EPS Doubles from Year Earlier Period Before One-Time Merger Charges
MELVILLE, N.Y., Oct. 19 /PRNewswire/ -- V. I. Technologies, Inc.
(Nasdaq: VITX) today announced financial results for the third quarter and
three quarters ended October 2, 1999. For the quarter, the Company reported
net income, excluding one-time charges, of $1,012,000, or $0.08 per share.
These results compare to net income of $486,000, or $0.04 per share, for the
third quarter of fiscal 1998. Revenue for the quarter was $10,502,000
compared to $11,660,000 in the year-ago quarter.
In connection with the previously announced merger with Pentose
Pharmaceuticals, the Company recorded one-time charges of $2,338,000 for the
restructuring of its R&D operations. Including the one-time charges, the
Company reported a net loss of $1,326,000, or $0.11 per share. The charges
cover costs associated with the integration of the two organizations including
staff reductions, eliminating duplicate facilities and discontinuing the
Company's red cell viral inactivation program. R&D operations will be
consolidated at Pentose's facility and associated staff levels have been
reduced by approximately 50%.
For the year to date period ended October 2, 1999, the Company recorded
net income, excluding one-time charges, of $1,104,000, or $0.09 per share,
compared to a loss of $5,223,000, or $0.53 per share, in the comparable 1998
period. Accounting for one-time charges, the net loss for the year to date
period ended October 2, 1999 was $3,879,000, or $0.31 per share, in comparison
with a net loss of $7,425,000, or $0.75 per share, in the comparable 1998
period. Revenue for the first three quarters of 1999 was $30,996,000 compared
to $23,727,000 in the year ago period.
During the quarter, VITEX took a planned two-week shutdown for maintenance
and the completion of a significant expansion in fractionation capacity, which
operates at full capacity, 24 hours per day, seven days per week. Despite the
shutdown and the effects of idle plant time, gross margins for the quarter
were in excess of 40% compared to 33% in the year ago period.
Significant Third Quarter Developments
In addition to the definitive merger agreement with Pentose
Pharmaceuticals, developer of the INACTINE viral inactivation technology,
significant events that strengthened VITEX's leadership position in the field
of viral inactivation include:
-- The FDA approval of Pentose's IND for INACTINE-treated virally
inactivated red blood cells to begin clinical trials,
-- VITEX's filing of an IND to initiate pivotal trials for the Universal
version of PLAS+(R)SD,
-- VITEX's filing with the FDA for an expanded label claim for
PLAS+(R)SD to include screening for parvo B-19, the first such claim
for any blood product worldwide, and
-- The receipt of FDA approval to operate VITEX's new fractionation
assets, completing the last phase of a two year project that expanded
capacity by 35%. The final phase resulted in a 15% capacity increase.
In addition, the American National Red Cross (Red Cross) announced a plan
to accelerate to a full conversion from fresh frozen plasma to VITEX's
PLAS+(R)SD transfusion plasma over the next year and has significantly lowered
prices to its hospital customers, particularly members of the Novation
purchasing group. To support this conversion, VITEX initiated a sales
incentive program whereby the Red Cross can earn a rebate on future purchases
if pre-defined conversion milestones are achieved. The Red Cross also shipped
the first units of PLAS+(R)SD to customers in Quebec, Canada during the
quarter.
John Barr, President and CEO of VITEX commented, "We are particularly
excited about the strategic merger with Pentose Pharmaceuticals, which will
transform our R&D programs and enhance our leadership position in the viral
inactivation of all three blood components, red cells, platelets and plasma.
During the quarter, we moved decisively to prepare for the integration of
VITEX and Pentose. With the R&D restructuring behind us, we are confident in
our ability to maintain total VITEX R&D headcount at pre merger levels, as
previously committed. We also expect our existing commercial operations to
fund our post-merger R&D spending."
Mr. Barr continued, "Performance was strong in nearly every aspect of our
business. Despite our manufacturing shutdown, in our third quarter we had the
best financial results from operations in our history. Additionally, the Red
Cross reaffirmed their leadership role in establishing viral inactivation as a
standard of care for the blood industry worldwide. We are very pleased with
this development."
Upcoming Milestones
VITEX expects to continue the momentum generated in the third quarter.
