CAMBRIDGE, Mass., May 5 /PRNewswire-FirstCall/ -- Transkaryotic Therapies,
Inc. (Nasdaq: TKTX) today announced its consolidated financial results for the
three months ended March 31, 2005.
Total revenues for the three months ended March 31, 2005 were $22.6
million, compared to $17.4 million for the same period in 2004. Sales of
Replagal(TM) (agalsidase alfa), TKT's enzyme replacement therapy for the
treatment of Fabry disease, for the first quarter of 2005 were approximately
$22.5 million, a 29% increase over the $17.4 million in sales in the same
period in 2004. First quarter Replagal sales in 2005 approximated Replagal
sales recorded in the fourth quarter of 2004. Replagal sales increased in the
first quarter of 2005 over the first quarter of 2004 primarily due to higher
unit sales. In addition, foreign currency fluctuations contributed $1.3
million to the increase in the first quarter 2005 product sales as compared to
the first quarter of 2004.
Total operating expenses for the first quarter of 2005 were $40.5 million,
compared to $31.9 million in the first quarter of 2004.
Cost of goods sold for the first quarter of 2005 were approximately $3.1
million versus $2.2 million for the same period in 2004. The increase in cost
of goods sold was due primarily to increased unit sales of Replagal in 2005.
Research and development spending increased to approximately $25.2 million
for the first quarter of 2005 compared to $19.8 million in the corresponding
quarter in 2004. The increase in R&D spending was attributed primarily to
increases in costs associated with the company's extension study for the
company's enzyme replacement therapy for the treatment of Hunter syndrome,
I2S, as well as employee related costs associated with increases in research
and development head count period over period.
Selling, general and administration expenses totaled approximately $11.0
million in the first quarter of 2005 compared to approximately $9.0 million in
the first quarter of 2004. The increase in SG&A spending was primarily due to
increases in employee related costs associated with increased SG&A hiring over
2004.
The net loss for the first quarter was approximately $21.7 million, or
$0.62 per share, compared to a net loss of approximately $14.2 million, or
$0.41 per share, for the corresponding period in 2004. The net loss in 2005
included $4.1 million in charges associated with foreign currency losses
determined in connection primarily with re-measurements of the company's
intercompany balances held in a currency other than the dollar.
As of March 31, 2005, TKT had $130.5 million in cash and marketable
securities.
On April 21, 2005, the company announced that it had signed a definitive
agreement with Shire Pharmaceuticals Group plc. under which Shire has agreed
to acquire TKT. Under the agreement, Shire has agreed to pay $37 in cash for
each share of TKT common stock, or approximately $1.6 billion. Closing of the
transaction is subject to, among other things, regulatory clearance and
approval of the stockholders of each company. The transaction is expected to
close in the third quarter of 2005.
Conference Call and Webcast:
TKT invites the public to participate on a conference call and live
webcast with investment analysts beginning today, May 5, 2005 at 10:00 a.m.
Eastern Time to discuss its first quarter 2005 financial results and its
outlook for the balance of 2005. To participate by telephone, dial (719) 457-
2642. 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 conference call and webcast will be available once a
transcript has been filed with the SEC. Participants may access this replay by
dialing (719) 457-0820 and using the access code 2495707. A replay of the
webcast will be archived on the TKT website under Events in the Investor
Information section.
About TKT
Transkaryotic Therapies, Inc. is a biopharmaceutical company primarily
focused on researching, developing and commercializing treatments for rare
diseases caused by protein deficiencies. Within this focus, the company
markets Replagal(TM), an enzyme replacement therapy for Fabry disease, and is
developing treatments for Hunter syndrome and Gaucher disease. In addition to
its focus on rare diseases, TKT intends to commercialize Dynepo(TM), its Gene-
Activated(R) erythropoietin product for anemia related to kidney disease, in
the European Union. TKT was founded in 1988 and is headquartered in Cambridge,
Massachusetts, with additional operations in Europe, Canada and South America.
Additional information about TKT is available on the company's website at
http://www.tktx.com.
Important Additional Information Will Be Filed with the SEC
TKT plans to file with the SEC and mail to its stockholders a Proxy
Statement in connection with the proposed transaction with Shire. The Proxy
Statement will contain important information about TKT, the transaction and
related matters. Investors and security holders are urged to read the Proxy
Statement carefully when it is available.
Investors and security holders will be able to obtain free copies of the
Proxy Statement and other documents filed with the SEC by the company through
the web site maintained by the SEC at http://www.sec.gov.
