Trofile(TM) Assay Introduced Commercially; Pivotal VeraTag(TM) Study
Initiated
-- Conference call today at 4:30 p.m. ET --
SOUTH SAN FRANCISCO, Calif., Oct. 24 /PRNewswire-FirstCall/ -- Monogram
Biosciences, Inc. (Nasdaq: MGRM) today reported financial results for the
quarter ended September 30, 2007.
Third Quarter Results
The Company had revenue of $10.4 million for the third quarter of 2007,
compared to $11.1 million in the third quarter of 2006. Trofile(TM),
Monogram's proprietary co-receptor tropism assay, was introduced
commercially in August 2007 and, in September, coverage and reimbursement
were established by Medicare. Monogram has performed over 700 Trofile tests
to date, of which approximately 350 tests were performed in the quarter
ended September 30, 2007. Because of the timing of reimbursement decisions
by payers, revenue recognized from tests performed in the quarter ended
September 30, 2007 was not significant.
The net loss was $3.1 million, or $0.02 per common share, in the third
quarter of 2007, compared to a net loss of $6.6 million, or $0.05 per
common share, for the same period in 2006. Included in these results were
substantial non-cash items, which are described below under "Non-GAAP
Proforma Results." On a non-GAAP proforma basis, adjusted for these
non-cash items, the net loss was $7.5 million, or $0.06 per share, in the
third quarter of 2007 compared to a net loss of $6.6 million, or $0.05 per
share, in the same period of 2006.
Nine Month Results
The Company had revenue of $29.5 million for the first nine months of
2007, compared to revenue of $37.7 million for the first nine months of
2006. Prior year revenues, especially during the first two quarters of
2006, included substantial revenues from the use of the Company's assays in
Pfizer's phase III trial of maraviroc.
The net loss was $18.5 million, or $0.14 per common share, in the first
nine months of 2007, compared to a net loss of $31.7 million, or $0.24 per
common share, for the same period in 2006. Included in these results were
substantial non-cash items, which are described below under "Non-GAAP
Proforma Results." On a non-GAAP proforma basis, adjusted for these
non-cash items, the net loss was $25.6 million, or $0.19 per share, in the
first nine months of 2007 compared to a net loss of $15.3 million, or $0.12
per share, in the same period of 2006.
The Company had approximately $30 million in cash resources (comprised
of cash, cash equivalents and short-term investments) at September 30,
2007.
Monogram's Trofile Assay and Pfizer's maraviroc
"This has been a pivotal quarter for our HIV business," said William
Young, Monogram chief executive officer. "Several positive developments,
including FDA approval of Pfizer's maraviroc, culminated in the commercial
introduction of Trofile and the rapid establishment of coverage and
reimbursement by Medicare. This important reimbursement benchmark bodes
well for ongoing discussions with other public and private payers."
Pfizer has announced several positive developments for maraviroc, know
as Selzentry(TM) in the U.S. and Celsentri(R), outside of the U.S. These
include:
-- positive clinical results from 48 week follow up of patients enrolled
in both the phase III trial of maraviroc in treatment-experienced
patients and the separate trial in treatment-naive patients
-- approval, by both the FDA and the European Commission (EC), of
maraviroc for use in treatment-experienced patients selected by tropism
testing
-- availability, in mid September, of maraviroc throughout the U.S.
Monogram received positive coverage and coding reimbursement from
Medicare in September, just one month after Trofile was made available to
physicians and just prior to maraviroc's availability in U.S. pharmacies.
We have already received over 1,400 samples and have processed over 700
tests and testing volumes have shown weekly increases since launch.
Monogram is an approved vendor to the Federal Supply Schedule and we
recently gained coverage for Trofile to service the Veterans Affairs,
Corrections and Indian Affairs departments. Many discussions are well
underway with the large private payers and state medicaids. "We are pleased
with the progress made with payers in the short time since FDA approval of
maraviroc and our ongoing discussions are progressing well and on
schedule," said William Welch, Monogram chief commercial officer. "We still
expect that by the middle of 2008, coverage will be established with a
substantial majority of the relevant third party payers."
