57% Revenue Growth; New VeraTag Assays Available for Clinical
Development SOUTH SAN FRANCISCO, Calif., May 1
/PRNewswire-FirstCall/ -- Monogram Biosciences, Inc. (NASDAQ:MGRM)
today reported financial results for the quarter ended March 31,
2008. The Company had revenue of $14.8 million for the first
quarter of 2008, 57% higher than $9.4 million in the first quarter
of 2007. This growth in revenue was driven primarily by revenue
from Trofile(TM), Monogram's proprietary tropism assay. Trofile is
the only clinically validated assay for selecting the appropriate
HIV patients to be treated with Selzentry(TM), Pfizer's CCR5
antagonist. For U.S. patients, Monogram has performed over 6,000
Trofile tests to date, of which approximately 2,700 tests were
performed in the quarter ended March 31, 2008. Reflecting the
portion of these tests for which reimbursement has been
established, revenue from Trofile in the quarter ended March 31,
2008 was $3.8 million. "Revenues were again at a record level in
the first quarter," said Alfred Merriweather, Monogram's chief
financial officer. "Gross margin on product revenues was 55 percent
in the quarter ended March 31, 2008, continuing the advance seen
since the initiation of sales of Trofile." The Company had
approximately $26.8 million in cash resources (comprised of cash,
cash equivalents and short-term investments) at March 31, 2008.
Monogram's Trofile Assay and Pfizer's Selzentry "The recent
establishment of coverage for Trofile by the New York Medicaid
program was an important benchmark for the commercialization of
Trofile and Selzentry," said William Young, Monogram's chief
executive officer. "Coverage is now established not only with
Medicare and several other federal agencies, but with the Medicaid
and ADAP programs in states accounting for over 80% of the HIV/AIDS
patients in the U.S. Many private payers, including Blue Cross,
Blue Shield, Aetna, Cigna and United Healthcare are processing
claims for Trofile and we are working with these payers to
establish appropriate reimbursement levels." Monogram plans to
introduce its enhanced tropism assay, which sets an even higher
standard of sensitivity for CCR5 positive patients, in the second
quarter of 2008 and this will be capable of identifying X4 virus
present at a level as low as 0.3% of the total viral population.
Data on the clinical validation of the new assay format will be
presented at the Drug Resistance Workshop in Sitges, Spain in
mid-June 2008. Outside of the U.S., where Pfizer is taking the lead
in commercializing Trofile, the test is now available in 15
countries. Monogram expects that access to Trofile will be
established in countries representing over 95% of the European
market potential by the end of June and in approximately 30
countries worldwide by the end of the year. HERmark(TM) Breast
Cancer Assay Additionally, Monogram continues to make progress on
its HERmark proprietary diagnostic that accurately quantifies HER2
expression and dimerization in patients with breast cancer. "We now
have had the opportunity to assess HERmark in almost 2,000 breast
cancer tissue samples in both the metastatic and adjuvant
settings," commented Young. "From these studies, we believe we have
amassed a substantial body of data in support of HERmark as a
superior and substantially more sensitive tool for measuring HER2
protein than conventional IHC and FISH technologies, in addition to
providing unique measurements of the HER2:HER2 homodimer." Less
than 50% of metastatic breast cancer patients selected for
treatment with Herceptin(R) by currently available IHC and FISH
tests actually respond. There is growing concern among clinicians
that these tests may not be adequate and may miss patients who can
benefit from Herceptin. "This is the information deficiency that we
aim to address with HERmark," added Young. Clinical studies in
metastatic and adjuvant samples are continuing. Clinical data from
a metastatic cohort of patients will be the subject of an oral
presentation at the upcoming ASCO meeting. This third cohort of
metastatic breast cancer patients confirmed prior observations that
HERmark is capable of identifying subpopulations of
Herceptin-treated metastatic breast cancer patients with different
clinical outcomes based on the measured levels of HER2 expression
and homodimers. Studies of HERmark in two separate cohorts of
patients treated with Herceptin in the adjuvant setting are under
way. These adjuvant studies involve up to 2,600 patients.
