Tanox, Inc. Reports First Quarter 2001 Results

Apr 30, 2001, 01:00 ET from Tanox, Inc.

    HOUSTON, April 30 /PRNewswire/ -- Tanox, Inc. (Nasdaq:   TNOX) today
 announced results for its first quarter ended March 31, 2001.  Revenues were
 $121,000 compared to $149,000 for the first quarter of 2000, consisting of
 grants and licensing agreements.  The net loss for the quarter was
 $2,971,000 or $0.07 per share, compared to a net loss of $5,967,000 or
 $0.18 per share for the first quarter of 2000.  The improvement in financial
 performance reported for the first quarter of 2001 was due primarily to
 substantially higher interest income earned on the investments made with the
 funds received in the Company's April, 2000 initial public offering.
     Operating costs and expenses totaled $6,976,000 in the first quarter of
 2001 compared to $6,594,000 in the first quarter of 2000.  Research and
 development expenses in the first quarter of 2000 included a charge of
 $2,500,000 to acquire the right to certain non-exclusive licenses for up to
 four antigens from Protein Design Labs, Inc.  Excluding this charge, the
 increase in operating expenses was $2,882,000.  This increase was attributable
 primarily to costs associated with additional personnel ($834,000) and the
 advancing of product development ($234,000), as well as increased legal
 expenses pertaining to the Company's ongoing litigation ($936,000).  Tanox
 expects expenses to ramp up in the coming quarters to support increased
 clinical trial activities.
     As of March 31, 2001, Tanox had $275,939,000 in cash and investments, an
 increase of $18,000 from December 31, 2000.
     Based on information furnished by Genentech, Inc., Tanox anticipates that
 Xolair(TM) will be approved in the latter part of 2001, but recognizes that
 approval may not occur until early 2002.  However, the Company continues to be
 confident of the potential of Xolair and its economic benefit to Tanox.  "As
 Xolair progresses through the FDA approval process, we believe that, with the
 total of royalty and net profit revenues on Xolair ranging, as a percentage of
 worldwide sales, from high single to low double digits, Tanox will still be
 able to achieve profitability in 2003," said Michael A. Kelly, Chief Financial
 Officer of Tanox.
     "We're extremely pleased that the safety and efficacy data from Xolair's
 ongoing trials continues to be positive.  Xolair is considered by leaders in
 both the clinical and academic communities to be one of the most promising
 developments in allergy and asthma therapy today.  Moreover, we continue to
 make progress with the other products in our pipeline, of which two more are
 expected to go into the clinic later this year," added Nancy T. Chang, Chief
 Executive Officer of Tanox.
     Tanox, Inc. is a biopharmaceutical company with demonstrated expertise in
 monoclonal antibody technology.  The Company is engaged in the discovery and
 development of therapeutic monoclonal antibodies designed to address
 significant unmet medical needs in the areas of asthma, allergy, autoimmune,
 inflammation and other diseases affecting the human immune system.  Xolair,
 Tanox's most advanced product in development, is an anti-immunoglobulin E, or
 anti-IgE, antibody which is being developed for allergic asthma, seasonal
 allergic rhinitis (hay fever) and perennial allergic rhinitis in collaboration
 with Novartis Pharmaceutical Corporation and Genentech, Inc.  A BLA for Xolair
 for allergic asthma and seasonal allergic rhinitis has been submitted to the
 U.S. FDA and a submission for marketing approval has been filed with health
 authorities in the EU, Switzerland, Australia and New Zealand.  Tanox is
 developing a number of monoclonal antibodies to address unmet medical needs in
 the following programs.  TNX-901 (formerly Hu-901), an anti IgE antibody
 proprietary to Tanox, is in a Phase 2 trial for the prevention of severe
 peanut allergy, and TNX-100 (formerly 5D12), an anti-CD40 antibody, is in a
 Phase 1 trial in Crohn's disease.  Trials are expected to begin later this
 year with TNX-355 (formerly 5A8), an anti-CD4 antibody, in treatment-
 refractory HIV infection, and with TNX-224 (formerly 166-32), an anti-
 complement factor D antibody.  After a Phase 1 study, TNX-224 will be
 investigated in the prevention of the complement-mediated inflammatory organ
 injury experienced by patients undergoing cardiopulmonary bypass procedures.
     Statements in Tanox's press releases, reports and information disclosures
 about its products, including Xolair, and their prospects for development and
 commercialization, other than statements of historical facts, are forward-
 looking statements and are subject to a number of uncertainties that may cause
 actual events or results to differ materially from those suggested in the
 forward-looking statements.  Factors that could affect actual events or
 results include risks associated with obtaining regulatory approval for and
 market acceptance of Tanox's products, performance by the Company's present
 and future collaboration partners, the outcome of pending litigation, the
 uncertainty of preclinical and clinical testing results, the Company's limited
 experience and capability in manufacturing and marketing the Company's
 products, the Company's ability to enter into future collaborations,
 competition and technological change, the strength of the Company's patent
 portfolio, the Company's ability to manage growth and to attract and retain
 key personnel, the Company's access to additional financings in the future,
 and existing and future government regulations.  Other risks that may affect
 Tanox include the variability of royalty, license and other revenues,
 timelines that are subject to change, and the unpredictability of decisions by
 the FDA and other regulatory agencies, including decisions regarding whether
 sufficient data and compliance with other requirements exist to support
 product licensure.
     This release and other information about Tanox, Inc. can be found on the
 World Wide Web at http://www.tanox.com.
 
