Healthcare Revenue Increases 11% in Quarter, First Half Loss Narrows on Asset
Sale
RESEARCH TRIANGLE PARK, N.C., Aug. 15 /PRNewswire-FirstCall/ --
Biotechnology company Icoria, Inc. (OTC: ICOR.OB), announced that it had
narrowed its loss for the second quarter, which ended June 30, 2005, from $3.6
million, or $0.10 per common share in the prior year, to $3.0 million, or
$0.08 per share. Healthcare revenue grew 11 percent over the year-ago period
to $2.5 million. As expected, agriculture revenue declined by 39 percent,
primarily due to the first-quarter sale of Icoria's agricultural genomics
assets to Monsanto Company.
For the six months ended June 30, 2005, Icoria reported a net loss of $1.9
million, or $0.05 per common share, an improvement on the year-ago net loss of
$7.3 million, or $0.21 per common share. The significant improvement was
largely due to a $4.7 million gain from the asset sale to Monsanto Company.
The benefit of this gain was partially offset by approximately $0.9 million in
one-time costs incurred as the company realigned its cost structure after the
sale, including previously announced reductions in its headcount and executive
staff. Operating expenses increased 2 percent for the same time period to
$18.8 million, including these severance costs.
Overall revenue declined 21 percent, from $6.3 million in the second
quarter of 2004 to $5.0 million in the second quarter of 2005. Total
operating expenses in the second quarter dropped to $8.5 million from $9.8
million in the second quarter of 2004 and were decreased from $10.2 million in
the first quarter of 2005. The second quarter operating expenses included
approximately $0.8 million in severance costs, as discussed above. Without
these one-time charges, second quarter operating expenses would have decreased
25 percent from the prior quarter.
"The second quarter was a period of transition for Icoria, and our
financial results reflect this," said Douglas Morton, Ph.D., Interim CEO. "We
are working to restructure our cost base and to minimize our burn rate without
impairing the operations and research activities on which Icoria is building
its future. While this realignment has resulted in some severance costs, we
believe we will realize the benefits of these actions through savings in
subsequent periods."
As of June 30, 2005, Icoria reported unrestricted cash, cash equivalents
and short-term investments in the amount of $8.7 million, down from $9.6
million as of December 31, 2004. In addition, as of June 30, 2005, the
company's assets included accounts receivable of $4.6 million. A large portion
of this receivable balance related to several invoices from the NIEHS contract
which are expected to be collected in the third quarter of 2005.
Management Discussion
"We are pleased by the performance of our healthcare business in the first
half of 2005," said Morton. "Icoria has been in active discussions with
potential collaborators and customers as we are continuing to focus our
development efforts on biomarker suites and panels that we believe will appeal
to the diagnostics industry."
"As work on biomarkers with potential applications in liver diagnostics
and biomarkers for the oncology market continues in our labs, we are laying
the groundwork to monetize these developments. In the meantime, our NIEHS
contract, ParadigmArrayLabs(TM) business and other service business continue
to generate revenue to help fund our ongoing operations," he continued.
Icoria continues to analyze data from internal studies related to liver
disorders and metabolic disease and is concentrating on biomarkers related to
liver functionality. "Currently utilized liver panels provide a very limited
window on liver function," said Morton. "We are aggressively pursuing what we
believe is a significant opportunity for a non-invasive multi-analyte
diagnostics test that provides doctors with more information on liver function
as well as detection and prognosis of liver disease."
