PRINCETON, N.J., Feb. 25 /PRNewswire-FirstCall/ -- Medarex, Inc. (Nasdaq: MEDX) announced today its financial results for the quarter and year ended December 31, 2008.
Medarex's net loss for the year ended December 31, 2008, was $38.5 million, or ($0.30) per share, as compared to a net loss of $27.1 million, or ($0.21) per share, for 2007. Medarex's net loss for 2008 includes a gain of $151.8 million, or $1.18 per share, from Medarex's sale of 2.5 million shares of Genmab A/S ("Genmab") stock in February 2008; a non-cash loss of $13.0 million, or ($0.10) per share, representing the loss associated with Medarex's ownership of Celldex Therapeutics, Inc. ("Celldex"); a non-cash charge of $22.1 million, or ($0.17) per share, for stock-based compensation recorded in accordance with FAS 123(R); and a non-cash impairment charge of $5.3 million, or ($0.04) per share, related to a write-down of Medarex's investment in three of its corporate partners. Excluding the impact of these items, Medarex's net loss on a non-GAAP basis for 2008 was $149.9 million, or ($1.17) per share.
Total revenues for the year ended December 31, 2008, decreased by $4.0 million from $56.3 million in 2007 to $52.3 million in 2008. Contract and license revenues increased by $0.4 million for the year ended December 31, 2008, from $35.9 million in 2007 to $36.3 million in 2008. Reimbursement of development costs for the year ended December 31, 2008, decreased by $4.4 million from $20.4 million in 2007 to $16.0 million in 2008 and relates primarily to the development of ipilimumab with Bristol-Myers Squibb Company.
Research and development (R&D) expenses for the year ended December 31, 2008, decreased by $3.4 million from $198.3 million in 2007 to $194.9 million in 2008. Included in R&D expense for the year ended December 31, 2008, is approximately $10.6 million of non-cash stock-based compensation expense recorded in accordance with FAS 123(R) and approximately $1.5 million related to Celldex.
General and administrative (G&A) expenses for the year ended December 31, 2008, decreased by $2.5 million from $46.9 million in 2007 to $44.4 million in 2008. Included in G&A expense for the year ended December 31, 2008, is approximately $11.5 million of non-cash stock-based compensation expense recorded in accordance with FAS 123(R) and approximately $1.7 million related to Celldex .
Medarex ended 2008 with approximately $353.7 million in cash, cash equivalents and marketable securities. In addition, as of December 31, 2008, the fair market value of Medarex's equity interests in Genmab and Celldex were approximately $87.4 million and approximately $39.3 million, respectively.
For the three-month period ended December 31, 2008, Medarex reported a net loss of $43.0 million, or ($0.33) per share. This compares to a net loss of $44.8 million, or ($0.35) per share, for the three-month period ended December 31, 2007. Included in the consolidated net loss for the three-month period ended December 31, 2008, is a non-cash equity loss of $1.9 million, or ($0.01) per share, representing Medarex's share of the net loss of Celldex for the period; a non-cash charge of $5.4 million, or ($0.04) per share, for stock-based compensation expense recorded in accordance with FAS 123(R); and a non-cash impairment charge of $5.3 million, or ($0.04) per share, related to a write-down of Medarex's investment in three of its corporate partners. Excluding the impact of these items, Medarex's net loss on a non-GAAP basis for the three-month period ended December 31, 2008, was $30.4 million, or ($0.24) per share.
During 2008, Medarex's cash burn rate was $12.2 million per month, or approximately $146 million for the full year. Medarex currently expects its cash burn rate for the full year of 2009 to remain largely consistent with full-year 2008 net cash burn.
