Tanox Reports 2006 Second Quarter Results
08 Août 2006 - 12:30PM
PR Newswire (US)
Revenue Up 72% Year Over Year ---- TNX-355 Discussions With FDA
Ongoing ---- Conference Call Today at 10 a.m., EDT HOUSTON, Aug. 8
/PRNewswire-FirstCall/ -- Tanox, Inc. (NASDAQ:TNOX) today reported
financial results for the second quarter ended June 30, 2006.
Revenues for the second quarter of 2006 were $12.7 million compared
to revenues of $7.4 million for the second quarter of 2005, and
$9.8 million for the first quarter of 2006. Net royalty revenue
from sales of Xolair(R) (omalizumab) was $9.9 million for the
second quarter of 2006, compared to Xolair royalty revenue of $7.3
million for second quarter of 2005, and $8.8 million for the first
quarter of 2006. In addition to royalty revenue, Tanox recorded net
profit-sharing revenue of $1.2 million for the second quarter of
2006. The profit-sharing revenue represented Tanox's share of
Novartis Pharma AG's net profits from U.S. sales of Xolair in the
first quarter of 2006. Tanox also recorded second quarter
manufacturing-rights revenue of $651,000 from Genentech and
Novartis based on the quantity of Xolair produced in the first
quarter of 2006. Profit-sharing and manufacturing-rights revenue
are recorded one quarter in arrears. In the second quarter of 2006,
Novartis submitted an application for the approval of Xolair in
Japan. Under Tanox's collaboration agreement with Novartis, this
filing resulted in a $2.0 million milestone payment to Tanox, of
which $1.0 million was recorded as revenue in the second quarter.
The remaining $1.0 million of the milestone payment is creditable
against future royalties and was recorded as deferred revenue.
Tanox reported a net loss of $2.3 million, or $0.05 per share, for
the second quarter of 2006, compared to a net loss of $5.4 million,
or $0.12 per share, for the second quarter of 2005, and a net loss
of $5.2 million, or $0.12 per share, for the first quarter of 2006.
Results for the second quarter of 2006 reflected the company's Jan.
1, 2006 adoption of Statement of Financial Accounting Standards No.
123R (FAS 123R). The impact of expensing employee stock
compensation is reflected in the table below: Loss Per Share Stock
Reported Before Stock Compensation Loss Compensation Expense Per
Share Expense Second Quarter 2006 $(0.02) $(0.03) $(0.05) Research
and development costs for the second quarter of 2006 were $14.0
million, compared to $12.0 million for the second quarter of 2005,
and $14.0 million for the first quarter of 2006. The year-over-year
increase in research and development costs was attributed to
manufacturing activities in preparation for planned clinical
trials, preclinical research activities and employee stock
compensation expense. General and administrative expenses were $3.0
million for the second quarter of 2006, compared to $1.8 million
for the second quarter of 2005, and $2.8 million for the first
quarter of 2006. The majority of the year-over- year increase in
general and administrative costs for the second quarter was due to
employee stock compensation expense. Additional expenses were
related to business-development activities. As of June 30, 2006,
Tanox had $172.3 million in cash and investments, compared to
$164.5 million at Dec. 31, 2005. The increase in cash is due
primarily to a one-time net milestone payment of $12.8 million
received in the first quarter of 2006. Recent and Second Quarter
Company Highlights * Tanox conducted a meeting with the Food and
Drug Administration to discuss clinical-trial results and continued
development of TNX-355, the company's antibody being investigated
for the treatment of HIV/AIDS. The FDA indicated that an additional
dose-finding study will be needed. The FDA also indicated that a
dose-finding trial, if appropriately designed and successful, could
serve as one of the pivotal studies for a Biologics License
Application (BLA) submission. The company expects to continue its
discussions with the Agency regarding clinical-trial design over
the next several weeks. The outcome of these discussions may delay
the company's anticipated submission of a BLA. Tanox intends to
provide additional information about the timing of future clinical
trials for TNX-355 later this quarter. * Two TNX-355 abstracts will
be presented later this month at the 2006 International AIDS
Conference in Toronto. An oral presentation will provide 48-week
Phase 2 efficacy and safety data of TNX-355 in combination with an
optimized background regimen. A poster presentation will highlight
in vitro findings of TNX-355's activity against
enfuvirtide-resistant HIV. Both presentations will be made Aug. 17.
* Patient enrollment began in a Phase 1 clinical trial of TNX-650
for the treatment of Hodgkin's lymphoma. Enrollment of the first
two patient cohorts has been completed. In addition, a second
clinical- trial site has been added to the program and is expected
to begin enrolling patients in the trial's third cohort in August.
"I am encouraged by the advancement of our drug-development
programs through the first half of the year," said Danong Chen,
Ph.D., president and chief executive officer. "The steps we've
taken with our internal projects in 2006 have been supported by the
strong financial impact of our Xolair alliance, which has provided
us with a growing revenue stream." Financial Outlook The company
anticipates net cash usage in 2006 of approximately $10 million.