 
                                       TANOX, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
 
                                                  For the Three Months Ended
                                               March 31, 2001    March 31, 2000
     REVENUES:
       Development agreement with related
        party                                         $---            $1,000
       Other development agreements and
        licensing fees                             121,000           148,000
          Total revenues                           121,000           149,000
 
     OPERATING COSTS AND EXPENSES:
       Research and development                  4,253,000         5,403,000
       General and administrative                2,723,000         1,191,000
          Total operating costs and expenses     6,976,000         6,594,000
 
     (LOSS) FROM OPERATIONS                     (6,855,000)       (6,445,000)
 
     OTHER INCOME (EXPENSE):
       Interest income                           4,193,000           716,000
       Interest expense                           (309,000)         (200,000)
       Other                                           ---           (38,000)
          Total other income                     3,884,000           478,000
 
     INCOME (LOSS) BEFORE INCOME TAXES:         (2,971,000)       (5,967,000)
       (Provision) benefit for income taxes            ---               ---
      NET INCOME (LOSS)                        $(2,971,000)      $(5,967,000)
 
     EARNINGS (LOSS) PER SHARE -
      Basic and Diluted                             $(0.07)           $(0.18)
 
     SHARES USED IN COMPUTING LOSS PER SHARE -
      Basic and Diluted                         43,715,000        33,527,000
 
 
                                TANOX, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEET
 
                                            March 31, 2001      December 31,
                                              (unaudited)           2000
                   ASSETS
     CURRENT ASSETS:
       Cash and cash equivalents              $115,889,000       $29,264,000
       Short-term investments                  103,723,000       149,020,000
       Accounts receivable                         431,000           435,000
       Interest receivable                       2,312,000         4,156,000
       Income taxes receivable                     132,000           132,000
       Prepaid and deferred expenses               618,000           506,000
         Total current assets                  223,105,000       183,513,000
 
     LONG-TERM INVESTMENTS                      56,327,000        97,637,000
 
     PROPERTY AND EQUIPMENT:
       Land                                      1,675,000           719,000
       Laboratory and office equipment          11,522,000        10,669,000
       Leasehold improvements                    3,232,000         2,711,000
       Furniture and fixtures                      600,000           230,000
                                                17,029,000        14,329,000
       Accumulated depreciation and
        amortization                            (6,024,000)       (5,717,000)
 
         Net property and equipment             11,005,000         8,612,000
 
     OTHER ASSETS, net of accumulated
      amortization of $92,000 and $92,000        1,727,000         1,216,000
 
            TOTAL ASSETS                      $292,164,000      $290,978,000
 
 
       LIABILITIES AND STOCKHOLDERS' EQUITY
 
     CURRENT LIABILITIES:
       Accounts payable                         $1,030,000        $1,590,000
       Accrued liabilities                       4,891,000         2,863,000
       Accrued arbitration award                 3,881,000         3,751,000
         Total current liabilities               9,802,000         8,204,000
 
     NOTE PAYABLE TO RELATED PARTY              10,000,000        10,000,000
 
 
     STOCKHOLDERS' EQUITY:
       Preferred stock, $.01 par value;
        10,000,000 shares authorized;
        none outstanding                               ---               ---
       Common stock, $.01 par value;
        120,000,000 shares authorized;
        44,029,715 shares in 2001 and
        43,603,955 shares in 2000 issued
        and outstanding                            440,000           436,000
       Additional paid-in capital              306,819,000       304,647,000
       Deferred compensation                      (209,000)         (555,000)
       Loans receivable from employees            (442,000)         (442,000)
       Other comprehensive income,
        cumulative translation adjustment          233,000           196,000
       Retained earnings (deficit)             (34,479,000)      (31,508,000)
       TOTAL STOCKHOLDERS' EQUITY              272,362,000       272,774,000
 
         TOTAL LIABILITIES AND
          STOCKHOLDERS' EQUITY                $292,164,000      $290,978,000
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X49521837
 
