SOUTH SAN FRANCISCO, Calif., Aug. 7 /PRNewswire-FirstCall/ -- Cell
Genesys, Inc. (Nasdaq: CEGE) today reported financial results for the
second quarter ended June 30, 2007. The company reported a net loss of $1.9
million, or $0.03 per fully diluted share, for the second quarter of 2007,
compared with a net loss of $27.9 million, or $0.60 per fully diluted
share, in the corresponding period of 2006.
The decrease in net loss reported in the second quarter of 2007
compared with the net loss for the corresponding period in the previous
year is due to a favorable settlement with the Internal Revenue Service
(IRS) in the second quarter of 2007 relating to the company's 2000 tax
return. The settlement resulted in a decrease of approximately $26.8
million in accrued income tax liabilities following a payment to the IRS of
$3.3 million in federal tax and interest.
"We are very pleased with our recent business progress, most notably
the completion of patient recruitment in the first of two ongoing Phase 3
trials of our lead product, GVAX immunotherapy for prostate cancer. This is
a major milestone for this program and our business in general," stated
Stephen A. Sherwin, M.D., chairman and chief executive officer of Cell
Genesys. "We are equally pleased that we have been able to maintain our
financial strength as we advance this key development program with a
successful equity financing during the quarter."
Revenues for the second quarter ended June 30, 2007, were less than
$0.1 million compared with revenues of $1.0 million for the corresponding
period in 2006. The difference is due to the timing of revenue from
existing licensing arrangements which varies from quarter to quarter.
The company's research and development costs were $25.0 million for the
second quarter of 2007 compared with $23.2 million for the corresponding
period in 2006. The increase is primarily due to expenses related to the
ongoing Phase 3 clinical trials of the company's lead product development
program, GVAX immunotherapy for prostate cancer. General and administrative
expenses were $4.8 million for the second quarter of 2007 compared to $4.3
million for the corresponding period in 2006. This increase is primarily
attributed to an increase in administrative expenses.
As of June 30, 2007, Cell Genesys had approximately $171.1 million in
cash, cash equivalents and short-term investments compared to $154.1
million at December 31, 2006. The ending second quarter balance reflects
gross proceeds raised since the beginning of 2007, including $12.5 million
raised in the first quarter from the company's Committed Equity Financing
Facilities with Kingsbridge Capital Limited, and $60.0 million raised from
a registered direct offering in the second quarter.
Second Quarter and Other Recent Highlights
-- Announced the completion of recruitment of over 600 patients into
VITAL-1, the first of two ongoing Phase 3 clinical trials of GVAX
immunotherapy for prostate cancer. The multi-center, randomized,
controlled Phase 3 study in advanced prostate cancer will compare GVAX
cancer immunotherapy to Taxotere(R) (docetaxel) chemotherapy plus
prednisone in hormone refractory prostate cancer (HRPC) patients with
metastatic disease. The primary endpoint of the trial is an improvement
in survival. The company estimates the timing of the pre-planned
interim analysis from the VITAL-1 trial to be in 2008, probably in the
first half of the year, and that there will be a sufficient number of
events required for the final analysis to follow sometime later in
2009.
-- Reported updated clinical data for GVAX immunotherapy for prostate
cancer from the second of two, independent, multi-center Phase 2
clinical trials, which combined involved approximately 115 patients.
Data from these two trials showed a median survival of 34.9 months and
35.0 months, respectively, for the patients who received doses
comparable to the Phase 3 dose. The results of the first trial were
published in the July 1, 2007, issue of Clinical Cancer Research.
These results exceeded the predicted survival of 22.5 months and 22.0
months, respectively, as determined by a seven point patient disease
characteristic nomogram. Results from both studies also compare
favorably to the previously published median survival of 18.9 months
for metastatic HRPC patients treated with Taxotere chemotherapy plus
prednisone, the current standard of care. The company's ongoing
Phase 3 program is designed to confirm a potential survival benefit and
safety profile for GVAX immunotherapy for prostate cancer.
