Cell Genesys Reports First Quarter Results

Ends Quarter With $243 Million in Cash



Apr 23, 2001, 01:00 ET from Cell Genesys, Inc.

    FOSTER CITY, Calif., April 23 /PRNewswire Interactive Press Release/ --
 Cell Genesys, Inc. (Nasdaq:   CEGE) reported a net loss of $203,000 or $0.01 per
 share for the quarter ended March 31, 2001. This compares with net income of
 $130 million or $3.56 per fully diluted share in the same quarter of 2000
 which included income primarily derived from the sale of a portion of the
 company's holdings in Abgenix, Inc. Cell Genesys ended the quarter with
 approximately $243.0 million in cash, cash equivalents and short-term
 investments, down from $260.0 million at the end of 2000. The decrease can be
 primarily attributed to the purchase of the operating assets of Chiron's gene
 therapy business announced in January 2001 and to the company's final
 estimated tax payment relating to the two Abgenix stock sales which occurred
 in 2000.
     Revenues for the quarter ended March 31, 2001 were $6.0 million, compared
 with $4.6 million for the comparable period in 2000, and the company's
 research and development costs for the quarter were $10.7 million, compared
 with $6.4 million for the first quarter of 2000. The increased research and
 development expenses were primarily due to clinical trial and manufacturing
 costs related to the company's advancing GVAX(R) cancer vaccine programs.
 Interest income for the quarter ended March 31, 2001 was $7.1 million compared
 with $2.0 million for the first quarter of 2000.
     "Cell Genesys continues to operate from a position of financial strength,
 which is enabling us to simultaneously evaluate our GVAX(R) cancer vaccines in
 multiple types of cancer and to expand our manufacturing facilities for future
 Phase III trials and market launch," stated Stephen A. Sherwin, M.D., chairman
 and chief executive officer of Cell Genesys. "Additionally, as our business
 focus increases in the cancer area, we will continue to maximize the value of
 our other product programs through corporate partnering, or if the technology
 warrants, through the creation of subsidiaries, as we did with Abgenix in 1996
 and with Ceregene earlier this year."
 
     Cell Genesys Highlights for the First Quarter of 2001:
     -- Acquired the principal operating assets of Chiron Corporation's gene
        therapy business, including a fully equipped and staffed GMP
        manufacturing facility. The approximately 48,000 square foot leased
        facility is located in San Diego, Calif. and is staffed with
        approximately 25 highly skilled employees with expertise in the
        manufacturing of gene therapy products.
     -- Launched a new majority-owned subsidiary, Ceregene, Inc., which is
        focused on gene therapies for neurologic disorders such as Alzheimer's
        disease and Parkinson's disease. Ceregene was formed through the
        acquisition of Neurologic Gene Therapeutics, a private San Diego-based
        start-up company.
     -- Published updated data for a Phase I GVAX(R) pancreatic cancer vaccine
        trial in the Journal of Clinical Oncology reporting that three of
        eight patients who received the higher doses of the vaccine in
        combination with surgery and standard adjuvant therapy remain alive and
        disease-free at 38, 35 and 33 months after diagnosis.
     -- Initiated a Phase I/II clinical trial of GVAX(R) cancer vaccine in
        myeloma, a type of bone marrow malignancy. The trial is being conducted
        in 15 patients at Johns Hopkins Oncology Center and is evaluating the
        vaccine in combination with chemotherapy and bone marrow stem cell
        transplantation.
 
