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Interleukin Genetics Reports Second Quarter 2009 Financial Results
Date:8/13/2009

WALTHAM, Mass., Aug. 13 /PRNewswire-FirstCall/ -- Interleukin Genetics, Inc. (NYSE Amex: ILI) today announced financial and operational results for the second quarter ended June 30, 2009.

"The launch of our new Inherent Health brand of genetic test products marked a significant milestone for the Company in the second quarter. Our novel and unique product, the Weight Management genetic test, has been well received and is generating interest through a number of channels," said Lewis H. Bender, Chief Executive Officer. "We further executed on our key strategic objective, which is to grow our genetic testing business, by divesting the Alan James Group and signing a licensing partnership with LABEC Pharma for sales and distribution of our Heart Health product in Spain and Portugal."

Revenue from continuing operations for the three months ended June 30, 2009 was $0.2 million compared to $0.5 million for the same period in the prior year. The decrease was primarily attributable to lower contract research revenue. Genetic test revenue increased this quarter over the same period in the prior year as we experience positive growth in that segment of our business.

In addition, prior to the opening of business on July 1, 2009, the Company executed an agreement to sell substantially all of the Alan James Group assets of its subsidiary AJG Brands, Inc. to Pep Products, Inc. for a sales price of $4.6 million, with $4.4 million received on July 1, 2009 and the balance of $200,000 due to the Company after two years, subject to certain conditions.

Research and development expenses from continuing operations were $0.9 million for the three months ended June 30, 2009 compared to $0.7 million for the same period in the prior year. The increase is primarily attributable to ongoing costs associated with our patent portfolio. In addition, we continue to allocate resources to projects underway with Alticor, as well as the development of our own genetic test products.

Selling, general and administrative expenses from continuing operations were $1.3 million for the three months ended June 30, 2009, compared to $1.2 million for same period in the prior year. The increase was primarily attributable to product development costs associated with our new Inherent Health((TM)) brand of genetic tests.

The Company reported a net loss from continuing operations of $2.3 million, or $(0.07) per basic and diluted common share, for the second quarter of 2009, compared to $1.6 million, or $(0.05) for the same period in the prior year. The Company recorded a net loss from discontinued operations of $1.4 million or $(0.05) per basic and diluted common share. The Company reported a total net loss of $3.7 million, or $(0.12) per basic and diluted common share, for the second quarter of 2009 compared to $1.7 million or $(0.05) for the same period in the prior year. On June 30, 2009, the Company reported cash and cash equivalents of $0.9 million. In addition to cash on hand and the $4.4 million in cash proceeds received on July 1, 2009 from the sale of AJG assets, the Company has access to $9.3 million under its credit facility with Pyxis Innovations, Inc., an affiliate of Alticor.

2009 Highlights to Date

Corporate Highlights

  • Sold Alan James Group assets of its subsidiary AJG Brands, Inc. In July, the Company executed an agreement to sell the Alan James Group assets of its subsidiary AJG Brands, Inc. to Pep Products, Inc. for $4.6 million.
  • Launched Inherent Health Brand of Genetic Tests. Announced in June the introduction of Inherent Health brand of genetic tests and related programs including the first-of-its-kind test for weight management that identifies an individual's genetic tendencies for weight gain and metabolism.
  • Granted License of Heart Health Genetic Test to LABEC Pharma. In April, the Company entered into a licensing agreement to permit LABEC Pharma to market and sell the Company's Heart Health genetic test throughout Spain and Portugal.
  • Amex Accepts Plan to Meet Continued Listing Standards. In May, Interleukin Genetics announced the Corporate Compliance Staff of the NYSE Amex LLC (the "Exchange") accepted the Company's plan to meet continued listing standards and granted the Company an extension to become compliant through December 31, 2009.

Scientific Highlights

  • Presented Data at the American Diabetes Association's Annual Meeting. In June, Interleukin Genetics presented research findings highlighting associations between perilipin gene variants and response to weight loss in overweight individuals at the ADA's 69(th) Scientific Sessions in New Orleans.
  • Co-Presented on Use of Biomarkers in Drug Development at BIO. Moderated and co-presented panel discussion on use of biomarkers in drug development in May at the BIO International Convention.

Conference Call and Webcast Information

Interleukin Genetics will host a live conference call and webcast today at 4:30 p.m. EDT to review the Company's new business developments and first quarter financial results. To access the live call, dial 877-440-5796 (domestic) or 719-325-4847 (international). The live webcast and replay access will be available on the Investors section of the Company's website at http://www.ilgenetics.com.