"Important progress was made in 2008 to advance product assets into later stages of development and to expand our portfolio," said Howard H. Pien, Chairman and CEO of Medarex. "These research and clinical development accomplishments, along with our strategy execution and financial discipline, leave Medarex well-positioned for the future. Our focus and efforts in 2009 will progress our business plans and pipeline opportunities towards commercial success. We are also pleased with the regulatory progress being made by our licensing partners, including the Canadian and European approvals of Centocor's STELARA(TM) psoriasis antibody, the first approved antibody generated from our UltiMAb(R) technology available for commercial sale. We also eagerly anticipate the regulatory outcomes for Centocor's golimumab and Novartis' canakinumab antibody programs, which were also generated from our technology in exchange for milestone and royalty payments."
Company and Pipeline Highlights in 2008
Non-GAAP Financial Measurements
This press release and the accompanying tables include non-GAAP financial measures. Please see the section of the accompanying tables titled "Reconciliation of GAAP Net Loss to Non-GAAP Net Loss" for a description of these non-GAAP financial measures, including reasons for Medarex management's decision to use 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.
Conference Call and Webcast Details
Medarex will hold a public conference call and webcast today, February 25, 2009, at 4:30 p.m. Eastern Time to review its financial and business results. To access the call live, please dial 1-866-804-6925 (U.S./Canada) or 1-857-350-1671 (international) and enter passcode number 405-36-543. The webcast can be accessed through the Investor Relations section of Medarex's website at www.medarex.com and will be archived for 7 days following the webcast. A telephonic replay of the conference call will be available following the event until midnight Eastern Time, March 5, 2009. Access numbers for this replay are 1-888-286-8010 (U.S./Canada) or 1-617-801-6888 (international); passcode number 263-79-360.
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 forty of these therapeutic product candidates derived from Medarex technology are in human clinical testing or have had INDs submitted for such trials, with the most advanced product candidates currently in Phase 3 clinical trials, the subject of regulatory applications for marketing authorization or approved in Canada and Europe. 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 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 "future"; "anticipate"; "potential"; "believe"; 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, compliance with regulatory requirements, risks associated with the use of hazardous substances and risks associated with the enforceability of our patents 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, 2007 and the subsequent quarterly filings on Form 10-Q. There can be no assurance that such development efforts will succeed or that 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) Year Ended Three Months Ended December 31, December 31, (unaudited) ------------------------------------- 2008 2007 2008 2007 ---- ---- ---- ---- Contract and license revenues $36,274 $35,906 $16,135 $15,135 Reimbursement of development costs 16,018 20,352 3,986 5,362 -------- --------- -------- -------- Total revenues 52,292 56,258 20,121 20,497 Costs and expenses: Research and development 194,861 198,317 48,842 56,857 General and administrative 44,386 46,925 8,474 11,905 Acquisition of in-process technology - 6,900 - - -------- --------- -------- -------- Operating loss (186,955) (195,884) (37,195) (48,265) Equity in net loss of affiliate (10,092) - (1,948) - Interest income and realized gains, net 163,622 166,271 1,389 3,290 Impairment loss on investments in partners (5,298) (2,141) (5,298) - Minority interest - Celldex - 4,699 - 157 -------- --------- -------- -------- Loss before provision (benefit) for income taxes (38,723) (27,055) (43,052) (44,818) Provision (benefit) for income taxes (258) 12 (59) 5 -------- --------- -------- -------- Net loss $(38,465) $(27,067) $(42,993) $(44,823) ======= ======= ======= ======= Basic and diluted net loss per share $(0.30) $(0.21) $(0.33) $(0.35) ======= ======= ======= ======= Weighted average number of common shares outstanding during the year - basic and diluted 128,152 126,665 128,444 127,409 ======= ======= ======= =======
Condensed Consolidated Balance Sheets (In thousands) December 31, December 31, 2008 2007 ----------- ----------- (1) Cash, cash equivalents and marketable securities - Medarex $353,668 $343,862 Cash and cash equivalents - Celldex - 4,910 Marketable securities - Genmab - 152,000 Other current assets 21,793 29,013 Property, buildings and equipment, net 67,154 79,925 Investment in Genmab 87,428 139,165 Other assets 6,812 10,985 -------- --------- $536,855 $759,860 ======== ========= Current liabilities $64,299 $81,645 Other liabilities 78,247 89,454 Convertible notes 145,430 143,505 Shareholders' equity 248,879 445,256 -------- --------- $536,855 $759,860 ======== ========= (1) Derived from the December 31, 2007 audited financial statements. For further information, refer to the financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2007.
