Transgene Announces Fourth Quarter and Fiscal Year 2003 Financial
Results STRASBOURG, France, Feb. 11 /PRNewswire-FirstCall/ --
Transgene (Nasdaq: TRGNY; Euronext: FR0005175080) today announced
results for the fourth quarter and fiscal year ended December 31,
2003. Quarterly results Revenues decreased euro 1 million (US$ 1.3
million) to euro 0.6 million (US$ 0.8 million) in the fourth
quarter 2003, compared to euro 1.6 million (US$ 2 million) in the
fourth quarter 2002. In 2002, all revenues from the Association
Francaise contre les Myopathies ("AFM") were recorded in the fourth
quarter. Accounting rules did not permit Transgene to record these
amounts until after the AFM Agreement was renewed in December 2002.
On a comparable basis, revenues in the fourth quarter of 2002 were
euro 0.6 million (US$ 0.8 million), same as in 2003. Research and
development costs increased euro 0.2 million (US$ 0.3 million) in
the fourth quarter 2003 compared to the same period of 2002.
Clinical trials and manufacturing costs increased euro 0.6 million
(US$ 0.8 million), whereas research and intellectual property costs
decreased euro 0.4 million (US$ 0.5 million). General &
administrative costs increased euro 0.4 million (US$ 0.5 million)
in the fourth quarter of 2003 compared to the same period of 2002,
primarily reflecting higher business development, communication
& legal expenses and mostly-non-recurring accruals. Due to
lower cash-on-hand and interest rates, interest income was euro 0.2
million (US$ 0.3 million) in the last quarter of 2003 compared to
euro 0.5 million (US$ 0.6 million) in the last quarter of 2002. As
a result, Transgene reported a net loss for the fourth quarter 2003
of euro 6.5 million (US$ 8.1 million) compared to a net loss of
euro 4.7 million (US$ 5.9 million) in the fourth quarter 2002.
Fiscal year ended December 31, 2003 For the year ended December 31,
2003, Transgene reported total revenues of euro 2.5 million (US$
3.2 million) compared to euro 2.2 million (US$ 2.8 million) for the
fiscal year ended December 31, 2002. The increase is primarily
attributable to contracts signed in 2003 with Merck & Co., Inc.
(licensing-out) and the International AIDS Vaccine Initiative
(manufacturing of preclinical lots), partially offset by a decrease
of AFM revenues. Operating expenses were euro 24.4 million (US$
30.7 million) in 2003 compared to euro 22.7 million (US$ 28.6
million) in 2002. While a reduction in research and intellectual
property expenses was observed, the increasereflects the expansion
of the 2003 clinical trials program (149 patients enrolled in 2003
compared to 115 in 2002) and higher activity in Transgene's
manufacturing plant and related controls. The balance of the
restructuring provision was totally reversed in 2003, of which 0.1
million (US$ 0.1 million) corresponded to an unused portion. Due to
lower cash-on-hand and interest rates, interest income was halved
in 2003 (euro 1.1 million or US$ 1.3 million) compared to 2002
(euro 2 million or US$ 2.5 million). Transgene reported a net loss
of euro 20.9 million (US$ 26.3 million), or euro 2.08 (US$ 2.62)
per share, in 2003, compared to a net loss of euro 18.6 million
(US$ 23.3 million), or euro 1.84 (US$ 2.32) per share, in 2002.
Cash expenditures in2003 amounted to euro 19.6 million (US$ 24.6
million) compared to euro 17.3 million (US$ 21.8 million) in 2002,
reflecting primarily higher 2003 operating expenditures.
Additionally, in comparison to 2002, the 2003 cash expenditures
have been negatively impacted by a lower refund of research &
development tax credit (impact of euro 1.3 million or US$ 1.6
million) and lower interest income (impact of euro 0.9 million or
US$ 1.1 million). The above negative impacts have been partially
offset by lower restructuring payments in 2003 (impact of euro 1
million or US$ 1.3 million), additional contracts revenues (impact
of euro 0.3 million or euro 0.4 million) and favorable working
capital evolution (impact of euro 0.5 million or US$ 0.6 million).