About Interleukin Genetics

Interleukin Genetics, Inc. (NYSE Amex: ILI) develops and markets genetic tests that empower consumers to prevent chronic diseases of aging and that assist pharmaceutical companies in the development and marketing of targeted therapeutics. The Company leverages its research, intellectual property, and biomarker development experience to facilitate the emerging personalized health market. Interleukin Genetics is headquartered in Waltham, MA. For more information please visit www.ilgenetics.com.

Certain statements contained herein are "forward-looking" statements including statements regarding growth of the Company's genetic testing business and the Company's ability to achieve compliance with the NYSE Amex continued listing standards by December 31, 2009. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, the risk of market acceptance of the Company's products, the risk of technology and product obsolescence, delays in product development, the performance of commercial partners, the availability of adequate capital, the actions of competitors and other competitive risks, and those risks and uncertainties described in the Company's annual report on Form 10-K for the year ended December 31, 2008, quarterly reports on Form 10-Q and other filings with the Securities and Exchange Commission. The Company disclaims any obligation or intention to update these forward-looking statements.

              INTERLEUKIN GENETICS, INC. AND SUBSIDIARIES
                           FINANCIAL HIGHLIGHTS

    Balance Sheet Data:          30-Jun      31-Dec
                                   2009        2008
                                   ----        ----
                             (Unaudited)  (Audited)

    Cash and cash equivalents  $851,526  $4,952,481
    Total current assets      5,660,319   6,866,284
    Total assets             $7,634,065 $12,154,388

    Total current
     liabilities             $4,122,193  $3,666,961
    Total liabilities         9,122,193   7,671,961

    Total shareholders'
     (deficit) equity        (1,488,128)  4,482,427

    Total liabilities and
     shareholders' (deficit)
     equity                  $7,634,065 $12,154,388


    Statement of Operations
     Data (Unaudited):            Three Months Ended        Six Months Ended
                                       June 30,                  June 30,
                                   2009        2008        2009        2008
                                   ----        ----        ----        ----
    Revenue:
      Genetic testing service
       revenue                  $95,309     $90,993     $232,821    $192,745
      Contract research revenue 119,046     402,280      322,732     939,293
      Other                       8,638      28,346       14,904      31,453

        Total revenue from
         continuing operations  222,993     521,619      570,457   1,163,491

    Operating costs and
     expenses:
      Cost of genetic testing
       services                 301,875     208,457      606,847     443,241
      Research and development  874,192     708,855    1,755,748   1,522,226
      Selling, general and
       administrative         1,334,472   1,208,325    2,813,625   2,667,637
      Amortization of
       intangibles               28,863      22,841       57,727      44,341

        Total operating costs
         and expenses         2,539,402   2,148,478    5,233,947   4,677,445

    Loss from continuing
     operations              (2,316,409) (1,626,859)  (4,663,490) (3,513,954)

    Total other expense
     and income, net            (34,401)      9,946      (58,239)     62,476

    Net loss from continuing
     operations before income
     taxes                   (2,350,810) (1,616,913)  (4,721,729) (3,451,478)

    Provision for income
     taxes                       10,000          50            -      (6,000)

    Net loss from continuing
     operations             $(2,340,810)$(1,616,863) $(4,721,729)$(3,457,478)
                            =========== ===========  =========== ===========

    Net loss from discontinued
     operations              (1,370,707)    (49,482)  (1,445,875)    (83,969)

    Net Loss                $(3,711,517)$(1,666,345) $(6,167,604)$(3,541,447)
                            =========== ===========  =========== ===========

    Net loss per basic and
     diluted common share
     from continuing
     operations                  $(0.07)     $(0.05)      $(0.14)     $(0.11)
                                 ======      ======       ======      ======

    Net loss per basic and
     diluted common share
     from discontinued
     operations                  $(0.05)     $(0.00)      $(0.05)     $(0.00)
                                 ======      ======       ======      ======

    Net loss per basic and
     diluted common share        $(0.12)     $(0.05)      $(0.19)     $(0.11)
                                 ======      ======       ======      ======

    Weighted average common
     shares outstanding      32,010,387  30,976,909   31,933,612   30,904,916
                             ==========  ==========   ==========   ==========


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SOURCE Interleukin Genetics, Inc.
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