Innogenetics (BE) - Innogenetics' first quarter results for 2004: ...

Gent (Belgium), May 18, 2004 - Innogenetics today announced its results for the first quarter ending March 31, 2004.

 

 

 

• Diagnostics division profitable for the 3rd consecutive quarter

• Revenues(*) slightly increased to €14.6 million

• Gross margin improved to 57.0% versus 55.2% (including Therapeutics)

• R&D investments increased by 12%, driven by the new therapeutic vaccine programs
• Operating loss of €5.5 million, with Diagnostics reaching operating profit of €0.2 million
• Cash position at €41.6 million compared to €32.2 at the end of March 2003 (€43.5 million at end 2003)
• Therapeutics: positive final results in LyphoDerm's phase 2a clinical study; significantly improved liver fibrosis in hepatitis C patients after 3 years of therapeutic vaccination with INNO 101; acquisition of therapeutic vaccine program of Genencor in field of infectious diseases

 

(*) Revenues include product sales, royalty and license fee income.

 

Philippe Archinard, CEO of Innogenetics, commented: "In the first quarter 2004 Diagnostics performed profitably.  With the exception of the HLA product line, all diagnostics products performed strongly, thus clearly confirming our overall 2004 objectives. On the Therapeutics front, we continue to progress in the field of wound care with the excellent results for XCELLentis' LyphoDerm, and in the field of hepatitis C with outstanding 3-year fibrosis data. Furthermore, the integration of the newly acquired therapeutic vaccine programs of Genencor is evolving according to plan. A complete overview of our Diagnostics and Therapeutics R&D pipeline will be presented on June 16, 2004 on the occasion of Innogenetics' 2004 R&D Day."

 

 

 

For the first three months of 2004, Innogenetics' Diagnostics activities operated at a profit of €0.2 million, versus an operating loss of € -0.1 million in the same period in 2003. Revenues(*) increased to €14.5 million versus €14.3 million in 2003. The slow increase was mainly due to a change in the ordering and inventory process of our HLA partner and to the lost revenues following the sale of its Dutch subsidiary (Delft Diagnostic Laboratory BV) whose revenues were accounted for until the end of November 2003. These two events affected Diagnostics product sales, which reached €13.0 million, compared to €13.4 million in the first quarter of 2003. However, all other diagnostics product sales in the field of infectious diseases, neurodegeneration, and genetic testing performed exceeded expectations, thus continuing to confirm the 10% product sales growth projected for 2004. 

 

Furthermore, the ongoing efforts to optimize productivity and control costs have resulted in an enhancement of the gross margin to a level of 57%, while Diagnostics R&D and operating expenses remained on course.

 

 

 

R&D expenses for the Therapeutics programs amounted to €5.2 million for the first three months of 2004 and are in line with the 2004 budget. These expenditures reflect the new focus on therapeutic vaccines, which include not only hepatitis C, but also the integration of the new therapeutic vaccine programs in hepatitis B and human papillomavirus.

 

 

 

During the first three months of 2004, royalty income increased substantially to €0.8 million, mainly due to the increased sales activities of our partners in the field of HIV-1 group O. License fee income remained at the current level of €0.7 million.

 

R&D contract income and R&D grants were in line with expectations reaching a level of €1.4 million, mainly reflecting the contractual commitments from Solvay and Roche, as well as new grants in the diagnostics fields of hepatitis C and Alzheimer's disease.

 

 

 

Confirming the trend in productivity improvement, including Therapeutics, the gross margin for the first three months of 2004 increased to 57.0% against 55.2% for the same period in 2003.

 

R&D expenses reached €8.1 million during the first three months of 2004, representing a 12% increase compared to the same period in 2003. Diagnostics R&D expenditures remained stable at a level of €2.9 million, while Therapeutics R&D expenses amounted to €5.2 million in the first quarter of 2004.

 

Both Sales & Marketing and General & Administrative expenses increased slightly in the first three months of 2004 compared to the same period in 2003, to reach €7.8 million.

 

 

 

For the first three months of 2004, Innogenetics posted an operating loss of €5.5 million, compared to €4.2 million for the same period of 2003. The increased operating loss mainly reflected the flat revenues. All other result items were well in line with expectations.  The net loss for the first quarter of 2004 amounted to €5.6 million.

 

 

 

As of March 31, 2004, Innogenetics' cash position was €41.6 million compared to €32.2 million at the end of March 2003.  The cash position as of December 31, 2003 amounted to €43.5 million, including the capital increase of net €22 million.

 

The cash flow during the first three months of 2004 was mainly influenced by the payment of the €5 million license fee payment by Roche to Innogenetics.

 

 

Innogenetics is an international biopharmaceutical company building parallel businesses in the areas of specialty diagnostics and therapeutic vaccines. In 2003, total revenues increased by 16% to €73 million, with specialty diagnostics reaching an operating profit of €7 million. Its Diagnostics Division develops a large number of specialty products covering three areas: infectious diseases (hepatitis C, hepatitis B, and HIV), genetic testing (HLA tissue typing and cystic fibrosis), and neurodegeneration (Alzheimer's disease). In its Therapeutics Division, Innogenetics focuses on the development of therapeutic vaccines to address unmet medical needs in the field of infectious diseases, with two compounds now in clinical trials (hepatitis C in phase 2 and hepatitis B in phase 1).

 

With a strong commercially oriented management team and distinctive dual business model, Innogenetics provides a low-risk biotech investment with potentially high returns. Founded in 1985, Innogenetics is listed on Euronext Brussels. Innogenetics' headquarters are in Gent, Belgium, with sales affiliates in the United States, Germany, France, Spain, and Italy. Innogenetics employs 590 people worldwide and has a market capitalization of approximately €350 million.

 

 

 

Jean-Christophe Donck

Vice President - Investor Relations & Strategic Planning

Tel        +32 (0)9 329 1701

E-mail   jeandon@innogenetics.com

 

 

 

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