deCODE genetics (Nasdaq:DCGN) today
announced its consolidated financial results for the year ended
December 31, 2005. A conference call to discuss the year's results and
recent operating highlights will be webcast live tomorrow, Tuesday,
March 7, at 8:00am EST/1:00 pm GMT (details below).
Revenue for the year ended December 31, 2005 was $44.0 million,
versus $42.1 million for the full year 2004. At December 31, 2005, the
company had $12.3 million in deferred revenue, which will be recognized
over future reporting periods.
Net loss for the year ended December 31, 2005 was $62.8 million,
compared to $57.3 million for the full year 2004. The principal
factor in this increase is higher research and development expense
related to clinical trials and preclinical development work for the
company's lead drug development programs. Basic and diluted net loss
per share was $1.17 for the full year 2005, compared to $1.07 for the
full year 2004. At the close of 2005, the company had approximately
54.7 million shares outstanding.
At December 31, 2005, the company had $155.6 million in cash and
investments, compared to $198.3 million, including $6.0 million in
restricted cash, at December 31, 2004.
Research and development expense for proprietary programs was $43.7
million for the full year 2005, compared to $24.9 million for the full
year 2004. This increase is the result principally of costs associated
with the conduct of clinical trials and preclinical work in heart
attack, peripheral artery disease (PAD), and pain, as well as a portion
of the costs relating to the Phase II clinical trial in asthma deCODE
is conducting under a drug development alliance with a third party.
Selling, general and administrative expenses for the full year 2005 were $20.1 million, compared to $20.2 million for 2004.
"deCODE is developing new drugs for some of the biggest indications
in medicine. Building on the work of the past year, we are now
preparing to begin the Phase III trial for DG031 for the prevention of
heart attack, are concluding our Phase II trial in asthma, and have
just announced encouraging results from our Phase I program for DG041
in peripheral artery disease. We are also making swift progress in our
preclinical work on a follow-on compound for the prevention of heart
attack and in an exciting program in pain. Hence by the end of this
year we expect to have five compounds in clinical trials, compounds
with a medical and market potential which I believe set us apart from
virtually every other company of our size," said Kari Stefansson, CEO
of deCODE.
"The success of our strategy is founded upon our leadership in human
genetics and the exceptional quality of the chemistry and downstream
development teams that are turning our discoveries into deCODE drugs.
Our financial results demonstrate that we are generating significant
value from the investment in our programs, with an operating structure
that has enabled us to channel a growing proportion of our financial
resources into our drug development effort. We are accelerating value
creation through our drug development pipeline and are committed to
capturing that value for our shareholders," said Kari Stefansson, CEO
of deCODE.
Fourth quarter 2005 results
Revenue for the
quarter ended December 31, 2005 was $9.8 million, compared to $11.2
million for the same period a year ago. Net loss for the fourth quarter
2005 was $21.1 million, compared to $19.4 million for the fourth
quarter 2004. This increase was the result principally of the increase
in research and development expense associated with the advancement of
the company's drug development programs. Research and development
expense for proprietary programs increased to $13.7 million for the
fourth quarter 2005 from $8.7 million for the same period in 2004. For
the fourth quarter 2005, selling, general and administrative expenses
were $6.4 million versus $6.0 million for the 2004 period.
Company highlights over the past year include:
Drug Discovery and Development
- Heart attack: DG031. deCODE is currently preparing
to commence a Phase III outcome trial for DG031, the company's lead
developmental compound for the prevention of heart attack. The trial is
being designed under a Special Protocol Assessment with the US Food and
Drug Administration (FDA). deCODE plans to focus the multicenter study
on African Americans heart patients who carry the HapK variant of the
gene encoding the leukotriene A4 hydrolase (LTA4H). deCODE published
its discovery of the link between HapK and increased risk of heart
attack in November. African Americans with the HapK variant are at a
more than a two and a half times greater risk of heart attack than are
controls. HapK, like the at-risk variants of FLAP, the target of DG031,
appears to confer increased risk of the disease by increasing the
production of leukotriene B4 (LTB4). LTB4 is a potent driver of
inflammation produced in atherosclerotic plaques. In Phase II trials
completed last year, DG031 was shown to be well tolerated at all doses
tested and to reduce the production of LTB4 in a dose-dependent manner.
By focusing the Phase III trial on those at highest risk through the
pathway targeted by DG031, deCODE believes it can conduct a small and
highly sensitive trial with the highest possible likelihood of success.
deCODE plans to commence this trial in the second quarter of 2006.
- Heart attack: DG051. We are conducting
advanced preclinical work on an inhibitor of the LTA4H as a follow-on
compound for the prevention of heart attack. In our preclinical studies
this compound, DG051, has been shown be a potent inhibitor of LTA4H, is
orally bioavailable and should allow for once-a-day oral dosing, and
appears to have minimal potential for drug-drug interaction. We expect
to file an IND for DG051 by mid-year 2006.
