PRINCETON, N.J., Aug. 5 /PRNewswire-FirstCall/ -- Medarex, Inc.
(Nasdaq: MEDX) announced today its financial results for the quarter ended
June 30, 2008.
Medarex's net loss for the quarter ended June 30, 2008 was $53.1
million, or ($0.42) per share as compared to a net loss of $41.0 million,
or ($0.32) per share for the second quarter of 2007. Included in the 2008
results was a non-cash charge of $6.0 million, or ($0.05) per share for
stock based compensation recorded in accordance with FAS 123(R) and a
non-cash equity in net loss of affiliate charge of $3.5 million or ($0.03)
per share related to our share of the net loss of AVANT Immunotherapeutics,
Inc. ("AVANT"). Excluding the impact of these items, Medarex's net loss on
a non-GAAP basis for the quarter ended June 30, 2008 was $43.6 million, or
($0.34) per share.
Total revenues for the quarter ended June 30, 2008 were $10.0 million,
as compared to $11.8 million for the second quarter of 2007. Research and
development (R&D) expenses for the quarter ended June 30, 2008 increased by
$7.3 million, from $45.3 million in the second quarter of 2007 to $52.6
million in the second quarter of 2008. General and administrative expenses
increased by $1.8 million for the quarter ended June 30, 2008, from $10.6
million in the second quarter of 2007 to $12.4 million in the second
quarter of 2008.
Medarex ended the second quarter of 2008 with approximately $426.7
million in cash, cash equivalents and marketable securities. In addition,
as of June 30, 2008, the fair market value of Medarex's equity interests in
Genmab A/S and AVANT were approximately $87.1 million and approximately
$72.2 million, respectively.
Non-GAAP Financial Measurements
This press release and the accompanying tables include non-GAAP
financial measures. Please see the section of the accompanying tables
titled "Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Loss" for
a description of these non-GAAP financial measures, including reasons for
Medarex management's decision to use each measure, and reconciliations of
these non-GAAP financial measures to the most directly comparable financial
measures prepared in accordance with Generally Accepted Accounting
Principles.
"Our clinical development achievements this quarter speak to our
steadfast commitment to execute on our business strategy, which is focused
on providing long-term value through the development and advancement of
medically meaningful products in our portfolio," said Howard H. Pien,
President and CEO of Medarex. "We are also pleased with the recent
regulatory progress announced by our licensing partner, Centocor, Inc.,
regarding the development of ustekinumab and golimumab for multiple
inflammatory diseases. These two antibodies represent some of the first
UltiMAbs generated from Medarex's technology that have the potential to
become significant royalty-generating assets for Medarex."
Medarex's 2008 Second Quarter Highlights:
-- At the 2008 American Society of Clinical Oncology (ASCO) annual
meeting in May/June 2008, preliminary results indicating long-term survival
and anti- tumor activity of ipilimumab in advanced melanoma were presented
in multiple presentations studying ipilimumab treatment as a monotherapy
and in combination with chemotherapy. Ipilimumab is an investigational
oncology immunotherapy designed to sustain an active immune response in its
attack on cancer cells. Interim data from a Phase 1/2 trial which
demonstrated safety and preliminary efficacy of ipilimumab in combination
with radiotherapy for metastatic castration resistant prostate cancer were
also presented at ASCO.
-- Positive preliminary anti-tumor activity data from an ongoing
oncology Phase 1 trial of MDX-1106 were also presented at the 2008 ASCO
annual meeting. MDX-1106 is a fully human antibody that targets the PD-1
signaling pathway, an important path in activating T-cell responses and
promoting an immune response to fight cancer and infectious disease.
-- Two separate Phase 2 trials of MDX-1100 were initiated for the
treatment of ulcerative colitis and rheumatoid arthritis. MDX-1100 is a
fully human antibody that targets IP-10, a chemokine expressed and
associated with multiple inflammatory disease conditions.
-- Positive Phase 1 safety and preliminary efficacy data for MDX-1100
in ulcerative colitis were presented at the 2008 Digestive Disease Week
meeting in May 2008.
-- At the 2008 Annual Meeting of the American Association for Cancer
Research in April 2008, several investigational programs using Medarex's
antibody-drug conjugate technology presented encouraging preclinical data.
