Berkeley, CA — May 8, 2002
XOMA Ltd. (Nasdaq: XOMA), a biopharmaceutical development company, today announced financial results for the first quarter of 2002. The Company,s net loss for the quarter ended March 31, 2002 was $5.9 million ($0.08 per share) compared with $7.6 million ($0.11 per share) for the quarter ended March 31, 2001.
Revenues for the first quarter of 2002 increased to $9.2 million from $2.9 million in the first quarter of 2001. The increase reflected higher contract revenues primarily from our collaborative arrangement with Onyx, as well as higher license fees. The increase in license fees reflected an agreement entered into in February of this year granting MorphoSys AG a license to use XOMA,s antibody expression technology for developing antibodies using MorphoSys, phage-display based antibody library.
Operating expenses increased to $14.8 million in the first quarter of 2002 from $10.1 million in the first quarter of 2001. This increase reflected spending on Xanelim(TM), LDP01, CAB-2 and ONYX-015, as well as litigation expenses. These increases were partially offset by savings in our Mycoprex(TM) and Genimune(TM) development programs, which were discontinued during 2001.
XOMA ended the quarter with $58.5 million in cash, cash equivalents and short-term investments, compared with $67.6 million at December 31, 2001 and $32.3 million at the end of the first quarter of 2001. Net cash used in operations in the first quarter of 2002 was $6.4 million, compared with $4.8 million in the first quarter of 2001.
While earnings and cash flow may vary substantially depending upon the pace of product development work (which depends on a variety of factors including product efficacy, clinical trial progress, regulatory review and developments in licensing and other collaborative relationships), the Company currently estimates that it will record a loss in the $0.46-0.48 range in 2002, and that it has sufficient cash resources to meet its currently anticipated operational cash needs through at least the middle of 2004.
"We have faced a number of challenges thus far in 2002," said John L. Castello, XOMA's Chairman, President and Chief Executive Officer, "and we've made significant progress in dealing with them. We have now completed enrollment in a third Phase III efficacy study testing Xanelim in patients with moderate-to-severe psoriasis, and subject to the results of that trial and discussions with the FDA, are targeting a BLA filing by year-end. We have also initiated a Phase II study testing Xanelim in patients with moderate-to-severe rheumatoid arthritis. A group of securities lawsuits against the company were dismissed, and we entered into a licensing arrangement with MorphoSys to use our bacterial cell expression technology with their phage display discovery system."
"We are pleased with our first quarter financial results," said Peter B. Davis, XOMA,s Vice President of Finance and Chief Financial Officer. "We have begun to see incremental revenue from our expression technology licensing efforts in the phage display arena, and have now further broadened our pipeline indications by initiating testing of Xanelim in rheumatoid arthritis patients."
BPI Protein Products
Bacterial cell expression is an enabling technology for the discovery and selection, as well as the development and manufacture, of recombinant protein pharmaceuticals, including diagnostic and therapeutic antibodies. XOMA has received nine U.S. patents to date relating to aspects of its bacterial cell expression system, including a family of six patents that broadly cover functional antibody secretion.
Access to XOMA,s patent estate is necessary for the practice of antibody phage display and other antibody screening applications. The Company has entered into a cross-licensing arrangement with MorphoSys relating to bacterial cell expression and phage display and has initiated licensing discussions with a number of other companies that use such technologies in the discovery and development of commercially useful antibodies.
XOMA,s patented technology also includes the araB promoter system, which allows efficient control of protein expression, and the pelB secretion system, which improves yields and reduces recovery and purification costs. The Company has previously licensed various aspects of its expression technology system to more than 20 pharmaceutical and biotechnology companies worldwide.
In March 2002, a federal court dismissed each of the three federal securities class action lawsuits filed last year against the Company, Genentech and certain of their officers. After further investigating the issues, plaintiffs, counsel had filed with the Court a Stipulation and Proposed Order of Voluntary Dismissal in all three actions. Thereafter, the Court entered an order dismissing each of the lawsuits without prejudice. No consideration was exchanged, and neither plaintiffs nor their counsel received any compensation or reimbursement of expenses.
XOMA has scheduled an investor conference call regarding this announcement to be held today beginning at 4:00 PM Eastern Time (1:00 PM. Pacific). Individual investors are invited to listen to the conference call by phone or via the Internet. The domestic dial-in number for the live call is (877) 711-7453 and the conference ID number is 4016702. The international dial-in number is 706-634-1542 and utilizes the domestic dial-in conference ID number. To listen to call via the Internet, please go to the XOMA web site at www.xoma.com a few minutes prior to the start of the call to register, download, and install the necessary audio software. The audiocast version of the call will be archived for 30 days and available for replay one hour after the conclusion of the conference call. A dial-in replay will be available until 6:00 PM Eastern (3:00 PM Pacific) May 15, 2002 at (800) 642-1687 for domestic callers and at (706) 645-9291 for international dialing. Enter conference ID number 4016702 to access the recording.
XOMA develops and manufactures antibody and other protein biopharmaceuticals for disease targets that include cancer, immunological and inflammatory disorders and infectious diseases. For more information About XOMA's pipeline and activities, please visit the Company web site at www.xoma.com.
The statements made in this news release related to the estimated size of the Company's loss for 2002, the sufficiency of its cash resources and the BLA filing time frame, as well as other statements related to the progress and timing of product development and present or future licensing or collaborative arrangements, or that otherwise relate to future periods, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on assumptions that may not prove accurate. Actual results could differ materially from those anticipated due to certain risks inherent in the biotechnology industry and for companies engaged in the development of new products in a regulated market. Among other things, the actual loss for 2002 could be higher depending on the size and timing of expenditures and whether there are unanticipated expenditures; the sufficiency of cash resources could be shortened if expenditures are made earlier or in larger amounts than anticipated or are unanticipated or if funds are not available; and the BLA filing could be delayed by unexpected safety or efficacy issues or additional time requirements for data analysis, BLA preparation, discussions with the FDA, additional clinical studies or manufacturing process modifications. These and other risks, including those related to the availability of additional licensing or collaboration opportunities, changes in the status of existing collaborative relationships, market demand for products, the ability of collaborators and other partners to meet their obligations, actions by the Food and Drug Administration or the U.S. Patent and Trademark Office and uncertainties regarding the status of biotechnology patents, are discussed in the Company's most recent annual report on Form 10-K and in other SEC filings. Consider such risks carefully in evaluating XOMA's prospects.
|$ 58,183||$ 67,320|
|Total current assets||66,648||71,268|
|$ 83,972||$ 86,107|
|Liabilities and Shareholders Equity:|
|$ 6,340||$ 3,520|
|Convertible subordinated note|
|Total current liabilities||20,897||18,645|
|- long term||52,241||50,980|
|$ 83,972||$ 86,107|
Note 1 - Amounts derived from the Company's audited financial statements
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited - in thousands except per share data)
|Three Months Ended|
|$ 6,313||$ 1,015|
|Operating Costs and Expenses:|
|Loss from operations||(5,562)||(7,224)|
|Other Income (Expense):|
|Basic and diluted loss per share||$ (0.08)||$ (0.11)|
|Shares used in computing basic|
and diluted net
loss per share