CAMBRIDGE, Mass., August 3 /PRNewswire-FirstCall/ -- Transkaryotic
Therapies, Inc. (Nasdaq: TKTX) reported today consolidated financial results
for the three and six months ended June 30, 2004.
Total sales of Replagal(TM) (agalsidase alfa), TKT's enzyme replacement
therapy for Fabry disease, were approximately $18.1 million for the second
quarter of 2004. This represents an increase of 26% over the same period in
2003 and 4% over the $17.4 million in sales that the company had in the first
quarter of 2004. For the six months ended June 30, 2004, Replagal sales
totaled $35.4 million, compared to sales of $26.6 million for the six months
ended June 30, 2003. Net loss for the second quarter of 2004 was $20.2
million, or $0.58 per share, compared to a net loss of $21.0 million, or $0.61
per share, for the same period in 2003. For the six months ended June 30,
2004, the net loss was $34.4 million, or $0.99 per share, compared to $47.0
million, or $1.36 per share in 2003. As of June 30, 2004, TKT had
approximately $232.3 million in cash and marketable securities. This amount
includes the net proceeds of approximately $90.9 million that TKT received
during the second quarter of 2004 from the sale of its 1.25% senior
convertible notes due 2011.
Updated 2004 Financial Outlook
TKT expects its total revenue to be approximately $67.0 to $77.0 million
in 2004, which represents a decrease from previously reported total revenue
guidance of $72.0 to $82.0 million. The company has revised this revenue
guidance because it included in its 2004 revenue guidance a $5.0 million
milestone payment relating to regulatory approval of Replagal in Japan that
the company now expects to receive in early 2005. TKT's expectation for
Replagal sales of $67.0 to $77.0 million in 2004 remains unchanged. TKT
expects its net loss to be approximately $70.0 to $75.0, as compared with
previous guidance of $55.0 to $65.0. The increase is due to the decrease in
anticipated 2004 revenues related to the milestone and increased expenses
associated with patent litigation and other anticipated expenses associated
with the establishment of contract manufacturing of Dynepo(TM) (epoetin
delta), TKT's Gene-Activated(R) erythropoietin product for anemia. The
company expects to end the year with approximately $125.0 to $140.0 million in
cash.
"We made solid progress during the first half of the year toward our goal
of reaching profitability in late 2006. With the prospect of three commercial
products in 2006 -- Replagal, I2S and Dynepo -- we can build a successful
business that will bring important therapies to patients," said Michael J.
Astrue, President and Chief Executive Officer of TKT.
The following is a summary of selected highlights relating to TKT's
commercial and clinical products.
Replagal for Fabry Disease
In June 2004, TKT obtained pricing and reimbursement approval in Australia
and commenced commercial launch activities. The company is seeking
reimbursement recommendation for Replagal in Canada in the third quarter of
2004 and, if successful, will commence commercial activities in Canada shortly
thereafter. Due primarily to an agency reorganization in Japan, TKT believes
that the anticipated approval of Replagal in Japan may not occur in 2004 but
may be delayed into the first quarter of 2005.
I2S for Hunter Syndrome
I2S received Fast Track designation from the FDA in July 2004. The
company is currently conducting a pivotal trial evaluating I2S and top line
results are expected in the second quarter of 2005. If the results are
positive, TKT expects to submit applications for approval in the U.S. and
Europe in the second half of 2005. Based on encouraging research data, TKT
also made the decision during the quarter to advance a second program for
Hunter syndrome into preclinical development to evaluate direct infusion of
enzyme into the central nervous system.
GA-GCB for Gaucher Disease
In April 2004, TKT commenced enrollment in a Phase I/II clinical trial to
evaluate GA-GCB, its Gene-Activated(R) glucocerebrosidase for Gaucher disease.
The trial is fully enrolled with 12 patients participating and the company
expects to have top line data in the second half of 2005.
Dynepo for Anemia
In August 2004, TKT and Lonza signed an agreement for the contract
manufacturing of Dynepo in Europe to support an anticipated commercial launch
in late 2005 or early 2006. TKT expects to file an amendment to Dynepo's
product license in Europe in the third quarter of 2005 for the new
manufacturing site.
Upcoming Events
TKT will present at several industry related conferences during the third
quarter including, the Robert W. Baird Small Cap Conference in New York on
August 5, 2004; the Thomas Weisel Healthcare Tailwinds 2004 Conference in
Boston, September 8-10, 2004; and the 2004 UBS Global Life Sciences Conference
in New York, September 27-30, 2004.
