deCODE genetics (Nasdaq:DCGN) today announced its consolidated
financial results for the quarter ended March 31, 2006.
A conference call to discuss the quarter’s results and
recent operating highlights will be webcast live tomorrow,
Tuesday, May 2, at 8:00am Eastern Daylight Time/12 noon
GMT/1pm British Summer time (details below).
Revenue for the first quarter 2006 was $10.1 million,
compared to $9.5 million for the first quarter 2005.
At March 31, 2006, the company had $15.9 million in
deferred revenue, which will be recognized over future
reporting periods.
Net loss for the first quarter 2006 was $20.3 million,
compared to $16.9 million for the first quarter last
year. The principal component of this increase is higher
research and development expense related to clinical
trials and preclinical development work in the company’s
lead drug development programs. Reported results for
the first quarter of 2006 also reflect the adoption
of Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 123 (revised 2004),
Share-based Payment, (FAS 123R), resulting in a charge
of $0.9 million, or $0.02 per basic and diluted share,
for share-based compensation. Basic and diluted net
loss per share was $0.37 for the first quarter 2006,
compared to $0.32 for the year-ago period. At the close
of the first quarter 2006, the company had approximately
55.5 million shares outstanding.
At March 31, 2006, the company had $140.3 million in
cash and investments, compared to $155.6 million at
December 31, 2005.
Research and development expense for proprietary programs
was $14.9 million for the first quarter of this year,
compared to $8.3 million for the first quarter 2005.
This increase is the result principally of costs associated
with the advancement of the company’s lead drug discovery
and development programs.
Selling, general and administrative expenses for the
first quarter 2006 were $5.3 million, compared to $4.2
million for the same period last year. The principal
factor in this increase was share-based compensation
expense resulting from the adoption of FAS 123R.
“deCODE is advancing the development of new drugs for
a broad and growing range of major diseases, and I expect
the coming weeks and months to be an exciting period
in our growth as a biopharmaceutical company. By midyear
we expect to begin enrollment in our Phase III trial
for DG031; initiate a Phase II program for DG041 for
peripheral artery disease (PAD); complete the analysis
of the data from our asthma trial; and be well on the
way towards an IND for DG051, our follow-on compound
in heart attack. I believe our results for the past
quarter demonstrate the fundamental advantage of our
capabilities in human genetics: enabling us to discover
and develop new drugs in major therapeutic areas, and
to do so in a cost-effective manner,” said Kari Stefansson,
CEO of deCODE.
Recent highlights include
Drug Discovery and Development
- Heart attack: DG031. deCODE is
preparing for the launch of the Phase III outcome
trial for DG031, its lead developmental compound for
the prevention of heart attack, and expects to begin
enrollment by the end of the second quarter of this
year. To date we have identified and are evaluating
more than 100 study sites and have taken delivery
of 3.5 million tablets for the trial. The trial is
being designed under a Special Protocol Assessment
with the US Food and Drug Administration (FDA), and
deCODE expects to begin recruitment shortly after
the SPA process is completed. We aim to maximize the
sensitivity and likelihood of success of the Phase
III study by focusing it on the group at highest risk
through the pathway targeted by the compound: African-American
heart patients who carry the HapK variant of the gene
encoding the leukotriene A4 hydrolase (LTA4H). Our
gene discovery work has shown that while HapK modestly
increases the risk of heart attack in people of European
descent, African Americans with the HapK variant are
at a more than a 250% increased risk of the disease.
The gene variants deCODE has linked to heart attack
appear to confer increased risk by raising the production
of leukotriene B4 (LTB4), a potent mediator of inflammation
expressed in atherosclerotic plaques. In Phase II
trials completed last year, DG031 was shown to be
well-tolerated and to reduce the production of LTB4
in a dose-dependent manner.
- Heart attack: DG051. We are conducting
advanced preclinical work on a follow on compound
for the prevention of heart attack. This compound
targets leukotriene A4 hydrolase (LTA4H), which acts
further down the same pathway modulated by FLAP, the
target of DG031. In preclinical studies this compound,
DG051, has been shown be a potent inhibitor of LTB4
production; is orally bioavailable; should allow for
once-a-day oral dosing; and appears to have minimal
potential for drug-drug interaction. We are on track
to file an IND for DG051 by mid-year 2006.
- PAD: DG041. In February we concluded
the Phase I clinical program for DG041, our compound
for the treatment of peripheral artery disease (PAD),
and are on track to begin a Phase II program by the
end of the second quarter of this year.
- Asthma. We have concluded our Phase
II clinical trial in asthma under a drug development
alliance with the company whose compound we are testing.
The study is examining safety and tolerability, as
well as improvement in lung function and reduction
in airway inflammation. We expect to finish the analysis
of the data from this trial by the middle of this
year.
- Pain: DG061. Exploiting our drug
discovery work in PAD, deCODE is bringing forward
a lead preclinical candidate, DG061, to meet the need
for alternatives to the selective COX-2 inhibitors
and other NSAIDs for the treatment of pain. Preclinical
studies of DG061 demonstrate that it is orally active
and efficacious in an animal model for pain. deCODE
expects to file an IND on DG061.
Target Discovery
- Type 2 Diabetes. In January, 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 company is employing the
discovery in its diagnostic and drug discovery programs
in T2D.
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 first quarter financial results and recent operating
highlights, will be webcast tomorrow, Tuesday, May 2,
at 8:00am EDT/12 noon GMT/1pm British Summer Time. The
webcast can be accessed via the Investors section of
deCODE’s website, www.decode.com,
or through www.earnings.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 827175.
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.