- PAD: DG041. In February this year we
concluded the Phase I clinical program for DG041, our compound for the
treatment of peripheral artery disease (PAD). DG041 is a novel,
first-in-class, orally-administered small molecule inhibitor of the EP3
receptor for prostaglandins E2 (PGE2), developed entirely through
deCODE's drug discovery capabilities. deCODE identified EP3 as a target
in PAD through its population genetics research, which linked variants
in the gene encoding EP3 to increased risk of the disease. Nearly 200
healthy subjects were exposed to DG041 in the Phase I program, at doses
up to 1600mg/day for seven days. The results of these studies showed
DG041 to be well-tolerated, without any drug-related serious adverse
events noted, and demonstrated that DG041 effectively inhibits platelet
aggregation in a dose-dependent manner without increasing bleeding
time. We expect to begin a Phase II clinical trial in the first half of
2006.
- Asthma. We are conducting a Phase II clinical
trial in asthma under a drug development alliance with another company.
The compound, developed by this third party originally for a different
indication, is an inhibitor of the MAP3K9 kinase, the product of a gene
deCODE has linked to risk of asthma. The study is examining safety and
tolerability, as well as improvement in lung function and reduction in
airway inflammation. deCODE expects this trial to conclude in the first
quarter of 2006.
- Pain: DG061. The recent identification of
increased cardiovascular risk associated with selective COX-2
inhibitors and other non-selective anti-inflammatory drugs (NSAIDs) has
created an urgent need for new, non-opiate based drugs for treating
acute and chronic pain. Exploiting its drug discovery work on
inhibitors of the EP3 receptor for prostaglandins E2, deCODE is
bringing forward a lead preclinical candidate, DG061, to meet this
need. Preclinical studies of DG061 demonstrate that it is orally active
and efficacious in an animal model for pain. Moreover, by targeting EP3
it may be possible to avert the risk of cardiovascular events and
gastric ulceration that accompany the long-term use of selective COX -2
inhibitors and other NSAIDs. deCODE expects to file an IND on DG061 in
2006.
Target Discovery
- Heart attack. In November, the company published
its discovery of a variant in the gene encoding LTA4H conferring
increased risk of heart attack. The link between the variant, known as
HapK, and increased risk of heart attack, first made in Iceland, was
confirmed in studies of three cohorts in the United States. In
Icelanders and in Americans of European origin the at-risk version of
the gene is quite common and confers a moderate increase in risk of the
disease. The variant occurs much less frequently in African Americans
but more than triples the risk of heart attack.
- Type 2 Diabetes. Earlier this year deCODE
reported the discovery of the most significant genetic risk factor for
type 2 diabetes (T2D) found to date. More than one third of individuals
in the populations studied carry one copy of the at-risk variant and
are at an approximately 45% greater risk of the disease than are
controls; 7% carry two copies and are at a 141% greater risk. The
original finding was made in Iceland and was subsequently confirmed in
studies in Denmark and the United States. The variant is in a gene on
chromosome 10 encoding a protein called transcription factor 7-like 2
(TCF7L2). The company is employing the discovery in its diagnostic and
drug discovery programs in T2D.
Personnel
- Dan Hartman. In July, deCODE announced the
appointment of Daniel Hartman, MD, as Senior Vice President of Product
Development. Dr. Hartman came to deCODE from Pfizer, where he held
senior clinical development positions.
- Linda Buck. Dr. Linda Buck joined deCODE's
Board of Directors in November 2005. Dr. Buck, who received a Nobel
Prize in physiology or medicine in 2004 for her discoveries on the
workings of the olfactory system, is Associate Director of the Basic
Sciences Division at Fred Hutchinson Cancer Research Center in Seattle
and is a Howard Hughes Medical Institute investigator. She also is an
affiliate professor of physiology and biophysics at the University of
Washington.
About deCODE
deCODE is a biopharmaceutical
company applying its discoveries in human genetics to the development
of drugs for common diseases. deCODE is a global leader in gene
discovery - our population approach and resources have enabled us to
isolate key genes contributing to major public health challenges from
cardiovascular disease to cancer, genes that are providing us with drug
targets rooted in the basic biology of disease. deCODE is also
leveraging its expertise in human genetics and integrated drug
discovery and development capabilities to offer innovative products and
services in DNA-based diagnostics, bioinformatics, genotyping,
structural biology, drug discovery and clinical development. deCODE is
delivering on the promise of the new genetics.SM Visit us on the web at
www.decode.com.
Conference Call Information
A conference call,
during which deCODE President and CEO Kari Stefansson and CFO Lance
Thibault will discuss the past year's financial results and recent
operating highlights, will be webcast tomorrow, Tuesday, March 7, at
8:00am EST/1:00pm GMT. The webcast can be accessed via the Investors
section of deCODE's website, www.decode.com, or through www.fulldisclosure.com.
A replay of the call will be available on these websites for at least
one week following the call. A digitized telephone replay of the call
can be accessed for the week following the call by dialing 1 800 475
6701 from the US, or +1 320 365 3844 from outside the US. The access
code is 820970.
Any statements contained in this presentation that relate to
future plans, events or performance are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements are subject to a number of
risks and uncertainties that could cause actual results, and the timing
of events, to differ materially from those described in the
forward-looking statements. These risks and uncertainties
include, among others, those relating to technology and product
development, integration of acquired businesses, market acceptance,
government regulation and regulatory approval processes, intellectual
property rights and litigation, dependence on collaborative
relationships, ability to obtain financing, competitive products,
industry trends and other risks identified in deCODE's filings with the
Securities and Exchange Commission. deCODE undertakes no
obligation to update or alter these forward-looking statements as a
result of new information, future events or otherwise.