At December 31, 2003, Transgene had euro 34.9 million (US$ 44
million) in cash and cash equivalents. Transgene believes that this
amount will be sufficient to meet its cash requirements for working
capital and capital expenditures through mid-2005. "We are
encouraged by the substantial progress made in our clinical
programs in 2003. We are entering an exciting period in the cancer
vaccine and immunotherapy fields and are looking forward to further
development of our product candidates in 2004," stated
Jean-Francois Carmier, chief executive officer of Transgene. 2003
highlights: In 2003, Transgene's four cancer product candidates
(MVA-Muc1-IL2 and MVA-HPV-IL2 in Phase II, Ad-IFNy and Ad-IL2 in
Phase I/II) generated clinical data supporting further specific
development. Transgene pursued the development of MVA-HPV-IL2 and
Ad-IFNy in monotherapy settings for early stage diseases, and
MVA-Muc1-IL2 and Ad-IL2 in combination with chemotherapy for
advanced cancers. Additional positive Phase II interim data of
MVA-Muc1-IL2 cancer vaccine were released on February 9th, 2004.
Transgene presented positive Phase I/II data on its Ad-IFNy product
candidate in cutaneous lymphoma at the American Society of Gene
Therapy Annual Meeting and announced that Ad-IFNy received orphan
drug designation in Europe. In June 2003, the AFM and Transgene
released results of the Phase I gene therapy trial on Duchenne and
Becker muscular dystrophies at the American Society of Gene Therapy
Annual Meeting. In September 2003, Transgene announced the decision
to commence clinical development of its anti-cancer product
candidate MVA-FCU1, a virus-directed enzyme-prodrug therapy which
is designed to cause the production of a chemotherapeutic drug
locally, within the tumor. Transgene, based in Strasbourg, France,
is a biopharmaceutical company dedicated to the discovery and
development of therapeutic vaccines, immunotherapy products, and
delivery technologies for the treatment of diseases for which there
is no cure or adequate treatment at present, with a focus on the
treatment of cancer. Transgene has five products in clinical
development, two of which are in Phase II clinical trials, two in
Phase I/II and one which has completed Phase I clinical trial.
Transgene's proprietary vector technology platform consists of
adenovirus, poxvirus and non-viral vectors. This press release
contains forward-looking statements, including statements regarding
Transgene's revenues, capital requirements and prospects.
Statements that are not historical facts are based on Transgene's
current expectations, beliefs, estimates, forecasts and
assumptions. The statements contained in this release are not
guarantees of future performance and involve certain risks,
uncertainties and assumptionswhich are difficult to predict.
Accordingly, actual outcomes and results may differ materially from
what is expressed in those forward-looking statements. Important
factors that may affect Transgene's future operating results
include the following: Transgene has a history of operating losses;
it may not have sufficient resources or may fail to obtain the
capital necessary to complete the research and commercialization of
any of its product candidates; Transgene may be unable to conduct
its clinical trials as quickly as it has predicted; Transgene's
clinical trials may not produce results sufficient to justify
further product development; Transgene's product candidates may not
demonstrate therapeutic efficacy; Transgene may be unable to obtain
regulatory approval for its product candidates; Transgene's patent
and proprietary rights may not provide it with any benefit and the
patents of others may prevent it from commercializing its products;
proceedings to obtain patents and litigation of third party
infringement claims are expensive and could limit its patent and
proprietary rights; competitors may develop technologies or
products superior to Transgene's technologies or products; and
other important factors described in Transgene's Annual Report on
Form 20-F for the year ended December 31, 2002 filed with the U.S.
Securities and Exchange Commission, including those factors
described in the section entitled "Risk Factors." Note: The
official financial information of Transgene is stated in Euros. The
financial information expressed in US$ is translated solely for the
convenience of the reader at euro 1.00 = $ 1.2597, the noon buying
rate of the Federal Reserve Bank of New York on December 31, 2003.
