Revenues Increased by 15%; Net Loss Reduced by 43%
RESEARCH TRIANGLE PARK, N.C., Nov. 12 /PRNewswire-FirstCall/ -- Paradigm
Genetics, Inc. (Nasdaq: PDGM), a biotechnology company, today reported
financial results for the quarter ended September 30, 2003. During the third
quarter, the company significantly reduced its net loss, while increasing
revenues.
Paradigm Genetics reported a third quarter 2003 net loss of $2.2 million,
or $0.07 per common share, which is a 43% improvement over the third quarter
2002 net loss of $3.9 million, or $0.12 per common share. The loss is in line
with earlier guidance provided by the company of $0.06 to $0.07 loss per
common share.
Total revenues for third quarter 2003 increased 15% to $6.0 million
compared to $5.2 million in the third quarter 2002. For the first nine months
of 2003, revenues increased 3% to $15.7 million compared to $15.3 million for
the same period in 2002. These improvements were primarily due to increases in
revenues recognized from the National Institute of Environmental Health
Sciences (NIEHS) contract and the Advanced Technology Program (ATP) grant,
partially offset by anticipated decreases in revenues from Bayer CropScience
and The Monsanto Company and other previously completed commercial agreements.
Revenues from sources other than the Bayer and Monsanto contracts have grown
during each of the past two quarters by an average of 68% and are expected to
continue to grow.
Total expenses for third quarter 2003 decreased 6% to $8.1 million
compared to $8.6 million in third quarter 2002. For the first nine months of
2003, operating expenses decreased 13% to $25.1 million compared to $28.8
million for the same period in 2002, due primarily to the company's internal
reorganization in April 2002 as well as continued cost controls. The company
indicated that cost savings from productivity gains have been partially
reinvested into further developing its human health offering.
As of September 30, 2003, the company reported unrestricted cash and
investments in the amount of $16.0 million, in the form of cash, cash
equivalents, short- and long-term investments, compared to $15.5 million at
the end of second quarter 2003. The company's improved cash balance was due to
net proceeds from its recent financing with Silicon Valley Bank and temporary
borrowing on September 30, 2003 in the amount of $1.5 million, which was
repaid in October, partially offset by the use of cash in operations.
"Paradigm has delivered strong operational improvement during the last
several quarters. Our repositioned core programs as well as our strengthened
balance sheet, helped by the restructuring of our existing debt, provide a
firm foundation for Paradigm's future growth," said Heinrich Gugger, Ph.D.,
President and CEO of Paradigm Genetics. "We expect an expansion of our
microarray services business (Paradigm Array Labs(TM)), enhanced by our recent
agreements with Affymetrix and Agilent, to contribute incremental revenue in
the near term. In parallel, we continue to seek revenue generating research
collaborations and other sources of funding to accelerate the building of an
internal product portfolio based on proprietary biomarkers and drug targets."
About Paradigm Genetics
Paradigm is a biotechnology company driving R&D productivity by focusing
its integrated suite of technologies on the product development cycle - from
target discovery to the subsequent enhancement of the safety and efficacy
profiles of development candidates in agriculture and human health. Paradigm
chooses a systems biology approach to understand gene function in the context
of biological pathways, and to develop assays and biomarkers for molecular
diagnostic solutions tailored to the needs of our partners. Paradigm's
proprietary Gene to Cell to System(TM) approach has four major components:
gene expression profiling, biochemical profiling (also known as metabolomics),
phenotypic profiling and data integration and coherence. For more information,
visit http://www.paradigmgenetics.com.
Quarterly Conference Call
Paradigm will host a conference call at 8:30 a.m. ET on Thursday, Nov. 13,
2003 to review financial results for the three months ended September 30,
2003. This call will be webcast via the Internet at http://www.paradigmgenetics.com,
where any supplemental financial information will be available, and will be
accessible through the investor relations section and homepage of Paradigm's
web site. To listen to the call via telephone, dial 800-289-0493 (U.S. and
Canadian callers) or 913-981-5520 (international callers) and enter conference
ID #602856. A taped replay will be available at the same number from 11:30
a.m. on Nov. 13 through midnight on Nov. 17.
PARADIGM GENETICS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
Revenues:
Revenues from commercial
and government
contracts $5,135,000 $5,135,000 $14,256,000 $15,192,000
Grant revenues 867,000 75,000 1,410,000 75,000
Total revenues 6,002,000 5,210,000 15,666,000 15,267,000
Operating expenses:
Research and development
(includes $53,000 and
$78,000 of stock based
compensation expense
for the three months
ended September 30, 2003
and 2002, respectively,
and includes $378,000
and $272,000 of stock based
compensation expense for
the nine months ended
September 30, 2003 and
2002, respectively) 6,172,000 5,992,000 18,516,000 20,713,000
Selling, general and
administrative (includes
$40,000 and $50,000 of
stock based compensation
expense for the three months
ended September 30, 2003
and 2002, respectively, and
includes $434,000 and
$272,000 of stock based
compensation expense for
the nine months ended
September 30, 2003 and
2002, respectively) 1,882,000 2,606,000 6,580,000 8,057,000
Total operating
expenses 8,054,000 8,598,000 25,096,000 28,770,000
Loss from operations (2,052,000) (3,388,000) (9,430,000) (13,503,000)
Other interest income
(expense), net (228,000) (79,000) (456,000) (216,000)
Net loss from continuing
operations (2,280,000) (3,467,000) (9,886,000) (13,719,000)
Discontinued operations 37,000 (466,000) (60,000) (439,000)
Net loss attributable to
common stockholders $(2,243,000) $(3,933,000) $(9,946,000)$(14,158,000)
Net loss per share
- basic and diluted
Loss from continuing
operations $(0.07) $(0.12) $(0.31) $(0.43)
Loss from discontinued
operations (0.00) 0.00 0.00 (0.01)
Net loss per common share$ (0.07) $ (0.12) $ (0.31) $ (0.44)
Weighted average common
shares outstanding
- basic and diluted 32,564,000 31,994,000 32,226,000 31,958,000
Paradigm Genetics, Inc.
