Lynx Reports Financial Results for the First Quarter Ended March 31, 2001

Apr 25, 2001, 01:00 ET from Lynx Therapeutics, Inc.

    HAYWARD, Calif., April 25 /PRNewswire/ --
 Lynx Therapeutics, Inc. (Nasdaq:   LYNX) today reported a net loss of
 approximately $5.7 million, or $(0.50) per share, for the quarter ended March
 31, 2001, compared to a net loss of approximately $0.5 million, or $(0.04) per
 share, for the same period in 2000. Lynx's loss from operations was
 approximately $5.2 million and $3.9 million for the first quarter of 2001 and
 2000, respectively.
     First quarter revenues were approximately $3.4 million in 2001 and
 $3.0 million in 2000 and consisted primarily of technology access and service
 fees from Lynx's customers and collaborators.
     Operating costs and expenses in the first quarter of 2001 were
 approximately $8.6 million, compared to approximately $6.9 million during the
 same period in 2000. The increase in Lynx's operating expenses reflects higher
 personnel and facilities-related expenses, and an increase in materials
 consumed in commercial operations and research and development efforts,
 including on the continuing development of the Megatype(TM) and Protein
 ProFiler(TM) technologies and in Lynx's internal discovery projects.
     Lynx's first quarter 2001 net loss included a non-operating loss of
 approximately $0.5 million related primarily to a writedown in the carrying
 value of its equity investment in Inex Pharmaceuticals Corporation ("Inex"),
 net of a gain recorded from the receipt of shares of common stock from Inex in
 the 2001 quarter as part of the proceeds related to the March 1998 sale of
 Lynx's former antisense program. Lynx's net loss for the first quarter 2000
 included as other income a gain of approximately $3.1 million from the receipt
 of shares of common stock from Inex. As of March 31, 2001, the Company had
 cash, cash equivalents and short-term investments of approximately
 $11.9 million.
 
     Collaborations and Agreements
     "Lynx has been more active than ever with its commercial and academic
 collaborations and agreements thus far in 2001," said Norrie Russell, Ph.D.,
 President and Chief Executive Officer. "We are very excited about the quality
 of partners we've enlisted and the commercial potential for these
 relationships. The variety of deals is a testament to the versatility of our
 technology offerings."
     In early March, Lynx and Celera Genomics signed two agreements involving
 Lynx's MPSS(TM) technology, which produces gene sequence information and
 high-resolution gene expression data. Celera intends to integrate sets of
 Lynx's data derived from normal human tissues into Celera's database products
 for distribution to Celera's customers through the Celera Discovery System
 (CDS). Additionally, Lynx will apply its MPSS(TM) technology to perform
 additional gene expression analyses on various tissues selected by Celera to
 help supplement the Lynx database offering. Relatedly, Celera intends to apply
 its bioinformatics expertise to analyze Lynx's high-resolution gene expression
 data and to design and develop software tools to view and distribute the
 related information in CDS.
     Later in March, Lynx entered an agreement with AstraZeneca to use
 Megatype(TM) technology to perform genome-wide scans to discover single
 nucleotide polymorphisms, or SNPs, associated with asthma. AstraZeneca will
 provide Lynx with DNA samples from asthmatic-affected and control individuals,
 the analysis of which is expected to provide insight into the genetic
 components of asthma, with the goal of identifying leads for drug targets.
     A second agreement with AstraZeneca was signed earlier this month to apply
 Megasort(TM) technology to identify genes that are differentially expressed
 between different human tissues. The differences in the gene expression
 patterns are expected to provide important information on the physiological
 processes leading to diseases or conditions involving these tissue types.
     The additional commercial and academic collaboration agreements entered
 into during early 2001 focus on Lynx's MPSS(TM) and Megasort(TM) technologies
 and are with:
 
     -- Norway-based GenoMar ASA, to identify genes associated with saltwater
        tolerance in the tropical fin fish, Tilapia, one of the most widely
        farmed species in aquaculture;
     -- France-based UroGene S.A., to discover differentially expressed genes
        associated with prostate cancer, benign prostatic hypertrophy, renal
        carcinoma and bladder cancer;
     -- Massachusetts-based Phytera, Inc., to identify plant genes involved in
        the biosynthesis of anti-oxidant polyphenols, which are naturally
        occurring compounds with nutraceutical and pharmaceutical activity; and
     -- several world-renowned academic researchers, focused on regulation of
        cholesterol and fatty acid metabolism, cardiac tissue repair, type 1
        diabetes, taste modifiers important for medical and nutritional
        applications, and diseases characterized by abnormal bone resorption,
        such as osteoporosis.
 
