Revenue Grows 6% and Net Loss Declines 41% on a GAAP Basis and 46%
on a Non-GAAP Basis FREMONT, Calif., May 4 /PRNewswire-FirstCall/
-- Ciphergen Biosystems, Inc. (NASDAQ:CIPH) today announced
financial results for its first quarter ended March 31, 2006. The
Company reported net revenue growth of 6.3% to $7.1 million in the
first quarter of 2006 as compared to $6.6 million in the first
quarter of 2005. On a GAAP basis, net loss declined 41% to $5.5
million in the first quarter of 2006 as compared to $9.3 million in
the first quarter of 2005. On January 1, 2006, the Company adopted
FAS 123(R) and is reporting employee stock-based compensation
expense in its GAAP results for the first quarter of 2006.
Excluding the impact of FAS 123(R), the Company's non-GAAP net loss
declined 46% to $5.0 million in the first quarter of 2006. On March
31, 2006, the Company's cash and investments totaled $24.4 million.
An additional $6.25 million is available under our loan facility
with Quest Diagnostics. Long-term debt totaled $32.5 million, of
which $28.7 million was convertible debt. "We are pleased with this
improvement in our financial results," stated Gail S. Page,
President and CEO. "Our efforts at achieving increased operational
efficiencies while growing our sales have resulted in this improved
financial performance. Concurrently, working closely with our
alliance partner Quest Diagnostics, we made substantial progress in
both assay development and clinical development in our ovarian
cancer program. The pivotal data presented at the Society of
Gynecologic Oncologists (SGO) meeting in March indicated a
significant benefit for our markers' potential utilization as an
aid in the treatment triage for women with an ovarian mass." Recent
Highlights -- Ovarian Cancer Diagnostic Progress. At the 37th
Annual Meeting of the SGO held in late March, Ciphergen announced
results of a prospective clinical study evaluating the performance
of a multi-marker panel that is designed to help triage women being
evaluated for a persistent pelvic mass or with pelvic pain. This
study was performed in conjunction with Professor Claus Hogdall at
Rigshospitalet, University of Copenhagen. The study evaluated 202
consecutive patients with suspicion of a primary ovarian tumor,
endometriosis or with pelvic pain. Data from 126 women were used
for training, and data from the remaining 76 women were used for
blinded testing. The marker panel, which consists of seven markers
previously identified in studies with The Johns Hopkins School of
Medicine, the University of Texas M. D. Anderson Cancer Center, and
the University of Kentucky, provided substantial benefit beyond
that previously reported. Ciphergen and its collaborators
demonstrated that this panel provides a significant improvement in
positive predictive value (the percentage of time a positive test
result is actually positive), from 59% to 80%, in distinguishing
benign from malignant pelvic masses. The particular study presented
at the SGO Annual Meeting is part of a comprehensive ovarian cancer
program being conducted by Ciphergen in conjunction with several
leading collaborators at The Johns Hopkins School of Medicine, the
University of Texas M.D. Anderson Cancer Center, University College
London, and the University of Kentucky. In addition to the ongoing
work aimed at developing assays that are designed to distinguish
between benign and malignant pelvic mass, Ciphergen has studies
underway to target the prediction of recurrence of ovarian cancer
as well as to provide additional tools to aid the physician in
triaging women considered at high risk of ovarian cancer.
Additional data will be presented at the annual meeting of the
American Society of Clinical Oncology in June. -- Shareholder
securities class action suit. We were pleased to learn that the
court ordered the action dismissed on March 29, 2006. -- Addition
to Board of Directors. Ciphergen is pleased that Kenneth J. Conway
has recently joined its Board of Directors. "As an innovator and
visionary leader of both start-up and established businesses in his
35 years of working in clinical diagnostics and pharmaceuticals,
Ken will provide seasoned guidance as Ciphergen moves forward with
its commercialization activities," stated Ms. Page. Conference Call
A conference call and webcast will be held on Thursday, May 4 at
5:00 p.m. EDT to discuss the first quarter results and provide an
update on business developments. To listen to the live webcast of
the conference call, please visit the "Investors" section of the
Company's website at http://www.ciphergen.com/. A telephonic replay
of the conference call will be available two hours after the call
and will be available until 7:00 p.m. on May 18, 2006. The replay
number for domestic callers is 800-633-8284 and for international
callers is +1-402-977-9140. The reservation number for both
domestic and international callers is 21291031. In addition, an
archived webcast of the conference call will be available under the
"Investors" section of the Company's website at
http://www.ciphergen.com/. About Ciphergen Ciphergen is dedicated
to translating protein biomarkers and panels of biomarkers into
protein molecular diagnostic tests that improve patient care. We
are also focused on providing collaborative R&D services
through our Biomarker Discovery Center(R) laboratories for
biomarker discovery for new diagnostic tests as well as
pharmacoproteomic services for improved drug toxicology, efficacy
and theranostic assays. Ciphergen develops, manufactures and
markets a family of ProteinChip(R) Systems and services for
clinical, research and process proteomics applications. ProteinChip
Systems enable protein discovery, validation, identification and
assay development to provide researchers with predictive,
multi-marker assay capabilities and a better understanding of
biological function at the protein level. Additional information
about Ciphergen can be found at http://www.ciphergen.com/. Safe
Harbor Statement Note Regarding Forward-Looking Statements: This
press release contains forward-looking statements. For purposes of
the Private Securities Litigation Reform Act of 1995 (the "Act"),
Ciphergen disclaims any intent or obligation to update these
forward-looking statements, and claims the protection of the Safe
Harbor for forward-looking statements contained in the Act.