Condensed Consolidated Balance Sheets (US GAAP) (Amounts in
thousands ) December 31, December 31, 2003 2003 2002 US$ euro euro
(Unaudited) (Audited) ASSETS Cash and cash equivalents 44,014
34,940 54,491 Other current assets 2,985 2,370 3,207 Total current
assets 46,999 37,310 57,698 Property, plant and equipment, net
10,120 8,034 8,666 Other assets 406 322 516 Total assets 57,525
45,666 66,880 LIABILITIES AND SHAREHOLDERS' EQUITY Total current
liabilities 6,448 5,119 5,277 Total long-term liabilities 7,593
6,028 6,396 Total shareholders'equity 43,484 34,519 55,207 Total
liabilities and shareholders' equity 57,525 45,666 66,880 Condensed
Consolidated Statements of Operations US GAAP (Amounts in thousands
except share and per share data) Three months ended December 31,
2003 2003 2002 US$ euro euro (Unaudited) Revenues Revenues from
collaborative and licensing agreements 736 584 1,763 Grants
received for research and development 53 42 (168) Total revenues
789 626 1,595 Operating expenses Research and development (7,383)
(5,861) (5,719) General & administrative (1,789) (1,420)
(1,007) Restructuring 4 3 46 Total operating expenses (9,168)
(7,278) (6,680) Loss from operations (8,380) (6,652) (5,085)
Interest and other income, net 244 194 454 Income tax benefit 0 0
(39) Net loss (8,135) (6,458) (4,670) Loss per ordinary share
(0.81) (0.64) (0.46) Weighted average number of shares outstanding
10,055,760 10,055,760 10,055,760 Loss per ADS (American Depositary
Share)(0.27) (0.21) (0.15) Weighted average number of ADSs
outstanding 30,167,280 30,167,280 30,167,280 US GAAP (Amounts in
thousands except share and per share data) Twelve months ended
December 31, 2003 2003 2002 US$ euro euro (Unaudited) (Audited)
Revenues Revenues from collaborative and licensing agreements 3,098
2,459 2,197 Grants received for research and development 53 42 9
Total revenues 3,151 2,501 2,206 Operating expenses Research and
development (25,518) (20,257) (19,149) General & administrative
(5,384) (4,274) (3,616) Restructuring 118 94 46 Total operating
expenses (30,783) (24,437) (22,719) Loss from operations (27,633)
(21,936) (20,513) Interest and other income, net 1,337 1,061 2,012
Income tax benefit 0 0 (39) Net loss (26,296) (20,875) (18,540)
Loss per ordinary share (2.62) (2.08) (1.84) Weighted average
number of shares outstanding 10,055,760 10,055,760 10,055,760 Loss
per ADS (American Depositary Share) (0.87) (0.69) (0.61) Weighted
average number of ADSs outstanding 30,167,280 30,167,280 30,167,280
Notes: The December 31, 2003 and December 31, 2002 balance sheets
and profit & loss statements have been restated to reflect the
retroactive adoptionof the fair value recognition provisions of
SFAS 123, Accounting for Stock Based Compensation. For
comparability between 2003 and 2002 an expense of euro 0.137
million (US$ 0.173 million) in the fourth quarter of 2002 has been
reclassified from "Interest & Other Income" to "General and
Administrative expenses." The official financial information of
Transgene is stated in Euros. The financial information expressed
in US$ is translated solely for the convenience of the reader at
euro 1.00 = $ 1.2597,the noon buying rate of the Federal Reserve
Bank of New York on December 31, 2003. DATASOURCE: Transgene
CONTACT: Philippe Poncet, Chief Financial Officer of Transgene,
+33-3-88-27-91-02; or Julio Cantre of Cohn & Wolfe,
+1-212-798-9779; or Estelle Guillot-Tantay, +33-1-53-70-74-93, or
Laurence Heilbronn, +33-1-53-70-74-64, both of Image7, all for
Transgene
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