Transgene Announces Second Quarter and First Half 2004 Financial Results STRASBOURG, France, Aug. 4 /PRNewswire-FirstCall/ -- Transgene (Nasdaq: TRGNY; Nouveau Marche: FR0005175080) today announced financial results for the second quarter ended June 30, 2004. Transgene had total revenues of euro 0.4 million (US$ 0.5 million) in the second quarter of 2004, the same as for the second quarter of 2003. For the first six months of 2004, revenues were euro 1.0 million (US$ 1.2 million), compared to euro 1.3 million (US$ 1.6 million) for the same period in 2003. In the first quarter of 2003, Transgene recorded the upfront payment related to the license agreement signed with Merck & Co., Inc. After completion of quality controls, revenues from the EUROVAC manufacturing work performed in the second quarter 2004 are expected to be recognized in the second half of 2004. Operating expenses decreased by euro 0.2 million (US$ 0.2 million) to euro 5.7 million (US$ 6.9 million) for the second quarter of 2004 compared to euro 5.9 million (US$ 7.2 million) for the second quarter of 2003. Clinical expenses were lower due to a decrease in the number of patients recruited in the second quarter of 2004 compared to the same period in 2003. Patient recruitment is now complete for most of the on-going Phase II clinical trials. General and administrative costs also decreased by euro 0.1 million (US$ 0.1 million). For the first six months of 2004, operating expenses were unchanged at euro 12.0 million (US$ 14.6 million). Interest and other income was euro 0.1 million (US$ 0.1 million) in the second quarter 2004 compared to euro 0.3 million (US$ 0.4 million) in the same period of 2003, due to lower cash and cash equivalent held and lower interest rates. Transgene recorded a net loss of euro 5.1 million (US$ 6.2 million), or euro 0.51 (US$ 0.62) per share, for the second quarter of 2004 compared to a net loss of euro 5.2 million (US$ 6.3 million), or euro 0.51 (US$ 0.62) per share for the same period in 2003. The net loss for the first six months ended June 30, 2004 was euro 10.7 million (US$ 13 million) or euro 1.06 (US$ 1.29) per share, compared to euro 10.0 million (US$ 12.2 million), or euro 0.99 (US$ 1.21) per share for the same period of 2003. Net cash expenditures were euro 10.2 million (US$ 12.4 million) for the first six months of 2004, resulting in cash and cash equivalents totaling euro 24.8 million (US$ 30.2 million) at June 30, 2004. Transgene believes that this amount will be sufficient to meet its cash requirements for working capital and capital expenditures through mid-2005. First Half 2004 Highlights * Transgene released positive interim data in three phase II trials with the MVA-MUC1-IL2 cancer vaccine candidate in patients with lung, kidney and prostate cancer. In lung cancer, the interim results indicate that 12 out of 18 patients have benefited from the combination of MVA-Muc1-IL2 vaccination with chemotherapy. In the sub-group of metastatic disease (14 patients with stage IV), 11 patients (79%) showed clinical benefit (partial and stable diseases). Results from the ongoing stage 2 of the study are expected in the coming months. In the prostate trial, the interim results showed that the vaccination with MVA-MUC1-IL2 is biologically active and may decelerate the progression of the disease. In kidney, enrollment in this 36-patient study proceeded quickly and has now completed. Nine out of 21 evaluable patients have had stable disease and continued their treatment with MVA-Muc1-IL2 monotherapy. Further data will be available in the coming months. * Transgene released positive data from the phase II trial with the MVA-HPV-IL2 cancer vaccine candidate in patients with human papilloma virus (HPV)-related disease, demonstrating dose-related effect and safety at the highest dose given. * Transgene manufactured clinical lots of HIV vaccine candidates in the frame of EUROVAC (European Vaccine Effort against HIV/AIDS), a European cluster of 21 laboratories, funded since 2000 by the European Union under the 5th Framework Programme. * Transgene and Merial Limited announced a collaboration to develop products for animal health indications using Transgene's vector platform. Under the terms of the agreement, Transgene will provide Merial with research and development support regarding vector-based expression of certain genes selected by Merial. 