MOUNTAIN VIEW, Calif., Oct. 26 /PRNewswire/ -- Aviron (Nasdaq: AVIR) today
announced results for the third quarter and nine months, ended
September 30, 2000.
For the third quarter, the company reported a net loss of $19.5 million
(basic net loss of $0.90 per share) compared to a net loss of $22.6 million
(basic net loss of $1.43 per share) for the third quarter of 1999. For the
first nine months of 2000, the company reported a net loss of $68.2 million
(basic net loss of $3.42 per share) compared to a net loss of $39.3 million
(basic net loss of $2.49 per share) for the first nine months of 1999.
Revenues in the 2000 third quarter totaled $2.9 million, compared to
$1.4 million for the 1999 third quarter. Revenues for the first nine months of
2000 were $7.9 million, as compared to $19.8 million for the first nine months
of 1999. Revenues during the 2000 third quarter and first nine months of
2000 were comprised principally of payments from Wyeth Lederle Vaccines
(Wyeth), a business unit of American Home Products Corporation (AHP), related
to the clinical development and commercialization of FluMist(TM), under the
terms of our FluMist(TM) collaboration agreement. FluMist(TM) is Aviron's
investigational intranasal influenza vaccine. Revenues in the first nine
months of 1999 included a non-refundable initial payment of $15.0 million from
Wyeth, combined with other revenues from contract and research grants. Aviron
and Wyeth are collaborating on the development and commercialization of
FluMist(TM).
Operating expenses in the 2000 third quarter totaled $22.4 million,
compared to $23.2 million for the 1999 third quarter. Operating expenses were
$74.3 million for the first nine months of 2000, as compared with
$57.4 million for the first nine months of 1999. Research and development
costs decreased to $19.0 million in the 2000 third quarter from $19.6 million
in the 1999 third quarter and totaled $54.0 million for the first nine months
of 2000, as compared with $48.0 million in the first nine months of 1999. The
decrease in research and development costs in the third quarter of 2000 was
primarily due to one-time development expenses incurred in 1999, which did not
recur in 2000. The increase in research and development costs for the first
nine months of 2000 was primarily due to increases in development activities,
documentation, validation and other commercial scale-up expenses associated
with FluMist(TM).
In addition, we recognized a one-time, non-cash charge for the acquisition
of in-process research and development in the amount of $10.9 million in the
first quarter of 2000 due to the amendment of our agreement with the
University of Michigan to accelerate the issuance of a warrant to the
university. General, administrative and marketing costs decreased to
$3.4 million in the 2000 third quarter from $3.6 million in the 1999 third
quarter, and to $9.3 million for the first nine months of 2000, as compared to
$9.4 million for the first nine months of 1999. The decrease was due to a
modest reduction in infrastructure and support activities.
Cash, cash equivalents, short-term investments, and long-term investments
totaled $122.1 million at September 30, 2000, compared to $52.3 million at
December 31, 1999. Cash needs to meet operating and capital expenditures
during the first nine months of 2000 were offset by the receipt of net
proceeds of $122.7 million from financing transactions which generated
$18.0 million in the first quarter, $80.7 million in the second quarter and
$24.0 million in the third quarter. Details of the third quarter transactions
are discussed below.
In December 1999, the Securities and Exchange Commission (SEC) issued
Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements
(SAB 101), which includes the SEC staff's view on accounting for
non-refundable up-front license fees received in connection with collaboration
agreements. We have determined that a change in accounting policy is necessary
for the $15.0 million up-front license fee received from Wyeth, recognized as
revenue in the first quarter of 1999. Based on recent guidance from the SEC
staff on the implementation of SAB 101, we expect to make this change in our
accounting policy in the fourth quarter of 2000, which will result in a charge
to operations for the cumulative effect of the change as of January 1, 2000.
This amount will be recorded as deferred revenue and recognized as revenue in
future periods. Prior financial statements will not be restated.
Company events during the third quarter and early fourth quarter included
several financings, personnel announcements, clinical developments and
commercialization related activities.
Operations
-- On October 11, we announced that our UK subsidiary, Aviron UK Ltd., had
agreed to acquire a 25-year lease from Celltech Group plc on
approximately eight acres of land in Speke, UK where Aviron intends
to utilize an existing 45,000 square foot structure on the property
to build a new FluMist(TM) manufacturing facility.
-- Also on October 11, we announced a restructuring of our contract
manufacturing agreement with Evans Vaccines, Ltd., a division of
PowderJect Pharmaceuticals plc, transferring responsibility for bulk
manufacture of FluMist(TM) in the Speke facility to Aviron UK Ltd.
through mid 2006.
Senior Leadership
-- In the third quarter, we made the following appointments: David M.
