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deCODE genetics Announces First Quarter 2009 Financial Results

REYKJAVIK, Iceland, May 11 /PRNewswire-FirstCall/ -- deCODE genetics (Nasdaq: DCGN) today announced its consolidated financial results for the quarter ended March 31, 2009. A conference call to discuss these results and recent developments in the company's business will be webcast live tomorrow, Tuesday, May 12, at 8:00am Eastern Daylight Time/12 noon GMT/1pm British Summer Time (details below).

Net loss for the quarter ended March 31, 2009 was $12.6 million, compared to $26.7 million for the first quarter 2008. Basic and diluted net loss per share was $0.21 for the first quarter 2009, compared to $0.44 for first quarter last year. At March 31, 2009, the company had approximately 61.8 million shares outstanding.

Revenue for the first quarter 2009 was $8.9 million, versus $15.0 million for the first quarter last year. This decline is due principally to lower contract service revenues. At March 31, 2009, the company had $12.7 million in deferred revenue, which will be recognized over future reporting periods.

Research and development expense for proprietary programs was $4.2 million for the first quarter of this year, compared to $12.7 million for the same period last year. This reflects the company's current focus on applying its established capabilities in human genetics to drive its diagnostics and deCODEme businesses, and the curtailment of investment in clinical trials for its therapeutics programs reflected in the 2008 period. Selling, general and administrative expenses for the first quarter 2009 were $4.9 million, compared to $7.2 million for the first quarter 2008.

At March 31, 2009, the company had cash and cash equivalents of $6.1 million, compared to $3.7 million at December 31, 2008. In early 2009 the company sold its auction rate securities (ARS) for approximately $11.0 million in cash, and last month, the company signed licensing agreements with Celera Corporation under which it received an upfront payment and will receive royalties on sales of Celera testing products and services incorporating deCODE genetic risk markers. The company believes it has sufficient resources to sustain operations through the second quarter of this year.

"Over the past few months we have been recasting deCODE's business around what we do best: discover genetic risk factors for common diseases and apply those findings in tests and services that can improve the prevention and treatment of disease. Our partnership with Celera is one facet of this strategy. Preliminary acceptance of our US patent application for one of our major genetic risk markers also underscores the wisdom of our approach to intellectual property, both for differentiating our products from the rest of the field and for pursuing additional licensing partnerships. At the same time, we are engaged in negotiations on large-scale sequencing collaborations, debt restructuring and equity financing, and on the sale of certain business units and therapeutics programs. Our aim in pursuing all of these opportunities is to position deCODE to capture the commercial potential of our leadership in human genetics," said Kari Stefansson, CEO of deCODE.

    Recent operating highlights include:

    Product Development and Partnerships

    - Celera. Last month, deCODE entered into agreements with Celera
      Corporation under which it has granted Celera non-exclusive worldwide
      licenses to deCODE's genetic markers for increased risk of major
      cardiovascular and metabolic diseases, including heart attack, stroke,
      atrial fibrillation (AF) and type 2 diabetes (T2D). The markers include
      SNPs discovered by deCODE on chromosome 9p21 linked to increased risk
      of heart attack and types of aneurysm, on chromosome 4q25 conferring
      risk of AF and stroke, and in the TCF7L2 gene linked to increased risk
      of T2D. These markers, which deCODE uses in its own risk assessment
      tests and deCODEme service, are among the highest impact and best-
      validated genetic risk factors for these conditions. Celera plans to
      incorporate them into risk assessment and testing services offered by
      its subsidiary Berkeley HeartLab, and deCODE will receive royalties on
      sales of tests and services utilizing its markers.
    - deCODEme(TM) personal genome scans. In addition to its pioneering
      full-genome scan, deCODEme(TM) in January launched the first focused
      genetic scans for assessing personal risk of several major
      cardiovascular diseases and common cancers. These scans offer a
      targeted snapshot of disease risk in two areas that may be of specific
      interest to certain subscribers, with deCODE quality science and
      analysis at a modest price. deCODEme Cardio(TM) detects genetic risk
      factors for heart attack, stroke and atrial fibrillation, two types of
      aneurysm and venous thromboembolism. deCODEme Cancer(TM) measures
      genetic risk factors for prostate, lung, bladder, skin and colorectal
      cancers, as well as the common form of breast cancer.
    - Gene and diagnostic target discovery. Since the beginning of the year
      deCODE has extended its list of major gene discoveries. In January,
      deCODE scientists and colleagues from eleven countries announced the
      discovery of common single-letter variations in the human genome (SNPs)
      linked to susceptibility of lung, bladder, prostate, skin and cervical
      cancers. In February deCODE published the first genetic risk factor for
      essential tremor, as well as major risk factors for thyroid cancer.
      deCODE has incorporated these findings into deCODEme(TM) and the newly-
      launched deCODEme Cancer(TM) scan.


