BIOV Bioventus Inc. Class A Common Stock (MM)

GAITHERSBURG, Md., Aug. 9 /PRNewswire-FirstCall/ -- BioVeris Corporation (NASDAQ:BIOV) reported today the financial results for its fiscal first quarter ended June 30, 2005. BioVeris adopted FASB Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46), as of March 31, 2004 based on a determination that Meso Scale Diagnostics, LLC. (MSD) qualified as a variable interest entity with the Company as the primary beneficiary. Accordingly, beginning as of March 31, 2004, the Company consolidated the financial information of MSD in its financial statements. In August 2004, the Company and MSD entered into a settlement agreement that resolved litigation between the parties and constituted a reconsideration event under FIN 46. The Company has determined that it no longer meets the conditions to be designated as the primary beneficiary of MSD, as certain provisions of the settlement agreement reallocated the obligation to absorb the majority of MSD's future expected losses and beginning August 12, 2004, the Company deconsolidated the financial results of MSD. Accordingly, the statement of operations for the quarter ended June 30, 2004 includes the consolidated revenue and expenses of MSD and the quarter ended June 30, 2005 includes only the financial results of BioVeris and its wholly-owned subsidiaries. BioVeris recorded revenues of $4.9 million for the fiscal 2006 first quarter ended June 30, 2005, compared to $8.2 million in the corresponding prior year period. Of the $3.3 million decrease, $3.0 million represents MSD revenues which were consolidated with BioVeris last year. Revenues include product sales of $4.6 million for the quarter ended June 30, 2005, compared to $7.8 million in the corresponding prior year period, of which $3.0 million were due to the consolidation of MSD's product sales. BioVeris' product sales in the current quarter were from $2.3 million of biodefense products and $2.3 million of products for the life science market. These changes in product sales in the current quarter reflect the change of orders and product deliveries for biodefense and life science products, which are based on customers' requirements. Product costs were $2.0 million (45% of total product sales) for the quarter ended June 30, 2005 compared to $4.6 million (59% of total product sales) in the corresponding prior year period. The current year decrease of $2.6 million consists of $2.3 million due to the consolidation of MSD's product costs last year and a $300,000 reduction in BioVeris' product costs. Research and development expenses decreased to $4.8 million for the quarter ended June 30, 2005 from $7.2 million in the corresponding prior year period. Of the $2.4 million decrease, $2.7 million represents MSD research and development expenses, offset by a $300,000 increase in BioVeris' expenses. BioVeris research and development expenditures increased in the current period due primarily to higher facilities and personnel costs. Research and development expenses primarily relate to ongoing development costs and product enhancements associated with the M-SERIES family of products, development of new assays and research and development of new systems and technologies, including point-of-care products. Future research and development costs are expected to increase as product development and core research expand, including costs associated with efforts in vaccines, developing clinical diagnostics and biodefense testing products, and development of a proprietary approach for determining an individual's personal immune status through unique diagnostic test panels. Selling, general and administrative expenses were $5.7 million for the quarter ended June 30, 2005 and $9.7 million in the corresponding prior year period. Of the $4.0 million decrease, $3.1 million represents MSD selling, general and administrative expenses. BioVeris' decrease in selling, general and administrative expenses was primarily attributable to lower professional fees in the current year. BioVeris' net loss for the quarter ended June 30, 2005 was $6.7 million ($0.25 per common share, compared to a net loss of $12.9 million ($0.48 per common share) for the quarter ended June 30, 2004. At June 30, 2005, BioVeris had cash, cash equivalents and short-term investments of $87.1 million. BioVeris Corporation is a global integrated health care company developing proprietary technologies in diagnostics and vaccinology. The Company is dedicated to the commercialization of innovative products and services for healthcare providers, their patients and their communities. BioVeris is headquartered in Gaithersburg, Maryland. More information about the Company can be found at http://www.bioveris.com/. This press release contains forward-looking statements within the meaning of the federal securities laws that relate to future events or BioVeris' future financial performance. All statements in this press release that are not historical facts, including any statements about consolidation of future financial information and future financial or operational plans are hereby identified as "forward-looking statements." The words "may," "should," "will," "expect," "could," "anticipate," "believe," "estimate," "plan," "intend" and similar expressions have been used to identify certain of the forward-looking statements. In this press release, BioVeris has based these forward-looking statements on management's current expectations, estimates and projections and they are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those described in the forward-looking statements. Such forward-looking statements should, therefore, be considered in light of various important factors, including changes in BioVeris' strategy and business plans; BioVeris' ability to develop and introduce new or enhanced products; BioVeris' ability to enter into new collaborations on favorable terms, if at all; and changes in general economic, business and industry conditions. The foregoing sets forth some, but not all, of the factors that could impact upon BioVeris' ability to achieve results described in any forward-looking statements. A more complete description of the risks applicable to BioVeris is provided in the Company's filings with the SEC available at the SEC's web site at http://www.sec.gov/. Investors are cautioned not to place undue reliance on these forward-looking statements. Investors also should understand that it is not possible to predict or identify all risk factors and that neither this list nor the factors identified in BioVeris' SEC filings should be considered a complete statement of all potential risks and uncertainties. BioVeris has no obligation to publicly update or release any revisions to these forward- looking statements to reflect events or circumstances after the date of this press release. (Financial data follows.) BioVeris Corporation Consolidated Statement of Operations (In thousands, except per share data) (Unaudited) Three Months Ended June 30, June 30, 2005 2004 REVENUES: Product sales $ 4,580 $ 7,839 Royalty income 309 320 Contract fees - 86 Total 4,889 8,245 OPERATING COSTS AND EXPENSES: Product costs 2,048 4,604 Research and development 4,765 7,176 Selling, general and administrative 5,681 9,710 Total 12,494 21,490 LOSS FROM OPERATIONS (7,605) (13,245) INTEREST INCOME 1,318 404 OTHER, NET (381) (10) NET LOSS $ (6,668) $ (12,851) Net loss per common share (basic and diluted) $ (0.25) $ (0.48) COMMON SHARES OUTSTANDING (basic and diluted) 26,728 26,728 BioVeris Corporation Consolidated Balance Sheets (In thousands) (Unaudited) June 30, March 31, 2005 2005 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 31,326 $ 41,739 Short-term investments 55,765 53,890 Accounts receivable, net 5,746 4,483 Inventory 5,015 5,235 Other current assets 2,640 2,813 Total current assets 100,492 108,160 Equipment and leasehold improvements, net 2,673 3,636 OTHER NONCURRENT ASSETS: Note receivable 4,971 4,709 Technology licenses 16,819 17,306 Other 353 354 TOTAL ASSETS $ 125,308 $ 134,165 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and accrued expenses $ 4,378 $ 6,457 Accrued wages and benefits 2,022 1,713 Other current liabilities 1,495 1,351 Total current liabilities 7,895 9,521 NONCURRENT DEFERRED LIABILITIES 1,458 1,890 Total liabilities 9,353 11,411 SERIES B PREFERRED STOCK, 1,000 shares designated, issued and outstanding 7,500 7,500 STOCKHOLDERS' EQUITY: Preferred stock, par value $0.01 per share, 15,000,000 shares authorized, issuable in series: Series A, 600,000 shares designated, none issued - - Common stock, par value $0.001 per share, 100,000,000 shares authorized, 26,728,000 shares issued and outstanding 27 27 Additional paid-in capital 203,464 203,464 Accumulated deficit (93,914) (87,238) Accumulated other comprehensive loss (1,122) (999) Total stockholders' equity 108,455 115,254 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 125,308 $ 134,165 BioVeris Corporation Supplemental Consolidated Statement of Operations (In thousands, except per share data) (Unaudited) Three Months Ended June 30, 2005 Three Months Ended June 30, 2004 BioVeris and BioVeris and Wholly-Owned Wholly-Owned Consolidating Subsidiaries Subsidiaries MSD Eliminations Consolidated (In thousands, except per share data) Revenues: Product sales $ 4,580 $ 4,886 $ 2,953 $ - $ 7,839 Royalty income 309 320 - - 320 Contract fees - 20 66 - 86 Total 4,889 5,226 3,019 - 8,245 Operating costs and expenses: Product costs 2,048 2,264 2,340 - 4,604 Research and development 4,765 4,561 2,682 (67) 7,176 Selling, general and administrative 5,681 6,608 3,102 - 9,710 Total operating costs and expenses 12,494 13,433 8,124 (67) 21,490 Loss from operations (7,605) (8,207) (5,105) 67 (13,245) Interest income 1,318 404 - - 404 Other, net (381) (54) 44 - (10) Equity in loss of joint venture - (4,994) - 4,994 - Net loss $(6,668) $(12,851) $(5,061) $5,061 $(12,851) Net loss per common share $ (0.25) $ (0.48) $ (0.19) $ 0.19 $ (0.48) Shares used in computing net loss per common share 26,728 26,728 26,728 26,728 26,728 DATASOURCE: BioVeris Corporation CONTACT: George Migausky of BioVeris Corporation, +1-301-869-9800, ext. 2013; Investors: Jonathan Fassberg of The Trout Group, +1-212-477-9007, ext. 16; or Media: Paul Caminiti or Andrew Cole of Citigate Sard Verbinnen, +1-212-687-8080 Web site: http:/www.bioveris.com

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