COPENHAGEN K, Denmark, Feb. 28, 2011 (GLOBE NEWSWIRE) -- Genmab A/S (Copenhagen:GEN) announced today results for the financial year ended December 31, 2010 and 2011 financial guidance.
"Over the past year Genmab has taken decisive actions to significantly strengthen our financial position ultimately leading to an increase in cash over the course of 2010," said Jan van de Winkel, Ph.D., Chief Executive Officer of Genmab. "We will continue to focus on cost control initiatives in 2011, adhering to our strategy to build a profitable and successful business. This comes alongside a highly active business development period with two new deals signed and our collaboration with GSK refocused," he added.
During this period, Genmab reported the following results:
- Revenues were DKK 582 million (USD 104 million) for the year ended December 31, 2010. In 2009, Genmab recognized revenues of DKK 586 million (USD 104 million). The revenues consist primarily of deferred revenue, royalties and milestone payments.
- An operating loss of DKK 161 million (USD 29 million). This compares to an operating loss of DKK 498 million (USD 89 million) in 2009. The improvement of DKK 337 million or 68% is mainly due the amendment of the GSK agreement and our continued strong focus on cost savings and control.
- A net loss for continuing operations of DKK 143 million (USD 26 million) compared to a net loss of DKK 348 million (USD 62 million) in 2009. The net loss per share for continuing operations was DKK 3.19 in 2010 compared to DKK 7.75 in 2009.
- A net loss of DKK 321 million (USD 57 million) compared to DKK 1,011 million (USD 180 million) in 2009. 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 operation amounted to DKK 178 million (USD 32 million) in 2010 compared to DKK 663 million (USD 118 million) in 2009. The fair value less cost to sell the facility has been reduced from approximately USD 145 million to USD 120 million as of September 30, 2010, resulting in a non-cash impairment charge of approximately DKK 130 million. This charge is included in the DKK 178 million mentioned above.
- Genmab ended the year with a cash position of DKK 1,546 million (USD 275 million). This represents a net increase of DKK 265 million (USD 47 million) compared to the end of December 2009 which is primarily related to the upfront payment of DKK 815 million received from GSK and the upfront payment of DKK 56 million received from Lundbeck, partially offset by the ongoing investment in our research and development activities.
- Overall, the total financial performance is in line with the most recent revised guidance issued on November 9, 2010. The operating loss and cash position is better than projected, partly driven by timing differences in development costs.
Envisioning a New Future
- Appointed Jan van de Winkel, Ph.D. as new CEO
- Elected three Genmab employees to Board of Directors
- Updated Genmab's corporate strategy
- Implemented a reorganization, saving DKK 30 million annually
Maximizing the Value of Arzerra® (ofatumumab)
- Received conditional marketing authorization for Arzerra in Europe
- Achieved first full year of Arzerra sales – GBP 31 million (DKK 270 million), resulting in DKK 54 million in royalty payments to Genmab
- Announced plans to focus on subcutaneous delivery in autoimmune indications
Advancing Our Pipeline
- Announced data from the Phase III study of zalutumumab in refractory head and neck cancer
- Provided update on potential regulatory pathway for zalutumumab
- Initiated six new clinical studies
- Phase III study of ofatumumab in combination with bendamustine in follicular NHL in patients who did not respond to a rituximab containing regimen
- Phase III maintenance study of ofatumumab versus no further treatment in patients with relapsed CLL who have responded to induction therapy
- Phase III study of ofatumumab versus rituximab in rituximab-sensitive follicular NHL that has relapsed at least 6 months after treatment with a rituximab-containing regimen
- Phase II study of ofatumumab in previously treated CLL in Japan
- Phase II RG1512 study in cardiovascular disease initiated by Roche
- Phase I study of cardiovascular effects of ofatumumab in refractory CLL
- Published data from seven clinical studies, including two Phase III trials
- Introduced DuoBody™, a novel, next generation bispecific antibody technology
- Announced new pre-clinical program – HuMax-cMet™
Driving Value through Collaborations
- Amended ofatumumab agreement with GSK
- Executed antibody development agreement with Lundbeck
- Entered research collaboration with Seattle Genetics for HuMax-TF™
- Reached three milestones totaling DKK 206 million – two GSK and one Roche
We expect our 2011 revenue to be DKK 325 – 350 million compared to DKK 582 million reported for 2010. The reduction in revenue 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 be DKK 675 – 725 million compared to DKK 743 million in 2010. The decrease is primarily attributable to a continued strong focus on cost control while continuing to progress our pre-clinical and clinical pipeline. 2011 operating expenses include approximately DKK 80 million related to zalutumumab and represents a full 12 months of development activity. This cost could potentially be reduced if we are able to enter into a licensing or other transaction.
We expect the operating loss from continuing operations for 2011 to be approximately DKK 350 - 400 million, compared to the operating loss of DKK 161 million reported for 2010.
The discontinued operation guidance of DKK 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 . 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.
As of December 31, 2010, we had cash, cash equivalents and marketable securities of DKK 1,546 million and are projecting a cash burn in 2011, excluding proceeds from the facility sale, of DKK 575 – 625 million. Taking into account the planned sale of the manufacturing facility, we are projecting a cash balance at the end of the year of DKK 1,575 – 1,625 million.
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 December 31, 2010 of USD 1.00 = DKK 5.6133.
Genmab will hold a conference call to discuss the results for 2010 tomorrow, Tuesday, March 1, at
3.00 pm CET
2.00 pm GMT
9.00 am EST
The conference call will be held in English.
The dial in numbers are as follows:
+1 877 317 6789 (in the US) and provide conference ID no. 447653
+1 412 317 6789 (outside the US) and provide conference ID no. 447653
A live webcast of the call and relevant slides will be available at . The webcast will also be archived on Genmab's website.
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