     Cell Genesys is focused on the development and commercialization of cancer
 vaccines and gene therapies to treat major, life-threatening diseases. The
 company is conducting clinical trials of GVAX(R) cancer vaccines in prostate
 cancer, pancreatic cancer, lung cancer and myeloma and expects to initiate new
 studies in acute leukemia during 2001. Preclinical stage programs include gene
 therapies for cancer, hemophilia and cardiovascular disorders. Cell Genesys'
 majority-owned subsidiary, Ceregene, is focused on gene therapies for central
 nervous system disorders. Cell Genesys also continues to hold a 10.5 percent
 equity interest in its former subsidiary, Abgenix, an antibody product
 company. For additional information, please visit the company's web site at
 www.cellgenesys.com.
     Cell Genesys will host its quarterly analyst call to discuss events that
 occurred during the first quarter and other recent events at 11:30 a.m. EDT on
 Tuesday, April 24, 2001. Investors may listen to the live webcast of the
 conference call on Cell Genesys' web site. A replay of the webcast will be
 available for two weeks following the call. Alternatively, investors may
 listen to a replay of the call by dialing 800-633-8284 from locations in the
 U.S. and 858-812-6440 from outside the U.S. The call-in replay will be
 available for 48 hours following the call. Please refer to reservation number
 18591552.
     Statements made herein about the company and its subsidiaries, other than
 statements of historical fact, including statements about the application of
 the company's financial assets, progress reports and plans for GVAX(R)
 clinical trials, the company's progress and results and timing of clinical
 trials and preclinical programs, progress and capabilities of manufacturing
 facility sites, manufacturing capabilities of potential products,
 marketability of potential products and therapies and the nature of product
 pipelines are forward-looking statements and are subject to a number of
 uncertainties that could cause actual results to differ materially from the
 statements made, including risks associated with the success of research and
 development programs, clinical trials, the regulatory approval process for
 clinical trials, competitive technologies and products, patents, continuation
 of corporate partnerships and the need for additional financings. For
 information about these and other risks which may affect Cell Genesys, please
 see the company's Annual Report on Form 10-K dated April 2, 2001 as well as
 Cell Genesys' reports on Form 10-Q and 8-K and other reports filed from time
 to time with the Securities and Exchange Commission. The company assumes no
 obligation to update the forward-looking information in this press release.
 
                         SELECTED FINANCIAL INFORMATION
                                  (unaudited)
 
     Consolidated Statements Of Operations
     (in thousands except per share data)          Three months ended March 31
                                                       2001            2000
 
     Revenue under collaborative agreements            $5,973         $4,600
 
     Operating expenses:
       Research and development                        10,726          6,400
       General and administrative                       2,700          1,659
 
         Total operating expenses                      13,426          8,059
 
     Gain on sale of Abgenix common stock                  --        190,236
     Non-operating income                                  93             --
     Interest income, net                               7,108          1,967
 
       Income (loss) before minority interest,
        income tax and cumulative effect of
        change in accounting                            (253)        188,744
     Income (loss) attributed to minority
      interest                                           (37)             --
     Income (loss) before income tax and
      cumulative effect of change in accounting         (290)        188,744
     Benefit (provision) for income tax                    87       (47,940)
     Income (loss) before cumulative effect of
      change in accounting                             $(203)       $140,804
     Cumulative effect of change in accounting
      principle, net of tax                                --       (10,767)
     Net income (loss)                                 $(203)       $130,037
     Basic income (loss) per common share
      before cumulative effect of change in
      accounting principle                            $(0.01)          $4.24
     Cumulative effect of change in accounting
      principle                                            --         (0.32)
     Basic income (loss) per common share             $(0.01)          $3.92
 
     Diluted income (loss) per common share
      before cumulative effect of change in
      accounting principle                            $(0.01)          $3.85
     Cumulative effect of change in accounting
      principle                                          0.00         (0.29)
     Diluted income (loss) per common share           $(0.01)          $3.56
     Weighted average shares of common stock
      outstanding -- basic                             34,232         33,151
     Weighted average shares of common stock
      outstanding -- diluted                           34,232         36,511
 
     Condensed Consolidated Balance Sheets
     (in thousands)
 
     Cash, cash equivalents and
      short-term investments                         $242,834       $259,647
     Investment in Abgenix common stock               212,106        528,858
     Other current assets                               1,775            482
     Property and equipment, net                        9,913          4,439
     Other assets                                         805            290
 
     Total assets                                    $467,433       $793,716
 
     Current liabilities                             $104,245       $239,002
     Long-term obligations                              1,188          1,350
     Minority interest in equity of subsidiary            378             --
     Series B preferred stock                          17,185         17,185
     Stockholders' equity                             344,437        536,179
 
     Total liabilities and stockholders' equity      $467,433       $793,716
 
     CONTACT:  Jennifer Cook Williams, Manager, Corporate Communications of
 Cell Genesys, Inc., 650-425-4542.
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X59992336
 
