PRINCETON, N.J., Oct. 31 /PRNewswire-FirstCall/ -- Medarex, Inc.
(Nasdaq: MEDX) announced today its financial results for the three-month
period ended September 30, 2007.
Medarex's net loss for the quarter ended September 30, 2007 was $51.6
million, or ($0.41) per share as compared to a net loss of $45.9 million,
or ($0.37) per share for the third quarter of 2006. Included in the 2007
results was $2.4 million, or ($0.02) per share of the net loss of Celldex
Therapeutics, Inc. (a 60% owned subsidiary of Medarex), an acquisition of
in- process technology charge of $6.9 million, or ($0.05) per share related
to the acquisition of Ability Biomedical Corporation and a non-cash charge
of $6.0 million, or ($0.05) per share for stock based compensation recorded
in accordance with FAS 123(R). Excluding the impact of these items,
Medarex's net loss on a non-GAAP basis for the quarter ended September 30,
2007 was $36.3 million, or ($0.29) per share.
Total revenues for the quarter ended September 30, 2007 were $12.4
million as compared to $12.4 million for the third quarter of 2006.
Research and development (R&D) expenses for the quarter ended September 30,
2007 increased by $0.8 million, from $48.4 million in the third quarter of
2006 to $49.2 million in the third quarter of 2007. General and
administrative expenses decreased by $2.4 million for the quarter ended
September 30, 2007, from $15.5 million in the third quarter of 2006 to
$13.1 million in the third quarter of 2007.
Medarex ended September 30, 2007 with approximately $396.1 million in
cash, cash equivalents, marketable securities and segregated cash.
Approximately $8.9 million of this balance relates to Celldex. In addition,
the fair market value of Medarex's equity interest in Genmab A/S as of
September 30, 2007 was approximately $297.0 million.
Financial Guidance
We continue to expect total cash burn to be approximately $13.0 million
per month for 2007, which includes approximately $3.0 million a month to
support our net contribution to the ipilimumab program. This cash burn
guidance is consistent with the guidance previously provided on February
28, 2007.
Non-GAAP Financial Measurements
This press release and the accompanying tables include non-GAAP
financial measures. For a description of these non-GAAP financial measures,
including the reasons management uses each measure, and reconciliations of
these non- GAAP financial measures to the most directly comparable
financial measures prepared in accordance with Generally Accepted
Accounting Principles, please see the section of the accompanying tables
titled "Non-GAAP Financial Measures".
Medarex's product development and business accomplishments during the
third quarter of 2007 include the following:
-- Announcing the expected milestone payment resulting from the initiation
of a Phase III trial by our licensing partner, Novartis Pharma AG, for
ACZ885, a fully human anti-IL1 beta antibody generated from Medarex's
UltiMAb(R) technology for the treatment of Muckle Wells Syndrome;
-- Announcing the initiation of a Phase Ib multi-dose clinical trial of
MEDI-545 for potential treatment of systemic lupus erythematosus by its
partner, MedImmune, Inc.;
-- Announcing the extension of a broad antibody development relationship
to continue to provide access to Medarex's UltiMAb(R) technology to its
licensing partner, Centocor R&D Inc.; and
-- Announcing the award of up to an additional $13.9 million of government
funding towards the development of Valortim(TM) for use as an anti-
toxin therapeutic to prevent and treat inhalation anthrax infections.
"We and our partners continue to make consistent progress in developing
and advancing the clinical pipeline, building momentum for continual
long-term growth for Medarex, and we anticipate seeing top-line data from
the ipilimumab monotherapy studies in second-line metastatic melanoma
patients before the end of this year," said Howard H. Pien, President and
CEO of Medarex.
About Medarex
Medarex is a biopharmaceutical company focused on the discovery,
development and potential commercialization of fully human antibody-based
therapeutics to treat life-threatening and debilitating diseases, including
cancer, inflammation, autoimmune disorders and infectious diseases. Medarex
applies its UltiMAb(R) technology and product development and clinical
manufacturing experience to generate, support and potentially commercialize
a broad range of fully human antibody product candidates for itself and its
partners. Over thirty of these therapeutic product candidates derived from
Medarex technology are in human clinical testing or have had INDs submitted
for such trials, with seven of the most advanced product candidates
currently in Phase III clinical trials. Medarex is committed to building
value by developing a diverse pipeline of antibody products to address the
world's unmet healthcare needs. For more information about Medarex, visit
its website at http://www.medarex.com.
