GAITHERSBURG, Md., Feb. 10 /PRNewswire-FirstCall/ -- BioVeris
Corporation (NASDAQ:BIOV) reported today the financial results for
its fiscal third quarter ended December 31, 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 nine months ended
December 31, 2004 includes the consolidated revenue and expenses of
MSD and the quarter and nine months ended December 31, 2005
includes only the financial results of BioVeris and its
wholly-owned subsidiaries. Revenues for the three months ended
December 31, 2005 increased to $5.5 million from $5.3 million in
the corresponding prior year period. Revenues for the nine months
ended December 31, 2005 decreased to $16.5 million from $21.4
million in the corresponding prior year period. Of this $4.9
million decrease, $4.3 million represents MSD revenues which were
consolidated with BioVeris' revenues in the prior year. Revenues
include product sales, which were $5.1 million for the three months
ended December 31, 2005, compared to $5.0 million in the
corresponding prior year period. Product sales were $15.4 million
for the nine months ended December 31, 2005, compared to $20.0
million in the corresponding prior year period. Of this $4.6
million decrease, $4.0 million represents MSD product sales which
were consolidated with BioVeris' product sales in the prior year.
Sales of biodefense products for the three and nine months ended
December 31, 2005 were $1.9 million and $7.2 million, respectively,
compared to $1.8 million and $8.2 million in the comparable prior
year periods. Sales of biodefense products in the prior year nine
month period included a $1.3 million sale to the U.S. Air Force
under a single order. Sales of products for the life science market
for the three and nine months ended December 31, 2005 were $3.2
million and $8.2 million, respectively, compared to $3.2 million
and $7.9 million in the comparable prior year periods. Product
costs were $2.5 million (49% of total product sales) for the
quarter ended December 31, 2005 compared to $2.6 million (51% of
total product sales) in 2004. Product costs were $6.6 million (43%
of total product sales) for the nine months ended December 31, 2005
compared to $10.7 million (53% of total product sales) in 2004. The
current year decrease of $4.1 million consists of $3.7 million due
to the consolidation of MSD's product costs in 2004, and a $400,000
reduction in BioVeris' costs. Research and development expenses
were $4.1 million for the quarter ended December 31, 2005, compared
to prior year costs of $4.5 million. Research and development
expenses were $13.1 million for the nine months ended December 31,
2005, compared to prior year costs of $17.2 million. The $4.1
million decrease is due primarily to the consolidation of MSD's
research and development expenses in 2004. 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.
Selling, general and administrative expenses were $6.2 million in
the quarter ended December 31, 2005, compared to prior year costs
of $7.1 million. Selling, general and administrative expenses were
$18.8 million in the nine months ended December 31, 2005, compared
to prior year costs of $25.7 million. Of this $6.9 million
decrease, $4.5 million represents MSD's selling, general and
administrative expenses in 2004. BioVeris' decrease in selling,
general and administrative costs in the quarter and nine months
ended December 31, 2005 was primarily attributable to lower
professional fees in the current year. Professional fees in the
prior year included costs associated with the Company's litigation
and settlement with MSD. Interest income was $100,000 and $900,000
in the quarters ended December 31, 2005 and 2004, respectively, and
was $2.7 million and $2.2 million in the nine months ended December
31, 2005 and 2004, respectively. Interest income in the quarter and
nine months ended December 31, 2005 includes approximately $400,000
and $1.2 million, respectively, from the accretion of income
related to the note receivable from MSD. During the three months
ended December 31, 2005, we recorded a charge against interest
income of approximately $158,000 to reflect amortization of the
purchase price premium of short-term investments. In addition,
during the three and nine months ended December 31, 2005, we
recorded an out of period adjustment of $894,000 and $615,000,
respectively, to reduce accumulated other comprehensive loss and
interest income in order to reflect the amortization related to
prior periods of the purchase priced premium of short-term
investments. The impact of this adjustment on the quarter and nine
months ended December 31, 2005 and on prior interim and annual
periods was not material, as the adjustment was comprised of
relatively small amounts related to each of the quarterly reporting
periods dating back to the quarter ended June 30, 2004. For all
periods, comprehensive loss was not impacted by the adjustment.
BioVeris' net loss for the quarter ended December 31, 2005 was $7.5
million ($0.28 per common share), compared to a net loss of $12.0
million ($0.45 per common share) in 2004. The net loss for the nine
months ended December 31, 2005 was $20.7 million ($0.77 per common
share), compared to a net loss of $70.4 million ($2.64 per common
share) in 2004. At December 31, 2005, the Company had cash, cash
equivalents and short- term investments of $72.8 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 Nine Months Ended
December 31, December 31, 2005 2004 2005 2004 REVENUES: Product
sales $5,051 $4,971 $15,420 $20,044 Royalty income 414 328 1,084
963 Contract fees - - - 388 Total 5,465 5,299 16,504 21,395
OPERATING COSTS AND EXPENSES: Product costs 2,459 2,559 6,625
10,701 Research and development 4,122 4,467 13,136 17,195 Selling,
general, and administrative 6,238 7,057 18,816 25,718 Total 12,819
14,083 38,577 53,614 LOSS FROM OPERATIONS (7,354) (8,784) (22,073)
(32,219) INTEREST INCOME 116 885 2,684 2,194 OTHER (EXPENSE)
INCOME, NET (272) 172 (1,292) 480 EQUITY IN LOSS OF JOINT VENTURE -
(1,037) - (3,788) LOSS ON JOINT VENTURE IMPAIRMENT - (3,210) -
(37,110) NET LOSS $(7,510) $(11,974) $(20,681) $(70,443) Net loss
per common share (Basic and Diluted) $(0.28) $(0.45) $(0.77)
$(2.64) COMMON SHARES OUTSTANDING (Basic and Diluted) 26,841 26,728
26,793 26,728 BioVeris Corporation Consolidated Balance Sheet (In
thousands) (Unaudited) December 31, March 31, 2005 2005 ASSETS
CURRENT ASSETS: Cash and cash equivalents $ 24,331 $ 41,739
Short-term investments 48,489 53,890 Accounts receivable, net 7,206
4,483 Inventory 5,209 5,235 Other current assets 2,312 2,813 Total
current assets 87,547 108,160 EQUIPMENT AND LEASEHOLD IMPROVEMENTS,
NET 3,033 3,636 OTHER NONCURRENT ASSETS: Note receivable 5,317
4,709 Technology licenses 15,844 17,306 Other 337 354 TOTAL ASSETS
$ 112,078 $ 134,165 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT
LIABILITIES: Accounts payable and accrued expenses $ 4,992 $ 6,457
Accrued wages and benefits 1,552 1,713 Other current liabilities
1,351 1,351 Total current liabilities 7,895 9,521 NONCURRENT
DEFERRED LIABILITIES 788 1,890 Total liabilities 8,683 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,
27,238,000 and 26,728,000 shares issued and outstanding as of
December 31 and March 31, respectively 27 27 Additional paid-in
capital 205,952 203,464 Deferred compensation (1,811) - Accumulated
other comprehensive loss (317) (999) Accumulated deficit (107,956)
(87,238) Total stockholders' equity 95,895 115,254 TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY $ 112,078 $ 134,165
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, for
BioVeris Corporation; or Media: Paul Caminiti or Andrew Cole of
Citigate Sard Verbinnen, +1-212-687-8080, for BioVeris Corporation
Web site: http://www.bioveris.com/
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