ATLANTA, GA , a pharmaceutical company focused on the treatment
of chronic inflammatory diseases, today reported financial results
for the fourth quarter and year ended December 31, 2007.
AtheroGenics reported a net loss of $16.0 million, or $0.40 per
share, for the fourth quarter of 2007, as compared to $20.7
million, or $0.52 per share, reported for the same period in 2006.
Net loss for the full year 2007 was $49.5 million, or $1.25 per
share, as compared to a net loss of $67.3 million or $1.71 per
share for the same period in 2006.
"In the fourth quarter, we achieved another key milestone in our
diabetes program with the completion of patient enrollment in our
ANDES Phase III clinical trial of AGI-1067 in Type 2 diabetes,"
stated Russell M. Medford, M.D., Ph.D., President and Chief
Executive Officer of AtheroGenics. "We believe that AGI-1067 has
the potential to become a much needed novel treatment for this
rapidly growing patient population whose diabetes is not
effectively controlled by current therapies. We are on track to
announce the interim analysis results from ANDES in the second
quarter of this year."
AtheroGenics reported total revenue of $3.1 million for the
fourth quarter of 2007 as compared to $11.0 million for the same
period in 2006. The decline in revenues in the fourth quarter of
2007 primarily reflected the absence of license fees related to the
AGI-1067 License Agreement with AstraZeneca, compared to $6.3
million of license revenue in the same period in 2006. Also
contributing to the fourth quarter decline are lower revenues from
research and development service fees received for conducting the
FOCUS clinical study, which has been concluded. For the year ended
December 31, 2007, revenues increased to $52.3 million, as compared
to $31.7 million for the same period in 2006. The increase in the
twelve month period principally reflects the recognition of the
remaining unamortized balance of the upfront license fee from
AstraZeneca, due to the termination of the Agreement. Also
contributing to the increased revenue in the twelve month period
were higher research and development service fees for conducting
the FOCUS clinical study.
Research and development expenses for the fourth quarter of 2007
decreased to $13.6 million as compared to $28.3 million for the
same period in 2006. For the twelve months ended December 31, 2007,
research and development expenses decreased to $72.7 million, as
compared to $82.9 million for the same period in 2006. These
expense declines were primarily due to the completion of the ARISE
clinical trial and reduced staff costs resulting from the Company's
organizational restructuring in May 2007, partially offset by costs
for the ANDES Phase III clinical trial, which commenced in 2007,
and higher FOCUS expenses, which affected the twelve-month
comparison.
Marketing, general and administrative expenses decreased to $3.3
million for the fourth quarter of 2007, as compared to $3.4 million
for the same period in 2006. The decrease in the quarter reflected
lower stock-based compensation. For the full year ended December
31, 2007, marketing, general and administrative expenses increased
to $13.9 million, as compared to $13.4 million for the same period
in 2006. The twelve month period increase was due to higher
marketing-related costs in the first half of 2007.
Restructuring and impairment costs for the twelve months ended
December 31, 2007 were $10.0 million, which included the write-off
of impaired manufacturing assets as a result of the transition of
commercial activities from AstraZeneca, as well as severance and
asset impairment costs from the organizational restructuring, which
occurred in the second quarter of 2007.
Interest income decreased to $1.2 million in the fourth quarter
of 2007 from $2.2 million reported for the comparable period in
2006. Interest income decreased to $6.0 million for the full year
ended December 31, 2007, compared to $9.2 million for the same
period in 2006. The decrease in both periods reflected reduced
levels of invested cash.
Interest expense increased to $3.4 million in the fourth quarter
of 2007, from $2.1 million for the comparable period in 2006, and
to $11.1 million in the full year ended December 31, 2007, from
$8.4 million for the comparable period in 2006. The increase in
interest expense in both periods was primarily due to the
additional debt incurred as a result of an exchange, in the third
quarter of 2007, of $38.0 million of 4.5 percent convertible notes
due in 2008 for $60.4 million of 4.5 percent convertible notes due
in 2011, as well as the accretion of the discount for the newly
issued notes. The increase for the full year comparison also
reflected the write-off of debt issuance costs related to the 2008
notes that were extinguished.
For the year ended December 31, 2006, AtheroGenics recorded $3.5
million in other expense attributable to non-cash costs related to
the exchange of a portion of the Company's 4.5 percent convertible
notes for common stock in January 2006.
At December 31, 2007, cash, cash equivalents and short-term
investments totaled approximately $93 million.
Full Year 2008 Financial Guidance
AtheroGenics announced that it expects to report net cash use
for operations in 2008 in the range of $40 to $50 million, which
does not take into account debt repayment. Net loss per share for
2008 is expected to be in the range of $1.40 to $1.50.
Webcast and Conference Call Information
AtheroGenics will be hosting a conference call and webcast on
Thursday, February 14, 2008, at 9:00 a.m. EST to discuss fourth
quarter and year-end 2007 financial results and to provide a
company update. Participants may access the live conference call by
dialing 877-407-8031 (domestic) or 201-689-8031 (international). To
access the webcast, please visit the AtheroGenics Investor
Relations website at www.atherogenics.com. A replay of the
conference will be accessible approximately one hour after the
conclusion of the call by dialing 877-660-6853 (domestic) or
201-612-7415 (international), account number 286, conference ID
number 273075. A replay of the webcast will be archived on the
Company's website until May 15, 2008.
