deCODE genetics Announces Full-year 2004 Financial Results

08-Mar-2005

deCODE genetics announced its consolidated financial results for the year ended December 31, 2004. Revenue for the year ended December 31, 2004 was $42.1 million, versus $46.8 million for the year ended December 31, 2003. This reflects the gradual redeployment of the discovery and product development capabilities from the generation of near-term revenue through service partnerships to the creation of significant longer-term value through the development of new drugs in major indications. At December 31, 2004, the company had $15.9 million in deferred research revenue, which will be recognized over future reporting periods.

Net loss for the year ended December 31, 2004 was $57.3 million, compared to $35.1 million for the year ended December 31, 2003. The principal factors in this increase are higher research and development expense related to the advancement of the company's drug development programs; lower revenues; costs associated with the service of the company's senior convertible notes issued in April 2004; and the impact, both realized and unrealized, of foreign exchange fluctuations.

At December 31, 2004, the company had $198.3 million in cash and investments. This amount includes restricted cash, cash equivalents, marketable securities and other investments, and reflects the net proceeds from the company's $150 million convertible notes issue completed in April 2004. Excluding the net proceeds of this financing, the company's balance of cash and investments decreased by $20.2 million from the end of 2003.

Cost of revenue, including collaborative programs, for the year 2004 was $43.4 million, compared to $45.9 million for 2003. These figures reflect the cost of services provided to customers and collaborators, including the entirety of costs incurred in connection with programs that have been partnered and for which we receive research funding.

Research and development expense for proprietary programs, excluding cost of revenue, was $24.9 million for the full year 2004, compared to $17.6 million for the full year 2003. This increase is the result principally of costs associated with the company's Phase IIa trial of DG031, which is being developed for the prevention of heart attack, and the conclusion of preclinical work for DG041, being developed for the treatment of atherosclerosis of the legs. Our research and development expenses for 2003 also reflect a net benefit of $3.2 million resulting from a reversal of accrued license fees in that year.

Selling, general and administrative expenses for the full year 2004 were $20.2 million, compared to $17.2 million for 2003. This increase is the result principally of higher salary and other employee-related costs including incentives, severance and the recruitment of new staff with expertise in drug development and approvals.

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