SAN DIEGO, April 3 /PRNewswire-FirstCall/ -- SGX Pharmaceuticals today announced financial results for the fourth quarter and year ended December 31, 2005.
Total revenues in the fourth quarter of 2005 were $6.9 million, compared to $8.9 million in the fourth quarter of 2004. Total revenues for the year ended December 31, 2005 were $21.6 million, compared to $27.3 million for the year ended December 31, 2004. Revenues were derived primarily from collaborations, commercial agreements, and grants involving SGX’s technology, such as its FAST(TM) drug discovery technology. The decrease in revenues was primarily attributable to the conclusion of a previously existing grant agreement, partially offset by a new grant agreement that commenced in the third quarter of 2005. In addition, the decrease can be attributed to fewer new agreements signed in 2005, which reflects a change in business strategy to focus on drug discovery and development.
Cash and cash equivalents totaled $17.7 million at December 31, 2005. This does not include net proceeds to the company of approximately $21.2 million from the initial public offering that was completed in February 2006 or $25.0 million in upfront and equity payments from the recently announced collaboration with Novartis.
“In 2005, we achieved each of our major objectives including the initiation of a pivotal Phase II/III trial of our lead oncology drug candidate, Troxatyl, for treatment of acute myelogenous leukemia,” said Mike Grey, President and CEO of SGX Pharmaceuticals. “2006 is shaping up to be a very significant year in the company’s history, with our initial public offering in February and our recent announcement in March of a major strategic partnership with Novartis that highlights the significant value of our FAST drug discovery technology. We look forward to results from our pivotal Phase II/III trial of Troxatyl by the end of the year.”
SGX 2005 Highlights: * Granted orphan drug status for Troxatyl(TM) for the third-line treatment of Acute Myelogenous Leukemia (AML) by both the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMEA); * Completed a Phase I/II trial of Troxatyl in relapsed and refractory AML in which the response and safety of Troxatyl compared favorably with historical data in similar stage patients; * Received Fast Track designation from the FDA for Troxatyl for the third-line treatment of AML in adults; * Initiated a pivotal Phase II/III trial of Troxatyl for the third-line treatment of AML. Data from this trial is expected in the fourth quarter of 2006; * Entered into a three-year collaboration agreement with the Cystic Fibrosis Foundation for the discovery of novel therapies to treat the cause of cystic fibrosis using the FAST(TM) drug discovery technology that may provide SGX up to $16.8 million in upfront, research, milestone and other payments; * Extended the research and technology collaboration with Eli Lilly and Company. This collaboration allows Lilly to utilize SGX’s proprietary technologies to accelerate Lilly’s drug discovery capabilities; * Received a $48.5 million award from the National Institutes of Health-National Institute of General Medical Sciences under a cooperative agreement to participate in the second phase of the Protein Structure Initiative; and * Presented in vitro data at the American Society of Hematology 47th Annual Meeting and Exposition (ASH) demonstrating that compounds discovered by applying FAST(TM) potently inhibit wild-type and Gleevec-resistant BCR-ABL, including the most clinically challenging mutation T315I. These compounds formed the basis of a strategic partnership with Novartis for the development of next-generation BCR-ABL inhibitors for the treatment of drug resistant Chronic Myelogenous Leukemia (CML), announced in March 2006.
SGX reported a net loss applicable to common stockholders in the fourth quarter and the full year ended December 31, 2005 of $6.1 million, or $7.61 per share, and $29.9 million, or $48.32 per share, respectively. This compares with a net loss applicable to common stockholders in the fourth quarter and the full year ended December 31, 2004 of $3.3 million, or $6.60 per share, and $19.1 million, or $39.84 per share, respectively. The increase in the net loss from 2004 to 2005 is primarily attributable to the amortization of stock based compensation recorded for financial reporting purposes in 2005, as a result of our initial public offering. The net loss per share amounts does not reflect the conversion of all outstanding shares of the Company’s redeemable preferred stock into common stock that occurred upon the close of the Company’s initial public offering in February 2006.