     Financial Guidance
     For 2001, Lynx estimates revenues will be approximately $4.5 million for
 the second quarter and in the range of $20 to $25 million for the fiscal year.
 The level of revenues in these future periods will be dependent upon the
 number and timing of tissue and cell samples received from existing customers
 and collaborators, as well as Lynx's performance of related genomics discovery
 services on these samples. Additionally, the number, type and timing of new
 Lynx collaborations and agreements and the related demand for, and delivery
 of, Lynx's services or products will impact the level of future revenues.
     Lynx is a leader in the development and application of novel technologies
 for the discovery of gene expression patterns and genomic variations important
 to the pharmaceutical, biotechnology and agricultural industries. These
 technologies are based on the Megaclone(TM) technology, Lynx's unique and
 proprietary cloning procedure, which transforms a sample containing millions
 of DNA molecules into one made up of millions of micro-beads, each of which
 carries approximately 100,000 copies of one of the DNA molecules in the
 sample. Megaclone(TM) technology is the foundation for Lynx's analytical
 applications, including: Massively Parallel Signature Sequencing, or MPSS(TM),
 technology, which provides gene sequence information and high-resolution gene
 expression data; Megasort(TM) technology, which provides differentially
 expressed gene sets; and Megatype(TM) technology, which is expected to provide
 single nucleotide polymorphism, or SNP, disease- or trait-association
 information. For more information, visit Lynx's web site at
 http://www.lynxgen.com.
 
     Statements included in this press release that are not historical in
 nature are "forward-looking statements" within the meaning of the "safe
 harbor" provisions of the Private Securities Litigation Reform Act of 1995.
 Forward-looking statements in this press release regarding financial results
 include statements relating to guidance for the second quarter and full-year
 2001 future revenues, the identification of differentially expressed genes, as
 well as the potential success of collaboration arrangements, the addition of
 new corporate partnerships and collaborations, Lynx's performance of its
 genomics discovery services for current and future partners and the expansion
 of the Company's commercial applications of its technologies. The Company
 cautions readers that forward-looking statements are subject to certain risks
 and uncertainties that could cause actual results to differ materially from
 those indicated in the forward-looking statements due to the risks and factors
 identified from time to time in the Company's reports filed with the U.S.
 Securities and Exchange Commission, including its Annual Report on Form 10-K
 for the year ended December 31, 2000. The information in this press release is
 current as of its release date. Lynx does not take the responsibility to
 update this information as it changes.
 
                Condensed Consolidated Statements of Operations
                    (in thousands, except per share amounts)
 
                                                        Three months ended
                                                              March 31,
                                                         2001           2000
                                                  (unaudited)    (unaudited)
 
     Net revenues:
       Technology access and service fees and other    $3,395         $3,016
     Total revenues                                     3,395          3,016
     Operating costs and expenses:
       Cost of service fees and other                     656            445
       Research & development                           5,956          5,004
       General & administrative                         2,001          1,485
     Total operating costs and expenses                 8,613          6,934
     Loss from operations                             (5,218)        (3,918)
     Other income (expense), net                        (480)          3,497
     Provision for income taxes                            --             60
     Net loss                                        $(5,698)         $(481)
     Basic and diluted net loss per share             $(0.50)        $(0.04)
     Shares used in computation of loss per share      11,470         11,209
 
 
                     Condensed Consolidated Balance Sheets
                                 (in thousands)
 
                                                    March 31,   December 31,
                                                         2001           2000
                                                  (unaudited)    (unaudited)
 
     Assets
       Cash, cash equivalents and
         short-term investments                       $11,871        $18,798
       Other current assets                             4,153          3,809
       Total current assets                            16,024         22,607
       Property and equipment, net                     16,424         15,819
       Other assets                                       791            789
       Total assets                                   $33,239        $39,215
     Liabilities and Stockholders' Equity
       Current liabilities                             $4,505         $4,501
       Deferred revenue -- current                      6,407          7,219
       Total current liabilities                       10,912         11,720
       Deferred revenue -- noncurrent                  16,406         17,467
       Noncurrent liabilities                           3,509          3,806
       Stockholders' equity                             2,412          6,222
       Total liabilities and stockholders' equity     $33,239        $39,215
 