 

SOURCE Tanox, Inc.
    HOUSTON, April 30 /PRNewswire/ -- Tanox, Inc. (Nasdaq:   TNOX) today
 announced results for its first quarter ended March 31, 2001.  Revenues were
 $121,000 compared to $149,000 for the first quarter of 2000, consisting of
 grants and licensing agreements.  The net loss for the quarter was
 $2,971,000 or $0.07 per share, compared to a net loss of $5,967,000 or
 $0.18 per share for the first quarter of 2000.  The improvement in financial
 performance reported for the first quarter of 2001 was due primarily to
 substantially higher interest income earned on the investments made with the
 funds received in the Company's April, 2000 initial public offering.
     Operating costs and expenses totaled $6,976,000 in the first quarter of
 2001 compared to $6,594,000 in the first quarter of 2000.  Research and
 development expenses in the first quarter of 2000 included a charge of
 $2,500,000 to acquire the right to certain non-exclusive licenses for up to
 four antigens from Protein Design Labs, Inc.  Excluding this charge, the
 increase in operating expenses was $2,882,000.  This increase was attributable
 primarily to costs associated with additional personnel ($834,000) and the
 advancing of product development ($234,000), as well as increased legal
 expenses pertaining to the Company's ongoing litigation ($936,000).  Tanox
 expects expenses to ramp up in the coming quarters to support increased
 clinical trial activities.
     As of March 31, 2001, Tanox had $275,939,000 in cash and investments, an
 increase of $18,000 from December 31, 2000.
     Based on information furnished by Genentech, Inc., Tanox anticipates that
 Xolair(TM) will be approved in the latter part of 2001, but recognizes that
 approval may not occur until early 2002.  However, the Company continues to be
 confident of the potential of Xolair and its economic benefit to Tanox.  "As
 Xolair progresses through the FDA approval process, we believe that, with the
 total of royalty and net profit revenues on Xolair ranging, as a percentage of
 worldwide sales, from high single to low double digits, Tanox will still be
 able to achieve profitability in 2003," said Michael A. Kelly, Chief Financial
 Officer of Tanox.
     "We're extremely pleased that the safety and efficacy data from Xolair's
 ongoing trials continues to be positive.  Xolair is considered by leaders in
 both the clinical and academic communities to be one of the most promising
 developments in allergy and asthma therapy today.  Moreover, we continue to
 make progress with the other products in our pipeline, of which two more are
 expected to go into the clinic later this year," added Nancy T. Chang, Chief
 Executive Officer of Tanox.
     Tanox, Inc. is a biopharmaceutical company with demonstrated expertise in
 monoclonal antibody technology.  The Company is engaged in the discovery and
 development of therapeutic monoclonal antibodies designed to address
 significant unmet medical needs in the areas of asthma, allergy, autoimmune,
 inflammation and other diseases affecting the human immune system.  Xolair,
 Tanox's most advanced product in development, is an anti-immunoglobulin E, or
 anti-IgE, antibody which is being developed for allergic asthma, seasonal
 allergic rhinitis (hay fever) and perennial allergic rhinitis in collaboration
 with Novartis Pharmaceutical Corporation and Genentech, Inc.  A BLA for Xolair
 for allergic asthma and seasonal allergic rhinitis has been submitted to the
 U.S. FDA and a submission for marketing approval has been filed with health
 authorities in the EU, Switzerland, Australia and New Zealand.  Tanox is
 developing a number of monoclonal antibodies to address unmet medical needs in
 the following programs.  TNX-901 (formerly Hu-901), an anti IgE antibody
 proprietary to Tanox, is in a Phase 2 trial for the prevention of severe
 peanut allergy, and TNX-100 (formerly 5D12), an anti-CD40 antibody, is in a
 Phase 1 trial in Crohn's disease.  Trials are expected to begin later this
 year with TNX-355 (formerly 5A8), an anti-CD4 antibody, in treatment-
 refractory HIV infection, and with TNX-224 (formerly 166-32), an anti-
 complement factor D antibody.  After a Phase 1 study, TNX-224 will be
 investigated in the prevention of the complement-mediated inflammatory organ
 injury experienced by patients undergoing cardiopulmonary bypass procedures.
     Statements in Tanox's press releases, reports and information disclosures
 about its products, including Xolair, and their prospects for development and
 commercialization, other than statements of historical facts, are forward-
 looking statements and are subject to a number of uncertainties that may cause
 actual events or results to differ materially from those suggested in the
 forward-looking statements.  Factors that could affect actual events or
 results include risks associated with obtaining regulatory approval for and
 market acceptance of Tanox's products, performance by the Company's present
 and future collaboration partners, the outcome of pending litigation, the
 uncertainty of preclinical and clinical testing results, the Company's limited
 experience and capability in manufacturing and marketing the Company's
 products, the Company's ability to enter into future collaborations,
 competition and technological change, the strength of the Company's patent
 portfolio, the Company's ability to manage growth and to attract and retain
 key personnel, the Company's access to additional financings in the future,
 and existing and future government regulations.  Other risks that may affect
 Tanox include the variability of royalty, license and other revenues,
 timelines that are subject to change, and the unpredictability of decisions by
 the FDA and other regulatory agencies, including decisions regarding whether
 sufficient data and compliance with other requirements exist to support
 product licensure.
     This release and other information about Tanox, Inc. can be found on the
 World Wide Web at http://www.tanox.com.
 
