- Conference Call Today at 9 a.m. Eastern - FREMONT, Calif., Feb.
23 /PRNewswire-FirstCall/ -- Ciphergen Biosystems, Inc.
(NASDAQ:CIPH) today announced financial results for its fourth
quarter and year ended December 31, 2006. "In 2006, we successfully
restructured and repositioned Ciphergen. With the completion of the
sale of our research life sciences business, we are focused on
leveraging our investment in proteomics and biomarkers to build a
leading diagnostics company," said Gail S. Page President and Chief
Executive Officer of Ciphergen. "We have three tests in validation
and clinical studies, an excellent strategic partner in Quest
Diagnostics Inc. that provides both financial and market resources,
and a robust pipeline of potential novel diagnostics." "We enter
2007 well positioned to execute this strategy. Since the close of
the Bio-Rad transaction, we have made significant progress in a
number of areas. We have restructured our balance sheet, advanced
our ovarian triage test into a prospective clinical trial for FDA
submission, and moved two other diagnostic programs forward into
development. Quest Diagnostics, our strategic partner for our
ovarian diagnostic, also has accepted the peripheral arterial
disease program as the second of three tests they have access to
under our agreement," continued Page. Fourth Quarter and Year-end
2006 Financial Results On November 13, 2006, Ciphergen sold its
life science research business to Bio-Rad Laboratories.
Accordingly, the only revenue in the fourth quarter of 2006 was
derived from sales of instruments and tools during the first 6
weeks of the quarter before the sale of the life science business
was complete. The Company reported net revenue of $1.2 million in
the fourth quarter of 2006, compared to $6.6 million in the fourth
quarter of 2005. Total operating expenses for the fourth quarter of
2006 were $7.7 million compared to $12.9 million in the same period
last year. Included in total operating expenses for the fourth
quarter of 2005 was a $2.5 million goodwill impairment charge. The
loss from continuing operations for the fourth quarter of 2006 was
$0.1 million, compared to $9.9 million in the fourth quarter of
2005. Included in the loss from continuing operations for the
fourth quarter of 2006 was a $6.9 million net gain on the sale of
the life science research business to Bio-Rad. The net loss for the
fourth quarter of 2006 was $1.9 million which included a $1.5
million loss on extinguishment of debt compared to $9.2 million for
the same period in 2005. Basic and diluted net loss for the fourth
quarter of 2006 was $0.05 per share compared to a basic and diluted
net loss per share of $0.26 per share for the same period in 2005.
The Company has 39.2 million shares outstanding as of December 31,
2006. Revenue for the full-year of 2006 was $18.2 million compared
to $27.2 million for 2005. For the full-year of 2006, the net loss
was $22.1 million or $0.61 per share, compared to $35.4 million or
$1.10 per share in the same period in 2005. At December 31, 2006,
the Company's cash and investments were $17.7 million, compared to
$15.0 million at September 30, 2006 and $28.0 million at December
31, 2005. In addition, Ciphergen has $3.0 million remaining to draw
from a loan facility from Quest Diagnostics, which indebtedness is
forgivable upon accomplishment of certain milestones. Recent
Accomplishments * Corporate Transformation - Completed the sale of
the life science research business to Bio-Rad Laboratories.
Ciphergen received $19 million from Bio-Rad, including a $3 million
equity investment in Ciphergen. An additional $2.0 million is
receivable upon the successful resolution of a patent matter and a
final $2.0 million is in escrow and subject to potential claims. -
Completed the exchange of its outstanding 4.50% Convertible Senior
Notes due 2008 (Outstanding Notes). $27.5 million aggregate
principal amount of Outstanding Notes were exchanged for $16.5
million of a new series of 7.00% Convertible Senior Notes due 2011
and $11.0 million of cash. * Ovarian Cancer Diagnostic Progress -
Initiated a prospective clinical trial to evaluate its ovarian
cancer triage test to differentiate women with ovarian cancer from
women with benign pelvic masses. - Selected PrecisionMed, Inc., a
contract research organization with expertise in the collection and
management of human biological samples. PrecisionMed is supporting
Ciphergen in its clinical trial for its ovarian tumor triage test.
- Engaged Emergo Group, Inc. to help gain regulatory clearance of
Ciphergen's ovarian test in various European countries. - Teamed
with Mosaic Health Care Consultants to develop and implement
reimbursement strategies and programs. * Other Diagnostic Programs
- Quest Diagnostics accepted the second of its three tests from
Ciphergen pursuant to the parties' existing strategic alliance
agreement. In addition to the ovarian tumor triage test, Quest
Diagnostics will assist Ciphergen in the development and
commercialization of a blood-based assay for the detection of
peripheral arterial disease (PAD). - Formed collaboration with Ohio
State University Research Foundation to develop and clinically
validate a diagnostic test to detect thrombotic thrombocytopenic
purpura (TTP), a hematologic disease, which causes abnormal
clotting and a decrease in platelets. 2007 Milestones Over the next
twelve months Ciphergen anticipates accomplishing the following
milestones: * Complete the prospective clinical trial of its
ovarian tumor triage test and submit the results to the U.S. Food
and Drug Administration for clearance as the first test for use as
an adjunct to other diagnostic methods to help physicians in the
differential diagnosis of a persistent pelvic mass; * Continue to
move the program in PAD forward through clinical validation
studies; and, * Prepare for market launch of the TTP assay. Going
forward the Company does not anticipate having revenue until its
diagnostic tests are commercialized. Operating expenses are
expected to be substantially reduced in 2007 given the reduction of
employees to approximately 40 persons. Ciphergen estimates that
cash used for operations in the first quarter of 2007 will be
approximately $5.0 million. The Company expects operating expenses
to continue to decrease. Conference Call A conference call and
webcast will be held on today at 9:00 a.m. Eastern to discuss these
results and provide an update on business developments. To access
the live conference call via phone, dial (877) 325-7371 from the
United States and Canada or (706) 634-0768 internationally. The
conference ID is 21329140. Please dial-in approximately ten minutes
prior to the start of the call. Additionally, you may access the
live and subsequently archived webcast of the conference call from
the Investor Relations section of the Company's website at
http://www.ciphergen.com/. Please connect to the web site at least
15 minutes prior to the call to allow for any software download
that may be necessary. A telephone replay will be available
beginning approximately one hour after the call through February 27
and may be accessed by dialing (800) 633-8284 from the United
States and Canada or (+1 402) 977-9140 internationally. The replay
passcode is 21329140. An archived replay of the call will be
available until the next quarterly call. About Ciphergen Ciphergen
Biosystems, Inc. is dedicated to the discovery, development and
commercialization of novel high-value diagnostic tests that help
physicians diagnose, treat and improve outcomes for patients.