About AtheroGenics
AtheroGenics is focused on the discovery, development and
commercialization of novel drugs for the treatment of chronic
inflammatory diseases, including diabetes and coronary heart
disease (atherosclerosis). AtheroGenics has commenced ANDES
(AGI-1067 as a Novel Anti-Diabetic Agent Evaluation Study), a Phase
III clinical trial to study its lead antioxidant and
anti-inflammatory drug candidate, AGI-1067, in patients with
diabetes. In addition, the Company has other clinical and
preclinical anti-inflammatory compounds, including AGI-1096, an
oral agent for the prevention of organ transplant rejection. For
more information about AtheroGenics, please visit
http://www.atherogenics.com.
Disclosure Regarding Forward-Looking Statements
Statements contained in this press release that relate to events
or developments that we expect or anticipate will occur in the
future are deemed to be forward-looking statements, and can be
identified by words such as "believes," "intends," "expects" and
similar expressions. AtheroGenics cautions investors not to place
undue reliance on the forward-looking statements contained in this
release. An example of a forward-looking statement in this press
release includes our expectation that we will announce interim
analysis results for the ANDES clinical trial in the second quarter
of 2008. These and other such statements are subject to certain
factors, risks and uncertainties that may cause actual results,
events and performances to differ materially from those referred to
in such statements. Additional information relating to the safety,
efficacy or tolerability of AGI-1067, may be discovered upon
further analysis of trial data. The U.S. Food and Drug
Administration might not allow us to conduct further studies of the
efficacy of AGI-1067 for the same or new endpoints, and, to the
extent approved, additional clinical trial work may take a
significant period of time to complete or require significant
additional resources to complete. We cannot ensure that AGI-1067
will ever be approved or be proven safe and effective for use in
humans. These and other risks are discussed in AtheroGenics'
Securities and Exchange Commission filings, including, but not
limited to, the risks discussed in AtheroGenics' Annual Report on
Form 10-K for the fiscal year ended December 31, 2006 and Quarterly
Report on Form 10-Q for the quarter ended September 30, 2007 and
are specifically incorporated by reference into this press release.
We undertake no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events,
or otherwise.
AtheroGenics, Inc.
Statements of Operations
(Unaudited)
Three months ended Twelve months ended
December 31, December 31,
---------------------------- ----------------------------
2007 2006 2007 2006
------------- ------------- ------------- -------------
Revenues:
License fees $ -- $ 6,250,000 $ 27,083,333 $ 22,916,667
Research and
development 3,118,004 4,715,495 25,193,494 8,758,178
------------- ------------- ------------- -------------
Total
revenues 3,118,004 10,965,495 52,276,827 31,674,845
Operating
expenses:
Research and
development 13,583,474 28,340,567 72,696,066 82,855,340
Marketing,
general and
administrative 3,316,566 3,382,868 13,936,132 13,373,112
Restructuring
and impairment
costs -- -- 9,996,332 --
------------- ------------- ------------- -------------
Total
operating
expenses 16,900,040 31,723,435 96,628,530 96,228,452
------------- ------------- ------------- -------------
Operating loss (13,782,036) (20,757,940) (44,351,703) (64,553,607)
Interest income 1,209,553 2,177,699 6,007,678 9,175,817
Interest
expense (3,429,314) (2,087,781) (11,124,544) (8,423,346)
Other expense -- -- -- (3,521,236)
------------- ------------- ------------- -------------
Net loss $ (16,001,797) $ (20,668,022) $ (49,468,569) $ (67,322,372)
============= ============= ============= =============
Net loss per
share - basic
and diluted $ (0.40) $ (0.52) $ (1.25) $ (1.71)
============= ============= ============= =============
Weighted average
shares
outstanding
- basic and
diluted 39,518,492 39,452,927 39,500,154 39,383,376
============= ============= ============= =============
Balance Sheet Data
(Unaudited)
December 31,
----------------------------
2007 2006
------------- -------------
Cash, cash equivalents and short-term
investments $ 92,875,420 $ 151,810,939
Working capital 50,229,551 118,786,367
Total assets 103,139,028 178,339,664
Current portion of long-term debt 35,968,750 --
Long-term obligations, less current portion 252,163,102 286,000,000
Accumulated deficit (411,465,815) (361,997,246)
Total shareholders' deficit (195,594,625) (153,987,649)
CONTACTS: AtheroGenics, Inc. Mark P. Colonnese Executive Vice
President 678-336-2511 Email Contact Media Inquiries Jayme Maniatis
/ Dana Conti Schwartz Communications, Inc. 781-684-0770 or
781-301-1051 Email Contact Investor Inquiries Lilian Stern Stern
Investor Relations, Inc. 212-362-1200 Email Contact
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