Genmab A/S
03.08.2011 17:48
Dissemination of a Adhoc News, transmitted by DGAP - a company of
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- Continued strong focus on cost control with improvement in first half
operating loss and cash burn over 2010
- Improving 2011 guidance as result of DKK 25 million reduction in operating
expenses
- Announced HuMax-CD74(tm) antibody-drug conjugate program with Seattle Genetics
- Decisive move to minimize future spending by winding down the zalutumumab
program
Copenhagen, Denmark; August 3, 2011 - Genmab A/S (OMX: GEN) announced today
results for the six month period ended June 30, 2011 and slightly improved 2011
guidance.
'This quarter we reaffirm Genmab's commitment to disciplined spending by
reducing operating expenses from previous guidance,' said Jan van de Winkel,
Ph.D., Chief Executive Officer of Genmab.
For the first half of 2011 Genmab reported the following results:
- Revenues were DKK 167 million (USD 32 million) for the first half of 2011. In
the first half of 2010, Genmab recognized revenues of DKK 276 million (USD 54
million). The revenues consist primarily of royalties, deferred revenue and
reimbursement of certain research and development costs related to our
collaboration agreements. The decrease was mainly due to the inclusion of a
milestone from GSK in 2010.
- An operating loss of DKK 127 million (USD 25 million). This compares to an
operating loss of DKK 240 million (USD 46 million) for the corresponding period
of 2010. This was an improvement of DKK 113 million or 47% and was mainly
related to a reduction in operating expenses due to the amended GSK agreement,
a continued strong focus on cost control and the inclusion of a one time
expense related to our former CEO in 2010.
- A net loss for continuing operations of DKK 173 million (USD 33 million)
compared to a net loss of DKK 191 million (USD 37 million) for the
corresponding period of 2010. The net loss per share for continuing operations
was DKK 3.84 for the first half of 2011 compared to DKK 4.25 for the first half
of 2010.
- A net loss of DKK 192 million (USD 37 million) compared to DKK 219 million
(USD 43 million) in the first half of 2010. This includes the results of our
manufacturing facility, which has been classified as held for sale and
presented as a discontinued operation due to our decision to sell the facility.
The loss for discontinued operations amounted to DKK 19 million (USD 4 million)
in the first half of 2011 compared to DKK 28 million (USD 6 million) in the
same period of 2010.
- Genmab ended the six month period with a cash position of DKK 1,308 million
(USD 253 million) compared to DKK 1,546 million (USD 300 million) as of
December 31, 2010. This represents a cash burn of DKK 238 million (USD 47
million) in the first half of 2011 compared to DKK 350 million (USD 68 million)
in the corresponding period in 2010. The cash burn was primarily related to the
ongoing investment in our research and development activities.
Second Quarter 2011 Highlights
- Genmab and Seattle Genetics expanded the companies' antibody-drug conjugate
(ADC) research collaboration to include HuMax-CD74. Seattle Genetics received
an undisclosed upfront payment and has the right to exercise a co-development
and co-commercialization option for any resulting ADC products at the end of
Phase I clinical development.
- We announced the decision to wind down the zalutumumab program (an antibody
targeting the Epidermal Growth Factor receptor).
- During the quarter Toon Wilderbeek was elected to the Board of Directors and
we appointed Rachel Curtis Gravesen as Senior Vice President, Investor
Relations and Communication.
Subsequent to the balance sheet date
- In July, we announced a royalty payment of DKK 17.7 million following net
sales for Arzerra for the second quarter of 2011 of GBP 10.5 million
(approximately DKK 88.6 million).
Outlook
We are slightly improving our 2011 financial guidance as a result of a
reduction in operating expenses of DKK 25 million.
We expect our 2011 revenue to remain the same as the previous guidance at DKK
325 - 350 million compared to DKK 582 million reported for 2010. The reduction
in revenue from 2010 is mostly due to the inclusion of two development
milestones related to our agreement with GSK totaling DKK 203 million in 2010.
There are no GSK development milestones included in 2011. Our projected revenue
for 2011 consists primarily of non-cash amortization of deferred revenue
totaling DKK 226 million and royalties on sales of Arzerra of DKK 80 million,
an increase of 48% compared to 2010.
We anticipate that our 2011 operating expenses from continuing operations will
now be DKK 650 - 700 million, a reduction of DKK 25 million from the previous
guidance of DKK 675 - 725 million. The reduction is due to a continued focus on
strong cost controls and lower development costs primarily due to beneficial
foreign exchange rates impacting costs under the GSK collaboration. The
operating expenses were DKK 743 million in 2010. The 2011 operating expenses
include approximately DKK 80 - 90 million related to the zalutumumab program,
and although we have announced the wind down of the current clinical studies,
savings will mostly be realized in 2012.
We expect the operating loss from continuing operations for 2011 to be
approximately DKK 325 - 375 million, again an improvement of DKK 25 million
compared to the previous guidance of DKK 350 - 400 million. An operating loss
of DKK 161 million was reported for 2010.
The discontinued operation guidance of DKK 40 - 50 million relates to the
ongoing running costs of the Minnesota manufacturing facility and represents a
full 12 months of activity maintaining the facility in a validated state. This
cost could be lower if the facility is sold before the end of the year. We
remain focused on entering a sales agreement in 2011. Further details of the
facility can be viewed at http://genmab-facility.com/. The fair value of the
manufacturing facility less costs to sell is estimated at USD 120 million,
approximately DKK 660 million, at an assumed exchange rate of USD 1.00 = DKK
5.50. If converted at the quarter end spot rate of 5.1607 then the sales value
would be DKK 619 million.
