CRGN Curagen Corp. (MM)

BRANFORD, Conn., Jan. 29 /PRNewswire-FirstCall/ -- CuraGen Corporation (NASDAQ:CRGN), today reported its financial results for the fourth quarter and calendar year of 2008 and provided milestone and financial guidance for the first half of 2009. During the three month period ended December 31, 2008, CuraGen utilized $3.8 million of cash and investments and ended the fourth quarter with $88 million of cash and investments. At December 31, 2008, CuraGen has outstanding $19 million of 4% convertible subordinated notes due February 2011 with a market value of approximately $15 million. For the quarter ended December 31, 2008, CuraGen reported total operating expenses of $4.1 million, compared to total operating expenses of $11.1 million during the same period in 2007. Included in fourth quarter operating expenses is approximately $0.5 million of restructuring charges for a reduction in work force undertaken in December 2008. "We currently have $88 million of cash and investments on hand and an attractive Phase II development asset that shows activity in metastatic melanoma and promise in breast cancer." commented Dr. Timothy M. Shannon, President and Chief Executive Officer. "We are encouraged by the activity CR011-vcMMAE has demonstrated to date and we will be releasing additional data on our two ongoing trials in the second quarter of 2009" commented Dr. Shannon. 2009 Milestones and Financial Guidance The following statements are based on CuraGen's current expectations. These statements are forward-looking and actual results may differ materially. Please see the note regarding Forward-Looking Statements in this release for a description of certain important risk factors that could cause actual results to differ and refer to CuraGen's periodic reports on file with the Securities and Exchange Commission for a more complete description of the risks. Anticipated milestones for CR011-vcMMAE through June 2009 include: -- Complete and report on the final Phase II results of CR011-vcMMAE in metastatic melanoma in the second quarter of 2009 -- Advance and report on the initial Phase II results of CR011-vcMMAE in breast cancer in the second quarter of 2009 CuraGen expects to use an average of $3.5 to $4.0 million of cash and investments per quarter in the first half of 2009 to fund operations and also expects to end the second quarter of 2009 with between $80 and $81 million of cash and investments. Forward-Looking Statements Statements in this press release regarding management's future expectations, beliefs, intentions, goals, strategies, plans or prospects, including statements relating to the Company's revenue, expenses, depreciation, amortization, asset impairment charges, losses, income, and future cash and investment positions, the timing and expected results of our clinical programs, and the development and marketability of planned drugs, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by terminology such as "anticipate," "believe," "could," "could increase the likelihood," "estimate," "expect," "intend," "is planned," "may," "should," "will," "will enable," "would be expected," "look forward," "may provide," "would" or similar terms, variations of such terms or the negative of those terms. Such forward-looking statements involve known and unknown risks, uncertainties and other factors including the risk that any one or more of CuraGen's drug development programs will not proceed as planned for technical, scientific or commercial reasons or due to patient enrollment issues or based on new information from nonclinical or clinical studies or from other sources, the success of competing products and technologies, CuraGen's stage of development as a biopharmaceutical company, government regulation and healthcare reform, technological uncertainty and product development risks, product liability exposure, uncertainty of additional funding, CuraGen's history of incurring losses and the uncertainty of achieving profitability, reliance on research collaborations and strategic alliances, competition, patent infringement claims against CuraGen's products, processes and technologies, CuraGen's ability to protect its patents and proprietary rights and uncertainties relating to commercialization rights, as well as those risks, uncertainties and factors referred to in CuraGen's Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, filed with the Securities and Exchange Commission under the section "Risk Factors," as well as other documents that may be filed by CuraGen from time to time with the Securities and Exchange Commission. As a result of such risks, uncertainties and factors, CuraGen's actual results may differ materially from any future results, performance or achievements discussed in or implied by the forward-looking statements contained herein. CuraGen is providing the information in this press release as of this date and assumes no obligations to update the information included in this press release or revise any forward-looking statements, whether as a result of new information, future events or otherwise. CRGN-F - FINANCIAL TABLES ATTACHED - CURAGEN CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Three Months Ended Year Ended December 31, December 31, ------------ ------------ 2008 2007 2008 2007 ---- ---- ---- ---- (unaudited) (unaudited) Collaboration revenue $- $22 $1,174 $88 -- --- ------ --- Operating expenses: Research and development 2,617 6,299 15,076 36,779 General and administrative 916 2,026 5,151 11,657 Restructuring charges 529 2,737 529 11,274 --- ----- --- ------ Total operating expenses 4,062 11,062 20,756 59,710 ----- ------ ------ ------ Gain on sale of intangible asset - - 36,397 - ------ (Loss) income from operations (4,062) (11,040) 16,815 (59,622) Interest income 713 1,478 3,356 5,583 Interest expense (213) (995) (1,687) (5,167) Gain on extinguishment of debt - 8,273 6,991 8,442 Realized (loss) gain on sale of available-for- sale investments, net (200) (312) (372) 616 ---- ---- ---- --- (Loss) income from continuing operations before income taxes (3,762) (2,596) 25,103 (50,148) Income tax benefit (provision) 40 25 (322) 185 -- -- ---- --- (Loss) income from continuing operations (3,722) (2,571) 24,781 (49,963) ------ ------ ------ ------- Discontinued operations: Loss from discontinued operations - - - (2,991) Gain on sale of subsidiary - - - 78,352 ------ Income from discontinued operations - - - 75,361 ------ Net (loss) income ($3,722) ($2,571) $24,781 $25,398 ======= ======= ======= ======= Basic (loss) income per share from continuing operations ($0.07) ($0.05) $0.44 ($0.89) Basic income per share from discontinued operations - - - 1.35 - - - ---- Basic net (loss) income per share ($0.07) ($0.05) $0.44 $0.45 ====== ====== ===== ===== Weighted average number of shares used in computing basic net (loss) income per share 56,870 56,279 56,738 55,853 ====== ====== ====== ====== SELECTED BALANCE SHEET INFORMATION December 31, December 31, 2008 2007 ---- ---- (unaudited) Cash and investments $87,664 $100,444 Restricted cash - 14,533 - ------ Total cash and investments and restricted cash 87,664 114,977 ====== ======= Working capital 84,044 107,844 ====== ======= Total assets 88,546 119,282 ====== ======= 4% Convertible subordinated notes due 2011 18,967 69,890 ====== ====== Total long-term liabilities 18,967 70,975 ====== ====== Accumulated deficit 462,793 487,574 ======= ======= Stockholders' equity 65,465 38,465 ====== ====== Contacts: Sean Cassidy Vice President and Chief Financial Officer 203 871-4400 DATASOURCE: CuraGen Corporation CONTACT: Sean Cassidy, Vice President and Chief Financial Officer, +1-203-871-4400,

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