Statement on Cautionary Factors
Except for the historical information presented herein, matters
discussed herein may constitute forward-looking statements that are subject
to certain risks and uncertainties that could cause actual results to
differ materially from any future results, performance or achievements
expressed or implied by such statements. Statements that are not historical
facts, including statements preceded by, followed by, or that include the
words "potential"; "believe"; "expect"; or similar statements are
forward-looking statements. Medarex disclaims, however, any intent or
obligation to update these forward- looking statements. Risks and
uncertainties include risks associated with product discovery and
development, uncertainties related to the outcome of clinical trials,
slower than expected rates of patient recruitment, unforeseen safety issues
resulting from the administration of antibody products in patients,
uncertainties related to product manufacturing, risks associated with the
use of hazardous substances as well as risks detailed from time to time in
Medarex's public disclosure filings with the U.S. Securities and Exchange
Commission (SEC), including its Annual Report on Form 10-K for the fiscal
year ended December 31, 2006. There can be no assurance that such
development efforts will succeed or that other developed products will
receive required regulatory clearance or that, even if such regulatory
clearance were received, such products would ultimately achieve commercial
success. Copies of Medarex's public disclosure filings are available from
its investor relations department.
Medarex(R), the Medarex logo and UltiMAb(R) are registered trademarks
of Medarex, Inc. All rights are reserved.
MEDAREX, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
(unaudited) (unaudited)
2007 2006 2007 2006
Contract and license revenues $6,973 $6,722 $20,771 $21,520
Reimbursement of development
costs 5,454 5,714 14,990 15,800
Total revenues 12,427 12,436 35,761 37,320
Costs and expenses:
Research and development 49,165 48,350 141,460 142,324
General and administrative 13,149 15,451 35,020 35,127
Acquisition of in-process
technology 6,900 - 6,900 -
Operating loss (56,787) (51,365) (147,619) (140,131)
Equity in net loss of affiliate - - - (1,037)
Interest income, net 3,635 3,786 162,981 9,511
Impairment loss on investments
in partners - - (2,141) -
Minority interest - Celldex 1,602 1,675 4,542 4,781
Non-cash gain on loss of
significant influence in
Genmab - - - 3,202
Income (loss) before provision
for income taxes (51,550) (45,904) 17,763 (123,674)
Provision for income taxes 5 37 7 321
Net income (loss) $(51,555) $(45,941) $17,756 $(123,995)
Basic net income (loss) per share $(0.41) $(0.37) $0.14 $(1.04)
Diluted net income (loss) per
share $(0.41) $(0.37) $0.14 $(1.04)
Weighted average number of common
shares outstanding during the
year - basic 127,125 124,555 126,200 119,698
- diluted 127,125 124,555 128,501 119,698
Condensed Consolidated Balance Sheets
(In thousands)
September 30, December 31,
2007 2006
(unaudited) (1)
Cash, cash equivalents and marketable
securities - Medarex $385,899 $475,494
Cash and cash equivalents - Celldex 8,698 14,000
Other current assets 23,266 22,271
Property, buildings and equipment, net 78,737 84,341
Marketable securities - Genmab 296,957 344,382
Investments in, and advances to other partners 6,041 8,141
Segregated cash - non current 1,479 1,477
Other assets 3,672 4,587
$804,749 $954,693
Current liabilities $81,511 $70,436
Other liabilities 89,654 97,804
Convertible notes 143,024 141,581
Minority interest 157 4,699
Shareholders' equity 490,403 640,173
$804,749 $954,693
(1) Derived from the December 31, 2006 audited financial statements. For
further information, refer to the financial statements and footnotes
there to included in the Company's annual report on Form 10-K for the
year ended December 31, 2006.
MEDAREX, INC.
