REYKJAVIK, Iceland, August 10 /PRNewswire-FirstCall/ -- deCODE
genetics (NASDAQ:DCGN) today announced its consolidated financial
results for the quarter ended June 30, 2009. A conference call to
discuss these results and recent developments in the company's
business will be webcast live tomorrow, Tuesday, August 11, at
8:00am Eastern Daylight Time/12 noon GMT/1pm British Summer Time
(details below). The financial results presented below reflect
deCODE's strategic focus on utilizing its leadership in human
genetics to develop and commercialize DNA-based risk assessment
tests, personal genome scans, and intellectual property. deCODE is
pursuing various options aimed at underpinning and advancing
product development and commercialization in this core business.
One likely component of this effort is the sale of some or all of
deCODE's US medicinal chemistry and structural biology units.
Although these units continue to operate and contribute to deCODE,
in view of their prospective sale the company has accounted for
these businesses as "discontinued operations." With the exception
of combined net loss figures, the operating results discussed below
are thus all for deCODE's continuing operations in its core
business of employing the company's capabilities in gene discovery
to advance DNA-based diagnostics, personal genome analysis,
intellectual property licensing opportunities, and contract
genotyping. The results of operations and related cashflows from
deCODE's US operations, and for the company's core and US
operations combined, for the three and six-month periods ended June
30, 2009 and 2008, are broken out in the table at the end of this
presentation. Net loss for the quarter ended June 30, 2009 was
$12.1 million, compared to $17.6 million for the second quarter
2008. Net loss for the first six months of 2009 was $24.3 million,
compared to $43.6 million for the first six months of last year.
Figures for both 2008 periods include non-operating losses
resulting from the revaluation of auction rate securities (ARS)
then held by the company. Basic and diluted net loss per share was
$0.20 and $0.39 for the second quarter and first six months of
2009, respectively, compared to $0.29 and $0.71 for the same
periods last year. At June 30, 2009, the company had approximately
61.8 million shares outstanding. For continuing and discontinued
operations combined, net loss for the quarter ended June 30, 2009
was $13.1 million, compared to $18.4 million for the second quarter
2008. Net loss for the first six months of 2009 for combined
operations was $25.8 million, compared to $45.0 million for the
first six months of last year. Basic and diluted net loss per share
for combined operations was $0.21 and $0.42 for the second quarter
and first six months of 2009, respectively, compared to $0.30 and
$0.73 for the 2008 periods. Revenue for the second quarter 2009 was
$3.5 million, versus $9.0 million for the second quarter last year.
Revenue for the first half of 2009 was $7.6 million, compared to
$18.1 million for the first half 2008. These figures reflect the
impact of lower year-on-year contract service revenues. At June 30,
2009, the company had $21.3 million in deferred revenue, to be
recognized over future reporting periods, including the upfront
payment from the Celera partnership signed in April. Research and
development expense for proprietary programs was $2.8 million for
the second quarter of this year, compared to $8.0 million for the
same period last year. For the first six months of the year,
research and development expense was $6.9 million in 2009 and $20.6
million in 2008. Selling, general and administrative expenses were
$4.3 million for the second quarter 2009, compared to $5.9 million
for the second quarter 2008, and $8.6 million for the first half
2009 versus $11.7 million for the first half of last year. These
figures reflect the company's current focus on controlling costs in
its core genetics activities creating intellectual property and
novel content for its diagnostic tests, deCODEme scans, and
outlicensing opportunities, as well as costs related to the
restructuring of the company. At June 30, 2009, the company had
cash and cash equivalents of $3.8 million, compared to $3.7 million
at December 31, 2008. In early 2009 the company sold its ARS for
approximately $11.0 million in cash, and in April 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
fund operations only into the latter half of the third quarter. It
is simultaneously pursuing several options to ensure sufficient
funding to take it to the execution of strategic options that can
support the near- and longer-term viability of its core business.
"As the focus of our healthcare system shifts toward prevention,
measuring and controlling individual risk of disease will become a
central part of everyday medicine. DNA-based risk assessment tests
and personal genome scans such as those we have developed offer a
novel and personalized means of more accurately gauging risk. The
goal of our strategic review is to recast deCODE as a diagnostics
company positioned to lead in this growing new market. Over the
past quarter we have made our gene discovery engine more efficient,
and shown that it continues to be second to none in delivering the
content required to create effective genetic risk tests for common
diseases. We are also advancing our strategic negotiations on
several fronts, including the sale of our US medicinal chemistry
and structural biology units; finding buyers or licensing partners
to take forward our therapeutics programs; additional licensing
deals for our intellectual property and diagnostic tests; and
securing new equity financing. All of these are steps towards the
same goal: to provide the company with the operating structure and
financial means to advance a product portfolio that we believe will
play an important role in improving healthcare," said Kari
Stefansson, CEO of deCODE. Recent operating highlights include:
Corporate and Product Development - Celera. In April, 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). 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. - deCODE AF(TM). The
company continued to expand the predictive power and clinical
utility of its reference laboratory test for measuring risk of
atrial fibrillation (AF) and stroke. Last month, deCODE scientists
published the discovery of another common single-letter variation
(SNP) in the sequence of the human genome conferring risk of AF and
stroke. More than a third of people of European descent carry at
least one copy of this new SNP on chromosome 16, putting them at
more then 20% greater risk of AF and stroke than non-carriers. -
Gene discovery. deCODE continues to reinforce its global leadership
in the discovery of genetic risk factors for common diseases. In
June, a deCODE team presented several new common SNPs linked to
risk of skin cancer, three of which appear to confer risk through
underlying mechanisms that are not modulated by sensitivity to the
UV radiation in sunlight. These variants were integrated into the
deCODEme(TM) and deCODEme Cancer(TM) scans, and one in particular,
located in the keratin 5 gene, may make a promising drug target. In
another study, deCODE scientists discovered a SNP on chromosome 21
that modulates risk of both kidney stones and osteoporosis. As both
conditions are related to dysfunctional calcium metabolism, this
finding may mark a new pathway for drug discovery. deCODE has also
led the largest ever study of the genetics of schizophrenia, and,
last month, the deCODE team and colleagues from the SGENE
consortium published the discovery of several novel common SNPs
linked to increased risk of the disease. - CAP Certification.