Wonnacott, Ph.D. to the position of vice president, regulatory
affairs, Charles F. Katzer to the position of vice president,
manufacturing and Harry B. Greenberg, M.D. to the position of senior
vice president, research and development and chief scientific
officer.
-- On August 30, we announced the election of R. Gordon Douglas, Jr., M.D.
to our board of directors.
Financing Transactions
-- In four separate private equity-financing transactions from
July 11 through October 3, we sold 949,627 shares of our common
stock to Acqua Wellington North American Equities Fund, Ltd. at an
average price of $33.70 per share for aggregate proceeds of
$32.0 million ($24.0 million in the third quarter and $8.0 million
in October).
-- On October 12, we sold 450,000 shares of our common stock in a private
equity transaction to Biotech Target S.A. for total proceeds of
$21.6 million, or $48.00 per share.
Clinical
-- On September 29, we announced that we were awarded a $2.7 million
Challenge Grant from the National Institute of Allergy and
Infectious Diseases of the National Institutes of Health to develop
a vaccine to protect against possible pandemic influenza viruses.
-- On October 25, we announced the initiation of a Phase 2 clinical trial
of an investigational vaccine against Epstein-Barr virus (EBV)
infection, a cause of infectious mononucleosis, being developed
under our license with SmithKline Beecham Biologicals (SBB). The
initiation of this trial triggered a $1.5 million payment from SBB
to Aviron. Pursuant to an agreement with ARCH Development, we will
pay 25 percent of each milestone received from SBB for the EBV
product to ARCH Development.
Aviron is a biopharmaceutical company based in Mountain View, California,
focused on the prevention of disease through innovative vaccine technology.
Actual results may differ materially from the forward-looking statements
contained in this release. Factors that could cause actual results to differ
include, but are not limited to, failure of clinical trials to demonstrate
safety and efficacy, inability to manufacture the vaccine and assessment by
regulatory agencies that the company's future license applications for its
nasal influenza vaccine are incomplete or inadequate to approve the product
for marketing to one or more target populations. Additional information
concerning factors that could cause such a difference is contained in Aviron's
SEC filings, including its S-3 Registration Statement and Annual Report on
Form 10-K for the year ended December 31, 1999.
To receive an index and copies of recent press releases, call Aviron's
News-On-Call toll-free fax service, 800-758-5804, extension 114000. Additional
information about the company can be located at http://www.aviron.com .
AVIRON
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Nine Months
Ended Ended
September 30, September 30,
2000 1999 2000 1999
Revenues:
Contract revenues and
grants $2,869 $1,363 $7,904 $19,838
Operating Expenses:
Research and
development 18,966 19,593 54,036 47,960
Acquisition of in process
research and development -- -- 10,904 --
General, administrative
and marketing 3,387 3,602 9,324 9,435
Total Operating
Expenses 22,353 23,195 74,264 57,395
Loss From Operations (19,484) (21,832) (66,360) (37,557)
Other Income/(Expense):
Interest income 1,981 804 4,351 3,077
Interest expense (2,033) (1,590) (6,177) (4,777)
Total Other Income/
(Expense), Net (52) (786) (1,826) (1,700)
Net Loss $(19,536) $(22,618) $(68,186) $(39,257)
Basic net loss
per share $(0.90) $(1.43) $(3.42) $(2.49)
Shares used in
calculation of basic
net loss per share 21,625 15,814 19,920 15,755
AVIRON
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
September 30, December 31,
2000 1999
(Unaudited) (Note)
ASSETS
Cash and cash equivalents
and short-term investments $121,089 $52,316
Accounts receivable 3,978 3,241
Inventory 3,309 2,082
Other current assets 1,091 1,009
Total Current Assets 129,467 58,648
Long-term investments 1,016 --
Property and equipment, net 24,671 25,635
Debt issuance costs, deposits and
other assets 7,316 7,411
Total Assets $162,470 $91,694
LIABILITIES and STOCKHOLDERS' EQUITY (Deficit)
Current liabilities 19,104 16,433
Long-term debt 110,424 112,657
Other long-term liabilities 2,012 2,223
Total Liabilities 131,540 131,313
Stockholders' Equity (Deficit) 30,930 (39,619)
Total Liabilities and
Stockholders' Equity (Deficit) $162,470 $91,694
NOTE: These amounts have been derived from audited financial statements.
SOURCE Aviron
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http://www.aviron.com
Company News On-Call:
http://www.prnewswire.com/comp/114000.html or fax,
800-758-5804, ext. 114000
CONTACT:
investors, Fred Kurland, 650-919-6666, or
media, John Bluth, 650-919-3716, or Asha Jennings, 650-919-1429,
all of Aviron; or Claudette Hibbert of Fleishman-Hillard,
212-453-2000, for Aviron
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