VeraTag(TM) Oncology Platform Monogram separately announced today
that two additional assays are now available for supporting
clinical development by biopharmaceutical companies. These are the
HER1 and HER3 Quantitative Protein Assays and provide measurements
of HER1 and HER3 protein that are highly quantitative and more than
five times as sensitive as routinely performed IHC testing. These
new assays join the HERmark Assay in Monogram's portfolio of
products available for use by biopharmaceutical companies in
clinical development programs. "There are over 25 compounds in
clinical development that target receptors or receptor dimers in
the HER family," commented Young. "This expanded range of assays is
available to biopharmaceutical companies to conduct more targeted
clinical studies for drugs in their pipeline." While the HERmark
Breast Cancer Assay, which measures the expression of the HER2
protein and the HER2:HER2 homodimer, is the first product to be
developed based on Monogram's proprietary VeraTag technology,
Monogram has a growing portfolio of VeraTag assays that measure
proteins, protein complexes and post-translational modifications
such as phosphorylation, in FFPE tumor samples. In addition to the
HER1, HER2 and HER3 assays and the HER2:HER2 homodimer assay,
Monogram has assays in advanced development for the measurement of
heterodimers of HER1 and HER2 (HER1:HER2), for the measurement of
heterodimers of HER2 and HER3 (HER2:HER3), and for the measurement
of a truncated form of HER2, known as p95. These activated proteins
are believed to mediate resistance to Herceptin in patients with
breast cancer and are targets of other cancer drugs in development.
This extended range of assays will expand the clinical reach of
Monogram's assays to lung, colorectal and other cancers.
Understanding these protein markers is expected to inform the
rational design of combination therapies, such as those for
patients with resistance to Herceptin. GAAP and Non-GAAP Proforma
Results Net Loss and Net Loss Per Share is shown below in
accordance with GAAP and also on a Non-GAAP Proforma Basis. The
Company is reporting Non-GAAP Proforma results which exclude
certain items to provide a clearer view of ongoing results without
the impact of non-cash valuation adjustments related to our
convertible debt. A reconciliation of these Non-GAAP Proforma
results to GAAP results is included with the Statement of
Operations data attached to this release. Three Months Ended March
31, 2008 2007 Net Loss ($ Millions) GAAP Net Loss $(1.7) $(11.6)
Non-GAAP Proforma Net Loss $(6.5) (9.7) Net Loss Per Share ($) GAAP
Net Loss Per Share $(0.01) $(0.09) Non-GAAP Proforma Net Loss Per
Share $(0.05) $(0.07) Non-cash "mark-to-market" adjustments to the
3% Senior Secured Convertible Note and the 0% Convertible Senior
Unsecured Debt that were reflected in non-operating income and
expense for the periods ended March 31, 2008 and 2007 are excluded
from proforma net loss. A favorable adjustment of $4.7 million and
an unfavorable adjustment of $4.1 million were recorded in the
three months ending March 31, 2008 and 2007, respectively. In
addition, a favorable adjustment of $2.2 million was recorded at
January 1, 2007 for the cumulative effect of the change in
accounting principle at that date. Such adjustments could be
significant and unpredictable in future quarters depending on
several factors, including the level of the Company's common stock
price. Stock-based compensation in accordance with SFAS123(R ) is
recorded as expense for purposes of both GAAP and our Non-GAAP
Proforma results. Such costs were $1.0 million in the first quarter
of 2008, compared to $1.2 million in the prior year's first
quarter. Capital Structure At March 31, 2008, a total of 134.2
million shares of common stock were outstanding. Stock options and
warrants were outstanding on 24.2 million shares and 27,000 shares
of common stock, respectively. The principal amount of Pfizer's $25
million convertible note, issued in May 2006, is convertible into
approximately 9.2 million shares of common stock. The $30 million
principal amount of Monogram's 0% Convertible Senior Unsecured
Notes, issued in January 2007, is convertible into approximately
11.9 million shares of common stock. Conference Call Details
Monogram will host a conference call today at 4:30 p.m. Eastern
Time. To participate in the live teleconference please call (877)
545-1402, or (719) 325-4903 for international callers, fifteen
minutes before the conference begins. Live audio of the call will
be simultaneously broadcast over the Internet and will be available
to members of the news media, investors and the general public.
Access to live and archived audio of the conference call will be
available by following the appropriate links at
http://www.monogrambio.com/ and clicking on the Investors/Media
link. Following the live broadcast, a replay of the call will also
be available at (888) 203-1112, or (719) 457-0820 for international
callers. The replay passcode is 4170582. The information provided
on the teleconference is only accurate at the time of the
conference call, and Monogram assumes no obligation to provide
updated information except as required by law. About Monogram
Monogram is advancing individualized medicine by discovering,
developing and marketing innovative products to guide and improve
treatment of serious infectious diseases and cancer. The Company's
products are designed to help doctors optimize treatment regimens
for their patients that lead to better outcomes and reduced costs.
