Aviron Announces First Quarter 2001 Results

Apr 25, 2001, 01:00 ET from Aviron

    MOUNTAIN VIEW, Calif., April 25 /PRNewswire/ -- Aviron (Nasdaq:   AVIR)
 today announced results for the first quarter, ended March 31, 2001.
     The company reported a net loss of $27.5 million (basic net loss of
 $0.96 per share) for the first quarter of 2001, compared to a net loss of
 $41.8 million (basic net loss of $2.44 per share) for the first quarter of
 2000. The results for the first quarter of 2000 reflect the implementation of
 Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements
 (SAB 101), as of January 1, 2000.
     Revenues in the 2001 first quarter totaled $3.2 million, compared to
 $3.4 million for the first quarter of 2000. Revenues during the first quarters
 of 2000 and 2001 were comprised principally of revenue from Wyeth Lederle
 Vaccines (Wyeth), a business unit of American Home Products Corporation (AHP),
 related to the clinical development and commercialization of FluMist(TM),
 under the terms of our FluMist(TM) collaboration agreement. FluMist(TM) is
 Aviron's investigational intranasal influenza vaccine.
     Operating expenses in the 2001 first quarter totaled $32.6 million,
 compared to $31.1 million for the first quarter of 2000. Research and
 development costs increased to $28.1 million in the 2001 first quarter from
 $17.6 million in the first quarter of 2000. The increase in research and
 development costs was due primarily to increases in development activities,
 clinical trials, and commercial scale-up expenses associated with FluMist(TM).
 The first quarter of 2000 also included a one-time, non-cash charge for the
 acquisition of in-process research and development in the amount of
 $10.9 million due to the February 2000 amendment of our agreement with the
 University of Michigan to accelerate the issuance of a warrant to the
 university. General, administrative and marketing costs increased to
 $4.5 million in the 2001 first quarter from $2.6 million in the 2000
 first quarter. The increase was due to significant growth in infrastructure
 and other costs to support preparations for a potential commercial launch of
 FluMist(TM) in 2001.
     During the first quarter of 2001, we exchanged approximately $33.5 million
 aggregate principal amount of our 5 3/4 percent convertible notes due in 2005
 for approximately 1.1 million shares of our common stock in a number of
 privately negotiated transactions. Additional non-cash interest expense
 related to these exchanges was approximately $1.6 million. Approximately
 $800,000 of unamortized debt issue costs related to the 2005 notes exchanged
 have been charged to additional paid-in capital in the first quarter of 2001.
 As of March 31, 2001, approximately $14.8 million aggregate principal amount
 of the 2005 notes remained outstanding.
     Cash, cash equivalents and investments totaled $523.5 million at
 March 31, 2001, compared to $136.8 million at December 31, 2000.
     Company events during the first quarter included several financings,
 commercialization related activities and personnel announcements.
 
     Financing transactions
     -- On January 29, we sold 161,060 shares of our common stock to Acqua
        Wellington North American Equities Fund, Ltd. (Acqua Wellington) for an
        aggregate price of $8.0 million, or $49.67 per share. This financing
        was the final transaction under Acqua Wellington's $84.0 million equity
        financing commitment.
     -- On February 7, we completed a public offering of 4,000,000 shares of
        our common stock at $50.00 per share and a concurrent public offering
        of $200.0 million of 5 1/4 percent convertible subordinated notes due
        in 2008. The 2008 notes are convertible into common stock at any time
        after the original issuance through maturity, unless previously
        redeemed or repurchased, at a conversion price of $62.50 per share. The
        sale of the securities under the concurrent common stock and debt
        offerings resulted in net proceeds to the company of approximately
        $382.5 million, after the deduction of commissions and offering costs.
 
     Operations
     -- On January 8, we announced the receipt of a $10.0 million advance from
        AHP to support commercial manufacturing and inventory build-up of
        FluMist(TM) for a potential product launch during the 2001-2002
        influenza season. This payment was an advance for payments AHP will owe
        Aviron under the companies' global collaboration agreement for
        FluMist(TM).
 
     Senior Management
     -- On January 8, we announced the election of C. Boyd Clarke, Aviron
        president and chief executive officer, as chairman of the board of
        directors.
     -- On January 24, we announced the promotion of Rayasam S. Prasad to
        senior vice president, technical affairs.
 