Research and development expenses totaled $10.3 million for the fourth quarter of 2005, compared to $3.5 million in the same period of 2004. Research and development expenses totaled $37.9 million for the year ended December 31, 2005, compared to $31.4 million for the year ended December 31, 2004. The increase in 2005 research and development expenses is primarily attributable to increased clinical trial expenses incurred for the development of Troxatyl and the recognition of equity-based compensation for option grants. General and administrative expenses totaled $2.4 million and $1.9 million for the fourth quarter of 2005 and 2004, respectively. General and administrative expenses totaled $11.8 million and $6.7 million for the years ended December 31, 2005 and 2004, respectively. The increase in 2005 general and administrative expenses is primarily attributable to an increase in equity-based compensation for option and restricted stock grants in 2005.
About SGX Pharmaceuticals
SGX Pharmaceuticals is a biotechnology company focused on the discovery, development and commercialization of innovative cancer therapeutics. The Company’s lead product candidate, Troxatyl(TM), is currently being evaluated in a pivotal phase II/III trial for the treatment of third-line acute myelogenous leukemia, an indication for which there is currently no approved therapy or standard of care. SGX has developed a pipeline of oncology drug candidates based on its enabling, proprietary FAST(TM) drug discovery platform, including a portfolio of next generation BCR-ABL inhibitors. FAST allows for the rapid identification of novel, potent and selective small molecule compounds for well validated but challenging targets. More information on SGX’s pipeline and drug discovery platform can be found at www.sgxpharma.com.
Forward-looking Statement
Statements in this press release that are not strictly historical in nature are forward-looking statements. These statements include but are not limited to statements related to SGX’s research and drug discovery and development programs and statements regarding prospects for the remainder of 2006, the value of SGX’s technology, the potential value and scope of SGX’s collaborations, including its collaborations with the Cystic Fibrosis Foundation and Novartis, SGX’s receipt of potential research and milestone payments, royalty payments or profits from sales of products developed under SGX’s collaborations, SGX’s business focus and strategies, expectations regarding the timing of initiation and completion of development, including clinical trials, and product launch milestones with respect to drug candidates, including drug candidates that may be discovered or developed under SGX’s collaborations, expectations with respect to the further development and potential regulatory approval of Troxatyl, the activity of BCR-ABL inhibitors, the potential of BCR-ABL-based therapies as treatments for CML, future plans and activities regarding SGX’s collaborations and SGX’s BCR-ABL program, the effectiveness and efficiency of SGX’s FAST technology to generate novel lead molecules for key therapeutic targets and SGX’s ability to discover, develop and commercialize cancer therapeutics. These statements are only predictions based on current information and expectations and involve a number of risks and uncertainties. Actual events or results may differ materially from those projected in any of such statements due to various factors, including the risks and uncertainties inherent in drug discovery, development and commercialization, collaborations with others, and litigation. In particular, the results of early clinical trials may not be predictive of future results, and SGX cannot provide any assurances that any of its product candidates will have favorable results in future clinical trials or receive regulatory approval. In addition, SGX’s results may be affected by risks that the required regulatory approvals will be received in a timely manner, or at all, risks related to the implementation of its collaborations, competition from other biotechnology and pharmaceutical companies, its effectiveness at managing its financial resources, its ability to successfully develop and market products, the level of efforts that its collaborative partners devote to development and commercialization of its product candidates, difficulties or delays in its clinical trials, difficulties or delays in manufacturing its clinical trials materials, the scope and validity of patent protection for its products, regulatory developments involving future products and its ability to obtain additional funding to support its operations. For a discussion of these and other factors, please refer to the risk factors section of the final prospectus from SGX’s initial public offering filed with the United States Securities and Exchange Commission on February 1, 2006 as well as other subsequent filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All forward-looking statements are qualified in their entirety by this cautionary statement and SGX undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof.
SGX Pharmaceuticals
CONTACT: Todd Myers, Chief Financial Officer of SGX Pharmaceuticals, Inc.,+1-858-228-1565, tmyers@sgxpharma.com
Web site: http://www.sgxpharma.com/