The Company's technology is also being used by numerous
biopharmaceutical companies to develop new and improved anti-viral
therapeutics and vaccines as well as targeted cancer therapeutics.
More information about the Company and its technology can be found
on its web site at http://www.monogrambio.com/. Forward Looking
Statements Certain statements in this press release are
forward-looking. These forward-looking statements include
references to the demand for our Trofile Assay, the outlook for
Selzentry and our Trofile Assay, reimbursement that may be
available for Trofile, guidelines regarding the use of co-receptor
tropism tests, the anticipated availability of Trofile
internationally, the ability of VeraTag technology, including
HERmark, to significantly improve the information available to
physicians, results of studies intended to demonstrate clinical
utility of our VeraTag technology and HERmark products and
anticipated clinical and laboratory validation of these products in
a CLIA setting and activities expected to occur in connection with
the Pfizer collaboration. These forward-looking statements are
subject to risks and uncertainties and other factors, which may
cause actual results to differ materially from the anticipated
results or other expectations expressed in such forward-looking
statements. These risks and uncertainties include, but are not
limited to: the risk that physicians may not use a molecular
diagnostic for patient selection for maraviroc or other HIV drugs;
risks related to the implementation of the collaboration with
Pfizer; risks related to our ability to recognize revenue from
activities under the collaboration with Pfizer; risks and
uncertainties relating to the performance of our products; the
growth in revenues; the size, timing and success or failure of any
clinical trials for CCR5 inhibitors, entry inhibitors or integrase
inhibitors; the risk that our Trofile Assay may not be utilized for
patient use with maraviroc and other CCR5 inhibitors; the risk that
our VeraTag assays may not predict response to particular
therapeutic agents; the risk that we may not be able to obtain
additional cohorts of patient samples for additional VeraTag
studies, our ability to successfully conduct clinical studies and
the results obtained from those studies; whether larger
confirmatory clinical studies will confirm the results of initial
studies; our ability to establish reliable, high-volume operations
at commercially reasonable costs; expected reliance on a few
customers for the majority of our revenues; the annual renewal of
certain customer agreements; actual market acceptance of our
products and adoption of our technological approach and products by
pharmaceutical and biotechnology companies; our estimate of the
size of our markets; our estimates of the levels of demand for our
products; the impact of competition; the timing and ultimate size
of pharmaceutical company clinical trials; whether payers will
authorize reimbursement for our products and services and the
amount of such reimbursement that may be allowed; whether the FDA
or any other agency will decide to further regulate our products or
services, including Trofile; whether the draft guidance on
Multivariate Index Assays issued by FDA will be subsequently
determined to apply to our current or planned products; whether we
will encounter problems or delays in automating our processes; the
ultimate validity and enforceability of our patent applications and
patents; the possible infringement of the intellectual property of
others; whether licenses to third party technology will be
available; whether we are able to build brand loyalty and expand
revenues; restrictions on the conduct of our business imposed by
the Pfizer, Merrill Lynch and other debt agreements; the impact of
additional dilution if our convertible debt is converted to equity;
and whether we will be able to raise sufficient capital in the
future, if required. For a discussion of other factors that may
cause actual events to differ from those projected, please refer to
our most recent annual report on Form 10-K and quarterly reports on
Form 10-Q, as well as other subsequent filings with the Securities
and Exchange Commission. We do not undertake, and specifically
disclaim any obligation, to revise any forward-looking statements
to reflect the occurrence of anticipated or unanticipated events or
circumstances after the date of such statements. PhenoSense,
PhenoSenseGT, Trofile, HERmark and VeraTag are trademarks of
Monogram Biosciences, Inc. Herceptin is a registered trademark of
Genentech, Inc. Selzentry is a trademark and Celsentri is a