     Business Outlook
     We anticipate our operating expenditures will be between $130 and
 $145 million in 2001. This increase from 2000 operating expenses is due
 primarily to an increase in the size of our operations in the U.K. and
 expenses that we expect to incur as we make preparations for a potential
 commercial launch of FluMist(TM) in the U.S. for the 2001-2002 influenza
 season. This increase includes amortization expense associated with the
 restructuring of our manufacturing agreement with Evans Vaccines Ltd. The
 portion of 2001 operating expenses that is depreciation and amortization is
 expected to be approximately $17.0 million, compared to $8.1 million for 2000.
     Our outlook for operating expenses in 2001 does not include a one-time
 non-cash charge associated with the vesting of employee stock options in the
 event of a 2001 approval by the FDA for marketing of FluMist(TM).
     As part of preparing for a potential FluMist(TM) commercial launch for the
 2001-2002 influenza season, we have begun the initial stages of
 commercial-scale manufacturing of FluMist(TM). Since the outcome and timing of
 the regulatory process will strongly influence the number of doses sold during
 the 2001-2002 influenza season, we have not made sales projections for 2001.
     FluMist(TM) sales projections for 2002 will depend upon the outcome and
 timing of regulatory approval, the labeled indications, the scope of any
 expanded recommendations for influenza vaccination by important medical
 organizations, the number of doses manufactured, the number of doses released
 for sale by the FDA and the ex-manufacture price. Our goal is to generate
 sufficient revenue to Aviron from FluMist(TM) sales during 2002 to achieve
 profitability.
     We intend to record the majority of our manufacturing spending as research
 and development expense, rather than capitalize into inventory, until
 FluMist(TM) is approved for marketing by the FDA. Thus, a significant portion
 of anticipated 2001 operating expense will include manufacturing activities.
 If we receive marketing approval for FluMist(TM), initial reported cost of
 goods sold may be lower than in future periods when manufacturing expenses
 will be charged to cost of goods sold.
     We expect capital expenditures to increase substantially as we commence
 building additional manufacturing facilities and commercialization systems and
 facilities. During 2001, we forecast that capital expenditures will be between
 $30.0 and $40.0 million.
     In conjunction with this press release, Aviron will host a conference call
 that will be broadcast live over the Internet. The conference call will take
 place on Thursday, April 26, beginning at 8:30 a.m. EDT. To access the
 webcast, visit the Aviron Web site at http://www.aviron.com and log-on to the
 audio feed as instructed. If you are unable to participate during the live
 webcast, the call will be archived at http://www.aviron.com until
 5:00 p.m. EDT on Monday, April 30. The information provided on the conference
 call and on the webcast is only accurate at the time of the call, and Aviron
 will take no responsibility for providing updated information.
     Aviron is a biopharmaceutical company based in Mountain View, California,
 focused on the prevention of disease through innovative vaccine technology.
     The business outlook and other sections of this press release contain
 forward-looking statements. These statements, which reflect management's
 current beliefs and expectations, are subject to risks and uncertainties that
 may cause actual results to differ materially from those projected in the
 forward-looking statements contained in this release. Factors that could cause
 actual results to differ include, but are not limited to, the assessment by
 regulatory agencies that our license applications for our nasal influenza
 vaccine, or other vaccines, are incomplete or inadequate to approve the
 product for marketing to one or more target populations, and those factors
 listed in the business outlook section of the release.
     Additional factors that could cause actual results to differ include,
 without limitation, the risk that the FDA will determine that our
 manufacturing facilities are not adequate, potential difficulties we may have
 with our manufacturing process, the risk that we are unable to perform the
 complex annual update of the FluMist(TM) formulation for new influenza strains
 in a timely manner, our dependence on Wyeth for marketing, promotion, sales
 and distribution activities, the risk that medical advisory bodies, doctors
 and other health care providers do not recommend FluMist(TM), the risk that
 the market does not accept FluMist(TM), and other business risks identified in
 our Annual Report on Form 10-K for the fiscal year ended December 31, 2000.
     To receive an index and copies of recent press releases, call Aviron's
 News-On-Call toll-free fax service, 800-758-5804, extension 114000. Additional
 information about the company can be located at http://www.aviron.com .
 