About Medarex
Medarex is a biopharmaceutical company focused on the discovery,
development and potential commercialization of fully human antibody-based
therapeutics to treat life-threatening and debilitating diseases, including
cancer, inflammation, autoimmune disorders and infectious diseases. Medarex
applies its UltiMAb(R) technology and product development and clinical
manufacturing experience to generate, support and potentially commercialize
a broad range of fully human antibody product candidates for itself and its
partners. Over forty of these therapeutic product candidates derived from
Medarex technology are in human clinical testing or have had INDs submitted
for such trials, with seven of the most advanced product candidates
currently in Phase 3 clinical trials or the subject of regulatory
applications for marketing authorization. Medarex is committed to building
value by developing a diverse pipeline of antibody products to address the
world's unmet healthcare needs. For more information about Medarex, visit
its website at http://www.medarex.com.
Statement on Cautionary Factors
Except for the historical information presented herein, the statements
relating to Medarex's investments and advances related to its products in
this press release may constitute forward-looking statements, as defined in
the Private Securities Litigation Reform Act of 1995, that are subject to
certain risks and uncertainties that could cause actual results to differ
materially from any future results, performance or achievements expressed
or implied by such statements. Statements that are not historical facts,
including statements preceded by, followed by, or that include the words
"potential"; "preliminary"; or similar statements are forward-looking
statements. Medarex disclaims any intent or obligation to update these
forward-looking statements. Risks and uncertainties include risks
associated with product discovery and development, uncertainties related to
the outcome of clinical trials, slower than expected rates of patient
recruitment, unforeseen safety issues resulting from the administration of
antibody products in patients, uncertainties related to product
manufacturing, the need for additional capital, compliance with regulatory
requirements, risks associated with the use of hazardous substances and
risks associated with the enforceability of our patents, as well as risks
detailed from time to time in Medarex's public disclosure filings with the
U.S. Securities and Exchange Commission (SEC), including its Annual Report
on Form 10-K for the fiscal year ended December 31, 2007 and its quarterly
reports on Form 10-Q. There can be no assurance that such development
efforts will succeed or that developed products will receive required
regulatory clearance or that, even if such regulatory clearance were
received, such products would ultimately achieve commercial success. Copies
of Medarex's public disclosure filings are available from its investor
relations department.
Medarex(R), the Medarex logo and UltiMAb(R) are registered trademarks
of Medarex, Inc. All rights are reserved.
MEDAREX, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
(unaudited) (unaudited)
Contract and license
revenues $5,891 $6,800 $13,875 $13,798
Reimbursement of
development costs 4,069 4,995 8,088 9,536
Total revenues 9,960 11,795 21,963 23,334
Costs and expenses:
Research and
development 52,574 45,273 101,866 92,295
General and
administrative 12,435 10,569 24,844 21,871
Operating loss (55,049) (44,047) (104,747) (90,832)
Equity in net loss of
affiliate (3,546) - (5,331) -
Interest income, net 5,496 3,945 160,314 159,346
Impairment loss on
investments in partners - (2,141) - (2,141)
Minority interest
- Celldex - 1,289 - 2,940
Income (loss) before
provision for income
taxes (53,099) (40,954) 50,236 69,313
Provision for income
taxes - - 23 2
Net income (loss) $(53,099) $(40,954) $50,213 $69,311
Basic net income (loss)
per share $(0.42) $(0.32) $0.39 $0.55
Diluted net income
(loss) per share $(0.42) $(0.32) $0.38 $0.52
Weighted average number
of common shares
outstanding during
the year - basic 127,724 126,430 127,927 125,730
- diluted 127,724 126,430 138,864 139,684
Condensed Consolidated Balance Sheets
(In thousands)
June 30, December 31,
2008 2007
(unaudited) (1)
Cash, cash equivalents and marketable
securities - Medarex $426,669 $334,772
Cash and cash equivalents - Celldex - 14,000
Marketable securities - Genmab - 152,000
Other current assets 18,554 29,013
Property, buildings and equipment, net 74,178 79,925
Marketable securities - Genmab non-current 87,054 139,165
Investment in AVANT Immunotherapeutics 7,809 -
Other assets 9,369 10,985
$623,633 $759,860
Current liabilities $71,427 $81,645
Other liabilities 83,545 89,454
Convertible notes 144,468 143,505
Shareholders' equity 324,193 445,256
$623,633 $759,860
(1) Derived from the December 31, 2007 audited financial statements. For
further information, refer to the consolidated financial statements
and footnotes thereto included in Medarex's Annual Report on Form 10-K
for the year ended December 31, 2007.
