Results Reflect Strong R&D Progress, New Six Year Agreement with Red Cross
WATERTOWN, Mass., Aug. 4 /PRNewswire/ -- V. I. Technologies, Inc.
(Nasdaq: VITX) today announced financial results for the second quarter ended
July 1, 2000.
For the quarter, the Company reported a net loss of $4.7 million, or
$0.24 per share, on net revenue of $8.5 million. This compares to a net loss
of $3.2 million, or $0.25 per share, on net revenue of $9.4 million in the
comparable quarter of fiscal 1999. The net loss in the second quarter of
fiscal 1999 included one-time costs of a product recall totaling $2.6 million.
Net revenue in the quarter declined by $0.8 million as a result of reduced
PLAS+(R)SD processing volumes. The planned receipt of plasma from the
American National Red Cross (ANRC) was lower than expected reflecting ongoing
industry shortages and are at a level consistent with the recently announced
ANRC Agreement. Net revenues also included a $0.7 million credit from the
ANRC incentive program. Going forward, ANRC volumes under the new agreement
should result in the Company reporting net revenues in the range of $8.0 to
$9.0 million per quarter.
Cost of goods sold in the second quarter of 2000 reflected fixed costs
consistent with pre-Agreement processing volumes. Subsequent to quarter end,
the Company implemented a reduction in its workforce to reduce its cost
structure to a level appropriate to new Agreement volumes. Severance and
related costs of this action, expected to total approximately $1 million, will
be recorded in the third quarter of 2000. Anticipated quarterly saving should
be approximately $1.0 million.
Research and development costs increased by $1.3 million over the prior
year quarter reflecting the acceleration in the Company's overall R&D efforts,
most notably in red cell viral inactivation. As the Company ramps up spending
on its ambitious R&D pipeline, losses are expected to continue.
For the six month period ended July 1, 2000, the Company reported net
revenues of $19.9 million and a net loss of $5.3 million, or $0.27 per share,
versus net revenues of $20.5 million and a loss of $2.6 million, or $0.21 per
share, in the year ago period.
The second quarter was notable for strong progress in all VITEX R&D and
clinical programs. Highlights include:
-- The unmatched viral inactivation and safety profile of the INACTINE(TM)
red blood cell program was presented to large crowds at the
International Society of Blood Transfusion (ISBT) conference in July.
For the first time, the Company made public important data on the
ability of INACTINE(TM) to inactivate the most common bacterial strains
known to infect red cells and to limit the ability of the bacteria to
proliferate throughout the storage process. VITEX also published the
results of key toxicology tests, confirming safety of INACTINE(TM).
-- VITEX had a successful meeting with the FDA to discuss the design of
Phase II/III clinical trials for INACTINE(TM). The Company's goal
remains to initiate the next phase of the clinical trial process before
year-end. VITEX's stated intention is to be the leader in the race to
commercialize red cell viral inactivation technology. The estimated
size of this market opportunity is in excess of $2 billion annually.
The Company plans to review Phase I data at the American Society of
Hematology meeting in early December.
-- In April, VITEX announced a collaboration with Amersham Pharmacia
Biotech (APB) to commercialize the use of INACTINE(TM) as a pathogen
inactivation system for plasma derivatives, biopharmaceuticals and
transgenic products. APB is the leader in providing separations and
purification to these industry segments. This collaboration will
further establish INACTINE(TM) as the pathogen inactivation standard in
blood and blood derived products. The APB agreement involved
substantial up-front payments and a continuing royalty stream.
-- The Universal PLAS+(R)SD program entered Phase III pivotal trials in
April. These trials are scheduled for completion late in 2000 with a
BLA filing expected soon thereafter. Universal, which is the next
generation of the Company's virally inactivated transfusion plasma
PLAS+(R)SD, eliminates the need for matching blood type of donor and
recipient. With its enhanced safety profile and superior economics
derived from expected reductions in hospital inventory costs, Universal
has the potential for rapid adoption.
John Barr commented: "It's been an exciting quarter on the R&D front as
programs like Universal and INACTINE(TM) continue to accelerate. We made
several very important additions to our senior management team to enable us to
manage the timeline for the development and commercialization of our
INACTINE(TM) technology. In addition to the program accomplishments we've
announced, we're encouraged by progress in our other research programs. We
hope to report on this progress later in the year."