 

SOURCE Cell Genesys, Inc.
    FOSTER CITY, Calif., April 23 /PRNewswire Interactive Press Release/ --
 Cell Genesys, Inc. (Nasdaq:   CEGE) reported a net loss of $203,000 or $0.01 per
 share for the quarter ended March 31, 2001. This compares with net income of
 $130 million or $3.56 per fully diluted share in the same quarter of 2000
 which included income primarily derived from the sale of a portion of the
 company's holdings in Abgenix, Inc. Cell Genesys ended the quarter with
 approximately $243.0 million in cash, cash equivalents and short-term
 investments, down from $260.0 million at the end of 2000. The decrease can be
 primarily attributed to the purchase of the operating assets of Chiron's gene
 therapy business announced in January 2001 and to the company's final
 estimated tax payment relating to the two Abgenix stock sales which occurred
 in 2000.
     Revenues for the quarter ended March 31, 2001 were $6.0 million, compared
 with $4.6 million for the comparable period in 2000, and the company's
 research and development costs for the quarter were $10.7 million, compared
 with $6.4 million for the first quarter of 2000. The increased research and
 development expenses were primarily due to clinical trial and manufacturing
 costs related to the company's advancing GVAX(R) cancer vaccine programs.
 Interest income for the quarter ended March 31, 2001 was $7.1 million compared
 with $2.0 million for the first quarter of 2000.
     "Cell Genesys continues to operate from a position of financial strength,
 which is enabling us to simultaneously evaluate our GVAX(R) cancer vaccines in
 multiple types of cancer and to expand our manufacturing facilities for future
 Phase III trials and market launch," stated Stephen A. Sherwin, M.D., chairman
 and chief executive officer of Cell Genesys. "Additionally, as our business
 focus increases in the cancer area, we will continue to maximize the value of
 our other product programs through corporate partnering, or if the technology
 warrants, through the creation of subsidiaries, as we did with Abgenix in 1996
 and with Ceregene earlier this year."
 
     Cell Genesys Highlights for the First Quarter of 2001:
     -- Acquired the principal operating assets of Chiron Corporation's gene
        therapy business, including a fully equipped and staffed GMP
        manufacturing facility. The approximately 48,000 square foot leased
        facility is located in San Diego, Calif. and is staffed with
        approximately 25 highly skilled employees with expertise in the
        manufacturing of gene therapy products.
     -- Launched a new majority-owned subsidiary, Ceregene, Inc., which is
        focused on gene therapies for neurologic disorders such as Alzheimer's
        disease and Parkinson's disease. Ceregene was formed through the
        acquisition of Neurologic Gene Therapeutics, a private San Diego-based
        start-up company.
     -- Published updated data for a Phase I GVAX(R) pancreatic cancer vaccine
        trial in the Journal of Clinical Oncology reporting that three of
        eight patients who received the higher doses of the vaccine in
        combination with surgery and standard adjuvant therapy remain alive and
        disease-free at 38, 35 and 33 months after diagnosis.
     -- Initiated a Phase I/II clinical trial of GVAX(R) cancer vaccine in
        myeloma, a type of bone marrow malignancy. The trial is being conducted
        in 15 patients at Johns Hopkins Oncology Center and is evaluating the
        vaccine in combination with chemotherapy and bone marrow stem cell
        transplantation.
 