-- Reported at the American Association for Cancer Research meeting in
April 2007, immune response data from the company's two previously
conducted Phase 2 clinical trials of GVAX immunotherapy for prostate
cancer. Evaluation of antibody responses in patients with advanced
prostate cancer from these studies shows that the GVAX cell-based
immunotherapy induces antibody responses to a broad array of prostate
cancer-associated antigens, including some not previously known to be
associated with prostate cancer. In addition, the antibody responses to
this non patient-specific product were predominantly patient-specific
and unique from patient to patient, indicating the potential advantage
of a cell-based multi-antigen product such as GVAX to generate the
broadest and most relevant immune response.
-- Announced three new clinical trials for GVAX immunotherapy for leukemia
that are now under way in collaboration with the Johns Hopkins Sidney
Kimmel Cancer Center. The new trials are based on encouraging results
in an initial Phase 2 study of the product in patients with chronic
myelogenous leukemia (CML) and include: a randomized Phase 2 trial in
56 patients with CML who have persistent molecular evidence of disease
following Gleevec(R) (imatinib) therapy that will compare the
combination of GVAX plus continued Gleevec to the combination of
interferon-alpha, GM-CSF plus continued Gleevec with respect to the
levels of bcr-abl, a well-established marker of residual leukemia. In
addition, there will be an extension study of the initial Phase 2 trial
in patients with CML that will evaluate the efficacy of a second course
of GVAX in patients who failed to achieve a sustained complete response
and a Phase 1 trial in 18 patients with poor risk myelodysplastic
syndrome.
-- Announced follow-up data from a Phase 2 clinical trial of GVAX
immunotherapy for pancreatic cancer that was conducted by the Johns
Hopkins Sidney Kimmel Cancer Center. The trial enrolled 60 patients
with operable pancreatic cancer who received GVAX after surgical
resection of their tumor and adjuvant radiation and chemotherapy. The
median overall survival for these patients was previously reported to
be 26.8 months, a result which compares favorably to the 17 to
22 months median survival results published from multiple studies in
patients undergoing pancreatic cancer surgery and adjuvant therapy. Of
note, 53 of the 60 patients were considered high risk, based on the
unfavorable finding that their cancer had spread to regional lymph
nodes. The new data included a median disease-free survival of
approximately 16 months which compares favorably to the 13 months
disease-free survival recently reported for gemcitabine adjuvant
therapy.
-- Announced follow-up data from the ongoing Phase 1 clinical trial in
patients with advanced prostate cancer receiving GVAX immunotherapy for
prostate cancer administered in combination with ipilimumab (MDX-010),
a fully human anti-CTLA-4 antibody that is being jointly developed by
Medarex and Bristol-Myers Squibb Company. The new data reported
includes median follow-up of 18 months on the first 12 patients
enrolled in the trial. Of the six patients who have received the two
highest doses, antitumor activity has been observed in five patients,
including prostate-specific antigen (PSA) declines of greater than
50 percent that were maintained in four of these patients for at least
six months, with the longest response to date at approximately
16 months. Clinical evidence of antitumor activity has been observed
in four of these five PSA responders, including complete resolution of
multiple lesions on bone scan in two patients, and resolution of
abdominal lymph node disease by CT scan and improvement in bone pain in
one patient each. The five patients with PSA declines experienced
either Grade 2 or 3 immune-mediated endocrine deficiencies similar in
type to those previously reported with ipilimumab therapy, and were
successfully treated with standard hormone replacement therapy and one
patient who received the highest dose of ipilimumab developed a Grade 3
dose-limiting pulmonary alveolitis that responded to steroid treatment.
Immunomonitoring studies showed that the combination therapy enhanced T
cell and dendritic cell activity, which was more pronounced at the
higher dose levels.
-- Raised gross proceeds of $60.0 million in a registered direct offering
to institutional investors of 10.8 million shares of the company's
common stock at $5.55 per share and warrants to purchase up to
2.2 million shares of the company's common stock at a price of $7.18
per share with selected institutional investors.
-- Reached a favorable settlement with the IRS regarding the audit of the
company's 2000 tax return. The settlement with the IRS was for
$3.3 million in taxes and interest and resulted in a decrease in
accrued income tax liabilities of $26.8 million.
Cell Genesys will host its quarterly conference call at 2:00 p.m. PST
on Tuesday, August 7, 2007, to discuss events that occurred during the
second quarter of 2007. Investors may listen to the webcast of the
conference call live on Cell Genesys' website. Alternatively, investors may
listen to a replay of the call by dialing 800-475-6701 from locations in
the U.S. and 320-365-3844 from outside the U.S. The call-in replay will be
available for at least 72 hours following the call. Please refer to
reservation number 880320.
