TKT Reports Third Quarter 2004 Financial Results CAMBRIDGE, Mass.,
Nov. 9 /PRNewswire-FirstCall/ -- Transkaryotic Therapies, Inc.
(NASDAQ:TKTX) today announced its consolidated financial results
for the three and nine months ending September 30, 2004. Total
sales of Replagal(TM) (agalsidase alfa), TKT's enzyme replacement
therapy for Fabry disease, were approximately $19.5 million for the
third quarter of 2004, which represents an increase of 28% over the
same period in 2003 and 8% over the $18.1 million recorded in the
second quarter of 2004. For the nine months ended September 30,
2004, Replagal sales totaled $54.9 million, compared to sales of
$41.7 million for the nine months ended September 30, 2003. Net
loss for the third quarter of 2004 was $18.8 million, or $0.54 per
share, compared to a net loss of $13.6 million, or $0.39 per share,
for the same period in 2003. For the nine months ended September
30, 2004, the net loss was $53.2 million, or $1.53 per share,
compared to $60.5 million, or $1.75 per share, for the nine months
ended September 30, 2003. Costs of goods sold in the third quarter
of 2004 totaled $3.4 million, or 17% of product sales, compared to
$2.8 million, or 18% of product sales, for the corresponding
quarter in 2003. For the nine months ended September 30, 2004, cost
of goods sold was $8.9 million compared to $11.0 million for the
nine months ended September 30, 2003. Research and development
expenses totaled $23.5 million in the third quarter of 2004,
compared to $17.9 million for the same period in 2003. For the nine
months ended September 30, 2004, research and development expenses
totaled $65.7 million, compared to $55.7 million for the same
period in 2003. The increase in research and development expenses
was primarily due to increased clinical trial and manufacturing
costs associated with iduronate-2- sulfatase (I2S), enzyme
replacement therapy for Hunter syndrome, and GA-GCB, enzyme
replacement therapy for Gaucher disease, as well as contract
manufacturing costs for Dynepo(TM) (epoeitin delta), TKT's
Gene-Activated(R) erythropoietin product for the treatment of
anemia. Selling, general and administrative expenses were $10.0
million in the third quarter of 2004, compared to $7.3 million for
the same period in 2003. For the nine months ended September 30,
2004, SG&A was $30.9 million, compared to $25.9 million for the
nine months ended September 30, 2003. The increase in SG&A was
primarily associated with increased sales costs, including
incentive compensation, at TKT Europe as well as costs incurred
with the U.K. Dynepo patent litigation. At September 30, 2004, the
company had cash and marketable securities of approximately $222.8
million and long-term debt totaling $94 million. "We are pleased
with the continued growth of Replagal in Europe and the progress we
have made on our key business goals," said Michael J. Astrue,
President and Chief Executive Officer of TKT. Program Highlights
Replagal for Fabry Disease In October 2004, TKT completed the
acquisition of the 20% minority interest in TKT Europe-5S for $61
million in cash. With this purchase, TKT now owns 100% of TKT
Europe-5S. I2S for Hunter Syndrome In September 2004, TKT commenced
its open-label extension study for I2S. Patients who have completed
twelve months of treatment in the pivotal clinical trial, referred
to as the AIM study (Assessment of I2S in MPS II) are eligible to
cross over into the extension study where all patients will receive
I2S. The company intends to report top-line results from the AIM
study in the second quarter of 2005. Also during the third quarter,
TKT received fast track designation for I2S from the U.S. Food and
Drug Administration and a $300,000 grant from the Office of Orphan
Drug Products to support the AIM study. GA-GCB for Gaucher Disease
In July 2004, TKT closed enrollment in its Phase I/II clinical
trial evaluating GA-GCB in 12 patients. The trial is expected to
conclude in the second quarter of 2005 and the company expects to
report top-line results during the second half of 2005. In October
2004, Professor Ari Zimran, lead investigator of the GA-GCB study,
reported preliminary safety findings at the American Society of
Human Genetics Annual meeting. Professor Zimran's findings
demonstrated that IV infusions of GA-GCB were well-tolerated by
patients in the trial. Dynepo for Anemia During the quarter, TKT
made the strategic decision to pursue a commercial partnership for
Dynepo in Europe. TKT also established a master contract
manufacturing agreement with Lonza in early August 2004. The
company continues to expect a European launch in late 2005 or early
2006. In addition, TKT expects to announce top-line data from a
pivotal trial evaluating Dynepo in patients with anemia undergoing
cancer chemotherapy in the first half of 2005 and, if the results
are positive, to file an amendment to the Dynepo product license
and seek to expand the label. In October 2004, the House of Lords
affirmed an earlier U.K. decision in favor of TKT in its patent
litigation against Kirin-Amgen, Inc. Upcoming Events During the
fourth quarter of 2004, TKT will present at the SG Cowen European
Health Care Conference being held in Geneva, Switzerland, November
16-17, 2004 and the Wachovia Capital Markets Ten for '05
Biotechnology Conference in New York, New York, December 16, 2004.
In addition, TKT is scheduled to present at the JPMorgan Health
Care Conference being held in San Francisco, California, January
10-13, 2005. Conference Call and Webcast In connection with this
announcement, TKT will host a conference call and live webcast
today, Tuesday, November 9, 2004, at 10:00 a.m. Eastern Standard
Time to discuss these results and the company's business generally.