     Cell Genesys is focused on the development and commercialization of cancer
 vaccines and gene therapies to treat major, life-threatening diseases. The
 company is conducting clinical trials of GVAX(R) cancer vaccines in prostate
 cancer, pancreatic cancer, lung cancer and myeloma and expects to initiate new
 studies in acute leukemia during 2001. Preclinical stage programs include gene
 therapies for cancer, hemophilia and cardiovascular disorders. Cell Genesys'
 majority-owned subsidiary, Ceregene, is focused on gene therapies for central
 nervous system disorders. Cell Genesys also continues to hold a 10.5 percent
 equity interest in its former subsidiary, Abgenix, an antibody product
 company. For additional information, please visit the company's web site at
 www.cellgenesys.com.
     Cell Genesys will host its quarterly analyst call to discuss events that
 occurred during the first quarter and other recent events at 11:30 a.m. EDT on
 Tuesday, April 24, 2001. Investors may listen to the live webcast of the
 conference call on Cell Genesys' web site. A replay of the webcast will be
 available for two weeks following the call. Alternatively, investors may
 listen to a replay of the call by dialing 800-633-8284 from locations in the
 U.S. and 858-812-6440 from outside the U.S. The call-in replay will be
 available for 48 hours following the call. Please refer to reservation number
 18591552.
     Statements made herein about the company and its subsidiaries, other than
 statements of historical fact, including statements about the application of
 the company's financial assets, progress reports and plans for GVAX(R)
 clinical trials, the company's progress and results and timing of clinical
 trials and preclinical programs, progress and capabilities of manufacturing
 facility sites, manufacturing capabilities of potential products,
 marketability of potential products and therapies and the nature of product
 pipelines are forward-looking statements and are subject to a number of
 uncertainties that could cause actual results to differ materially from the
 statements made, including risks associated with the success of research and
 development programs, clinical trials, the regulatory approval process for
 clinical trials, competitive technologies and products, patents, continuation
 of corporate partnerships and the need for additional financings. For
 information about these and other risks which may affect Cell Genesys, please
 see the company's Annual Report on Form 10-K dated April 2, 2001 as well as
 Cell Genesys' reports on Form 10-Q and 8-K and other reports filed from time
 to time with the Securities and Exchange Commission. The company assumes no
 obligation to update the forward-looking information in this press release.
 
                         SELECTED FINANCIAL INFORMATION
                                  (unaudited)
 
     Consolidated Statements Of Operations
     (in thousands except per share data)          Three months ended March 31
                                                       2001            2000
 
     Revenue under collaborative agreements            $5,973         $4,600
 
     Operating expenses:
       Research and development                        10,726          6,400
       General and administrative                       2,700          1,659
 
         Total operating expenses                      13,426          8,059
 
     Gain on sale of Abgenix common stock                  --        190,236
     Non-operating income                                  93             --
     Interest income, net                               7,108          1,967
 
       Income (loss) before minority interest,
        income tax and cumulative effect of
        change in accounting                            (253)        188,744
     Income (loss) attributed to minority
      interest                                           (37)             --
     Income (loss) before income tax and
      cumulative effect of change in accounting         (290)        188,744
     Benefit (provision) for income tax                    87       (47,940)
     Income (loss) before cumulative effect of
      change in accounting                             $(203)       $140,804
     Cumulative effect of change in accounting
      principle, net of tax                                --       (10,767)
     Net income (loss)                                 $(203)       $130,037
     Basic income (loss) per common share
      before cumulative effect of change in
      accounting principle                            $(0.01)          $4.24
     Cumulative effect of change in accounting
      principle                                            --         (0.32)
     Basic income (loss) per common share             $(0.01)          $3.92
 
     Diluted income (loss) per common share
      before cumulative effect of change in
      accounting principle                            $(0.01)          $3.85
     Cumulative effect of change in accounting
      principle                                          0.00         (0.29)
     Diluted income (loss) per common share           $(0.01)          $3.56
     Weighted average shares of common stock
      outstanding -- basic                             34,232         33,151
     Weighted average shares of common stock
      outstanding -- diluted                           34,232         36,511
 
     Condensed Consolidated Balance Sheets
     (in thousands)
 
     Cash, cash equivalents and
      short-term investments                         $242,834       $259,647
     Investment in Abgenix common stock               212,106        528,858
     Other current assets                               1,775            482
     Property and equipment, net                        9,913          4,439
     Other assets                                         805            290
 
     Total assets                                    $467,433       $793,716
 
     Current liabilities                             $104,245       $239,002
     Long-term obligations                              1,188          1,350
     Minority interest in equity of subsidiary            378             --
     Series B preferred stock                          17,185         17,185
     Stockholders' equity                             344,437        536,179
 
     Total liabilities and stockholders' equity      $467,433       $793,716
 
     CONTACT:  Jennifer Cook Williams, Manager, Corporate Communications of
 Cell Genesys, Inc., 650-425-4542.
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X59992336
 
 SOURCE  Cell Genesys, Inc.