About Cell Genesys
Cell Genesys is focused on the development and commercialization of
novel biological therapies for patients with cancer. The company is
currently pursuing two clinical stage product platforms -- GVAX(TM) cancer
immunotherapies and oncolytic virus therapies. Ongoing clinical trials
include Phase 3 trials of GVAX immunotherapy for prostate cancer, Phase 2
trials of GVAX immunotherapies for pancreatic cancer and for leukemia, and
a Phase 1 trial of CG0070 oncolytic virus therapy for bladder cancer. Cell
Genesys continues to hold an equity interest in its former subsidiary,
Ceregene, Inc., which is developing gene therapies for neurodegenerative
disorders. Cell Genesys is headquartered in South San Francisco, CA and has
its principal manufacturing operation in Hayward, CA. For additional
information, please visit the company's website at
http://www.cellgenesys.com.
Statements made herein about the company, other than statements of
historical fact, including statements about the company's progress, results
and timing of clinical trials and preclinical programs and the nature of
product pipelines are forward-looking statements and are subject to a
number of uncertainties that could cause actual results to differ
materially from the statements made, including risks associated with the
success of clinical trials and research and development programs, the
regulatory approval process for clinical trials, competitive technologies
and products, patents, continuation of corporate partnerships and the need
for additional financings. For information about these and other risks
which may affect Cell Genesys, please see the company's Annual Report on
Form 10-K for the year ended December 31, 2006 filed on March 1, 2007 as
well as Cell Genesys' reports on Form 10-Q and 8-K and other reports filed
from time to time with the Securities and Exchange Commission. The company
assumes no obligation to update the forward-looking information in this
press release.
CONTACT:
Susan Ferris
Investor Relations
650-266-3200
-- FINANCIAL CHARTS TO FOLLOW --
SELECTED CONSOLIDATED FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF OPERATIONS DATA
(unaudited, in thousands, except per share data)
Three months ended Six months ended
June 30, June 30,
2007 2006 2007 2006
Revenue $3 $1,046 $1,276 $1,222
Operating expenses:
Research and development 25,030 23,203 49,045 48,517
General and administrative 4,782 4,268 10,027 9,296
Total operating expenses 29,812 27,471 59,072 57,813
Loss from operations (29,809) (26,425) (57,796) (56,591)
Other income (expense):
Gain on sale of Abgenix,
Inc. common stock - - - 62,677
Gain on sale of property
and equipment 1,381 9 1,384 9
Interest and other income 2,201 1,756 4,120 3,316
Interest expense (2,582) (2,622) (5,181) (5,244)
Income (loss) before income
taxes (28,809) (27,282) (57,473) 4,167
Income tax benefit (provision) 26,918 (610) 26,133 (28,045)
Net loss $(1,891) $(27,892) $(31,340) $(23,878)
Basic and diluted net loss
per common share $(0.03) $(0.60) $(0.48) $(0.52)
Weighted average shares of
common stock outstanding -
basic and diluted 71,171 46,629 65,939 46,127
CONSOLIDATED BALANCE SHEET DATA
(in thousands) June 30, December 31,
2007 2006
(unaudited) Note 1
Cash, cash equivalents and short-term
investments, including restricted cash $171,079 $154,074
Prepaid expenses and other current assets 3,535 3,481
Property and equipment, net 123,237 129,643
Unamortized debt issuance costs and other assets 3,550 3,969
Total assets $301,401 $291,167
Other current liabilities $16,496 $15,904
Current portion of accrued income taxes - 35,410
Other liabilities 3,150 2,851
Non-current portion of accrued income taxes 5,947 -
Non-current portion of capital lease obligation 47,588 48,475
Convertible senior notes 145,000 145,000
Stockholders' equity 83,220 43,527
Total liabilities and stockholders' equity $301,401 $291,167
Note 1. Derived from audited financial statements.
SOURCE Cell Genesys, Inc.
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Related links:
http://www.cellgenesys.com
CONTACT:
Susan Ferris, Investor Relations of Cell
Genesys, Inc., +1-650-266-3200
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