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Genmab — Earnings Release 2009
Nov 10, 2009
3365_rns_2009-11-10_5fd88559-4612-4f31-a587-3d74939b4fb9.html
Earnings Release
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News Details
Ad-hoc | 10 November 2009 18:00
Genmab Announces Results for the Nine Months Period of 2009
Genmab A/S /
10.11.2009
Dissemination of a Adhoc News, transmitted by
DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
Summary: Genmab reports results for the nine month period ended September 30,
2009
Copenhagen, Denmark; November 10, 2009 - Genmab A/S (OMX: GEN) announced today
results for the nine month period ended September 30, 2009. During this period,
Genmab reported the following results:
Genmab's revenues were DKK 435 million (USD 86 million) for the nine month
period ended September 30, 2009. In the same period of 2008, Genmab recognized
revenues of DKK 667 million (USD 131 million).
An operating loss of DKK 536 million (USD 105 million). This compares to an
operating loss of DKK 508 million (USD 100 million) for the corresponding period
of 2008. Despite the decrease in revenues of DKK 232 million, the operating loss
has only increased by DKK 28 million compared to the corresponding period in
2008. This is mainly a result of our continued strong focus on cost savings and
control.
An income of DKK 141 million (USD 28 million) from net financial items for the
first nine months of 2009, compared to a loss of DKK 18 million (USD 4 million)
in the same period of 2008. The net financial items have continued to be
positively impacted by the improved market conditions which have resulted in
improved fair market valuations of our marketable securities.
A net loss of DKK 403 million (USD 79 million) compared to a net loss of DKK 526
million (USD 104 million) for the same period in 2008. The net loss per share
was DKK 8.98 (USD 1.77) for the first nine months of 2009 compared to DKK 11.81
(USD 2.32) in the first nine months of 2008.
Genmab ended the nine month period with a cash position of DKK 1,380 million
(USD 271 million), a decrease of DKK 382 million (USD 76 million) from the end
of 2008. The decrease arises primarily from the investment in our research and
development activities.
Highlights
During the third quarter of 2009, Genmab announced a number of business and
scientific highlights, as follows:
For ofatumumab:
Completion of patient recruitment in two ofatumumab studies: the Phase III
pivotal study in refractory chronic lymphocytic leukemia (CLL) and the Phase II
study in relapsed Diffuse Large B-cell Lymphoma (DLBCL).
Top-line results from four ofatumumab studies: a Phase III study to treat
rheumatoid arthritis (RA) in patients refractory to methotrexate; a Phase II
front line combination study in CLL; a Phase II front line combination study in
non-Hodgkin's lymphoma (NHL) and a pivotal Phase III study in rituximab
refractory NHL. The overall response rate in this Phase III pivotal study was
11%. Genmab and its partner GlaxoSmithKline (GSK) are continuing ongoing plans
for additional clinical studies in NHL.
For zalutumumab:
The FDA placed a partial clinical hold on zalutumumab clinical studies being
conducted under the US Investigational New Drug (IND) application, as well as
requests for new studies in June 2009. The company met the FDA's request for
additional safety information and the hold was lifted on July 16.
Financial guidance:
We published revised financial guidance for 2009 to reflect the exclusion of a
milestone payment related to the Phase III NHL study under the Arzerra TM
(ofatumumab) collaboration with GSK.
Subsequent to the balance sheet date:
In October, we announced that GSK had filed a declaratory judgment action
seeking a declaration that the US Patent 6,331,415 (the 'Cabilly' patent) is
invalid, unenforceable and not infringed by Arzerra.
In October, we received accelerated approval for Arzerra from the FDA for CLL
that is refractory to fludarabine and alemtuzumab. The FDA approval triggered a
milestone payment of DKK 116 million from GSK.
In November, we announced a reorganization plan to match resources to ongoing
and future needs, sell our US manufacturing facility and reduce headcount by
approximately 300 positions. We will retain a core staff with critical
development skills. We do not intend to discontinue any of our ongoing
development programs as a result of this reorganization and look forward to data
from the zalutumumab pivotal study in head and neck cancer, now expected in
2010, as overall patient survival is longer than anticipated.
In November, we published revised financial guidance for 2009 to reflect the
financial impact of the reorganization plan.
In November, we announced the initiation of a Phase III study of ofatumumab plus
chemotherapy versus rituximab plus chemotherapy to treat patients with relapsed
or refractory DLBCL.
Outlook
As announced on November 5, 2009, we revised our 2009 financial guidance due to
the announcement of a reorganization plan including a contemplated reduction in
headcount of approximately 300 positions and decision to sell our manufacturing
facility in Brooklyn Park, Minnesota, USA.
At certain Genmab locations the reduction in headcount and severance packages
offered are subject to consultation discussions and therefore the estimates
included in this guidance are subject to change. However, we estimate that the
cash cost of the reduction in workforce including severance, retention payments
and other costs to be approximately DKK 105 million. We currently estimate a
cash impact of DKK 38 million in 2009 and DKK 67 million in 2010.