Condensed Statements of Operations
(non-GAAP Basis)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
(unaudited) (unaudited)
2007 2006 2007 2006
Contract and license
revenues $6,648 $6,523 $19,693 $20,861
Reimbursement of
development costs 5,454 5,714 14,990 15,800
Total revenues 12,102 12,237 34,683 36,661
Costs and expenses:
Research and
development 44,649 43,180 127,093 128,183
General and
administrative 7,271 11,560 22,870 23,729
Operating loss (39,818) (42,503) (115,280) (115,251)
Equity in net loss of
affiliate - - - (1,037)
Interest income
(expense) net 3,524 3,610 10,526 8,853
Loss before provision
for income taxes (36,294) (38,893) (104,754) (107,435)
Provision for income
taxes 1 37 3 321
Net loss $(36,295) $(38,930) $(104,757) $(107,756)
Basic and diluted net
loss per share $(0.29) $(0.31) $(0.83) $(0.90)
Weighted average number of
common shares outstanding
during the year - basic
and diluted 127,125 124,555 126,200 119,698
MEDAREX, INC.
Reconciliation of GAAP Net Loss to Non-GAAP Net Loss (1)
(In thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(unaudited) (unaudited)
2007 2006 2007 2006
GAAP Net income (loss) $(51,555) (45,941) $17,756 $(123,995)
Celldex Net loss (2) 4,007 4,187 11,355 11,952
Minority interest -
Celldex (2) (1,602) (1,675) (4,542) (4,781)
Stock-Based
compensation expense (3) 5,955 4,499 13,776 12,270
Acquisition of in-process
technology 6,900 - 6,900 -
Impairment loss on
investments - - 2,141 -
Non-cash gain on loss
of significant
influence in Genmab (4) - - - (3,202)
Gain on sale of Genmab
stock (5) - - (152,143) -
Non-GAAP Net loss $(36,295) $(38,930) $(104,757) $(107,756)
GAAP Net loss per share,
per share, basic and
diluted $(0.41) $(0.37) $0.14 $(1.04)
Non-GAAP Net loss per
share, basic and
diluted $(0.29) $(0.31) $(0.83) $(0.90)
Shares used in computing
basic and diluted
Non-GAAP net loss
per share 127,125 124,555 126,200 119,698
(1) Non-GAAP amounts are intended to illustrate Medarex's results of
operations for the three and nine months ended September 30, 2007 and
2006 excluding the items discussed below. Management of Medarex
believes, the Non-GAAP results provide insight into Medarex's
performance by focusing on results generated by its ongoing
operations.
(2) In management's view, the operations of Celldex are not necessarily
indicative of or directly attributable to the Company's continuing
operations.
(3) For the three and nine months ended September, 2007, the Company
incurred $6.0 million and $13.8 million in stock compensation expense
of which $2.4 million and $6.8 million is included in research and
development expenses and $2.2 million and $3.4 million is included in
general and administrative expenses. Stock compensation expense
includes costs associated with stock awards including stock options
which were recorded in accordance with the provisions of FAS 123(R).
FAS 123(R) requires companies to record stock-based payments in the
financial statements using a fair value method. The Company adopted
FAS 123(R) on a modified prospective basis beginning on January 1,
2006.
(4) In connection with a reduction in the Company's ownership percentage
of Genmab below 20%, accumulated other comprehensive income
associated with the investment was first offset against the remaining
carrying value of the investment ($2.2 million) reducing the balance
to zero, with the remaining balance ($3.2 million) recorded as a non-
cash gain in accordance with FASB Staff Position APB 18-1, Accounting
by an Investor for Its Proportionate Share of Accumulated Other
Comprehensive Income of an Investee Accounted for in Accordance with
ABP Opinion No. 18 upon a Loss of Significant Influence.
(5) On February 17, 2007, the Company completed the sale of 2,578,500
shares of Genmab through a block trade. The Company received net
proceeds of approximately $152.1 million from this sale.
SOURCE Medarex, Inc.
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Related links:
http://www.medarex.com
http://www.prnewswire.com/comp/108265.html /
CONTACT:
Christian S. Schade, Senior VP and CFO,
+1-609-430-2880, Laura S. Choi, Investor Relations,
+1-609-430-2880, x2216, or Jean Mantuano, Corporate
Communications, +1-609-430-2880, x2221, all of Medarex, Inc.
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