                                     AVIRON
                Condensed Consolidated Statements of Operations
                                  (Unaudited)
                     (In thousands, except per share data)
 
                                                         Three Months Ended
                                                             March 31,
                                                       2001            2000
     Revenues:
       Contract revenues and grants                    $3,215         $3,407
     Operating Expenses:
       Research and development                        28,094         17,594
       Acquisition of in-process research
        and development                                    --         10,904
       General, administrative and marketing            4,473          2,568
         Total Operating Expenses                      32,567         31,066
     Loss From Operations                             (29,352)       (27,659)
     Other Income/(Expense), net                        1,886         (1,366)
     Net Loss, before cumulative effect of
      change in accounting principle                  (27,466)       (29,025)
     Cumulative effect of change in accounting
      principle                                            --        (12,750)
     Net Loss, after cumulative effect of change
      in accounting principle                        $(27,466)      $(41,775)
     Basic and diluted net loss per share:
       Loss before cumulative effect of change
        in accounting principle                        $(0.96)        $(1.70)
       Cumulative effect of change in accounting
        principle                                          --          (0.74)
       Loss after cumulative effect of change in
        accounting principle                           $(0.96)        $(2.44)
     Shares used in calculation of basic net
      loss per share                                   28,504         17,095
 
                                     AVIRON
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
 
                                                      March 31,   December 31,
                                                       2001          2000
                                                    (Unaudited)     (Note)
     ASSETS
       Cash and cash equivalents and short-term
        investments                                  $470,353       $132,313
       Accounts receivable                              6,553         23,288
       Inventory                                        5,492          4,264
       Other current assets                             4,249          2,691
         Total Current Assets                         486,647        162,556
 
       Long-term investments                           53,163          4,506
       Property and equipment, net                     30,569         27,707
       Intangible assets                               47,698         48,046
       Debt issuance costs, deposits and other
        assets                                         11,493          5,924
         Total Assets                                $629,570       $248,739
 
 
     LIABILITIES and STOCKHOLDERS' EQUITY
       Current liabilities                            $31,854        $26,361
       Long-term obligations, less current portion    257,426         89,947
       Other long-term liabilities                     10,628         11,845
         Total Liabilities                            299,908        128,153
       Stockholders' Equity                           329,662        120,586
         Total Liabilities and
           Stockholders' Equity                      $629,570       $248,739
 
     Note:  These amounts have been derived from the audited consolidated
     financial statements.
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X80687312
 
 

SOURCE Aviron
    MOUNTAIN VIEW, Calif., April 25 /PRNewswire/ -- Aviron (Nasdaq:   AVIR)
 today announced results for the first quarter, ended March 31, 2001.
     The company reported a net loss of $27.5 million (basic net loss of
 $0.96 per share) for the first quarter of 2001, compared to a net loss of
 $41.8 million (basic net loss of $2.44 per share) for the first quarter of
 2000. The results for the first quarter of 2000 reflect the implementation of
 Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements
 (SAB 101), as of January 1, 2000.
     Revenues in the 2001 first quarter totaled $3.2 million, compared to
 $3.4 million for the first quarter of 2000. Revenues during the first quarters
 of 2000 and 2001 were comprised principally of revenue from Wyeth Lederle
 Vaccines (Wyeth), a business unit of American Home Products Corporation (AHP),
 related to the clinical development and commercialization of FluMist(TM),
 under the terms of our FluMist(TM) collaboration agreement. FluMist(TM) is
 Aviron's investigational intranasal influenza vaccine.
     Operating expenses in the 2001 first quarter totaled $32.6 million,
 compared to $31.1 million for the first quarter of 2000. Research and
 development costs increased to $28.1 million in the 2001 first quarter from
 $17.6 million in the first quarter of 2000. The increase in research and
 development costs was due primarily to increases in development activities,
 clinical trials, and commercial scale-up expenses associated with FluMist(TM).
 The first quarter of 2000 also included a one-time, non-cash charge for the
 acquisition of in-process research and development in the amount of
 $10.9 million due to the February 2000 amendment of our agreement with the
 University of Michigan to accelerate the issuance of a warrant to the
 university. General, administrative and marketing costs increased to
 $4.5 million in the 2001 first quarter from $2.6 million in the 2000
 first quarter. The increase was due to significant growth in infrastructure
 and other costs to support preparations for a potential commercial launch of
 FluMist(TM) in 2001.
     During the first quarter of 2001, we exchanged approximately $33.5 million
 aggregate principal amount of our 5 3/4 percent convertible notes due in 2005
 for approximately 1.1 million shares of our common stock in a number of
 privately negotiated transactions. Additional non-cash interest expense
 related to these exchanges was approximately $1.6 million. Approximately
 $800,000 of unamortized debt issue costs related to the 2005 notes exchanged
 have been charged to additional paid-in capital in the first quarter of 2001.
 As of March 31, 2001, approximately $14.8 million aggregate principal amount
 of the 2005 notes remained outstanding.
     Cash, cash equivalents and investments totaled $523.5 million at
 March 31, 2001, compared to $136.8 million at December 31, 2000.
     Company events during the first quarter included several financings,
 commercialization related activities and personnel announcements.
 
