking statements. These risks and uncertainties include, but
are not limited to: the risk that physicians may not use a molecular
diagnostic for patient selection for maraviroc or other HIV drugs; risks
related to the implementation of the collaboration with Pfizer; risks
related to our ability to recognize revenue from activities under the
collaboration with Pfizer; risks and uncertainties relating to the
performance of our products; the growth in revenues; the size, timing and
success or failure of any clinical trials for CCR5 inhibitors, entry
inhibitors or integrase inhibitors; the risk that our Trofile Assay may not
be utilized for patient use with maraviroc and other CCR5 inhibitors; the
risk that our VeraTag assays may not predict response to particular
therapeutic agents; the risk that we may not be able to obtain additional
cohorts of patient samples for additional VeraTag studies, our ability to
successfully conduct clinical studies and the results obtained from those
studies; whether larger confirmatory clinical studies will confirm the
results of initial studies; our ability to establish reliable, high-volume
operations at commercially reasonable costs; expected reliance on a few
customers for the majority of our revenues; the annual renewal of certain
customer agreements; actual market acceptance of our products and adoption
of our technological approach and products by pharmaceutical and
biotechnology companies; our estimate of the size of our markets; our
estimates of the levels of demand for our products; the impact of
competition; the timing and ultimate size of pharmaceutical company
clinical trials; whether payers will authorize reimbursement for our
products and services and the amount of such reimbursement that may be
allowed; whether the FDA or any other agency will decide to further
regulate our products or services, including Trofile; whether the draft
guidance on Multivariate Index Assays issued by FDA will be subsequently
determined to apply to our current or planned products; whether we will
encounter problems or delays in automating our processes; the ultimate
validity and enforceability of our patent applications and patents; the
possible infringement of the intellectual property of others; whether
licenses to third party technology will be available; whether we are able
to build brand loyalty and expand revenues; restrictions on the conduct of
our business imposed by the Pfizer, Merrill Lynch and other debt
agreements; the impact of additional dilution if our convertible debt is
converted to equity; and whether we will be able to raise sufficient
capital in the future, if required. For a discussion of other factors that
may cause actual events to differ from those projected, please refer to our
most recent annual report on Form 10-K and quarterly reports on Form 10-Q,
as well as other subsequent filings with the Securities and Exchange
Commission. We do not undertake, and specifically disclaim any obligation,
to revise any forward-looking statements to reflect the occurrence of
anticipated or unanticipated events or circumstances after the date of such
statements.
PhenoSense, PhenoSenseGT, Trofile, HERmark and VeraTag are trademarks of
Monogram Biosciences, Inc. Herceptin is a registered trademark of Genentech,
Inc. Selzentry is a trademark and Celsentri is a registered trademark of
Pfizer Inc.
~ financials to follow ~
MONOGRAM BIOSCIENCES, INC.
SELECTED STATEMENT OF OPERATIONS DATA
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
2008 2007
Revenue:
Product revenue $14,007 $9,099
Contract revenue 820 318
License revenue 10 -
Total revenue 14,837 9,417
Operating costs and expenses:
Cost of product revenue 6,364 5,705
Research and development 6,024 5,331
Sales and marketing 4,352 3,943
General and administrative 4,566 4,228
Total operating costs and expenses 21,306 19,207
Operating loss (6,469) (9,790)
Convertible debt valuation adjustment
and interest income/(expense), net 4,742 (4,010)
Net loss before cumulative effect of
change in accounting principle (1,727) (13,800)
Cumulative effect of change in
accounting principle - 2,242
Net loss after cumulative effect of
change in accounting principle $(1,727) $(11,558)
Basic and diluted net loss per common share
before cumulative effect of change in
accounting principle $(0.01) $(0.11)
Cumulative effect per share of change in
accounting principle $- $0.02
Basic and diluted net loss per common share
after cumulative effect of change in
accounting principle $(0.01) $(0.09)
Weighted-average shares used in computing
basic net loss per common share 134,192 131,582
Reconciliation of Non-GAAP Proforma
Results to GAAP
Net loss after cumulative effect of
change in accounting principle $(1,727) $(11,558)
Adjustments for certain non-cash
items:
Cumulative effect of change in
accounting principle - (2,242)
Convertible debt valuation adjustment
and interest income/(expense), net (4,736) 4,055
Non-GAAP Proforma net loss (6,463) (9,745)
Non-GAAP Proforma net loss per common
share, basic $(0.05) $(0.07)
Management believes that this non-GAAP proforma financial data
supplements the Company's GAAP financial statements by providing investors
with additional information which allows them to have a clearer picture of
the Company's operations, financial performance and the comparability of
the Company's operating results from period to period as they exclude the
effects of revaluation of the Company's convertible debt that management
believes are not indicative of the Company's ongoing operations. The
presentation of this additional information is not meant to be considered
in isolation or as a substitute for results prepared in accordance with
GAAP. Above, management has provided a reconciliation of the non-GAAP
proforma financial information with the comparable financial information
reported in accordance with GAAP.
MONOGRAM BIOSCIENCES, INC.
SELECTED BALANCE SHEET DATA
(In thousands)
(Unaudited)
March 31, December 31,
2008 2007(1)
ASSETS
Current assets:
Cash and cash equivalents $20,862 $18,762
Short-term investments 5,956 11,828
Accounts receivable, net 13,818 9,100
Prepaid expenses 1,079 1,279
Inventory 1,571 1,250
Other current assets 1,458 917
Total current assets 44,744 43,136
Property and equipment, net 7,714 7,665
Goodwill 9,927 9,927
Deferred costs 9,903 7,906
Other assets 163 677
Total assets $72,451 $69,311
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $2,390 $2,116
Accrued compensation 3,783 3,324
Accrued liabilities 4,088 3,818
Current portion of restructuring costs 610 610
Deferred revenue, current portion 401 605
Current portion of loans payable and
capital lease obligations 10,197 4,469
Contingent value rights 2,131 2,119
Total current liabilities 23,600 17,061
Long-term 3% convertible promissory note 19,619 20,786
Long-term 0% convertible promissory note 14,943 18,511
Long-term portion of restructuring costs 145 289
Long-term deferred revenue 15,483 13,622
Other long-term liabilities 416 282
Total liabilities 74,206 70,551
Stockholders' deficit:
Common stock 134 134
Additional paid-in capital 287,365 286,196
Accumulated other comprehensive income/(loss) 12 (31)
Accumulated deficit (289,266) (287,539)
Total stockholders' deficit (1,755) (1,240)
Total liabilities and stockholders' deficit $72,451 $69,311
(1) The balance sheet data at December 31, 2007 is derived from audited
financial statements included in the Company's Annual Report on Form
10-K for the year ended December 31, 2007 filed with the Securities
and Exchange Commission.
contacts: Alfred G. Merriweather Jeremiah Hall
Chief Financial Officer Feinstein Kean Healthcare
Tel: 650 624 4576 Tel: 415 677 2700
amerriweather@monogrambio.com jeremiah.hall@fkhealth.com
SOURCE Monogram Biosciences, Inc.
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Related links:
http://www.monogrambio.com
CONTACT:
Alfred G. Merriweather, Chief Financial
Officer of Monogram Biosciences, Inc., +1-650-624-4576,
amerriweather@monogrambio.com; or Jeremiah Hall of Feinstein Kean
Healthcare, +1-415-677-2700, jeremiah.hall@fkhealth.com, for
Monogram Biosciences, Inc.
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