The accompanying press release dated February 25, 2009 contains non-GAAP financial measures. The following table reconciles the non-GAAP financial measures contained in the press release to the most directly comparable financial measures prepared in accordance with GAAP. These non-GAAP financial measures include non-GAAP net loss and non-GAAP net loss per share. Non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial measures prepared in accordance with GAAP.
The following reconciliation of GAAP net loss to non-GAAP net loss and GAAP net loss per share to non-GAAP net loss per share is provided as a complement to results presented in accordance with GAAP because Medarex's management believes these non-GAAP financial measures provide better insight into Medarex's performance by focusing on results generated by its ongoing operations and are important in comparing current results with prior period results. Non-GAAP net loss and non-GAAP net loss per share are intended to illustrate Medarex's results of operations for the periods presented excluding the items discuss below. Medarex's management believes investors' understanding of Medarex's financial performance is enhanced as a result of our disclosing these non-GAAP financial measures. Non-GAAP net loss and non-GAAP net loss per share should not be viewed in isolation or as a substitute for GAAP net loss or GAAP net loss per share.
MEDAREX, INC. Reconciliation of GAAP Net Loss to Non-GAAP Net Loss (In thousands, except per share data) Year Ended Three Months Ended December 31, December 31, ------------------------------------- (unaudited) (unaudited) 2008 2007 2008 2007 ---- ---- ---- ---- GAAP Net loss $(38,465) $(27,067) $(42,993) (44,823) Celldex Net loss (1) 2,924 15,231 - 3,876 Minority interest - Celldex (1) - (4,699) - (157) Stock-based compensation expense (2) 22,094 18,551 5,393 4,775 Acquisition of in-process technology - 6,900 - - Impairment loss on investments in partners 5,298 2,141 5,298 - Equity in net loss of affiliate 10,092 - 1,948 - Gain on sale of Genmab stock (151,834) (152,143) - - ------- ------- ------- ------ Non-GAAP Net loss $(149,891) $(141,086) $(30,354) (36,329) ======= ======= ======= ====== GAAP Net loss per share, basic and diluted $(0.30) $(0.21) $(0.33) $(0.35) ======= ======= ======= ====== Non-GAAP Net loss per share, basic and diluted $(1.17) $(1.11) $(0.24) $(0.29) ======= ======= ======= ====== Shares used in computing basic and diluted Non-GAAP net loss per share 128,152 126,665 128,444 127,409 ======= ======= ======= ======
(1) In management's view, the operations of Celldex prior to its merger with AVANT Immunotherapeutics Inc.(effective March 7, 2008) are not necessarily indicative of or directly attributable to, Medarex's continuing operations. Celldex's operations relate primarily to the research, development and commercialization of therapeutic vaccines,
which is outside the scope of Medarex's ongoing core business operations.
(2) For the twelve and three months ended December 31, 2008, the Company incurred $22.9 million and $6.2 million in non-cash stock compensation expense of which $10.6 million and $3.2 million is included in research and development expenses and $12.3 million and $3.0 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.
In addition to excluding the items described in footnotes 1 and 2 above, certain items have been excluded based upon management's evaluation (on an individual basis) of both quantitative and qualitative aspects of the item, including, (i) size and nature, (ii) whether it relates to Medarex's ongoing core business operations, and (iii) whether management expects it to occur as part of our normal business on a regular basis. Those additional items excluded for purposes of determining non-GAAP net loss and non-GAAP net loss per share were gain on sales of Genmab stock, equity in net loss of affiliate, acquisition of in-process technology and impairment loss on investments in partners.
|SOURCE Medarex, Inc.|
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