We estimate that the reorganization charges above will impact the 2009 income
statement by approximately DKK 80 million, including non-cash warrant expenses
of approximately DKK 22 million.
We will also recognize an impairment charge in the fourth quarter of 2009
related to the proposed sale of the Brooklyn Park facility. We have estimated
the fair value of the facility to be approximately USD 150 million less sales
related costs of approximately USD 5 million, resulting in a fair value less
cost to sell of approximately USD 145 million (DKK 737 million as of November 3,
2009), which resulted in a non-cash impairment charge of approximately USD 83
million (DKK 420 million as of November 3, 2009). The fair value less cost to
sell and impairment is based on the best information available and may be
subject to change.
The Brooklyn Park facility will be classified as held for sale and will
therefore be presented as a discontinued operation in the fourth quarter of
2009. This change in presentation is not yet reflected in the revised guidance
below. The facility will be kept in maintenance mode pending the sale, incurring
an estimated annualized expense of USD 10 million (DKK 50 million).
The annualized impact of the reorganization is estimated to yield savings of
approximately DKK 300 million, including non-cash items of approximately DKK 60
million.
This revised guidance also includes some other changes to the previously issued
2009 guidance. We expect our 2009 revenue to be approximately DKK 640 million
compared to the previous estimate of DKK 750 million. The reduction in revenue
is primarily due to the delay of a milestone payment to 2010 that was originally
expected in 2009 under the Arzerra collaboration with GSK.
We anticipate that our operating expenses will be approximately DKK 1.3 billion,
DKK 100 million below our previous guidance of DKK 1.4 billion due to a
continued focus on cost control. This will result in a revised operating loss
of approximately DKK 660 million before the reorganization charges, as compared
to our previous guidance of DKK 650 million.
Including the impact of all of the items discussed above we estimate a revised
operating loss of approximately DKK 1,160 million, as compared to our previous
guidance of DKK 650 million.
After reflecting the impact of the reorganization we expect the cash burn for
2009 to be approximately DKK 700 million which is at the same level as our
previous guidance. Therefore, Genmab still projects a cash balance at the end of
the year of approximately DKK 1.1 billion.
We therefore anticipate that the guidance after reflecting the impact of the
reorganization and other items discussed above to be as follows:
| 2009 | New | Previous |
| Guidance | | |
| | With | Before | Before |
| | Reorganization | Reorganization | Reorganization |
| | DKK | USD | DKK | USD | DKK | USD |
| | Millio | Million | Million | Millions | Million | Millions |
| | ns | s | s | | s | |
| Revenues | 640 | 126 | 640 | 126 | 750 | 148 |
| Operating | 1,300 | 256 | 1,300 | 256 | 1,400 | 275 |
| expenses | | | | | | |
| Reorganizati | 80 | 15 | - | - | - | - |
| on charge | | | | | | |
| Impairment | 420 | 83 | - | - | - | - |
| charge | | | | | | |
| Operating | (1,160) | (228) | (660) | (130) | (650) | (127) |
| loss | | | | | | |
| Cash burn | (700) | (138) | (660) | (130) | (700) | (138) |
| Cash at the | 1,060 | 209 | 1,100 | 216 | 1,050 | 207 |
| end | | | | | | |
| of the year* | | | | | | |
| *Cash, cash equivalents and marketable securities |
In addition to factors already mentioned the estimates above are subject to
change due to numerous reasons, including the timing and variation of
development activities, related income and costs and fluctuations in the value
of our marketable securities, fair value less cost to sell related to our
manufacturing facility and currency exchange rates. The financial guidance also
assumes that no further significant agreements are entered into during 2009 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. The conversion has been made using the Danish Central Bank closing spot
rate on September 30, 2009 of USD 1.00 = DKK 5.0839.
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Conference Call
Genmab will hold a conference call to discuss the results for the nine month
period ended September 30, 2009 tomorrow, Wednesday, November 11, 2009, 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:
+1 877 941 2333 (in the US) and provide conference ID 4181679
+1 480 629 9724 (outside the US) and provide conference ID 4181679
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 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 www.genmab.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
www.genmab.com. 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(R); the Y-shaped Genmab logo(R); HuMax(R); HuMax-CD20(R); HuMax-EGFr(TM);
HuMax-IL8(TM); HuMax-TAC(TM); HuMax-HepC(TM); HuMax-CD38(TM); HuMax-CD32b(TM);
HuMax-TF(TM); HuMax-Her2(TM); HuMax-VEGF(TM) and UniBody(R) are all trademarks
of Genmab A/S. Arzerra(TM) is a trademark of GlaxoSmithKline.
Contact: Helle Husted, Vice President, Investor Relations, T: +45 33 44 77 30,
M: +45 25 27 47 13, E: [email protected]
Stock Exchange Release no. 45/2009
News Source: NASDAQ OMX
10.11.2009 Financial News distributed by DGAP. Media archive at www.dgap-medientreff.de and www.dgap.de
Language: English
Company: Genmab A/S
Denmark
Phone:
Fax:
E-mail:
Internet:
ISIN: DK0010272202
WKN:
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