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SOURCE Lynx Therapeutics, Inc.
    HAYWARD, Calif., April 25 /PRNewswire/ --
 Lynx Therapeutics, Inc. (Nasdaq:   LYNX) today reported a net loss of
 approximately $5.7 million, or $(0.50) per share, for the quarter ended March
 31, 2001, compared to a net loss of approximately $0.5 million, or $(0.04) per
 share, for the same period in 2000. Lynx's loss from operations was
 approximately $5.2 million and $3.9 million for the first quarter of 2001 and
 2000, respectively.
     First quarter revenues were approximately $3.4 million in 2001 and
 $3.0 million in 2000 and consisted primarily of technology access and service
 fees from Lynx's customers and collaborators.
     Operating costs and expenses in the first quarter of 2001 were
 approximately $8.6 million, compared to approximately $6.9 million during the
 same period in 2000. The increase in Lynx's operating expenses reflects higher
 personnel and facilities-related expenses, and an increase in materials
 consumed in commercial operations and research and development efforts,
 including on the continuing development of the Megatype(TM) and Protein
 ProFiler(TM) technologies and in Lynx's internal discovery projects.
     Lynx's first quarter 2001 net loss included a non-operating loss of
 approximately $0.5 million related primarily to a writedown in the carrying
 value of its equity investment in Inex Pharmaceuticals Corporation ("Inex"),
 net of a gain recorded from the receipt of shares of common stock from Inex in
 the 2001 quarter as part of the proceeds related to the March 1998 sale of
 Lynx's former antisense program. Lynx's net loss for the first quarter 2000
 included as other income a gain of approximately $3.1 million from the receipt
 of shares of common stock from Inex. As of March 31, 2001, the Company had
 cash, cash equivalents and short-term investments of approximately
 $11.9 million.
 
     Collaborations and Agreements
     "Lynx has been more active than ever with its commercial and academic
 collaborations and agreements thus far in 2001," said Norrie Russell, Ph.D.,
 President and Chief Executive Officer. "We are very excited about the quality
 of partners we've enlisted and the commercial potential for these
 relationships. The variety of deals is a testament to the versatility of our
 technology offerings."
     In early March, Lynx and Celera Genomics signed two agreements involving
 Lynx's MPSS(TM) technology, which produces gene sequence information and
 high-resolution gene expression data. Celera intends to integrate sets of
 Lynx's data derived from normal human tissues into Celera's database products
 for distribution to Celera's customers through the Celera Discovery System
 (CDS). Additionally, Lynx will apply its MPSS(TM) technology to perform
 additional gene expression analyses on various tissues selected by Celera to
 help supplement the Lynx database offering. Relatedly, Celera intends to apply
 its bioinformatics expertise to analyze Lynx's high-resolution gene expression
 data and to design and develop software tools to view and distribute the
 related information in CDS.
     Later in March, Lynx entered an agreement with AstraZeneca to use
 Megatype(TM) technology to perform genome-wide scans to discover single
 nucleotide polymorphisms, or SNPs, associated with asthma. AstraZeneca will
 provide Lynx with DNA samples from asthmatic-affected and control individuals,
 the analysis of which is expected to provide insight into the genetic
 components of asthma, with the goal of identifying leads for drug targets.
     A second agreement with AstraZeneca was signed earlier this month to apply
 Megasort(TM) technology to identify genes that are differentially expressed
 between different human tissues. The differences in the gene expression
 patterns are expected to provide important information on the physiological
 processes leading to diseases or conditions involving these tissue types.
     The additional commercial and academic collaboration agreements entered
 into during early 2001 focus on Lynx's MPSS(TM) and Megasort(TM) technologies
 and are with:
 
     -- Norway-based GenoMar ASA, to identify genes associated with saltwater
        tolerance in the tropical fin fish, Tilapia, one of the most widely
        farmed species in aquaculture;
     -- France-based UroGene S.A., to discover differentially expressed genes
        associated with prostate cancer, benign prostatic hypertrophy, renal
        carcinoma and bladder cancer;
     -- Massachusetts-based Phytera, Inc., to identify plant genes involved in
        the biosynthesis of anti-oxidant polyphenols, which are naturally
        occurring compounds with nutraceutical and pharmaceutical activity; and
     -- several world-renowned academic researchers, focused on regulation of
        cholesterol and fatty acid metabolism, cardiac tissue repair, type 1
        diabetes, taste modifiers important for medical and nutritional
        applications, and diseases characterized by abnormal bone resorption,
        such as osteoporosis.
 
