CAMBRIDGE, Mass., Nov. 9 /PRNewswire-FirstCall/ -- Transkaryotic
Therapies, Inc. (Nasdaq: TKTX) today announced its consolidated financial
results for the three and nine months ending September 30, 2004.
Total sales of Replagal(TM) (agalsidase alfa), TKT's enzyme replacement
therapy for Fabry disease, were approximately $19.5 million for the third
quarter of 2004, which represents an increase of 28% over the same period in
2003 and 8% over the $18.1 million recorded in the second quarter of 2004.
For the nine months ended September 30, 2004, Replagal sales totaled $54.9
million, compared to sales of $41.7 million for the nine months ended
September 30, 2003.
Net loss for the third quarter of 2004 was $18.8 million, or $0.54 per
share, compared to a net loss of $13.6 million, or $0.39 per share, for the
same period in 2003. For the nine months ended September 30, 2004, the net
loss was $53.2 million, or $1.53 per share, compared to $60.5 million, or
$1.75 per share, for the nine months ended September 30, 2003.
Costs of goods sold in the third quarter of 2004 totaled $3.4 million, or
17% of product sales, compared to $2.8 million, or 18% of product sales, for
the corresponding quarter in 2003. For the nine months ended September 30,
2004, cost of goods sold was $8.9 million compared to $11.0 million for the
nine months ended September 30, 2003.
Research and development expenses totaled $23.5 million in the third
quarter of 2004, compared to $17.9 million for the same period in 2003. For
the nine months ended September 30, 2004, research and development expenses
totaled $65.7 million, compared to $55.7 million for the same period in 2003.
The increase in research and development expenses was primarily due to
increased clinical trial and manufacturing costs associated with iduronate-2-
sulfatase (I2S), enzyme replacement therapy for Hunter syndrome, and GA-GCB,
enzyme replacement therapy for Gaucher disease, as well as contract
manufacturing costs for Dynepo(TM) (epoeitin delta), TKT's Gene-Activated(R)
erythropoietin product for the treatment of anemia.
Selling, general and administrative expenses were $10.0 million in the
third quarter of 2004, compared to $7.3 million for the same period in 2003.
For the nine months ended September 30, 2004, SG&A was $30.9 million, compared
to $25.9 million for the nine months ended September 30, 2003. The increase
in SG&A was primarily associated with increased sales costs, including
incentive compensation, at TKT Europe as well as costs incurred with the U.K.
Dynepo patent litigation.
At September 30, 2004, the company had cash and marketable securities of
approximately $222.8 million and long-term debt totaling $94 million.
"We are pleased with the continued growth of Replagal in Europe and the
progress we have made on our key business goals," said Michael J. Astrue,
President and Chief Executive Officer of TKT.
Program Highlights
Replagal for Fabry Disease
In October 2004, TKT completed the acquisition of the 20% minority
interest in TKT Europe-5S for $61 million in cash. With this purchase, TKT
now owns 100% of TKT Europe-5S.
I2S for Hunter Syndrome
In September 2004, TKT commenced its open-label extension study for I2S.
Patients who have completed twelve months of treatment in the pivotal clinical
trial, referred to as the AIM study (Assessment of I2S in MPS II) are eligible
to cross over into the extension study where all patients will receive I2S.
The company intends to report top-line results from the AIM study in the
second quarter of 2005. Also during the third quarter, TKT received fast track
designation for I2S from the U.S. Food and Drug Administration and a $300,000
grant from the Office of Orphan Drug Products to support the AIM study.
GA-GCB for Gaucher Disease
In July 2004, TKT closed enrollment in its Phase I/II clinical trial
evaluating GA-GCB in 12 patients. The trial is expected to conclude in the
second quarter of 2005 and the company expects to report top-line results
during the second half of 2005. In October 2004, Professor Ari Zimran, lead
investigator of the GA-GCB study, reported preliminary safety findings at the
American Society of Human Genetics Annual meeting. Professor Zimran's
findings demonstrated that IV infusions of GA-GCB were well-tolerated by
patients in the trial.
Dynepo for Anemia
During the quarter, TKT made the strategic decision to pursue a commercial
partnership for Dynepo in Europe. TKT also established a master contract
manufacturing agreement with Lonza in early August 2004. The company
continues to expect a European launch in late 2005 or early 2006. In
addition, TKT expects to announce top-line data from a pivotal trial
evaluating Dynepo in patients with anemia undergoing cancer chemotherapy in
the first half of 2005 and, if the results are positive, to file an amendment
to the Dynepo product license and seek to expand the label. In October 2004,
the House of Lords affirmed an earlier U.K. decision in favor of TKT in its
patent litigation against Kirin-Amgen, Inc.
Upcoming Events
During the fourth quarter of 2004, TKT will present at the SG Cowen
European Health Care Conference being held in Geneva, Switzerland, November
16-17, 2004 and the Wachovia Capital Markets Ten for '05 Biotechnology
Conference in New York, New York, December 16, 2004. In addition, TKT is
scheduled to present at the JPMorgan Health Care Conference being held in San
Francisco, California, January 10-13, 2005.
Conference Call and Webcast
In connection with this announcement, TKT will host a conference call and
live webcast today, Tuesday, November 9, 2004, at 10:00 a.m. Eastern Standard
Time to discuss these results and the company's business generally.
Participants may access the call by dialing (719) 457-2618. The live webcast
may be accessed in the Investor Information section of TKT's website at
http://www.tktx.com.