Supporting the company's efforts to broaden the marketing and
reimbursement of its DNA-based risk assessment tests, deCODE's
CLIA-registered DNA isolation and genotyping laboratory has been
accredited by the American College of Pathologists (CAP). The
laboratory processes the company's deCODEme(TM) personal genome
scans and risk assessment diagnostic tests. The US Centers for
Medicare and Medicaid Services (CMS) has granted the CAP Laboratory
Accreditation Program deeming authority, and its accreditations can
also be used to meet many state certification requirements. Finance
- Nasdaq Global Market reinstatement. In June, the listing of
deCODE's common stock was reinstated to the Nasdaq Global Market.
The reinstatement followed the Nasdaq Hearing and Listing Review
Council's reversal of a decision in February by the Nasdaq Listing
Qualifications panel under which the listing of deCODE's common
stock was transferred to the Nasdaq Capital Market. Subsequent
Events - On July 30, 2009, deCODE's stockholders approved the
increase in deCODE's authorized shares of common stock from 150,000
to 1,150,000 and also approved the amendment of its Amended and
Restated Certificate of Incorporation to allow for a reverse stock
split at the discretion of deCODE's Board of Directors. These steps
position the company to bring in new equity investment and to
renegotiate its debt. About deCODE deCODE is a biotechnology
company developing DNA-based tests to assess individual risk of
common diseases and to improve prevention, diagnosis and treatment.
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 understanding risk and empowering
prevention. 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. Through its chemistry and biology units
deCODE has also developed a therapeutic product portfolio, which
includes DG041, an antiplatelet compound being developed for the
prevention of arterial thrombosis; DG051, a compound 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. The
company intends to partner or directly outlicense these programs.
Visit us on the web at http://www.decode.com/; on our diagnostics
site at http://www.decodediagnostics.com/; for our pioneering
deCODEme(TM) personal genome analysis service and focused deCODEme
Cardio(TM) and deCODEme Cancer(TM) scans at
http://www.decodeme.com/; and on our blog at
http://www.decodeyou.com/. deCODE is delivering on the promise of
the new genetics.SM Conference Call Information A conference call,
during which deCODE CEO Kari Stefansson and CFO Lance Thibault will
discuss the past quarter's financial results and operating
highlights, will be webcast tomorrow, Tuesday, August 11, at 8:00am
EDT/12 noon GMT/1pm BST. The webcast can be accessed via the
Investors section of deCODE's website, http://www.decode.com/, or
through http://www.earnings.com/. 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 111342.
Condensed Consolidated Statements of Operations For the three
months For the six months ended June 30, ended June 30, 2009 2008
2009 2008 in thousands, except per share amounts (unaudited)
Revenue............... $ 3,501 $ 8,956 $ 7,613 $ 18,129 Operating
expenses Cost of revenue..... 4,436 8,199 8,555 18,343 Research and
development 2,841 7,964 6,872 20,578 Selling, general and
administrative.......... 4,318 5,929 8,582 11,678 Total operating
expense. 11,595 22,092 24,009 50,599 Operating income (loss) from
continuing operations (8,094) (13,136) (16,396) (32,470) Interest
income....... 18 452 175 1,489 Interest expense...... (4,380)
(3,716) (8,611) (7,336) Other non-operating income and (expense),
net*.................. 330 (1,170) 565 (5,247) Net loss from
continuing operations.............. (12,126) (17,573) (24,267)
(43,564) Loss from discontinued operations.............. (1,070)
(784) (1,566) (1,455) Net loss ............. $ (13,196) $ (18,354)
$ (25,833) $ (45,019) Basic and diluted net loss per share from
continuing operations: $ (0.20) $ (0.29) $ (0.39) $ (0.71) Basic
and diluted net loss per share from discontinued operations: $
(0.01) $ (0.01) $ (0.03) $ (0.02) Basic and diluted net loss per
share: $ (0.21) $ (0.30) $ (0.42) $ (0.73) Shares used in computing
basic and diluted net loss per share...... ... 61,489 61,371 61,481
61,318 Condensed Consolidated Balance Sheet Data At June 30, At
December 31, 2009 2008 in thousands (unaudited) Cash and cash
equivalents. $ 3,765 $ 3,701 Total assets........................
69,853 75,137 Total liabilities................... 313,927 296,213
Total shareholders' equity..... (244,074) (221,076) * Other
non-operating expense for the three and six months ended June 30,
2009 and 2008 principally reflect an unrealized loss resulting from
the revaluation of the company's non-current auction rate security
investments and for the three and six months ended June 30, 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, our ability to develop
and market diagnostic products, the level of third party
reimbursement for our products, 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 +1-212-481-3891 Gisli Arnason
+354-570-1900 Edward Farmer +354-570-1900 DATASOURCE: DeCODE
Genetics Inc CONTACT: Contacts: deCODE genetics, Joy Bessenger,
+1-212-481-3891, ; Gisli Arnason, +354-570-1900, ; Edward Farmer,
+354-570-1900,
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