     Financing transactions
     -- On January 29, we sold 161,060 shares of our common stock to Acqua
        Wellington North American Equities Fund, Ltd. (Acqua Wellington) for an
        aggregate price of $8.0 million, or $49.67 per share. This financing
        was the final transaction under Acqua Wellington's $84.0 million equity
        financing commitment.
     -- On February 7, we completed a public offering of 4,000,000 shares of
        our common stock at $50.00 per share and a concurrent public offering
        of $200.0 million of 5 1/4 percent convertible subordinated notes due
        in 2008. The 2008 notes are convertible into common stock at any time
        after the original issuance through maturity, unless previously
        redeemed or repurchased, at a conversion price of $62.50 per share. The
        sale of the securities under the concurrent common stock and debt
        offerings resulted in net proceeds to the company of approximately
        $382.5 million, after the deduction of commissions and offering costs.
 
     Operations
     -- On January 8, we announced the receipt of a $10.0 million advance from
        AHP to support commercial manufacturing and inventory build-up of
        FluMist(TM) for a potential product launch during the 2001-2002
        influenza season. This payment was an advance for payments AHP will owe
        Aviron under the companies' global collaboration agreement for
        FluMist(TM).
 
     Senior Management
     -- On January 8, we announced the election of C. Boyd Clarke, Aviron
        president and chief executive officer, as chairman of the board of
        directors.
     -- On January 24, we announced the promotion of Rayasam S. Prasad to
        senior vice president, technical affairs.
 
     Business Outlook
     We anticipate our operating expenditures will be between $130 and
 $145 million in 2001. This increase from 2000 operating expenses is due
 primarily to an increase in the size of our operations in the U.K. and
 expenses that we expect to incur as we make preparations for a potential
 commercial launch of FluMist(TM) in the U.S. for the 2001-2002 influenza
 season. This increase includes amortization expense associated with the
 restructuring of our manufacturing agreement with Evans Vaccines Ltd. The
 portion of 2001 operating expenses that is depreciation and amortization is
 expected to be approximately $17.0 million, compared to $8.1 million for 2000.
     Our outlook for operating expenses in 2001 does not include a one-time
 non-cash charge associated with the vesting of employee stock options in the
 event of a 2001 approval by the FDA for marketing of FluMist(TM).
     As part of preparing for a potential FluMist(TM) commercial launch for the
 2001-2002 influenza season, we have begun the initial stages of
 commercial-scale manufacturing of FluMist(TM). Since the outcome and timing of
 the regulatory process will strongly influence the number of doses sold during
 the 2001-2002 influenza season, we have not made sales projections for 2001.
     FluMist(TM) sales projections for 2002 will depend upon the outcome and
 timing of regulatory approval, the labeled indications, the scope of any
 expanded recommendations for influenza vaccination by important medical
 organizations, the number of doses manufactured, the number of doses released
 for sale by the FDA and the ex-manufacture price. Our goal is to generate
 sufficient revenue to Aviron from FluMist(TM) sales during 2002 to achieve
 profitability.
     We intend to record the majority of our manufacturing spending as research
 and development expense, rather than capitalize into inventory, until
 FluMist(TM) is approved for marketing by the FDA. Thus, a significant portion
 of anticipated 2001 operating expense will include manufacturing activities.
 If we receive marketing approval for FluMist(TM), initial reported cost of
 goods sold may be lower than in future periods when manufacturing expenses
 will be charged to cost of goods sold.
     We expect capital expenditures to increase substantially as we commence
 building additional manufacturing facilities and commercialization systems and
 facilities. During 2001, we forecast that capital expenditures will be between
 $30.0 and $40.0 million.
     In conjunction with this press release, Aviron will host a conference call
 that will be broadcast live over the Internet. The conference call will take
 place on Thursday, April 26, beginning at 8:30 a.m. EDT. To access the
 webcast, visit the Aviron Web site at http://www.aviron.com and log-on to the
 audio feed as instructed. If you are unable to participate during the live
 webcast, the call will be archived at http://www.aviron.com until
 5:00 p.m. EDT on Monday, April 30. The information provided on the conference
 call and on the webcast is only accurate at the time of the call, and Aviron
 will take no responsibility for providing updated information.
     Aviron is a biopharmaceutical company based in Mountain View, California,
 focused on the prevention of disease through innovative vaccine technology.
     The business outlook and other sections of this press release contain
 forward-looking statements. These statements, which reflect management's
 current beliefs and expectations, are subject to risks and uncertainties that
 may cause actual results to differ materially from those projected in the
 forward-looking statements contained in this release. Factors that could cause
 actual results to differ include, but are not limited to, the assessment by
 regulatory agencies that our license applications for our nasal influenza
 vaccine, or other vaccines, are incomplete or inadequate to approve the
 product for marketing to one or more target populations, and those factors
 listed in the business outlook section of the release.
     Additional factors that could cause actual results to differ include,
 without limitation, the risk that the FDA will determine that our
 manufacturing facilities are not adequate, potential difficulties we may have
 with our manufacturing process, the risk that we are unable to perform the
 complex annual update of the FluMist(TM) formulation for new influenza strains
 in a timely manner, our dependence on Wyeth for marketing, promotion, sales
 and distribution activities, the risk that medical advisory bodies, doctors
 and other health care providers do not recommend FluMist(TM), the risk that
 the market does not accept FluMist(TM), and other business risks identified in
 our Annual Report on Form 10-K for the fiscal year ended December 31, 2000.
     To receive an index and copies of recent press releases, call Aviron's
 News-On-Call toll-free fax service, 800-758-5804, extension 114000. Additional
 information about the company can be located at http://www.aviron.com .
 