This press release dated August 5, 2008, contains non-GAAP financial
measures. The following table reconciles the non-GAAP financial measures
contained in the press release to the most directly comparable financial
measures prepared in accordance with GAAP. These non-GAAP financial
measures include non-GAAP net loss and non-GAAP net loss per share.
Non-GAAP financial measures should be considered in addition to, and not as
a substitute for, or superior to, financial measures prepared in accordance
with GAAP.
The following reconciliation of GAAP net income (loss) to non-GAAP net
loss and GAAP net income (loss) per share to non-GAAP net loss per share is
provided as a complement to results presented in accordance with GAAP
because Medarex's management believes these non-GAAP financial measures
provide better insight into Medarex's performance by focusing on results
generated by its ongoing operations and are important in comparing current
results with prior period results. Non-GAAP net loss and non-GAAP net loss
per share are intended to illustrate Medarex's results of operations for
the periods presented excluding the items discuss below. Medarex's
management believes investors' understanding of Medarex's financial
performance is enhanced as a result of our disclosing these non-GAAP
financial measures. Non-GAAP net loss and non- GAAP net loss per share
should not be viewed in isolation or as a substitute for GAAP net income
(loss) or GAAP net income (loss) per share.
MEDAREX, INC.
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Loss
(In thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
(unaudited) (unaudited)
2008 2007 2008 2007
GAAP Net income (loss) $(53,099) $(40,954) $50,213 $69,311
Celldex net loss (1) - 3,221 2,924 7,349
Minority interest -
Celldex (1) - (1,289) - (2,940)
Stock-Based compensation
expense (2) 5,968 4,322 11,259 7,821
Impairment loss on
investments in partners - 2,141 - 2,141
Equity in net loss
of affiliate 3,546 - 5,331 -
Gain on sale of
Genmab stock - - (151,834) (152,143)
Non-GAAP Net loss $(43,585) $(32,559) $(82,107) $(68,461)
GAAP Net income (loss)
per share,
basic $(0.42) $(0.32) $0.39 $0.55
diluted $(0.42) $(0.32) $0.38 $0.52
Non-GAAP Net loss
per share, basic
and diluted $(0.34) $(0.26) $(0.64) $(0.54)
Shares used in computing
basic and diluted GAAP
net income (loss) per
share and Non-GAAP net
loss per share 127,724 126,430 127,927 125,730
(1) In management's view, the operations of Celldex prior to its merger
with AVANT Immunotherapeutics, Inc. (effective March 7, 2008) are not
necessarily indicative of, or directly attributable to, Medarex's
continuing operations. Celldex's operations relate primarily to the
research, development and commercialization of therapeutic vaccines,
which is outside the scope of Medarex's core business operations.
(2) For the three and six months ended June 30, 2008, Medarex incurred
$6.0 million and $11.3 million in non-cash stock compensation expense,
of which $2.8 million and $4.8 million are included in research and
development expenses and $3.2 million and $6.5 million, respectively,
are included in general and administrative expenses. Stock
compensation expense includes costs associated with stock awards,
including stock options which were recorded in accordance with the
provisions of FAS 123(R). FAS 123(R) requires companies to record
stock-based payments in the financial statements using a fair value
method.
In addition to excluding the items described in footnotes 1 and 2
above, items have been excluded based upon management's evaluation (on an
individual basis) of both quantitative and qualitative aspects of the item,
including, (i) size and nature, (ii) whether it relates to our ongoing
business operations, and (iii) whether management expects it to occur as
part of our normal business on a regular basis. Those additional items
excluded for purposes of determining non-GAAP net loss and non-GAAP net
loss per share are gain on sales of Genmab stock, equity in net loss of
affiliate and impairment loss on investments in partners.
SOURCE Medarex, Inc.
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Related links:
http://www.medarex.com
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CONTACT:
Christian S. Schade, Senior VP and CFO,
+1-609-430-2880, Laura S. Choi, Investor Relations,
+1-609-430-2880, ext. 2216, or Nichol Harber, Corporate
Communications (media), +1-609-430-2880, ext. 2214, all of
Medarex, Inc.
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