Examples of such forward-looking statements include statements
regarding increasing operational efficiencies and growing sales and
assay and clinical development. Actual results may differ
materially from those projected in such forward- looking statements
due to various factors, including the risk that Ciphergen may not
be able to continue to increase operational efficiencies or expand
sales at a sufficient rate and the risk that assay and clinical
development may be negatively impacted by future events. Investors
should consult Ciphergen's filings with the Securities and Exchange
Commission, including its Form 10-K filed March 17, 2006, for
further information regarding these and other risks related to the
Company's business. NOTE: Ciphergen, ProteinChip and Biomarker
Discovery Center are registered trademarks of Ciphergen Biosystems,
Inc. Ciphergen Biosystems, Inc. Unaudited Condensed Consolidated
Statements of Operations Reconciliation of GAAP to NON-GAAP
Operating Results (1) (in thousands, except per share data) Three
Months Ended March 31, 2006 2005 GAAP Adjustments Non-GAAP GAAP
Revenue $7,064 $-- $7,064 $6,648 Cost of revenue 3,404 (45) 3,359
3,135 Gross profit 3,660 45 3,705 3,513 Operating expenses:
Research and development 2,992 (100) 2,892 3,507 Sales and
marketing 3,503 (103) 3,400 5,273 General and administrative 2,279
(212) 2,067 3,504 Total operating expenses 8,774 (415) 8,359 12,284
Loss from operations (5,114) 460 (4,654) (8,771) Interest and other
income (expense), net (236) -- (236) (411) Loss before income taxes
(5,350) 460 (4,890) (9,182) Income tax provision 114 -- 114 150 Net
loss $(5,464) $460 $(5,004) $(9,332) Basic and diluted net loss per
share $(0.15) $(0.14) $(0.32) Shares used in computing basic and
diluted net loss per share 35,999 35,999 29,472 (1) To supplement
our consolidated financial statements in accordance with generally
accepted accounting principles (GAAP), we use non-GAAP measures of
operating results, net loss and net loss per share, which are
adjusted from results based on GAAP to exclude FAS 123(R)
stock-based compensation expenses. This non-GAAP financial
presentation is given in part to enhance the understanding of the
Company's historical financial performance and comparability
between periods in light of a change in accounting standards,
particularly since the Company has not included stock-based
compensation under FAS 123(R) as an expense in financial statements
before. In addition, the Company believes that the non-GAAP
presentation to exclude stock-based compensation is relevant and
useful information that will be widely used by analysts, investors
and other interested parties. Further, these non-GAAP results are
one of the primary indicators management uses for assessing our
performance, allocating resources and planning and forecasting
future periods. Accordingly, the Company is disclosing this
information to permit additional analysis of the Company's
performance. These measures should be considered in addition to
results prepared in accordance with GAAP, but should not be
considered a substitute for or superior to GAAP results. Ciphergen
Biosystems, Inc. Unaudited Condensed Consolidated Balance Sheets
(in thousands) March 31, December 31, 2006 2005 (1) ASSETS Current
assets: Cash and cash equivalents $24,384 $25,738 Short term
investment -- 2,240 Accounts receivable, net 5,070 5,828 Prepaid
expenses and other current assets 1,442 1,746 Inventories 5,006
5,594 Total current assets 35,902 41,146 Property, plant and
equipment, net 6,755 7,320 Goodwill and other intangible assets,
net 2,328 2,493 Other long term assets 1,760 1,852 Total assets
$46,745 $52,811 LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable $2,390 $3,188 Accrued liabilities
5,123 6,298 Current portion of deferred revenue 3,857 4,132 Current
portion of capital lease obligations 22 21 Current portion of long
term debt 190 377 Total current liabilities 11,582 14,016 Deferred
revenue, net of current portion 524 508 Capital lease obligations,
net of current portion 22 28 Long term debt owed to related party
3,750 2,500 Convertible senior notes, net of discount 28,718 28,586
Other long term liabilities 597 650 Total liabilities 45,193 46,288
Stockholders' equity: Common stock 36 36 Additional paid in capital
202,946 202,485 Accumulated other comprehensive loss (172) (204)
Accumulated deficit (201,258) (195,794) Total stockholders' equity
1,552 6,523 Total liabilities and stockholders' equity $46,745
$52,811 (1) The condensed consolidated balance sheet at December
31, 2005 has been derived from the audited consolidated financial
statements at that date included in the Company's Form 10-K for the
fiscal year ended December 31, 2005. DATASOURCE: Ciphergen
Biosystems, Inc. CONTACT: Sue Carruthers, Investor Relations of
Ciphergen Biosystems, Inc., +1-510-505 2297 Web site:
http://www.ciphergen.com/
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