Trofile is also now available outside of the U.S. where Pfizer will be
taking the lead in commercializing Trofile. Following on the recent EC
approval of maraviroc, Monogram has established a European organization to
support availability of Trofile and has appointed laboratory and courier
partners to facilitate access to Trofile in the U.K., Ireland, Germany and
Canada.
VeraTag(TM) Assays for Oncology Less than 50% of breast cancer patients
selected for treatment with Herceptin(R) by currently available tests (IHC
and/or FISH) actually respond. There is growing concern that currently
available tests may not be adequate and may miss some patients who can
benefit from Herceptin. "We expect that our first VeraTag product - the
HERmark(TM) Assay - will be directed at predicting response in breast
cancer patients to Herceptin," said Young. "The need for better tests is
clear and we expect that the novel insights provided by the HERmark Assay
will greatly enhance physicians' ability to select the appropriate
therapies for their patients. This leads us to two significant market
opportunities."
The first market opportunity is represented by breast cancer patients
being treated in the adjuvant setting. These patients are generally newly
diagnosed with breast cancer, have had surgery and are now embarked on a
first course of treatment to supplement the surgical procedure. There are
approximately 200,000 new cases of breast cancer each year. Nearly all of
these patients are candidates for adjuvant treatment and will therefore be
candidates for our planned HERmark adjuvant breast cancer assay. The second
market opportunity is represented by patients with metastatic breast
cancer. These are patients for whom the cancer has spread beyond the
breast, and in many cases multiple treatments may have already been
provided. There are an additional 60,000 women annually who are newly
diagnosed with Stage IV breast cancer or who have progressed from earlier
stages of disease. "We are proceeding on parallel paths to generate
clinical data to validate the ability of HERmark to predict patient
response in each of these clinical settings," continued Young.
"We have recently begun our work in the adjuvant use of Herceptin with
the initiation of a pivotal study in up to 1,600 patient samples from a
well controlled and highly credible clinical study," said Young. "This
study is designed to evaluate HERmark as a tool for predicting response to
Herceptin in the adjuvant setting and is a very important platform for
validating the VeraTag technology and the first HERmark products. We have
already received and processed the first samples and expect to receive the
remaining samples for processing over the next several months."
Monogram is continuing its evaluation of HERmark in metastatic breast
cancer patients, where in three separate cohorts of patients involving a
total of approximately 250 patients, consistent relationships have been
identified between assay measurements and clinical outcomes. Two of these
cohorts were presented at ASCO in June 2007 and the third, for which
preliminary analysis has been completed, will be presented, on completion
of the analyses, at the San Antonio Breast Cancer Symposium in December
2007. Additional patient samples are being sought to establish clinical
cutoffs.
Capital Structure
At September 30, 2007, a total of 132.4 million shares of common stock
were outstanding. Stock options and warrants were outstanding on 20.8
million shares and 0.7 million shares of common stock, respectively. The
principal amount of Pfizer's $25 million convertible note, issued in May
2006, is convertible into approximately 9.2 million shares of common stock.
The $30 million principal amount of our 0% Convertible Senior Unsecured
Notes, issued in January 2007, is convertible into approximately 11.9
million shares of common stock.
Non-GAAP Proforma Results
The Company is reporting non-GAAP proforma results which exclude
certain items to provide a clearer view of ongoing expenses without the
impact of non- cash valuation adjustments related to our convertible debt
in 2007 and to our CVRs in 2006. A reconciliation of these non-GAAP
proforma results to GAAP results is included with the Statement of
Operations data attached to this release.
In prior years, we have reported non-GAAP proforma information that
excludes the effect of stock compensation, since there was a lack of
comparability in the information reported in our statement of operations
for stock compensation under different accounting rules in 2005 and 2006.