A replay of this conference call will be available for two weeks beginning
today, November 9, 2004, at 1:00 p.m. Eastern Standard Time, by dialing (719)
457-0820 and using the access code 953576. A replay of the webcast will be
archived for one year on the TKT website in the Investor Information section.
About TKT
Transkaryotic Therapies, Inc. is a biopharmaceutical company primarily
focused on researching, developing and commercializing treatments for rare
diseases caused by protein deficiencies. Within this focus, the company
markets Replagal(TM), an enzyme replacement therapy for Fabry disease, and is
developing treatments for Hunter syndrome and Gaucher disease. Outside its
focus on rare diseases, TKT intends to commercialize Dynepo(TM), its Gene-
Activated(R) erythropoietin product for anemia related to kidney disease, in
the European Union. TKT was founded in 1988 and is headquartered in Cambridge,
Massachusetts, with additional operations in Europe, Canada and South America.
Additional information about TKT is available on the company's website at
http://www.tktx.com.
Forward-looking Statements
This press release contains forward-looking statements including
statements regarding TKT's development of certain products, including
Replagal, I2S, GA-GCB and Dynepo, as well as statements containing the words
"believes," "anticipates," "plans," "expects," "estimates," "intends,"
"should," "could," "will," "may," and similar expressions. There are a number
of important factors that could cause the company's actual results to differ
materially from those indicated by such forward-looking statements, including:
whether any of the company's products will achieve the commercial success
anticipated by the company; the timing of submissions to and decisions by
regulatory authorities regarding clinical trials and marketing and other
applications; whether the FDA, the EMEA and equivalent regulatory authorities
will grant marketing approval for the company's products on a timeline
consistent with TKT's expectations, or at all; whether TKT will be able to
complete clinical trials of its products on a timely basis; whether the
results of clinical trials will be consistent with the results of earlier
clinical trials of the company's products and warrant submission of
applications for regulatory approval for such products to the FDA and
equivalent regulatory authorities; whether TKT and its third party
manufacturers will be able to complete the manufacturing development necessary
to satisfy regulatory requirements on a timeline consistent with TKT's
expectations or at all and to manufacture sufficient quantities of TKT's
products to satisfy both clinical trial requirements and commercial demand, or
to manufacture material at all, if approved; the availability and extent of
coverage from third party payors and the timing and receipt of reimbursement
approvals for the company's products; whether competing products will reduce
any market opportunity that may exist; results of ongoing litigation and the
risks of future litigation; whether competitors will be able to limit access
to markets in which TKT is attempting to sell Dynepo, through legal
maneuvering or otherwise; the need for cash; and other factors set forth under
the caption "Certain Factors That May Affect Future Results" in the company's
quarterly report on Form 10-Q filed August 9, 2004, which is on file with the
Securities and Exchange Commission and which factors are incorporated herein
by reference. While the company may elect to update forward-looking statements
at some point in the future, the company specifically disclaims any obligation
to do so, even if its expectations change.
Gene-Activated(R) is a registered trademark and Replagal(TM) is a
trademark of Transkaryotic Therapies, Inc. Dynepo(TM) is a trademark of
Sanofi-Aventis SA.
Contacts:
Justine E. Koenigsberg
Senior Director, Corporate Communications
(617) 349-0271
Daniella M. Lutz
Corporate Communications Manager
(617) 349-0205
- Financial Table to Follow-
Condensed Consolidated Statements of Operations (unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(In thousands, except per share 2004 2003 2004 2003
amounts)
Product sales $19,479 $15,185 $54,920 $41,738
License and research revenues 79 1,533 239 1,577
19,558 16,718 55,159 43,315
Operating expenses:
Cost of goods sold 3,387 2,769 8,907 11,045
Research and development 23,527 17,895 65,674 55,730
Selling, general and
administrative 9,984 7,285 30,893 25,863
Restructuring charge 1,257 2,765 3,030 11,324
Intellectual property license
expense - - - 1,350
38,155 30,714 108,504 105,312
Loss from operations before
minority interest (18,597) (13,996) (53,345) (61,997)
Minority interest in net
(income)/loss of consolidated
subsidiary 23 31 55 (305)
Loss from operations after
minority interest (18,574) (13,965) (53,290) (62,302)
Net interest income 166 417 552 1,834
Loss on disposal of fixed assets (402) (5) (433) (50)
Net loss $(18,810) $(13,553) $(53,171) $(60,518)
Basic and diluted net loss per
share $(0.54) $(0.39) $(1.53) $(1.75)
Shares used to compute basic and
diluted net loss per share 34,728 34,567 34,665 34,551
Condensed Consolidated Balance Sheets (unaudited)
September 30, December 31,
(In thousands) 2004 2003
Cash and marketable securities $222,833 $180,947
Other current assets 46,932 44,392
Property and equipment, net 62,737 61,908
Other assets 4,846 1,922
Total assets $337,348 $289,169
Total current liabilities $27,939 $21,149
Long term liabilities 9,022 9,285
Long term debt 94,000 -
Minority interest 358 413
Total stockholders' equity 206,029 258,322
Total liabilities and stockholders'
equity $337,348 $289,169
SOURCE Transkaryotic Therapies, Inc.
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http://www.tktx.com
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CONTACT:
Justine E. Koenigsberg, Senior Director,
Corporate Communications, +1-617-349-0271, or Daniella M. Lutz,
Corporate Communications Manager, +1-617-349-0205, both of
Transkaryotic Therapies, Inc.
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