Mr. Barr commented further on the quarter, "We are very pleased to extend
our important collaboration with the ANRC for the commercialization of
PLAS+(R)SD. We are both truly excited about the potential for the Universal
version of this product and together have developed an aggressive plan to
accelerate its penetration once we have received approval for the technology
from the FDA."
VITEX is a leading developer and manufacturer of a broad portfolio of
blood products that utilize its patented viral inactivation technologies
designed to ensure product safety. The technologies are tailored for all
blood component applications and other blood-derived products, including
plasma, plasma derivatives, red blood cells and platelets. The first of
VITEX's virally inactivated products, PLAS+SD, is the only FDA-approved method
for viral inactivation of plasma.
VITEX is collaborating with Pall Corporation (NYSE: PLL) on the red cell
pathogen inactivation program. Pall Corporation, the technology leader in the
filtration industry, offers the broadest range of advanced blood filtration
products and support services to help blood centers meet the challenges of
implementing routine, high volume blood filtration. Pall has annual sales of
over $1 billion and operates directly in over 30 countries.
For further information, please visit the VITEX web site at
http://www.vitechnologies.com .
Except for the historical information contained herein, the matters
discussed are forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. These
statements involve risks and uncertainties, such as quarterly fluctuations in
operating results, the timely availability of new products, market acceptance
of the company's products, the impacts of competitive products and pricing,
government regulation of the company's products and other risks and
uncertainties set forth in the company's filings with the Securities and
Exchange Commission. These risks and uncertainties could cause actual results
to differ materially from any forward-looking statements made herein.
To receive additional information on V. I. Technologies, Inc., via fax, at
no charge, dial 1-800-PRO-INFO and enter code VITX.
V. I. Technologies, Inc.
Condensed Statements of Operations
(In thousands, except for per share data)
Thirteen weeks Ended Twenty-six weeks Ended
July 1, July 3, July 1, July 3,
2000 1999 2000 1999
(unaudited)(unaudited)(unaudited)(unaudited)
Revenue $7,875 $9,352 $18,675 $20,494
ANRC Incentive Program 666 -- 1,231 --
Net Revenue $8,541 $9,352 $19,906 $20,494
Costs and expenses:
Cost of goods sold 7,263 5,326 14,340 11,386
Research and development,
net 3,447 2,104 5,844 4,115
Selling, general and
administrative expenses 2,925 2,496 5,413 4,989
Charge related to product
recall -- 2,645 -- 2,645
Total operating costs and
expenses 13,635 12,571 25,597 23,135
Loss from operations ($5,094) ($3,219) ($5,691) ($2,641)
Interest income (expense),
net (23) 51 6 88
Discount on customer
advance, net 402 -- 402 --
Total other income, net 379 51 408 88
Net loss ($4,715) ($3,168) ($5,283) ($2,553)
Basic and diluted net loss
per share ($0.24) ($0.25) ($0.27) ($0.21)
Weighted average number of
shares 19,872 12,435 19,786 12,421
Condensed Balance Sheet
(In thousands)
July 1, January 1,
2000 2000
(unaudited) (audited)
Cash and cash equivalents $11,986 $26,886
Trade receivables 6,666 4,596
Inventory 3,289 2,744
Other current assets 1,959 1,460
Property, plant & equipment, net 40,022 37,520
Other intangibles, net 4,073 4,251
Other assets 535 641
Total assets $68,530 $78,098
Current liabilities $7,395 $10,837
Current portion, long-term debt 4,365 4,175
Deferred revenue 545 --
Long-term debt 5,634 7,701
Stockholders' equity 50,591 55,385
Total liabilities and stockholders' equity $68,530 $78,098
SOURCE V. I. Technologies, Inc.
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Related links:
http://www.vitechnologies.com
CONTACT:
John Barr, President and CEO of V. I.
Technologies, 617-926-1551 ext. 7256; or Alison Ziegler or
Cecilia Heer or Deanne Eagle, 212-661-8030, all of The Financial
Relations Board
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