registered trademark of Pfizer Inc. ~ financials to follow ~
MONOGRAM BIOSCIENCES, INC. SELECTED STATEMENT OF OPERATIONS DATA
(In thousands, except per share amounts) (Unaudited) Three Months
Ended March 31, 2008 2007 Revenue: Product revenue $14,007 $9,099
Contract revenue 820 318 License revenue 10 - Total revenue 14,837
9,417 Operating costs and expenses: Cost of product revenue 6,364
5,705 Research and development 6,024 5,331 Sales and marketing
4,352 3,943 General and administrative 4,566 4,228 Total operating
costs and expenses 21,306 19,207 Operating loss (6,469) (9,790)
Convertible debt valuation adjustment and interest
income/(expense), net 4,742 (4,010) Net loss before cumulative
effect of change in accounting principle (1,727) (13,800)
Cumulative effect of change in accounting principle - 2,242 Net
loss after cumulative effect of change in accounting principle
$(1,727) $(11,558) Basic and diluted net loss per common share
before cumulative effect of change in accounting principle $(0.01)
$(0.11) Cumulative effect per share of change in accounting
principle $- $0.02 Basic and diluted net loss per common share
after cumulative effect of change in accounting principle $(0.01)
$(0.09) Weighted-average shares used in computing basic net loss
per common share 134,192 131,582 Reconciliation of Non-GAAP
Proforma Results to GAAP Net loss after cumulative effect of change
in accounting principle $(1,727) $(11,558) Adjustments for certain
non-cash items: Cumulative effect of change in accounting principle
- (2,242) Convertible debt valuation adjustment and interest
income/(expense), net (4,736) 4,055 Non-GAAP Proforma net loss
(6,463) (9,745) Non-GAAP Proforma net loss per common share, basic
$(0.05) $(0.07) Management believes that this non-GAAP proforma
financial data supplements the Company's GAAP financial statements
by providing investors with additional information which allows
them to have a clearer picture of the Company's operations,
financial performance and the comparability of the Company's
operating results from period to period as they exclude the effects
of revaluation of the Company's convertible debt that management
believes are not indicative of the Company's ongoing operations.
The presentation of this additional information is not meant to be
considered in isolation or as a substitute for results prepared in
accordance with GAAP. Above, management has provided a
reconciliation of the non-GAAP proforma financial information with
the comparable financial information reported in accordance with
GAAP. MONOGRAM BIOSCIENCES, INC. SELECTED BALANCE SHEET DATA (In
thousands) (Unaudited) March 31, December 31, 2008 2007(1) ASSETS
Current assets: Cash and cash equivalents $20,862 $18,762
Short-term investments 5,956 11,828 Accounts receivable, net 13,818
9,100 Prepaid expenses 1,079 1,279 Inventory 1,571 1,250 Other
current assets 1,458 917 Total current assets 44,744 43,136
Property and equipment, net 7,714 7,665 Goodwill 9,927 9,927
Deferred costs 9,903 7,906 Other assets 163 677 Total assets
$72,451 $69,311 LIABILITIES AND STOCKHOLDERS' DEFICIT Current
liabilities: Accounts payable $2,390 $2,116 Accrued compensation
3,783 3,324 Accrued liabilities 4,088 3,818 Current portion of
restructuring costs 610 610 Deferred revenue, current portion 401
605 Current portion of loans payable and capital lease obligations
10,197 4,469 Contingent value rights 2,131 2,119 Total current
liabilities 23,600 17,061 Long-term 3% convertible promissory note
19,619 20,786 Long-term 0% convertible promissory note 14,943
18,511 Long-term portion of restructuring costs 145 289 Long-term
deferred revenue 15,483 13,622 Other long-term liabilities 416 282
Total liabilities 74,206 70,551 Stockholders' deficit: Common stock
134 134 Additional paid-in capital 287,365 286,196 Accumulated
other comprehensive income/(loss) 12 (31) Accumulated deficit
(289,266) (287,539) Total stockholders' deficit (1,755) (1,240)
Total liabilities and stockholders' deficit $72,451 $69,311 (1) The
balance sheet data at December 31, 2007 is derived from audited
financial statements included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2007 filed with the
Securities and Exchange Commission. contacts: Alfred G.
Merriweather Jeremiah Hall Chief Financial Officer Feinstein Kean
Healthcare Tel: 650 624 4576 Tel: 415 677 2700 DATASOURCE: Monogram
Biosciences, Inc. CONTACT: Alfred G. Merriweather, Chief Financial
Officer of Monogram Biosciences, Inc., +1-650-624-4576, ; or
Jeremiah Hall of Feinstein Kean Healthcare, +1-415-677-2700, , for
Monogram Biosciences, Inc. Web site: http://www.monogrambio.com/
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