 
                                       TANOX, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
 
                                                  For the Three Months Ended
                                               March 31, 2001    March 31, 2000
     REVENUES:
       Development agreement with related
        party                                         $---            $1,000
       Other development agreements and
        licensing fees                             121,000           148,000
          Total revenues                           121,000           149,000
 
     OPERATING COSTS AND EXPENSES:
       Research and development                  4,253,000         5,403,000
       General and administrative                2,723,000         1,191,000
          Total operating costs and expenses     6,976,000         6,594,000
 
     (LOSS) FROM OPERATIONS                     (6,855,000)       (6,445,000)
 
     OTHER INCOME (EXPENSE):
       Interest income                           4,193,000           716,000
       Interest expense                           (309,000)         (200,000)
       Other                                           ---           (38,000)
          Total other income                     3,884,000           478,000
 
     INCOME (LOSS) BEFORE INCOME TAXES:         (2,971,000)       (5,967,000)
       (Provision) benefit for income taxes            ---               ---
      NET INCOME (LOSS)                        $(2,971,000)      $(5,967,000)
 
     EARNINGS (LOSS) PER SHARE -
      Basic and Diluted                             $(0.07)           $(0.18)
 
     SHARES USED IN COMPUTING LOSS PER SHARE -
      Basic and Diluted                         43,715,000        33,527,000
 
 
                                TANOX, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEET
 
                                            March 31, 2001      December 31,
                                              (unaudited)           2000
                   ASSETS
     CURRENT ASSETS:
       Cash and cash equivalents              $115,889,000       $29,264,000
       Short-term investments                  103,723,000       149,020,000
       Accounts receivable                         431,000           435,000
       Interest receivable                       2,312,000         4,156,000
       Income taxes receivable                     132,000           132,000
       Prepaid and deferred expenses               618,000           506,000
         Total current assets                  223,105,000       183,513,000
 
     LONG-TERM INVESTMENTS                      56,327,000        97,637,000
 
     PROPERTY AND EQUIPMENT:
       Land                                      1,675,000           719,000
       Laboratory and office equipment          11,522,000        10,669,000
       Leasehold improvements                    3,232,000         2,711,000
       Furniture and fixtures                      600,000           230,000
                                                17,029,000        14,329,000
       Accumulated depreciation and
        amortization                            (6,024,000)       (5,717,000)
 
         Net property and equipment             11,005,000         8,612,000
 
     OTHER ASSETS, net of accumulated
      amortization of $92,000 and $92,000        1,727,000         1,216,000
 
            TOTAL ASSETS                      $292,164,000      $290,978,000
 
 
       LIABILITIES AND STOCKHOLDERS' EQUITY
 
     CURRENT LIABILITIES:
       Accounts payable                         $1,030,000        $1,590,000
       Accrued liabilities                       4,891,000         2,863,000
       Accrued arbitration award                 3,881,000         3,751,000
         Total current liabilities               9,802,000         8,204,000
 
     NOTE PAYABLE TO RELATED PARTY              10,000,000        10,000,000
 
 
     STOCKHOLDERS' EQUITY:
       Preferred stock, $.01 par value;
        10,000,000 shares authorized;
        none outstanding                               ---               ---
       Common stock, $.01 par value;
        120,000,000 shares authorized;
        44,029,715 shares in 2001 and
        43,603,955 shares in 2000 issued
        and outstanding                            440,000           436,000
       Additional paid-in capital              306,819,000       304,647,000
       Deferred compensation                      (209,000)         (555,000)
       Loans receivable from employees            (442,000)         (442,000)
       Other comprehensive income,
        cumulative translation adjustment          233,000           196,000
       Retained earnings (deficit)             (34,479,000)      (31,508,000)
       TOTAL STOCKHOLDERS' EQUITY              272,362,000       272,774,000
 
         TOTAL LIABILITIES AND
          STOCKHOLDERS' EQUITY                $292,164,000      $290,978,000
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X49521837
 
 SOURCE  Tanox, Inc.