2003 Third Quarter Results
Condensed Balance Sheet Data
September 30, December 31,
2003 2002
(unaudited)
Assets:
Cash, cash equivalents, short-term
investments $9,912,000 $10,909,000
Other current assets 5,457,000 6,500,000
Total Current Assets 15,369,000 17,409,000
Long term investments 6,117,000 10,323,000
Property plant & equipment net 18,521,000 22,431,000
Other noncurrent assets 1,759,000 2,459,000
Total Assets $41,766,000 $52,622,000
Liabilities and Stockholders' Equity:
Current liabilities 15,814,000 18,557,000
Long-term obligations 4,296,000 3,378,000
Stockholders' equity 21,656,000 30,687,000
Total Liabilities and Stockholders' Equity $41,766,000 $52,622,000
Paradigm Genetics, Inc.
Supplemental Information Re:Increase/(Decrease) in Cash, Cash Equivalents,
Short - Term and Long - Term Investments (See Note Below)
(Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
2003 2002 2003 2002
Net cash used in
operating activities $(2,059,000) $(3,335,000)$(5,505,000)$(12,806,000)
Net cash (used in)
provided by investing
activities, excluding
purchases and maturities
of short-term and
long-term investments (103,000) 115,000 (242,000) (531,000)
Net cash provided by
(used in) financing
activities 2,701,000 (1,323,000) 544,000 (6,195,000)
Net increase (decrease)
in cash, cash equivalents,
short-term investments
and long-term
investments 539,000 (4,543,000) (5,203,000)(19,532,000)
Cash, cash equivalents,
short-term investments
and long term investments,
beginning of period 15,490,000 28,003,000 21,232,000 42,992,000
Cash, cash equivalents,
short-term investments
and long term investments,
end of period $16,029,000 $23,460,000 $16,029,000 $23,460,000
Note: The above presentation of the change in cash and investments is not
meant to be in accordance with generally accepted accounting principles
("GAAP") in the U.S. GAAP requires the presentation of a statement of cash
flows only (i.e., excluding changes in short and long-term investments). In
order to fully assess the Company's liquidity position, management believes
that the cash flow measure presented above, which includes Short-Term and
Long-Term Investments, is an appropriate measure for evaluating the Company's
liquidity, because this reflects all liquid resources available for strategic
opportunities including, among others, to invest in the business and continue
operating activities. However this measure should be considered in addition
to, and not as a substitute for, or superior to, cash flows, prepared in
accordance with generally accepted accounting principles in the U.S.
Under GAAP, cash flows from investing activities above would improve by
net maturities of investment securities and unrealized gains and losses on
investments in the amount of $0.05 million and $4.4 million for the three
months ended September 30, 2003 and 2002, respectively, and by $6.2 million
and $17.7 million for the nine months ended September 30, 2003 and 2002,
respectively. Also under GAAP, cash and cash equivalents at the beginning and
end of the period would be less, as they would exclude short and long-term
investments of $9.2 million and $9.2 million, and $23.6 million and $19.2
million for the three months ended September 30, 2003 and 2002, respectively
and by $15.3 million and $9.2 million, and $36.8 million and $19.2 million for
the nine months ended September 30, 2003 and 2002, respectively. Cash, cash
equivalents, short-term and long-term investments exclude restricted cash.
This press release contains forward-looking statements, including
statements regarding the Company's expectations regarding business development
activities and near-term revenue opportunities; the financial statement impact
of the significant reduction in SG&A expense and increase in R&D investment;
and the Company's ability to hit its milestones and execute on its strategy.
Such forward-looking statements are based on management's current expectations
and are subject to a number of risks, factors and uncertainties that may cause
actual results, events and performance to differ materially from those
referred to in the forward-looking statements. These risks, factors and
uncertainties include, but are not limited to, Paradigm's early stage of
development, history of net losses, technological and product development
uncertainties, reliance on research collaborations, uncertainty of additional
funding and ability to protect its patents and proprietary rights. Certain of
these and other risks are identified in Paradigm's annual report on Form 10-K
for the year ended December 31, 2002 and in its quarterly report on Form 10-Q
for the quarter ended June 30, 2003, each filed with the Securities and
Exchange Commission. The Company does not intend to update any of the forward-
looking statements after the date of this release to conform these statements
to actual results or to changes in our expectations, except as may be required
by law.
SOURCE Paradigm Genetics, Inc.
 back to top
Related links:
http://www.paradigmgenetics.com
CONTACT:
Melissa Matson, Director, Corporate
Communications, of Paradigm Genetics, Inc., +1-919-425-3000, or
Brian Ritchie or Mark Vincent of Noonan Russo Presence Euro RSCG,
+1-212-845-4200
|