The following are a number of significant, upcoming milestones for the
Company:
-- The Pentose acquisition is scheduled to close on November 12, 1999.
The total transaction value is estimated at $41 million, of which
approximately $34.5 million will be written off as acquired in-process
R&D. Capitalized intangibles will be approximately $6 million,
resulting in an annual amortization charge of less than $500,000.
-- Pentose is scheduled to initiate the treatment of the first patients in
its clinical trial of INACTINES for red cells.
-- Pall is required to make their second VITEX equity milestone investment
in the amount of $3,000,000 with the enrollment of the first red cell
patient.
-- Pentose is scheduled to present pre-clinical results of the INACTINE
red cell program at the American Association of Blood Banks in early
November.
-- VITEX expects to receive approval to initiate a pivotal clinical trial
for the Universal version of PLAS+(R)SD.
-- VITEX expects to receive approval of an expanded label claim to add
screening for parvo B-19 for PLAS+(R)SD.
Pentose Pharmaceuticals, Inc. develops and commercializes novel antiviral
products for medical use based on innovative applications of nucleic acid
chemistry. The company has developed the INACTINE technology platform for
inactivation of viral pathogens in blood components for transfusion, plasma
derivatives and biopharmaceuticals. Pentose is a privately held
biopharmaceutical company founded in 1995 and is based in Cambridge,
Massachusetts.
VITEX is a leading developer and manufacturer of a broad portfolio of
blood products that utilize its patented viral inactivation technologies
designed to ensure safe blood products. 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+(R)SD, is the only FDA approved
method for viral inactivation of plasma.
Central to VITEX's strategy are collaborations to accelerate the
commercialization of its products. These include agreements with Bayer
Corporation to supply plasma fractions, the American National Red Cross
distribute PLAS+(R)SD, United States Surgical Corporation for the development
and distribution of fibrin sealant and Pall Corporation for the development
and distribution of systems for the viral inactivation of red blood cells and
platelets.
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)
Quarter Ended Three Quarters Ended
Oct. 2, Oct. 3, Oct. 2, Oct. 3,
1999 1998 1999 1998
(unaudited) (unaudited)(unaudited)(unaudited)
Revenue $10,502 $11,660 $30,996 $23,727
Costs and expenses:
Cost of goods sold 6,296 7,818 17,683 17,923
Research and development,
net 913 1,894 5,024 5,288
Selling, general and
administrative expenses 2,330 1,648 7,322 5,187
Operating expenses,
excluding one-time charges 9,539 11,360 30,029 28,398
Income (loss) from
operations, excluding
one-time charges $963 $300 $967 ($4,671)
Interest income (expense),
net 49 186 137 (552)
Net income (loss), excluding
one-time charges $1,012 $486 $1,104 ($5,223)
One-time charges
Charge related to R&D
restructuring 2,338 -- 2,338 --
Charges related to product
recall and research
collaboration -- -- 2,645 2,202
Net income (loss) ($1,326) $486 ($3,879) ($7,425)
Net income (loss) per share,
excluding one-time charges $0.08 $0.04 $0.09 ($0.53)
Basic and diluted net income
(loss) per share ($0.11) $0.04 ($0.31) ($0.75)
Weighted average number of
shares 12,476 12,250 12,439 9,897
Condensed Balance Sheets
(In thousands)
October 2, January 2,
1999 1999
Cash and cash equivalents $22,172 $35,264
Trade receivables 8,981 3,967
Inventory 2,569 2,512
Other current assets 1,769 1,895
Property, plant & equipment, net 35,116 30,821
Other assets 1,276 766
Total assets $71,883 $75,225
Current liabilities $9,555 $6,575
Current portion, long-term debt 3,960 3,960
Long-term debt 8,245 11,055
Stockholders' equity 50,123 53,635
Total liabilities and stockholders' equity $71,883 $75,225
SOURCE V.I. Technologies, Inc.
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CONTACT:
John Barr, President and CEO of V.I.
Technologies, Inc., 516-752-7314, ext. 6110, or Alison Ziegler,
Brian Gill, or Deanne Eagle, all of The Financial Relations
Board, 212-661-8030, for V.I. Technologies, Inc.
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