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 that has completed Phase I clinical trial. Transgene's proprietary vector technology platform consists of adenovirus and poxvirus. This press release contains forward-looking statements, including statements regarding Transgene's revenues, capital requirements, manufacturing capabilities 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 assumptions which are difficult to predict. Accordingly, actual outcomes and results may differ materially from what is expressed in those forward-looking statements. Important factors which 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's products are in early stage clinical trials and the favorable results of some of the trials may not be indicative of broader results for a large number of humans; 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 most recent fiscal year 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 = $ 1.2179, the noon buying rate of the Federal Reserve Bank of New York on June 30, 2004. Condensed Consolidated Balance Sheets (US GAAP) (Amounts in thousands) June 30, December 31, 2004 2004 2003 US$ euro euro (Unaudited) (Audited) ASSETS Cash and cash equivalents 30 192 24 790 34 940 Other current assets 2 457 2 017 2 522 32 648 26 807 37 462 Property, plant and equipment, net 9 301 7 637 8 034 Other assets 391 321 322 42 340 34 765 45 818 LIABILITIES AND SHAREHOLDERS' EQUITY Total current liabilities 5 937 4 875 5 301 Total long-term liabilities 7 211 5 921 5 998 Total shareholders' equity 29 192 23 969 34 519 42 340 34 765 45 818 Condensed Consolidated Statements of Operations US GAAP (Amounts in thousands except share and per share data) Three months ended June 30, Six month ended June 30, 2004 2004 2003 2004 2004 2003 US$ euro euro US$ euro euro (Unaudited) (Unaudited) Revenues Revenues from collaborative and licensing agreements 529 434 423 1 202 987 1 319 Grants received for research and development 0 0 0 0 0 0 Total revenues 529 434 423 1 202 987 1 319 Operating expenses Research and devel- opment (5 683) (4 666) (4 725) (12 279) (10 082) (9 899) General & administra- tive (1 236) (1 015) (1 146) (2 290) (1 880) (2 065) Restructuring 0 0 0 0 0 0 Total opera- ting expenses (6 919) (5 681) (5 871) (14 569) (11 962) (11 964) Loss from opera- tions (6 390) (5 247) (5 448) (13 367) (10 975) (10 645) Interest and other income, net 166 136 289 415 341 646 Income tax benefit (21) (17) 0 (21) (17) 0 Net loss (6 245) (5 128) (5 159) (12 972) (10 651) (9 999) Loss per ordinary share (0.62) (0.51) (0.51) (1.29) (1.06) (0.99) Weighted average number of shares outstand- ing 10 055 760 10 055 760 10 055 760 10 055 760 10 055 760 10 055 760 Loss per ADS (American Depositary Share) (0.21) (0.17) (0.17) (0.43) (0.35) (0.33) Weighted average number of ADSs outstand- ing 30 167 280 30 167 280 30 167 280 30 167 280 30 167 280 30 167 280 Notes: 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 = $ 1.2179, the noon buying rate of the Federal Reserve Bank of New York on June 30, 2004. The 2003 accounts have been restated to SFAS 123 "Accounting for Stock based Compensation." During the second quarter of 2004, Transgene reviewed revenue recognition from a certain manufacturing contract and concluded that the euro 0.653 million revenues reported in the first quarter of 2004 should be reduced by euro 0.100 million, down to euro 0.553 million. As a result of this change, net loss should be euro 5.523 million, compared to the previously reported euro 5.423 million. Consolidated balance sheet and statement of operations for the quarter ended March 31, 2004 have been restated accordingly, as shown below: Condensed Consolidated Balance Sheets (US GAAP) (Amounts in thousands ) March 31, 2004 2004 US$ euro (Unaudited) ASSETS Cash and cash equivalents 36 404 29 616 Other current assets 3 059 2 489 Total current assets 39 463 32 105 Property, plant and equipment, net 9 626 7 831 Other assets 256 208 Total assets 49 345 40 144 LIABILITIES AND SHAREHOLDERS' EQUITY Total current liabilities 6 316 5 138 Total long-term liabilities 7 325 5 959 Total shareholders' equity 35 705 29 047 Total liabilities and shareholders' equity 49 345 40 144 Condensed Consolidated Statements of Operations US GAAP (Amounts in thousands except share and per share data) Three months ended March 31, 2004 2004 2003 US$ euro euro (Unaudited) Revenues Revenues from collaborative and licensing agreements 680 553 896 Grants received for research and development 0 0 0 Total revenues 680 553 896 Operating expenses Research and development (6 657) (5 416) (5 174) General & administrative (1 063) (865) (919) Restructuring 0 0 0 Total operating expenses (7 721) (6 281) (6 093) Loss from operations (7 041) (5 728) (5 197) Interest and other income, net 252 205 357 Income tax benefit 0 0 0 Net loss (6 789) (5 523) (4 840) Loss per ordinary share (0.68) (0.55) (0.48) Weighted average number of shares outstanding 10 055 760 10 055 760 10 055 760 Loss per ADS (American Depositary Share) (0.23) (0.18) (0.16) Weighted average number of ADSs outstanding 30 167 280 30 167 280 30 167 280 Notes: 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 = $ 1.2292, the noon buying rate of the Federal Reserve Bank of New York on March 31, 2004. The 2003 accounts have been restated to SFAS 123 "Accounting for Stock based Compensation." DATASOURCE: Transgene CONTACT: Philippe Poncet, Chief Financial Officer of Transgene, +33-3-88-27-91-21; or Michael Long of Cohn & Wolfe, +1-212-798 9775; or Estelle Guillot-Tantay, +33-1-53-70-74-93, or Laurence Heilbronn, +33-1-53-70-74-64, both of Image 7, all for Transgene Web site: http://www.transgene.fr/

Copyright