However, since for 2007, the statement of operations for the current year
and the immediately preceding year are both presented on the same basis in
accordance with SFAS123(R) we are no longer excluding these non- cash items
from proforma net loss. Stock-based compensation in accordance with
SFAS123(R) was $1.2 million in the third quarter of 2007, compared to $1.4
million in the prior year's third quarter.
The following non-cash items that were reflected in non-operating
income and expense for the periods ended September 30, 2007 and 2006 are
excluded from proforma net loss:
-- "Mark-to-market" adjustments to the 3% Senior Secured Convertible Note
and the 0% Convertible Senior Unsecured Debt. Favorable adjustments
of $4.2 million and $4.7 million were recorded in the three and nine
months ending September 30, 2007, respectively. There were no such
adjustments in the prior year, although a favorable adjustment of $2.2
million was recorded at January 1, 2007 for the cumulative effect of
the change in accounting principle at that date. Such adjustments
could be significant and unpredictable in future quarters depending on
several factors, including the level of the Company's common stock
price.
-- "Mark-to-market" adjustments in 2006 to the liability established for
the payment on the CVRs issued as part of the merger consideration for
ACLARA. As the outstanding CVR's were settled in the second quarter of
2006, adjustments are not significant for third and fourth quarters of
2006 or for 2007. An unfavorable adjustment of $16.5 million was
recorded in the nine months ended September 30, 2006.
Conference Call Details
Monogram will host a conference call today at 4:30 p.m. Eastern Time.
To participate in the live teleconference please call (877) 548-7912, or
(719) 325-4878 for international callers, fifteen minutes before the
conference begins. Live audio of the call will be simultaneously broadcast
over the Internet and will be available to members of the news media,
investors and the general public. Access to live and archived audio of the
conference call will be available by following the appropriate links at
http://www.monogrambio.com and clicking on the Investor Relations link. Following
the live broadcast, a replay of the call will also be available at (888)
203-1112, or (719) 457-0820 for international callers. The replay passcode
is 4277521.
The information provided on the teleconference is only accurate at the
time of the conference call, and Monogram assumes no obligation to provide
updated information except as required by law.
About Monogram
Monogram is advancing individualized medicine by discovering,
developing and marketing innovative products to guide and improve treatment
of serious infectious diseases and cancer. The Company's products are
designed to help doctors optimize treatment regimens for their patients
that lead to better outcomes and reduced costs. The Company's technology is
also being used by numerous biopharmaceutical companies to develop new and
improved anti-viral therapeutics and vaccines as well as targeted cancer
therapeutics. More information about the Company and its technology can be
found on its web site at http://www.monogrambio.com.
Forward Looking Statements
Certain statements in this press release are forward-looking. These
forward-looking statements include references to the demand for our Trofile
Assay, the potential use of our Trofile Assay for patient selection for
maraviroc, the size and timing of clinical trials utilizing our products,
the outlook for maraviroc and our Trofile Assay, the number of patients
each year in the U.S. who potentially could be candidates for new classes
of HIV drugs such as maraviroc, the ability of VeraTag technology to
significantly improve the information available to physicians, results of
studies intended to demonstrate clinical utility of our VeraTag technology
and products and anticipated clinical and laboratory validation of VeraTag
in a CLIA setting, expected protection provided by patents, possible
regulation of Trofile and our other products by the FDA, and activities
expected to occur in connection with the Pfizer collaboration. These
forward-looking statements are subject to risks and uncertainties and other
factors, which may cause actual results to differ materially from the