Participants may access the call by dialing (719) 457-2618. The
live webcast may be accessed in the Investor Information section of
TKT's website at http://www.tktx.com/. A replay of this conference
call will be available for two weeks beginning today, November 9,
2004, at 1:00 p.m. Eastern Standard Time, by dialing (719) 457-0820
and using the access code 953576. A replay of the webcast will be
archived for one year on the TKT website in the Investor
Information section. About TKT Transkaryotic Therapies, Inc. is a
biopharmaceutical company primarily focused on researching,
developing and commercializing treatments for rare diseases caused
by protein deficiencies. Within this focus, the company markets
Replagal(TM), an enzyme replacement therapy for Fabry disease, and
is developing treatments for Hunter syndrome and Gaucher disease.
Outside its focus on rare diseases, TKT intends to commercialize
Dynepo(TM), its Gene- Activated(R) erythropoietin product for
anemia related to kidney disease, in the European Union. TKT was
founded in 1988 and is headquartered in Cambridge, Massachusetts,
with additional operations in Europe, Canada and South America.
Additional information about TKT is available on the company's
website at http://www.tktx.com/. Forward-looking Statements This
press release contains forward-looking statements including
statements regarding TKT's development of certain products,
including Replagal, I2S, GA-GCB and Dynepo, as well as statements
containing the words "believes," "anticipates," "plans," "expects,"
"estimates," "intends," "should," "could," "will," "may," and
similar expressions. There are a number of important factors that
could cause the company's actual results to differ materially from
those indicated by such forward-looking statements, including:
whether any of the company's products will achieve the commercial
success anticipated by the company; the timing of submissions to
and decisions by regulatory authorities regarding clinical trials
and marketing and other applications; whether the FDA, the EMEA and
equivalent regulatory authorities will grant marketing approval for
the company's products on a timeline consistent with TKT's
expectations, or at all; whether TKT will be able to complete
clinical trials of its products on a timely basis; whether the
results of clinical trials will be consistent with the results of
earlier clinical trials of the company's products and warrant
submission of applications for regulatory approval for such
products to the FDA and equivalent regulatory authorities; whether
TKT and its third party manufacturers will be able to complete the
manufacturing development necessary to satisfy regulatory
requirements on a timeline consistent with TKT's expectations or at
all and to manufacture sufficient quantities of TKT's products to
satisfy both clinical trial requirements and commercial demand, or
to manufacture material at all, if approved; the availability and
extent of coverage from third party payors and the timing and
receipt of reimbursement approvals for the company's products;
whether competing products will reduce any market opportunity that
may exist; results of ongoing litigation and the risks of future
litigation; whether competitors will be able to limit access to
markets in which TKT is attempting to sell Dynepo, through legal
maneuvering or otherwise; the need for cash; and other factors set
forth under the caption "Certain Factors That May Affect Future
Results" in the company's quarterly report on Form 10-Q filed
August 9, 2004, which is on file with the Securities and Exchange
Commission and which factors are incorporated herein by reference.
While the company may elect to update forward-looking statements at
some point in the future, the company specifically disclaims any
obligation to do so, even if its expectations change.
Gene-Activated(R) is a registered trademark and Replagal(TM) is a
trademark of Transkaryotic Therapies, Inc. Dynepo(TM) is a
trademark of Sanofi-Aventis SA. Contacts: Justine E. Koenigsberg
Senior Director, Corporate Communications (617) 349-0271 Daniella
M. Lutz Corporate Communications Manager (617) 349-0205 - Financial
Table to Follow- Condensed Consolidated Statements of Operations
(unaudited) Three Months Ended Nine Months Ended September 30,
September 30, (In thousands, except per share 2004 2003 2004 2003
amounts) Product sales $19,479 $15,185 $54,920 $41,738 License and
research revenues 79 1,533 239 1,577 19,558 16,718 55,159 43,315
Operating expenses: Cost of goods sold 3,387 2,769 8,907 11,045
Research and development 23,527 17,895 65,674 55,730 Selling,
general and administrative 9,984 7,285 30,893 25,863 Restructuring
charge 1,257 2,765 3,030 11,324 Intellectual property license
expense - - - 1,350 38,155 30,714 108,504 105,312 Loss from
operations before minority interest (18,597) (13,996) (53,345)
(61,997) Minority interest in net (income)/loss of consolidated
subsidiary 23 31 55 (305) Loss from operations after minority
interest (18,574) (13,965) (53,290) (62,302) Net interest income
166 417 552 1,834 Loss on disposal of fixed assets (402) (5) (433)
(50) Net loss $(18,810) $(13,553) $(53,171) $(60,518) Basic and
diluted net loss per share $(0.54) $(0.39) $(1.53) $(1.75) Shares
used to compute basic and diluted net loss per share 34,728 34,567
34,665 34,551 Condensed Consolidated Balance Sheets (unaudited)
September 30, December 31, (In thousands) 2004 2003 Cash and
marketable securities $222,833 $180,947 Other current assets 46,932
44,392 Property and equipment, net 62,737 61,908 Other assets 4,846
1,922 Total assets $337,348 $289,169 Total current liabilities
$27,939 $21,149 Long term liabilities 9,022 9,285 Long term debt
94,000 - Minority interest 358 413 Total stockholders' equity
206,029 258,322 Total liabilities and stockholders' equity $337,348
$289,169 http://www.newscom.com/cgi-bin/prnh/19990913/TKTLOGO
http://photoarchive.ap.org/ DATASOURCE: Transkaryotic Therapies,
Inc. CONTACT: Justine E. Koenigsberg, Senior Director, Corporate
Communications, +1-617-349-0271, or Daniella M. Lutz, Corporate
Communications Manager, +1-617-349-0205, both of Transkaryotic
Therapies, Inc. Web site: http://www.tktx.com/ Company News
On-Call: http://www.prnewswire.com/comp/120657.html
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