In addition, investors and security holders will be able to obtain free
copies of the Proxy Statement from TKT by contacting Corporate Communications,
700 Main Street, Cambridge, MA 02139.
TKT, and its directors and executive officers, may be deemed to be
participants in the solicitation of proxies in respect of the proposed
transaction with Shire. Information regarding TKT's directors and executive
officers is contained in TKT's Annual Report on Form 10-K for the year ended
December 31, 2004, as amended on May 2, 2005, its proxy statement dated April
27, 2004, and its Current Reports on Form 8-K dated March 30, 2005, April 15,
2005, and April 27, 2005, each of which is filed with the SEC. As of April
22, 2005, TKT's directors and executive officers and their affiliates,
including Warburg Pincus & Co., beneficially owned approximately 6,085,200
shares, or 17.4%, of TKT's common stock. All outstanding options for TKT
common stock, whether or not vested, including those held by current directors
and executive officers, will be cashed out in the merger based on the $37 per
share purchase price. In addition, Shire has committed to maintaining TKT's
2005 Management Bonus Plan, in which the company's executive officers
participate in accordance with its current terms in respect of the 2005
performance year. Following the merger, Shire has agreed to provide certain
retention and severance benefits to TKT's employees, including its executive
officers. A more complete description will be available in the Proxy
Statement when it is filed with the SEC.
Safe Harbor for Forward-Looking Statements
This press release contains forward-looking statements regarding the
proposed transaction between Shire and TKT, the company's development of
certain products, including Replagal, I2S and Dynepo, the timing of clinical
trials, clinical trial results and regulatory filings, and statements
regarding the company's financial outlook, as well as statements about future
expectations, beliefs, goals, plans or prospects, including 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 actual
results to differ materially from those indicated by such forward-looking
statements, including: the ability to obtain the approval of the merger from
the stockholders of each company; the ability to consummate the transaction;
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 the company will be able to
successfully complete clinical trials of its products; enrollment rates for
clinical trials; whether the results of clinical trials, 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 the company and
its collaborators 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; 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
the company'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; results of litigation; whether the company will be
successful in establishing European manufacturing for Dynepo; and other
factors set forth under the caption "Certain Factors That May Affect Future
Results" in the company's Annual Report on Form 10-K for the year ended
December 31, 2004, which is on file with the SEC 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. Dynepo(TM) is a trademark of
Sanofi-Aventis SA.
For More Information Contact:
Justine E. Koenigsberg
Senior Director, Corporate Communications
(617) 349-0271
Daniella M. Lutz
Manager, Corporate Communications
(617) 349-0205
- Consolidated Financial Table To Follow -
Condensed Consolidated Statements of Operations (unaudited)
Three Months Ended March 31,
(In thousands, except per share
amounts) 2005 2004
Product sales $22,496 $17,372
License and research revenues 78 62
22,574 17,434
Operating expenses:
Cost of goods sold 3,082 2,236
Research and development 25,203 19,837
Selling, general and
administrative 10,950 8,958
Restructuring charges 671 861
Amortization of intangible assets 562 -
40,468 31,892
Loss from operations before minority
interest (17,894) (14,458)
Minority interest in net income of
consolidated subsidiary - (1)
Loss from operations after minority
interest (17,894) (14,459)
Foreign currency exchange loss (4,104) -
Net interest income 430 308
Provision for income taxes (119) -
Other income 4 -
Net loss $(21,683) $(14,151)
Basic and diluted net loss per share $(0.62) $(0.41)
Shares used to compute basic and
diluted net loss per share 34,875 34,612
Condensed Consolidated Balance Sheets (unaudited)
March 31, December 31,
(In thousands) 2005 2004
Cash and marketable securities $130,525 $155,214
Other current assets 56,512 51,275
Property and equipment, net 58,614 60,992
Goodwill 39,038 39,038
Intangible assets, net 21,369 21,931
Other assets 4,933 4,900
Total assets $310,991 $333,350
Total current liabilities $35,147 $36,735
Long term liabilities 7,868 8,304
Long term debt 94,000 94,000
Total stockholders' equity 173,976 194,311
Total liabilities and stockholders'
equity $310,991 $333,350
SOURCE Transkaryotic Therapies, Inc.
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Related links:
http://www.tktx.com
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PRN Photo Desk, photodesk@prnewswire.com
Company News On-Call:
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CONTACT:
Justine E. Koenigsberg, Senior Director,
Corporate Communications, +1-617-349-0271, or Daniella M. Lutz,
Manager, Corporate Communications, +1-617-349-0205, both of
Transkaryotic Therapies, Inc.
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