Quarterly Conference Call
The company's management team will conduct a conference call and webcast
to discuss the results on Tuesday, August 16, at 8:30 a.m. ET. Interested
participants should call 1-800-474-8920 or, for those calling internationally,
719-457-2727. The conference call ID number is 2043271. 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
intends to use these future biomarkers internally to develop multi-analyte
diagnostics to define and grade pathology or disease state with a high level
of specificity and sensitivity, and use its technology to help 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
(Unaudited - in thousands)
Three Months Six Months
Ended Ended
June 30, June 30,
2005 2004 2005 2004
Revenues:
Revenues from healthcare
customers
Commercial and government
contracts $2,035 $1,929 $4,998 $2,908
Government grant 489 344 921 868
Total healthcare revenues 2,524 2,273 5,919 3,776
Revenue from agriculture
commercial contracts 2,431 3,981 6,834 7,367
Total revenue $4,955 $6,254 $12,753 $11,143
Operating expenses:
Research and development 5,462 6,755 12,823 12,877
Selling, general and
administrative 3,066 3,056 5,936 5,454
Total operating expenses 8,528 9,811 18,759 18,331
Gain on sale of agriculture
assets 753 - 4,701 -
Loss from operations (2,820) (3,557) (1,305) (7,188)
Other interest income (expense), net (213) (64) (591) (127)
Net loss from continuing
operations (3,033) (3,621) (1,896) (7,315)
Discontinued operations - 3 - 26
Net loss attributable to common
stockholders (3,033) $(3,618) $(1,896) $(7,289)
Net loss per share - basic and
diluted
Loss from continuing operations $(0.08) $(0.10) (0.05) $(0.21)
Loss from discontinued
operations - - - -
Net loss per common share $(0.08) $(0.10) $(0.05) $(0.21)
Weighted average common shares
outstanding - basic and diluted 39,616 36,241 38,323 34,833
Icoria, Inc.
2005 Second-Quarter Results
Condensed Balance Sheet Data
(in thousands)
June 30, December 31,
2005 2004
(unaudited)
Assets:
Cash, cash equivalents, short-term
investments $8,690 $9,598
Accounts receivable 4,620 1,816
Other current assets 1,039 1,600
Total Current Assets $14,349 $13,014
Property plant & equipment, net 7,851 14,516
Other non-current assets 770 1,740
Total Assets $22,970 $29,270
Liabilities and Stockholders' Equity:
Current liabilities $9,016 $13,689
Long-term obligations 3,784 4,802
Stockholders' equity 10,170 10,779
Total Liabilities and Stockholders' $22,970 $29,270
Equity
Icoria, Inc.
Supplemental Information Re: Increase/(Decrease) in Cash, Cash
Equivalents,
Short - Term and Long - Term Investments (See Note Below)
(Unaudited - in thousands)
Three Months Six Months
Ended Ended
June 30 June 30
2005 2004 2005 2004
Net cash used in operating
activities $(3,538) $(1,887) $(5,453) $(3,660)
Net cash provided by (used in)
investing activities, excluding
purchases and maturities of
short-term and long-term
investments 789 (347) 5,209 1,756
Net cash used in financing
activities (366) (2,236) (664) (3,658)
Net decrease in cash, cash
equivalents, short-term
investments and long-term
investments (3,115) (4,470) (908) (5,562)
Cash, cash equivalents, short-
term investments and long term
investments, beginning of period 11,805 15,193 9,598 16,285
Cash, cash equivalents, short-
term investments and long term
investments, end of period $8,690 $10,723 $8,690 $10,723
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 by
net purchases of investment securities in the amount of $0.3 million for
the three months ended June 30, 2005. 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 $0.7 million as of June 30, 2005,
$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
research 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 June 30, 2005 and 2004, the company's
activities related to the agriculture industry are as follows (in
thousands):
Three Months Ended Six Months Ended
June 30, June 30,
(unaudited) (unaudited)
2005 2004 2005 2004
Revenues $2,431 $3,981 $6,834 $7,367
Operating expenses:
Research and development 1,976 3,286 4,732 6,604
Selling, general and
administrative 388 207 614 380
Total operating expenses 2,364 3,493 5,346 6,984
Gain on sale of selected
agricultural assets 753 - 4,701 -
Income from operations $820 $488 $6,189 $383
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 June 30, 2005 is as follows (in thousands):
Accounts receivable $1,472
Prepaid expenses 21
Total current assets 1,493
Property plant & equipment, net 989
Total assets $2,482
Accounts payable $319
Accrued liabilities 574
Deferred Revenue 415
Total current liabilities 1,308
Deferred compensation (1)
Total liabilities and deferred compensation $1,307
This press release contains forward-looking statements, including
statements regarding the Company's expectations for using its systems biology
platform to discover biomarkers for understanding drug toxicities and human
disease, its future commercialization opportunities and plans for future
growth. 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 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 and in its quarterly report on Form 10-Q
for the quarter ended March 31, 2005, each 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.
For further Information, please contact:
Icoria, Inc.
Media-Public Relations
919-425-2999
SOURCE Icoria, Inc.
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Related links:
http://www.icoria.com
CONTACT:
Media-Public Relations of Icoria, Inc.,
+1-919-425-2999
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