The revised forecast reflects the company's expectation that
certain costs associated with continued development of TNX-355 will
now occur in 2007 and beyond. Conference Call Tanox will host a
conference call for investors today at 10 a.m., EDT. The conference
call can be accessed at 1-800-591-6923 (domestic) or 1-671-614-4907
(international). The pass code is 3150-1740. Live audio of the call
will be webcast on the Internet. The webcast can be accessed from
the Tanox Web site at http://www.tanox.com/ in the Investor
Relations section. An audio replay of the webcast will be available
beginning at noon, EDT, Aug. 8, 2006 through 11 a.m., EDT, Sept. 8,
2006. Access phone numbers for the replay are: 1-888-286-8010
(domestic) and 1-617-801-6888 (international); conference pass code
2582-3445. About Tanox, Inc. Tanox is a biotechnology company
specializing in the discovery and development of monoclonal
antibodies. The company develops innovative biotherapeutics for the
treatment of immune-mediated diseases, inflammation, infectious
disease and cancer. Tanox's lead investigational therapy, TNX-355,
is a viral-entry inhibitor antibody to treat HIV/AIDS. TNX-355 has
shown significant antiviral activity in Phase 2 clinical testing.
Tanox's first- approved drug, Xolair(R) (omalizumab), is the first
antibody approved to treat moderate-to-severe confirmed, allergic
asthma. Xolair was developed in collaboration with Genentech, Inc.
and Novartis Pharma AG and is approved for marketing in the United
States, Canada and major European countries. Tanox is based in
Houston and has a manufacturing facility in San Diego. Additional
corporate information is available at http://www.tanox.com/ . This
news release contains forward-looking statements regarding Tanox's
expectations for net cash usage and the timing of clinical
developments, as well as statements regarding the therapeutic
potential for TNX-355 and TNX-650. These statements are based on
Tanox's current beliefs and expectations, and are subject to risks
and uncertainties that could cause actual results to differ
materially due to a number of factors, including: the continued
market acceptance of Xolair(R); the results of our collaborators,
Genentech and Novartis, in growing sales of Xolair; our ability to
successfully recruit participants for clinical trials; failure to
achieve positive results in clinical trials; and the strength of
our patent portfolio. The therapeutic potential of TNX-355 as a
treatment for HIV-1-infected patients or TNX-650 as a treatment for
Hodgkin's lymphoma patients is subject to the risks inherent in
drug development. The conduct or timing of any future trials of
TNX-355 can depend on many factors, including our discussions with
the FDA, whether we choose to partner the program, and availability
of sufficient quantities of clinical-trial material. Success in
early stage clinical trials does not ensure that later-stage or
larger-scale clinical trials will be successful, and the results
achieved in later-stage trials may not be sufficient to meet
applicable regulatory standards. Problems or delays may arise
during clinical trials or in the course of developing, testing or
manufacturing drugs. For more detailed information on the risks and
uncertainties associated with Tanox's drug development and other
activities, see Tanox's periodic reports filed with the Securities
and Exchange Commission. The Tanox logo is a registered trademark
with the U.S. Patent and Trademark Office. TANOX, INC. CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except per-share
data) Summary of Operations (unaudited) Three Months Ended Six
Months Ended June 30, June 30, 2006 2005 2006 2005 Revenues, net
$12,746 $7,378 $22,561 $13,306 Operating expenses: Research and
development 13,980 12,015 27,941 23,755 Acquired in-process
research and development --- --- --- 13,680 General and
administrative 2,963 1,822 5,757 3,755 Total operating expenses
16,943 13,837 33,698 41,190 Loss from operations (4,197) (6,459)
(11,137) (27,884) Other income (net) 1,924 1,042 3,683 2,005 Net
loss $(2,273) $(5,417) $(7,454) $(25,879) Loss per share - basic
and diluted $(0.05) $(0.12) $(0.17) $(0.58) Shares used in
computing loss per share - basic and diluted 44,835 44,060 44,784
44,457 Employee stock compensation expense included in operating
expenses: Research and development $427 --- $759 --- General and
administrative 965 --- 1,326 --- Total $1,392 --- $2,085 ---
Summary Balance Sheet Information June 30, 2006 December 31, 2005
(Unaudited) Assets: Cash, cash equivalents and investments $172,251
$164,501 Property and equipment (net) 30,942 31,214 Other assets
19,088 34,221 Total assets $222,281 $229,936 Liabilities and
Stockholders' Equity: Accounts payable, accrued liabilities and
deferred revenue $11,559 $16,495 Stockholders' equity 210,722
213,441 Total liabilities and stockholders' equity $222,281
$229,936 http://www.newscom.com/cgi-bin/prnh/20050207/TNOXLOGO
DATASOURCE: Tanox, Inc. CONTACT: Steve Sievert of Tanox, Inc.,
+1-713-578-4211 or Web site: http://www.tanox.com/
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