anticipated results or other expectations expressed in such forward-looking
statements. These risks and uncertainties include, but are not limited to:
the risk that physicians may not use a molecular diagnostic for patient
selection for maraviroc or other HIV drugs; risks related to the
implementation of the collaboration with Pfizer; risks related to our
ability to recognize revenue from activities under the collaboration with
Pfizer; risks and uncertainties relating to the performance of our
products; the growth in revenues; the size, timing and success or failure
of any clinical trials for CCR5 inhibitors, entry inhibitors or integrase
inhibitors; the risk that our Trofile Assay may not be utilized for patient
use with maraviroc and other CCR5 inhibitors; the risk that our VeraTag
assays may not predict response to particular therapeutic agents; the risk
that we may not be able to obtain additional cohorts of patient samples for
additional VeraTag studies, our ability to successfully conduct clinical
studies and the results obtained from those studies; whether larger
confirmatory clinical studies will confirm the results of initial studies;
our ability to establish reliable, high-volume operations at commercially
reasonable costs; expected reliance on a few customers for the majority of
our revenues; the annual renewal of certain customer agreements; actual
market acceptance of our products and adoption of our technological
approach and products by pharmaceutical and biotechnology companies; our
estimate of the size of our markets; our estimates of the levels of demand
for our products; the impact of competition; the timing and ultimate size
of pharmaceutical company clinical trials; whether payers will authorize
reimbursement for our products and services and the amount of such
reimbursement that may be allowed; whether the FDA or any other agency will
decide to further regulate our products or services, including Trofile;
whether the draft guidance on Multivariate Index Assays issued by FDA will
be subsequently determined to apply to our current or planned products;
whether we will encounter problems or delays in automating our processes;
the ultimate validity and enforceability of our patent applications and
patents; the possible infringement of the intellectual property of others;
whether licenses to third party technology will be available; whether we
are able to build brand loyalty and expand revenues; restrictions on the
conduct of our business imposed by the Pfizer, Merrill Lynch and other debt
agreements; the impact of additional dilution if our convertible debt is
converted to equity; and whether we will be able to raise sufficient
capital in the future, if required. For a discussion of other factors that
may cause actual events to differ from those projected, please refer to our
most recent annual report on Form 10-K and quarterly reports on Form 10-Q,
as well as other subsequent filings with the Securities and Exchange
Commission. We do not undertake, and specifically disclaim any obligation,
to revise any forward-looking statements to reflect the occurrence of
anticipated or unanticipated events or circumstances after the date of such
statements.
PhenoSense, PhenoSenseGT, Trofile, HERmark and VeraTag are trademarks
of Monogram Biosciences, Inc. Heceptin is a registered trademark of
Genentech, Inc. Selzentry is a trademark and Celsentri is a registered
trademark of Pfizer Inc.
- financials to follow -
MONOGRAM BIOSCIENCES, INC.
SELECTED STATEMENT OF OPERATIONS DATA
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Revenue:
Product revenue $8,745 $10,415 $26,751 $35,418
Contract revenue 463 687 1,266 2,310
License revenue 1,186 - 1,486 -
Total revenue 10,394 11,102 29,503 37,728
Operating costs and expenses:
Cost of product revenue 5,774 5,962 16,806 17,307
Research and development 3,788 4,638 14,295 14,421
Sales and marketing 4,178 3,819 12,280 11,264
General and administrative 4,292 3,377 12,149 11,240
Total operating costs and expenses 18,032 17,796 55,530 54,232
Operating loss (7,638) (6,694) (26,027) (16,504)
Convertible debt valuation
adjustment and
interest income/(expense), net 4,340 90 5,057 1,233
CVR valuation adjustment 218 - 218 (16,450)
Net loss before cumulative effect of
change in accounting principle (3,080) (6,604) (20,752) (31,721)
Cumulative effect of change in