     Financial Guidance
     For 2001, Lynx estimates revenues will be approximately $4.5 million for
 the second quarter and in the range of $20 to $25 million for the fiscal year.
 The level of revenues in these future periods will be dependent upon the
 number and timing of tissue and cell samples received from existing customers
 and collaborators, as well as Lynx's performance of related genomics discovery
 services on these samples. Additionally, the number, type and timing of new
 Lynx collaborations and agreements and the related demand for, and delivery
 of, Lynx's services or products will impact the level of future revenues.
     Lynx is a leader in the development and application of novel technologies
 for the discovery of gene expression patterns and genomic variations important
 to the pharmaceutical, biotechnology and agricultural industries. These
 technologies are based on the Megaclone(TM) technology, Lynx's unique and
 proprietary cloning procedure, which transforms a sample containing millions
 of DNA molecules into one made up of millions of micro-beads, each of which
 carries approximately 100,000 copies of one of the DNA molecules in the
 sample. Megaclone(TM) technology is the foundation for Lynx's analytical
 applications, including: Massively Parallel Signature Sequencing, or MPSS(TM),
 technology, which provides gene sequence information and high-resolution gene
 expression data; Megasort(TM) technology, which provides differentially
 expressed gene sets; and Megatype(TM) technology, which is expected to provide
 single nucleotide polymorphism, or SNP, disease- or trait-association
 information. For more information, visit Lynx's web site at
 http://www.lynxgen.com.
 
     Statements included in this press release that are not historical in
 nature are "forward-looking statements" within the meaning of the "safe
 harbor" provisions of the Private Securities Litigation Reform Act of 1995.
 Forward-looking statements in this press release regarding financial results
 include statements relating to guidance for the second quarter and full-year
 2001 future revenues, the identification of differentially expressed genes, as
 well as the potential success of collaboration arrangements, the addition of
 new corporate partnerships and collaborations, Lynx's performance of its
 genomics discovery services for current and future partners and the expansion
 of the Company's commercial applications of its technologies. The Company
 cautions readers that forward-looking statements are subject to certain risks
 and uncertainties that could cause actual results to differ materially from
 those indicated in the forward-looking statements due to the risks and factors
 identified from time to time in the Company's reports filed with the U.S.
 Securities and Exchange Commission, including its Annual Report on Form 10-K
 for the year ended December 31, 2000. The information in this press release is
 current as of its release date. Lynx does not take the responsibility to
 update this information as it changes.
 
                Condensed Consolidated Statements of Operations
                    (in thousands, except per share amounts)
 
                                                        Three months ended
                                                              March 31,
                                                         2001           2000
                                                  (unaudited)    (unaudited)
 
     Net revenues:
       Technology access and service fees and other    $3,395         $3,016
     Total revenues                                     3,395          3,016
     Operating costs and expenses:
       Cost of service fees and other                     656            445
       Research & development                           5,956          5,004
       General & administrative                         2,001          1,485
     Total operating costs and expenses                 8,613          6,934
     Loss from operations                             (5,218)        (3,918)
     Other income (expense), net                        (480)          3,497
     Provision for income taxes                            --             60
     Net loss                                        $(5,698)         $(481)
     Basic and diluted net loss per share             $(0.50)        $(0.04)
     Shares used in computation of loss per share      11,470         11,209
 
 
                     Condensed Consolidated Balance Sheets
                                 (in thousands)
 
                                                    March 31,   December 31,
                                                         2001           2000
                                                  (unaudited)    (unaudited)
 
     Assets
       Cash, cash equivalents and
         short-term investments                       $11,871        $18,798
       Other current assets                             4,153          3,809
       Total current assets                            16,024         22,607
       Property and equipment, net                     16,424         15,819
       Other assets                                       791            789
       Total assets                                   $33,239        $39,215
     Liabilities and Stockholders' Equity
       Current liabilities                             $4,505         $4,501
       Deferred revenue -- current                      6,407          7,219
       Total current liabilities                       10,912         11,720
       Deferred revenue -- noncurrent                  16,406         17,467
       Noncurrent liabilities                           3,509          3,806
       Stockholders' equity                             2,412          6,222
       Total liabilities and stockholders' equity     $33,239        $39,215
 
                     MAKE YOUR OPINION COUNT -- Click Here
                http://tbutton.prnewswire.com/prn/11690X55262662
 
 SOURCE  Lynx Therapeutics, Inc.