                                     AVIRON
                Condensed Consolidated Statements of Operations
                                  (Unaudited)
                     (In thousands, except per share data)
 
                                                         Three Months Ended
                                                             March 31,
                                                       2001            2000
     Revenues:
       Contract revenues and grants                    $3,215         $3,407
     Operating Expenses:
       Research and development                        28,094         17,594
       Acquisition of in-process research
        and development                                    --         10,904
       General, administrative and marketing            4,473          2,568
         Total Operating Expenses                      32,567         31,066
     Loss From Operations                             (29,352)       (27,659)
     Other Income/(Expense), net                        1,886         (1,366)
     Net Loss, before cumulative effect of
      change in accounting principle                  (27,466)       (29,025)
     Cumulative effect of change in accounting
      principle                                            --        (12,750)
     Net Loss, after cumulative effect of change
      in accounting principle                        $(27,466)      $(41,775)
     Basic and diluted net loss per share:
       Loss before cumulative effect of change
        in accounting principle                        $(0.96)        $(1.70)
       Cumulative effect of change in accounting
        principle                                          --          (0.74)
       Loss after cumulative effect of change in
        accounting principle                           $(0.96)        $(2.44)
     Shares used in calculation of basic net
      loss per share                                   28,504         17,095
 
                                     AVIRON
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
 
                                                      March 31,   December 31,
                                                       2001          2000
                                                    (Unaudited)     (Note)
     ASSETS
       Cash and cash equivalents and short-term
        investments                                  $470,353       $132,313
       Accounts receivable                              6,553         23,288
       Inventory                                        5,492          4,264
       Other current assets                             4,249          2,691
         Total Current Assets                         486,647        162,556
 
       Long-term investments                           53,163          4,506
       Property and equipment, net                     30,569         27,707
       Intangible assets                               47,698         48,046
       Debt issuance costs, deposits and other
        assets                                         11,493          5,924
         Total Assets                                $629,570       $248,739
 
 
     LIABILITIES and STOCKHOLDERS' EQUITY
       Current liabilities                            $31,854        $26,361
       Long-term obligations, less current portion    257,426         89,947
       Other long-term liabilities                     10,628         11,845
         Total Liabilities                            299,908        128,153
       Stockholders' Equity                           329,662        120,586
         Total Liabilities and
           Stockholders' Equity                      $629,570       $248,739
 
     Note:  These amounts have been derived from the audited consolidated
     financial statements.
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X80687312
 
 SOURCE  Aviron