    - Cash position and ARS. In January 2009, deCODE sold its auction rate
      securities (ARS) for approximately $11.0 million in cash through an
      agreement with NBI, an Icelandic financial institution. Under this
      agreement, deCODE has the call option to require NBI to sell the
      securities back to the company at any time until January 1, 2010. NBI
      has the put option to require deCODE to repurchase the securities
      following the sale of certain other deCODE assets, or if not previously
      repurchased, on or before December 31, 2009.
    - Nasdaq listing review. On April 28, deCODE received a letter from the
      Nasdaq Listing and Hearing Review Council stating that the Council has
      called for review the determination of the Nasdaq Listing
      Qualifications Panel regarding the delisting of the company's common
      stock from the Nasdaq Stock Market. Pending the completion of this
      review, the company's stock will continue to trade as usual on the
      Nasdaq Capital Market.
    - Notes interest payment. In order to provide more time for the execution
      of strategic alternatives currently under consideration, the company
      elected to utilize a 30-day grace period for the scheduled April 15
      interest payment on its outstanding 3.5% Senior Convertible Notes due

About deCODE

deCODE is a bio-pharmaceutical company developing drugs and DNA-based tests to improve the treatment, diagnosis and prevention of common diseases. Its lead therapeutic programs, which leverage the company's expertise in chemistry and structural biology, include DG041, an antiplatelet compound being developed for the prevention of arterial thrombosis; DG051 and DG031, compounds targeting the leukotriene pathway for the prevention of heart attack; and DG071 and a platform for other PDE4 modulators with therapeutic applications in Alzheimer's disease and other conditions. deCODE is a global leader in human genetics, and has identified key variations in the genome (SNPs) conferring increased risk of major public health challenges from cardiovascular disease to cancer. Based upon these discoveries deCODE has brought to market a growing range of DNA-based tests for gauging risk and empowering prevention of common diseases. Through its CLIA-registered laboratory, deCODE offers deCODE T2(TM) for type 2 diabetes; deCODE AF(TM) for atrial fibrillation and stroke; deCODE MI(TM) for heart attack; deCODE ProstateCancer(TM) for prostate cancer; deCODE Glaucoma(TM) for a major type of glaucoma; and deCODE BreastCancer, for the common forms of breast cancer. deCODE is delivering on the promise of the new genetics.SM Visit us on the web at; on our diagnostics site at; for our pioneering personal genome analysis service and new focused disease scans, integrating the genetic variants included in these tests and those linked to another twenty common diseases, as well as for our new deCODEme Cardio(TM) and deCODEme Cancer(TM), at; and on our blog at

Conference Call Information

A conference call, during which deCODE CEO Kari Stefansson and CFO Lance Thibault will discuss the past year's financial results and operating highlights, will be webcast tomorrow, Tuesday, May 12, at 8:00am EDT/12 noon GMT/1pm BST. The webcast can be accessed via the Investors section of deCODE's website,, or through A replay of the call will be available on these websites for at least one week following the call. A digitized telephone replay of the call can be accessed for the week following the call by dialing 1 800 475 6701 from the US, or +1 320 365 3844 from outside the US. The access code is 100482.

               Condensed Consolidated Statements of Operations

                                                       For the three months
                                                           ended March 31,
                                                        2009          2008
                                                       In thousands, except
                                                         per share amounts

    Revenue...................................... $    8,917    $   14,978
    Cost of revenue............................        8,184        14,714
    Research and development...............            4,233        12,653
    Selling, general and administrative.......         4,903         7,211
    Total operating expense...........                17,320        34,578
    Operating loss................................    (8,403)      (19,600)
    Interest income..............................        157         1,037
    Interest expense.............................     (4,626)       (4,025)
    Other non-operating income and (expense), net*.      235        (4,077)
    Net loss ....................................  $ (12,637)    $ (26,665)
    Basic and diluted net loss per share:          $   (0.21)    $   (0.44)
    Shares used in computing basic and
    diluted net loss per share...................     61,489        61,266

               Condensed Consolidated Balance Sheet Data

                                            At March 31,   At December 31,
                                                 2009           2008
                                                    In thousands,

    Cash and cash equivalents........... $     6,148        $     3,701
    Total assets.......................       74,616             75,137
    Total liabilities...................     307,165            296,213
    Total shareholders' equity (deficit).   (232,549)          (221,076)

    * Other non-operating expense for the three-months ended March 31, 2009
      and 2008 principally reflects an unrealized loss resulting from the
      revaluation of the company's non-current auction rate security
      investments and for the three-months ended March 31, 2009 offset by
      foreign currency translation gains.

Any statements contained in this presentation that relate to future plans, events or performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results, and the timing of events, to differ materially from those described in the forward-looking statements. These risks and uncertainties include, among others, those relating to our ability to obtain sufficient financing to continue as a going concern, the outcome of the review of the continued listing of our common stock on The Nasdaq Stock Market, our ability to develop and market diagnostic products, the level of third party reimbursement for our products, risks related to preclinical and clinical development of pharmaceutical products, including the identification of compounds and the completion of clinical trials, our ability to form collaborative relationships, the effect of government regulation and the regulatory approval processes, market acceptance, our ability to obtain and protect intellectual property rights for our products, dependence on collaborative relationships, the effect of competitive products, industry trends and other risks identified in deCODE's filings with the Securities and Exchange Commission, including, without limitation, the risk factors identified in our most recent Annual Report on Form 10-K and any updates to those risk factors filed from time to time in our Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. deCODE undertakes no obligation to update or alter these forward-looking statements as a result of new information, future events or otherwise.

    Contacts: deCODE genetics

    Joy Bessenger

    Gisli Arnason

    Edward Farmer

SOURCE deCODE genetics Inc
Copyright©2009 PR Newswire.
All rights reserved

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