Copenhagen, Denmark; May 11, 2011 – Genmab A/S (OMX: GEN) announced todayresults for the three month period ended March 31, 2011.
"Despite a decrease in revenues in the first quarter of 2011 compared to 2010, our continued cost control initiatives have resulted in a 58% reduction in operating loss this quarter," said Jan van de Winkel, Ph.D., Chief Executive Officer of Genmab.
During this period, Genmab reported the following results:
- Revenues were DKK 83 million (USD 16 million) for the first quarter of 2011. In the first quarter of 2010, Genmab recognized revenues of DKK 107 million (USD 20 million). The revenues consist primarily of royalties, deferred revenue and reimbursement of certain research and development costs related to our collaboration agreements.
- An operating loss of DKK 62 million (USD 12 million). This compares to an operating loss of DKK 147 million (USD 28 million) for the corresponding period of 2010. The improvement of DKK 85 million was mainly due the amendment of the GSK agreement and our continued strong focus on cost control.
- A net loss for continuing operations of DKK 101 million (USD 19 million) compared to a net loss of DKK 116 million (USD 22 million) for the corresponding period of 2010. The net loss per share for continuing operations was DKK 2.25 for the first quarter of 2011 compared to DKK 2.57 for the first quarter of 2010.
- A net loss of DKK 111 million (USD 21 million) compared to DKK 130 million (USD 25 million) in the first quarter 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 10 million (USD 2 million) in the first quarter of 2011 compared to DKK 15 million (USD 3 million) in the same period of 2010.
- Genmab ended the three month period with a cash position of DKK 1,452 million (USD 277 million) compared to DKK 1,546 million (USD 295 million) as of December 31, 2010. This represents a cash burn of DKK 94 million (USD 18 million) in the first quarter of 2011 compared to DKK 204 million (USD 39 million) in the corresponding period in 2010. The cash burn was primarily related to the ongoing investment in our research and development activities.
First Quarter 2011 Highlights
- In January we held an R&D day in Utrecht, the Netherlands, and presented a comprehensive update on our pre-clinical and clinical portfolio and our next generation antibody technologies.
- In February we published net sales for Arzerra® (ofatumumab) for the fourth quarter of 2010 of GBP 9 million (approximately DKK 77 million), resulting in a royalty payment of approximately DKK 15.5 million to Genmab.
Subsequent to the balance sheet date
In April we announced:
- The election of Toon Wilderbeek as a new member of the Board of Directors at our Annual General Meeting.
- An expansion of the antibody-drug conjugate (ADC) research collaboration between Genmab and Seattle Genetics 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.
- Net sales for Arzerra (ofatumumab) for the first quarter of 2011 of GBP 9.4 million (approximately DKK 82 million), resulting in a royalty payment of approximately DKK 16.4 million to Genmab.
- The appointment of Rachel Curtis Gravesen as Senior Vice President, Investor Relations and Communication.
Genmab is maintaining its 2011 financial guidance as announced on February 28, 2011.
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 a cash position 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 position 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 March 31, 2011 of USD 1.00 = DKK 5.2486.
Genmab will hold a conference call to discuss the 2011 first quarter results tomorrow, Thursday, May 12, 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 provide conference ID no. 449372
+1 412 317 6789 (outside the US) and provide conference ID no. 449372
A live webcast of the call and relevant slides will be available at . The webcast will also be archived on Genmab's website.
About Genmab A/S
Genmab is a leading international biotechnology company focused on developing fully human antibody therapeutics for the potential treatment of cancer. Genmab's world class discovery and development teams are using cutting-edge technology to create and develop products to address unmet medical needs. Our primary goal is to improve the lives of patients who are in urgent need of new treatment options. For more information on Genmab's products and technology, visit .
Rachel Curtis Gravesen, Senior Vice President, Investor Relations and Communication
T: +45 3344 7720; M: +45 25 12 62 60; E: email@example.com
This Stock Exchange Release 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 . Genmab does not undertake any obligation to update or revise forward looking statements in this Stock Exchange Release nor to confirm such statements in relation to actual results, unless required by law.
Genmab®; the Y-shaped Genmab logo®; HuMax®; HuMax-CD20®; HuMax-EGFr™; HuMax-IL8™; HuMax-TAC™; HuMax-CD38™; HuMax-TF™; HuMax-Her2™; HuMax-cMet™, HuMax-CD74™, DuoBody™ and UniBody® are all trademarks of Genmab A/S. Arzerra® is a trademark of GlaxoSmithKline.
Stock Exchange Release no. 19
CVR no. 2102 3884
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