As of December 31, 2010, we had a cash position of DKK 1,546 million and are
projecting a cash burn in 2011, excluding proceeds from the facility sale, of
DKK 550 - 600 million, compared to the previous guidance of DKK 575 - 625
million, due to the reduction in operating expenses. Taking into account the
planned sale of the manufacturing facility at DKK 660 million, we are
projecting a cash position at the end of the year of DKK 1,600 - 1,650 million.
MDKK
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New Previous
2011 Guidance 2011 Guidance
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Revenue 325 - 350 325 - 350
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Operating expenses (650) - (700) (675) - (725)
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Operating loss continuing operations (325) - (375) (350) - (400)
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Discontinued operation (40) - (50) (50)
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Cash position beginning of year* 1,546 1,546
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Cash used in operations (550) - (600) (575) - (625)
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GSK upfront payment - -
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Facility sale 660 660
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Cash position at end of year* 1,600 - 1,650 1,575 - 1,625
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* Cash, cash equivalents, bank overdrafts and marketable securities
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In addition to factors already mentioned, the estimates above are subject to
change due to numerous reasons, including but not limited to the timing and
variation of development activities (including activities carried out by our
collaboration partners) and related income and costs; fair value less cost to
sell of our manufacturing facility; fluctuations in the value of our marketable
securities; Arzerra sales and corresponding royalties to Genmab; and currency
exchange rates. The financial guidance also assumes that no significant
agreements are entered into during 2011 that could materially affect the
results.
Conversion of Certain DKK Amounts to USD
For the convenience of the reader certain DKK amounts have been converted to
USD. Unless otherwise indicated, conversion herein of financial information
from DKK to USD has been made using the Danish Central Bank closing spot rate
on June 30, 2011 of USD 1.00 = DKK 5.1607.
Conference Call
Genmab will hold a conference call to discuss the 2011 second quarter results
tomorrow, Thursday, August 4, at
3.00 pm CEST
2.00 pm BST
9.00 am EDT
The conference call will be held in English.
The dial in numbers are as follows:
+1 877 317 6789 (in the US) and ask for the Genmab conference call
+1 412 317 6789 (outside the US) and ask for the Genmab conference call
A live webcast of the call and relevant slides will be available at
www.genmab.com. The webcast will also be archived on Genmab's website.
About Genmab A/S
Genmab is a publicly traded, international biotechnology company specializing
in the creation and development of differentiated human antibody therapeutics
for the treatment of cancer. Founded in 1999, the company's first marketed
antibody, Arzerra(r) (ofatumumab), was approved to treat fludarabine and
alemtuzumab refractory chronic lymphocytic leukemia after less than eight years
in development. Genmab's validated and next generation antibody technologies
are expected to provide a steady stream of future product candidates.
Partnering of innovative product candidates and technologies is a key focus of
Genmab's strategy and the company has alliances with top tier pharmaceutical
and biotechnology companies. For more information visit www.genmab.com.
Contact:
Rachel Curtis Gravesen, Senior Vice President, Investor Relations &
Communication
T: +45 33 44 77 20; M: +45 25 12 62 60; E: r.gravesen@genmab.com
This Company Announcement contains forward looking statements. The words
'believe', 'expect', 'anticipate', 'intend' and 'plan' and similar expressions
identify forward looking statements. Actual results or performance may differ
materially from any future results or performance expressed or implied by such
statements. The important factors that could cause our actual results or
performance to differ materially include, among others, risks associated with
product discovery and development, uncertainties related to the outcome and
conduct of clinical trials including unforeseen safety issues, uncertainties
related to product manufacturing, the lack of market acceptance of our
products, our inability to manage growth, the competitive environment in
relation to our business area and markets, our inability to attract and retain
suitably qualified personnel, the unenforceability or lack of protection of our
patents and proprietary rights, our relationships with affiliated entities,
changes and developments in technology which may render our products obsolete,
and other factors. For a further discussion of these risks, please refer to the
section 'Risk Management' in Genmab's Annual Report, which is available on
www.genmab.com. Genmab does not undertake any obligation to update or revise
forward looking statements in this Company Announcement nor to confirm such
statements in relation to actual results, unless required by law.
Genmab(r); the Y-shaped Genmab logo(r); HuMax(r); HuMax-CD20(r); HuMax-EGFr(tm);
HuMax-IL8(tm); HuMax-TAC(tm); HuMax-CD38(tm); HuMax-TF(tm); HuMax-Her2(tm);
HuMax-cMet(tm),
HuMax-CD74(tm), DuoBody(tm) and UniBody(r)are all trademarks of Genmab A/S.
Arzerra(r) is
a trademark of GlaxoSmithKline.
Company Announcement no. 25
CVR no. 2102 3884
Genmab A/S
Bredgade 34
1260 Copenhagen K
Denmark
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Language: English
Company: Genmab A/S
Dänemark
Phone:
Fax:
E-mail:
Internet:
ISIN: DK0010272202
WKN:
End of Announcement DGAP News-Service
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DGAP-Adhoc: Genmab Announces Financial Results for the First Half of 2011 and Improved Guidance
| Source: EQS Group AG