Ciphergen, along with its prestigious scientific collaborators, has
ongoing diagnostic programs in oncology/hematology, cardiology and
women's health with an initial focus in ovarian cancer. Based in
Fremont, California, more information about Ciphergen can be found
on the Web at http://www.ciphergen.com/. Safe Harbor Statement Note
Regarding Forward-Looking Statements: This press release contains
forward-looking statements. For purposes of the Private Securities
Litigation Reform Act of 1995 (the "Act"), Ciphergen disclaims any
intent or obligation to update these forward-looking statements,
and claims the protection of the Safe Harbor for forward-looking
statements contained in the Act. Examples of such forward-looking
statements include statements regarding Ciphergen's expectations
for the timing of completion of its ovarian tumor triage test
clinical trial and the related submission to the U.S. Food and Drug
Administration, its TTP and PAD program plans, expected decreases
in operating expenses and projected cash usage in the first quarter
of 2007. Actual results may differ materially from those projected
in such forward-looking statements due to various factors,
including the risk that Ciphergen is unable to successfully utilize
its resources and execute plans for its diagnostics business.
Investors should consult Ciphergen's filings with the Securities
and Exchange Commission, including its Form 10-Q filed November 20,
2006, for further information regarding these and other risks
related to the Company's business. NOTE: Ciphergen is a registered
trademark of Ciphergen Biosystems, Inc. Ciphergen Biosystems, Inc.
Unaudited Condensed Consolidated Statements of Operations (in
thousands, except per share data) Three Months Twelve Months Ending
December 31 Ending December 31 2006 2005 2006 2005 Revenue $1,218
$6,601 $18,215 $27,246 Cost of Revenue 505 3,626 9,338 13,693 Gross
Profit 713 2,975 8,877 13,553 Operating expenses: Research and
development 2,695 2,965 11,474 13,196 Sales and marketing 1,917
3,808 12,568 18,009 General and administrative 3,112 3,676 10,661
14,404 Goodwill Impairment - 2,453 - 2,453 Total operating expenses
7,724 12,902 34,703 48,062 Gain on sale of life science research
business (6,929) - (6,929) - Loss from continuing operations (82)
(9,927) (18,897) (34,509) Loss on extinguishment of debt (1,481) -
(1,481) - Interest and other income (expense), net (327) (399)
(1,536) (1,871) Loss from continuing operations before income taxes
(1,890) (10,326) (21,914) (36,380) Income tax provision (benefit)
from continuing operations (38) (96) 152 7 Net loss from continuing
operations (1,852) (10,230) (22,066) (36,387) Gain from sale of
discontinued operations, net of tax - 1,000 - 954 Net loss $(1,852)
$(9,230) $(22,066) $(35,433) Basic and diluted net loss per share
$(0.05) $(0.26) $(0.61) $(1.10) Shares used in computing basic and
diluted net loss per share 37,718 35,961 36,465 32,321 Ciphergen
Biosystems, Inc. Unaudited Condensed Consolidated Balance Sheets
(in thousands) December 31, December 31, 2006 2005 (1) ASSETS
Currents assets: Cash and cash equivalents $17,711 $25,738 Short
term investment - 2,240 Accounts receivable 29 5,828 Inventory -
5,594 Prepaids and other current assets 2,300 1,746 Total current
assets 20,040 41,146 Property, plant and equipment, net 2,260 7,320
Goodwill and other intangible assets, net - 2,493 Other long term
assets 716 1,852 Total assets $23,016 $52,811 LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $2,401
$3,188 Accrued liabilities 4,601 6,298 Current portion of deferred
revenue 45 4,132 Current portion of capital lease obligations - 21
Current portion of long term debt - 377 Total current liabilities
7,047 14,016 Deferred revenue, net of current portion - 508 Capital
lease obligations, net of current portion - 28 Long term debt owed
to related party 7,083 2,500 Convertible senior notes, net of
discount 18,427 28,586 Other long term liabilities 360 650 Total
liabilities 32,917 46,288 Stockholders equity: Common stock 39 36
Additional paid in capital 207,991 202,485 Accumulated other
comprehensive loss (71) (204) Accumulated deficit (217,860)
(195,794) Total stockholders' equity (9,901) 6,523 Total
liabilities and stockholders' equity $23,016 $52,811 (1) The
condensed consolidated balance sheet at December 31, 2005 has been
derived from the audited consolidated financial statements at that
date included in the Company's Form 10-K for the fiscal year ended
December 31, 2005. DATASOURCE: Ciphergen Biosystems, Inc. CONTACT:
Ciphergen Biosystems, Inc., (toll-free) 1-888-864-3770, or
+1-510-505-2100, or fax - +1-510-505-2101 Web site:
http://www.ciphergen.com/
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