Conference Call and Webcast
In connection with this announcement, TKT will host a conference call and
live webcast today, Tuesday, August 3, 2004, at 10:00 a.m. Eastern Time to
discuss these results, the company's financial guidance and the company's
business generally. Participants may access the call by dialing (913) 981-
5592. The live webcast may be accessed in the Investor Information section of
TKT's website at http://www.tktx.com.
A replay of this conference call will be available for two weeks beginning
today, August 3, 2004, at 1:00 p.m. Eastern Time, by dialing (719) 457-0820
and using the access code 771615. A replay of the webcast will be archived on
the TKT website 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 Latin America.
Additional information about TKT is available on the company's website at
http://www.tktx.com.
This press release contains forward-looking statements including
statements regarding TKT's development of certain products, including
Replagal, I2S, GA-GCB and Dynepo, as well as 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 the company's actual results to differ
materially from those indicated by such forward-looking statements, including:
whether any of the company's products will achieve the commercial success
anticipated by the company; 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 will grant marketing approval for
the company's products on a timeline consistent with TKT's expectations, or at
all; whether TKT will be able to complete clinical trials of its products on a
timely basis; whether the results of clinical trials will be consistent with
the results of earlier clinical trials of the company's products and warrant
submission of applications for regulatory approval for such products to the
FDA and equivalent regulatory authorities; whether TKT and its third party
manufacturers will be able to manufacture sufficient quantities of TKT's
products to satisfy both clinical trial requirements and commercial demand, if
approved; the availability and extent of coverage from third party payors and
the timing and receipt of reimbursement approvals for the company's products;
the impact of the company's anticipated buyout of the minority holdings of its
European subsidiary on sales of Replagal and on legal reporting requirements;
whether competing products will reduce any market opportunity that may exist;
results of litigation; the need for cash; and other factors set forth under
the caption "Certain Factors That May Affect Future Results" in the company's
quarterly report on Form 10-Q filed May 10, 2004, which is on file with the
Securities and Exchange Commission 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
Aventis.
For More Information Contact:
Justine E. Koenigsberg
Senior Director, Corporate Communications
(617) 349-0271
Daniella M. Lutz
Corporate Communications Manager
(617) 349-0205
-- Consolidated Financial Table To Follow --
Condensed Consolidated Statements of Operations (unaudited)
(In thousands,
except per share Three Months Ended June 30, Six Months Ended June 30,
amounts) 2004 2003 2004 2003
Product sales $18,069 $14,384 $35,441 $26,553
License and
research revenues 98 30 160 44
18,167 14,414 35,601 26,597
Operating
expenses:
Cost of goods
sold 3,284 4,775 5,520 8,276
Research and
development 22,310 16,853 42,147 37,835
Intellectual
property
license
expense - - - 1,350
Selling,
general and
administrative 11,951 9,412 20,909 18,578
Restructuring
charge 912 4,957 1,773 8,559
38,457 35,997 70,349 74,598
Loss from
operations before
minority interest (20,290) (21,583) (34,748) (48,001)
Minority interest
in net
(income)/loss of
consolidated
subsidiary 33 (33) 32 (336)
Loss from
operations after
minority interest (20,257) (21,616) (34,716) (48,337)
Other income, net 47 596 355 1,372
Net loss $(20,210) $(21,020) $(34,361) $(46,965)
Basic and diluted
net loss per
share $(0.58) $(0.61) $(0.99) $(1.36)
Shares used to
compute basic and
diluted net loss
per share 34,654 34,535 34,633 34,543
Condensed Consolidated Balance Sheets (unaudited)
June 30, December 31,
(In thousands) 2004 2003
Cash and marketable securities $232,309 $180,947
Other current assets 50,094 44,392
Property and equipment, net 64,964 61,908
Other assets 4,858 1,922
Total assets $352,225 $289,169
Current liabilities $28,416 $21,149
Long-term liabilities 8,666 9,285
Convertible Notes Payable 94,000 -
Minority interest 381 413
Total stockholders' equity 220,762 258,322
Total liabilities and
stockholders' equity $352,225 $289,169
SOURCE Transkaryotic Therapies, Inc.
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CONTACT:
Justine E. Koenigsberg, Senior Director,
Corporate Communications, +1-617-349-0271, or Daniella M. Lutz,
Corporate Communications Manager, +1-617-349-0205, of TKT
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