accounting principle - - 2,242 -
Net loss after cumulative effect of
change in accounting principle $(3,080) $(6,604) $(18,510) $(31,721)
Basic and diluted net loss per
common share before
cumulative effect of change in
accounting principle $(0.02) $(0.05) $(0.16) $(0.24)
Cumulative effect per share of
change in accounting principle $- $- $0.02 $-
Basic and diluted net loss per
common share after
cumulative effect of change in
accounting principle $(0.02) $(0.05) $(0.14) $(0.24)
Weighted-average shares used in
computing basic
net loss per common share 132,393 130,694 132,003 130,223
Reconciliation of Non-GAAP Proforma
Results to GAAP
Net loss after cumulative effect of
change in accounting principle $(3,080) $(6,604) $(18,510) $(31,721)
Adjustments for certain non-cash
items:
Cumulative effect of change in
accounting principle - - (2,242) -
CVR valuation adjustment (218) - (218) 16,450
Convertible debt valuation
adjustment (4,244) - (4,652) -
Non-GAAP Proforma net loss (7,542) (6,604) (25,622) (15,271)
Non-GAAP Proforma net loss per
common share, basic $(0.06) $(0.05) $(0.19) $(0.12)
Management believes that this non-GAAP proforma financial data
supplements the Company's GAAP financial statements by providing investors
with additional information which allows them to have a clearer picture of
the Company's operations, financial performance and the comparability of
the Company's operating results from period to period as they exclude the
effects in 2007 of revaluation of the Company's convertible debt and the
effects in 2006 of revaluation of the contingent value rights issued in
connection with the Company's merger with ACLARA that management believes
are not indicative of the Company's ongoing operations. The presentation of
this additional information is not meant to be considered in isolation or
as a substitute for results prepared in accordance with GAAP. Above,
management has provided a reconciliation of the non-GAAP proforma financial
information with the comparable financial information reported in
accordance with GAAP.
MONOGRAM BIOSCIENCES, INC.
SELECTED BALANCE SHEET DATA
(In thousands)
(Unaudited)
September 30, December 31,
2007 2006
ASSETS (Note 1)
Current assets:
Cash and cash equivalents $18,553 $8,263
Short-term investments 10,933 22,867
Accounts receivable, net 8,694 6,849
Prepaid expenses 1,055 1,234
Inventory 1,184 961
Other current assets 248 378
Total current assets 40,667 40,552
Property and equipment, net 7,388 7,463
Goodwill 9,927 9,927
Deferred costs 5,236 1,783
Other assets 749 1,120
Total assets $63,967 $60,845
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,864 $1,271
Accrued compensation 2,712 2,258
Accrued liabilities 4,458 4,720
Current portion of restructuring
costs 610 1,128
Deferred revenue, current portion 1,140 404
Current portion of loans payable and
capital lease obligations 4,721 6,355
Contingent value rights 2,102 2,813
Total current liabilities 17,607 18,949
Long-term 3% convertible promissory note 20,683 25,000
Long-term 0% convertible promissory note 18,168 -
Long-term portion of restructuring costs 434 868
Long-term deferred revenue 6,071 1,783
Other long-term liabilities 297 337
Total liabilities 63,260 46,937
Stockholders' equity
Common stock 132 131
Additional paid-in capital 283,082 277,892
Accumulated other comprehensive loss (6) (124)
Accumulated deficit (282,501) (263,991)
Total stockholders' equity 707 13,908
Total liabilities and
stockholders' equity $63,967 $60,845
(1) The balance sheet data at December 31, 2006 is derived from audited
financial statements included in the Company's Annual Report on Form 10-K
for the year ended December 31, 2006 filed with the Securities and Exchange
Commission.
Contacts: Alfred G. Merriweather Jeremiah Hall
Chief Financial Officer Feinstein Kean Healthcare
Tel: 650 624 4576 Tel: 415 677 2700
amerriweather@ jeremiah.hall@
monogrambio.com fkhealth.com
SOURCE Monogram Biosciences, Inc.
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Related links:
http://www.monogrambio.com
CONTACT:
Alfred G. Merriweather, Chief Financial
Officer of Monogram Biosciences, Inc., +1-650-624-4576,
amerriweather@monogrambio.com; Jeremiah Hall of Feinstein Kean
Healthcare, +1-415-677-2700, jeremiah.hall@fkhealth.com, for
Monogram Biosciences, Inc.
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