Health Care Revenue up 126 Percent, Records One-Time Gain on Sale of
Agricultural Assets
RESEARCH TRIANGLE PARK, N.C., May 16 /PRNewswire-FirstCall/ --
Biotechnology company Icoria, Inc. (Nasdaq: ICOR) today reported that its
first quarter healthcare revenues of $3.4 million were up 126 percent over the
prior year and up 40 percent from the previous quarter. Total revenues in the
quarter ending March 31, 2005, were $7.8 million, a 60 percent increase over
the first quarter of 2004 and up 23 percent over the fourth quarter of 2004.
"While we are very pleased with our first quarter 2005 revenues and the
performance of our healthcare business, we must keep in mind that Icoria's
future revenues will be lower as a result of the sale of our agriculture
genomics assets to Monsanto and the previously announced termination of the
Bayer contract," said Doug Morton, Ph.D., who is serving as Interim CEO while
the company seeks a permanent replacement for Heinrich Gugger, who resigned
last week.
The sale of Icoria's agricultural genomics assets to Monsanto Company
closed on March 23, 2005, and was fully effective on May 9. In connection
with this transaction, Icoria booked a one-time gain of $3.9 million. The
sale is also expected to yield $4 million in net annual savings for Icoria.
Total operating expenses for the first quarter of 2005 were $10.2 million
compared to first quarter 2004 operating expenses of $8.5 million and fourth
quarter 2004 operating expenses of $10.1 million.
The company reported first quarter of 2005 net income of over $1.1
million, or $0.03 per share, due to the one-time gain of $3.9 million from the
asset sale. Excluding the one time gain, Icoria lost $2.8 million, or $0.08
per share, an improvement of 24 percent over the first quarter of 2004 loss of
$3.7 million or $0.11 per common share. Excluding one-time items, the first
quarter 2005 loss was 27% higher that the fourth quarter 2004 loss of $2.2
million.
Icoria ended the quarter with $11.8 million in cash, cash equivalents and
short-term investments, bolstered by a $4.75 million payment from Monsanto.
An additional payment of $1.2 million is due from Monsanto in January 2006. A
payment of $0.8 million may also be received by Icoria in January 2006 upon
the achievement of certain milestones.
Icoria had 179 employees at the end of the first quarter, 57 of whom
joined Monsanto on May 7. Icoria expects to end the second quarter with
approximately 110 employees.
Management Discussion
"The sale of these assets to Monsanto was a key strategic move for Icoria
in the midst of a consolidating agricultural research industry with a
declining potential for growth," said Morton. "We are now able to trim
expenditures and efficiently focus our resources on our healthcare business,
which offers greater short term and, more importantly, significant long-term
potential for our technologies."
"To support our cash needs, we will continue to rely on both our gene
expression and metabolomics service offerings. We see strong commercial
interest in biomarkers, both for drug discovery and development and
potentially for use in diagnostics and theranostics. We are engaged in
promising pilot programs and discussions with several of the top
pharmaceutical and biotechnology companies," continued Morton.
"We are making solid progress on our shift from a research service
provider to a product-oriented company focusing on biomarker discovery for use
in diagnostics. In fact, we recently signed two agreements that may enable us
to generate valuable intellectual property and will increase our knowledge
base and discovery research capabilities relating to metabolic pathways and
disease mechanisms in the liver. This type of proprietary research will be
the cornerstone of the long term value of the company going forward," said
Morton.
Conference Call Scheduled for 8:30 a.m.
The company's management team will conduct a conference call and webcast
to discuss the results on Tuesday, May 17, at 8:30 a.m. ET. Interested
participants should call 1-800-946-0782 or, for those calling internationally,
01-719-457-2657. The conference call ID number is 8663743. Icoria encourages
participants to dial in 10 minutes before the call commences.
The webcast can be accessed from Icoria's web site
at http://www.icoria.com by clicking on the Investor Relations link. For
those unable to participate, replays of the call may be heard online
at http://www.icoria.com . Supplemental information will also be available
online.
About Icoria
Icoria, Inc. is a biotechnology company focused on the discovery of novel,
multi-parameter biomarkers using its unique multi-platform approach. Icoria
is using these biomarkers internally to develop multi-analyte diagnostics that
can be used to define and grade pathology or disease state with a high level
of specificity and sensitivity. Icoria also uses its technology to help its
collaborators and customers develop better, safer drugs and diagnostics and to
identify targets, leads and drug/diagnostic combinations for liver injury,
metabolic disorders and cancer.
Icoria, Inc.
