CARLOS, California, March 28, 2006 - Deltagen, Inc. (Pink Sheets: DGEN), a leading
provider of drug discovery tools to the biopharmaceutical industry, today
reported unaudited consolidated financial results for the year ended December
and Interest Income: The Company's consolidated revenues for the year ended December 31, 2005 totaled
$6.70 million. The revenues were primarily attributable to license fees
associated with the provision of knockout mice and related phenotypic data
under its DeltaOneTM program, access
extension fees under its DeltaBase® collaborations and amounts received under
Deltagen's contract with the National Institutes of Health (NIH). The
Company booked revenues of $1.9 million in 2005 pursuant to the NIH
contract. The Company had interest
income of $0.31 million for the year ended December 31, 2005.
Expenses: Total consolidated
expenses for the year ended December
31, 2005 were $7.16 million. The expenses were primarily
attributable to salaries and management costs, and other general and
administrative expenses, license fees and third-party royalty obligations, as
well as legal fees associated with the administration of the Company's Chapter
11 bankruptcy case and patent prosecution expenses.
Net Loss: Net loss for the
year ended December 31,
2005 was $0.15 million. Net loss per share for the year ended
December 31, 2005
was approximately $0.0039.
Cash Equivalents: As of December
31, 2005, the Company had $11.56 million in consolidated cash and
The unaudited consolidated financials, Management's Discussion and
Analysis of Financial Condition and Results of Operations and Risk Factors have
been posted on Deltagen's website (www.deltagen.com).
from Chapter 11 Bankruptcy: Deltagen filed a voluntary petition for
relief under Chapter 11 of the bankruptcy court on June 27, 2003. After filing for bankruptcy, Deltagen
continued to operate its business and manage its properties as a
debtor-in-possession. On November 15, 2005, the
bankruptcy court approved Deltagen's plan of reorganization, under which
creditors claims were to be paid in their entirety and equity preserved
intact. The reorganization plan became
effective on November 29,
Settlement with Lexicon:
Deltagen and Lexicon Genetics Incorporated reached a global settlement
of their disputes, which was approved by the bankruptcy court on March 14, 2005. Under the settlement, the parties agreed to a
full cure of any and all claims by means of a $4 million cash payment by
Deltagen and certain deferred, contingent royalty payments based on Deltagen's
receipt of net revenues after September 1, 2004 from the licensing of completed
and future knockout mice. In the case of
licensing revenues for completed knockouts, the maximum, aggregate amount of
royalty payments due to Lexicon is $6 million.
Recovery of Deltagen Europe Investments: In Summer 2005, a sale of the parcel of land
that was intended for development by Deltagen's wholly-owned subsidiary, Deltagen Europe, S.A., was consummated. In late 2005, Deltagen Europe recovered
approximately $1.8 million associated with the land sale.
NIH Contract Award: In
September 2005, the NIH awarded Deltagen a three-year contract under which
Deltagen will provide selected knockout mouse lines and related phenotypic data
to the NIH. The NIH is permitted to make
the knockout mouse lines available to academic institutions for their research
use. Deltagen retains exclusive rights
to provide its knockout mouse materials to commercial entities. On September 30, 2005, the NIH placed an initial delivery
order for 129 knockout mouse lines, for a total price of $5.16 million. The maximum revenue from the NIH contract is
approximately $25 million. However, the
NIH has no obligation to place any further orders under the contract.
Agreement with Charles River Laboratories: In late 2005, Deltagen entered
into an arrangement with Charles River Laboratories of Wilmington,
Massachusetts (NYSE: CRL). CRL became
the exclusive custodian and worldwide distributor of Deltagen's repository of
knockout mouse materials. Under this
arrangement, CRL agreed to reduce the claim it had filed in Deltagen's Chapter
11 bankruptcy case from approximately $985,000 to $250,000.
Changes: Pursuant to Deltagen's
plan of reorganization, E. Lawrence Hill, Jr., Chief Executive Officer and
Responsible Individual during Deltagen's Chapter 11 case, resigned and was
replaced by Dr. Robert Driscoll, who was formerly Deltagen's Vice President,
Intellectual Property & Legal Affairs.
Along with the election of Dr. Driscoll as President, Chief Executive
Officer and Secretary, Dr. Winston Thomas was elected Chief Operating Officer
and Dr. Shera Kash was elected Vice President, Operations. Dr. Thomas was formerly the Company's Vice
President, Operations and Dr. Kash was formerly the Company's Director,
Operations. Mr. Daniel Ratto remains the
Company's Chief Financial Officer. In
addition, in December 2005, Dr. Driscoll, Mr. Hill, Dr. Philippe Chambon of New
Leaf Venture Partners and Mr. Martin Hernon of Boston Millenia Partners were
elected to the Board of Directors. Dr.
Constantine Anagnostopoulos, Mr. Thomas Penn and Dr. William Scott remain
members of the Board.
detail on these and other highlights may be found in Management's
Discussion and Analysis, which has been posted on the Company's website (www.deltagen.com).
In January 2006, the
Company received its first installment payments under the NIH contract in an
aggregate amount of $1.93 million in connection with the Company's delivery to
the NIH of knockout mouse materials and related phenotypic data relating to the
129 knockout mouse lines ordered by the NIH in its initial delivery order. The remaining installment payments (total
amount of $3.23 million) are expected to be received in mid-2006, assuming all
data and knockout mouse materials already delivered are accepted by the NIH
As of March 27, 2006, Deltagen's plan of
reorganization has been substantially consummated, with all contested claims
resolved and all assets of the estate fully administered. The Company expects its Chapter 11 case will
be closed on March 31, 2006.
Deltagen, Inc. is
a leading provider of drug discovery tools to the biopharmaceutical industry.
Deltagen offers access to its extensive inventory of knockout mouse lines and
related phenotypic data, which enhance the efficiency of target validation and
drug discovery. In addition, Deltagen offers target validation data in the
areas of immunology and metabolic diseases. Deltagen's products and programs
have been validated by customers and partners such as Eli Lilly & Co.,
GlaxoSmithKline, Merck & Co., Inc. and Pfizer Inc. For more information on
Deltagen, visit the Company's website at www.deltagen.com.
also contains the footnotes to the 2005 financial statements, Management's
Discussion and Analysis and Risk Factors.
This press release contains "forward-looking statements,"
including statements about Deltagen's future revenues and operating results,
royalty and milestone revenues from its collaborations, third-party royalty obligations,
discovery and development of products by collaborators, and third-party
licenses and intellectual property, as well as other matters that are not
historical facts or information. These forward-looking statements are
based on management's current assumptions and expectations and involve risks,
uncertainties and other important factors, specifically including those
relating to Deltagen's ability to achieve its operational objectives and
revenue projections, receive additional orders under the NIH contract, and
obtain patent protection for its discoveries, that may cause Deltagen's actual
results to be materially different from any future results expressed or implied
by such forward-looking statements. Information identifying such important risk
factors is contained under "Information Regarding Forward-Looking Statements"
and "Risk Factors Affecting Future Operating Results" in "Management's
Discussion and Analysis of Financial Conditions and Results of Operations",
which can be found at Deltagen's website at www.deltagen.com. Deltagen
undertakes no obligation to update or revise any such forward-looking
statements, whether as a result of new information, future events or otherwise.