CONDENSED STATEMENTS OF OPERATIONS (See Note 2 below)
(In thousands, except earnings per share data)
Three Months Ended March 31,
(unaudited)
2005 2004
Revenues:
Revenue from healthcare customers
Commercial and government contracts $2,962 $978
Government grant 432 524
Total healthcare revenues 3,394 1,502
Revenue from agriculture commercial contracts 4,404 3,386
Total revenue 7,798 4,888
Operating expenses:
Research and development 7,360 6,634
Selling, general and administrative 2,871 1,886
Total operating expenses 10,231 8,520
Gain on sale of selected agricultural assets 3,948 -
Income (loss) from operations 1,515 (3,632)
Other interest income (expense), net (378) (62)
Income (loss) from continuing operations 1,137 (3,694)
Discontinued operations 1 23
Net income (loss) $1,138 $(3,671)
Net income (loss) per share:
Income (loss) from continuing operations
Basic $0.03 $(0.11)
Diluted $0.03 $(0.11)
Loss from discontinued operations
Basic - -
Diluted - -
Net income (loss) per share
Basic $0.03 $(0.11)
Diluted $0.03 $(0.11)
Weighted average common shares outstanding:
Basic 37,389 33,425
Diluted 45,251 33,425
Icoria, Inc.
2005 First-Quarter Results
Condensed Balance Sheet Data (See Note 2 below)
(In thousands)
March 31, December 31,
2005 2004
(unaudited)
Assets:
Cash, cash equivalents, short-term investments $11,805 $9,598
Other current assets 4,614 3,416
Total current assets 16,419 13,014
Property plant & equipment, net 8,491 14,516
Other noncurrent assets 853 1,740
Total assets $25,763 $29,270
Liabilities and stockholders' equity:
Current liabilities 8,234 13,689
Long-term obligations 4,350 4,802
Stockholders' equity 13,179 10,779
Total liabilities and stockholders' equity $25,763 $29,270
Icoria, Inc.
Supplemental Information Re: Increase/(Decrease) in Cash, Cash Equivalents,
Short - Term and Long - Term Investments (See Note 1 Below)
(Unaudited)
(In thousands)
Three Months Ended March 31,
2005 2004
Net cash used in operating activities $(1,915) $ (1,564)
Net cash provided by investing activities,
excluding purchases and maturities of
short-term investments 4,420 1,895
Net cash used in financing activities (298) (1,423)
Net increase (decrease) in cash, cash
equivalents, short-term investments 2,207 (1,092)
Cash, cash equivalents, short-term investments,
beginning of period 9,598 16,285
Cash, cash equivalents, short-term investments,
end of period $11,805 $15,193
Note 1: 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 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 for,
or superior to, cash flows prepared in accordance with generally accepted
accounting principles in the U.S.
Under GAAP, cash flows from investing activities above would increase net
purchases of investment securities in the amount of $0.4 million for the
three months ended March 31, 2005 and decrease net maturities of
investment securities in the amount of $3.0 million for the three months
ended March 31, 2004. Also under GAAP, cash and cash equivalents at the
beginning and end of the period would be less, as they would exclude
short-term investments of $0.4 million as of March 31, 2005, $9.1 million
as of December 31, 2003 and $6.1 million as of March 31, 2004. Cash, cash
equivalents, short-term and long-term investments exclude restricted cash.
Note 2: As part of the agreement to sell agricultural genomics assets to
Monsanto, the company committed to transition out of the agriculture
industry with the principal exception of its remaining contracts with
DuPont or its subsidiaries. While the company has determined that it does
not yet meet the criteria to classify its remaining activities in the
agriculture industry as discontinued operations under Statement of
Financial Accounting Standards No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets," the company does believe these criteria
will be met upon the completion of the remaining contracts with Dupont and
its subsidiaries. As included in the company's statements of operations
for the periods ended March 31, 2005 and 2004, the company's activities
related to the agriculture industry are as follows (in thousands):
Three Months Ended
March 31,
(unaudited)
2005 2004
Revenues $4,404 $ 3,386
Operating expenses:
Research and development 2,786 3,319
Selling, general and administrative 227 173
Total operating expenses 3,013 3,492
Gain on sale of selected agricultural assets 3,948 -
Income (loss) from operations $5,339 $(106)
For purposes of these disclosures, the operating expenses presented above
only include those costs that are directly identifiable as relating to
agriculture activities with an allocation of facilities, information
support and employee benefits costs based on headcount. Summarized
balance sheet information for the Company's assets related to the
agriculture industry as of March 31, 2005 is as follows (in thousands):
Accounts receivable $2,075
Prepaid expenses 49
Total current assets 2,124
Property plant & equipment, net 1,144
Total assets $3,268
Accounts payable $138
Accrued liabilities 512
Deferred Revenue 1,115
Total current liabilities 1,765
Deferred compensation (15)
Total liabilities and stockholders' equity $1,750
This press release contains forward-looking statements including, but not
limited to, the Company's expectations for its new business plan, healthcare
focus and its diagnostic discovery platform. 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 Icoria's ability to identify biomarkers, Icoria'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 Icoria's annual report on Form 10-K
for the year ended December 31, 2004, as 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.
Note: Icoria and the Icoria logo are trademarks owned or used by Icoria,
Inc.
SOURCE Icoria, Inc.
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Related links:
http://www.icoria.com
CONTACT:
Media-Public Relations of Icoria, Inc.,
+1-919-425-2999; or Brian Ritchie of Noonan Russo,
+1-212-845-4200
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