deCODE genetics (Nasdaq:DCGN) today announced its consolidated
financial results for the quarter and year ended December
31, 2006. A conference call to discuss the year’s results
and recent operating highlights will be webcast live tomorrow,
Wednesday, March 7, at 8:00am EST/1:00 pm GMT (details below).
Revenue for the year ended December 31, 2006 was $40.5 million,
versus $44.0 million for the full year 2005. At December 31,
2006, the company had $9.8 million in deferred revenue, which
will be recognized over future reporting periods.
Net loss for the year ended December 31, 2006 was $85.5 million,
compared to $62.8 million for the full year 2005. This increase
is the result of investment in the conduct of clinical trials
in the company’s lead drug development programs. Basic and
diluted net loss per share was $1.49 for the full year 2006,
compared to $1.17 for the full year 2005. At the close of
2006, the company had approximately 61.6 million shares outstanding.
At December 31, 2006, the company had $152.0 million in cash
and investments, compared to $155.6 million at December 31,
2005.
Research and development expense for proprietary programs
was $57.1 million for the full year 2006, compared to $43.7
million for the full year 2005. This increase is the result
principally of costs associated with the conduct of clinical
trials in the company’s heart attack and arterial thrombosis
programs. Selling, general and administrative expenses for
the full year 2006 were $25.2 million, compared to $20.1 million
for 2005.
“Our clinical development work continues to provide compelling
evidence of the potential of our approach for bringing forward
new drugs targeting the biology of common diseases. And we
are preparing to launch next quarter the first product based
upon our work in human genetics: a DNA-based test for better
understanding risk of type 2 diabetes, which we expect will
be the first of several such reference laboratory tests. At
the end of last year we completed a Phase IIa trial for DG041,
our anti-platelet compound for the prevention of arterial
thrombosis, and we are now completing the Phase I multiple-dose
testing for DG051 for the prevention of heart attack. As we
prepare to present the results from these trials and begin
the next phases in clinical testing, we are also advancing
the reformulation of DG031 to be able to restart Phase III
testing near the end of this year. While hitting major milestones
in product development, we have also effectively met our financial
objectives, which are to invest our resources to bring important
new medicines to the marketplace,” said Kari Stefansson, CEO
of deCODE.
Fourth quarter 2006 results
Revenue
for the quarter ended December 31, 2006 was $11.5 million,
compared to $9.8 million for the fourth quarter 2005. Net
loss for the fourth quarter 2006 was $23.2 million, compared
to $21.1 million for the same period a year ago. Research
and development expense for proprietary programs increased
to $14.2 million for the fourth quarter 2006 from $13.7
million for the same period in 2005. For the fourth quarter
2006, selling, general and administrative expenses were
$8.6 million versus $6.4 million for the fourth quarter
2005.
Key highlights
over the
past year
include:
Drug and Diagnostic Development
Arterial thrombosis:
DG041. In December, the company completed
its Phase
IIa clinical trial for DG041, deCODE’s developmental anti-platelet
compound for the prevention of arterial thrombosis.
The trial
is examining safety and tolerability, dosing, and the effect
of different dose levels on platelet function and
a range
of serum biomarkers associated with atherosclerosis, and the
company expects to announce the results in the second
quarter.
Heart attack: DG051. deCODE completed Phase I single-dose
testing
of DG051 at the end of 2006 and is now completing the Phase
I multiple-dose studies. DG051 is a first-in-class,
small-molecule
inhibitor of leukotriene A4 hydrolase (LTA4H) discovered by
deCODE’s chemistry unit and being developed
for the
prevention of heart attack. LTA4H is encoded by one of the
genes in the leukotriene pathway deCODE has linked
to increased
risk of heart. The at-risk versions of these genes confer
increased risk of heart attack by increasing
the production
of the pro-inflammatory molecule leukotriene B4 (LTB4). Preliminary
results from the single-dose Phase
I study
demonstrated that DG051 reduces LTB4 production in a dose-dependent
manner and was well tolerated at all doses
tested.
Heart attack: DG031. In October deCODE voluntarily suspended
its Phase
III clinical trial for DG031 (veliflapon), the company’s developmental
compound for the prevention of heart attack,
in order
to address a formulation problem. deCODE is currently evaluating
new formulation and process combinations and expects
to have
sufficient clinical supplies to be able to reinitiate of Phase
III testing near the end of this year.
Asthma: CEP-1347. In 2006, deCODE completed a successful
Phase IIa
clinical trial of Cephalon’s CEP-1347 in asthma. The trial,
conducted by deCODE under a research collaboration
and licensing
agreement with Cephalon, was based upon deCODE’s discovery
of variants in the gene encoding the MAP3K9 kinase
as risk
factors for the development of asthma. The MAP3K9 kinase acts
within a pathway targeted by CEP-1347. The companies
are discussing
the next steps in continuing the clinical development of CEP-1347
in asthma.
Diagnostics. deCODE has applied for CLIA certification
of its
reference laboratory for DNA-based disease predisposition
testing. The first test the company expects to offer is for
a variant
in the gene encoding TCF7L2 which deCODE has linked
to significantly
increased risk of type 2 diabetes (T2D). This discovery has
been replicated in more than 20 populations,
and has
been shown in pre-diabetics to correlate with increased likelihood
of progression from prediabetes to T2D. The company
believes
that this test may be a useful addition to the range of known
risk factors for T2D, and may assist physicians in
identifying
the roughly one-third of their pre-diabetic patients who are
most likely to progress to type 2 diabetes, enabling
more focused
and effective lifestyle and prophylactic drug treatment regimes
to keep individuals from becoming diabetic.
The company
is also advancing DNA-base predisposition testing for atrial
fibrillation/stroke, prostate cancer, and heart
attack.
Target Discovery
Type 2 diabetes. In January
2006 deCODE scientists published the discovery of
a single letter variant, or SNP, in the TCF7L2
gene
on chromosome 10 that represents the most significant
and
best replicated genetic risk factor for type 2 diabetes
(T2D)
found to date. The impact of this variant has since
been
replicated in some twenty populations and by numerous
independent
researchers. The variant has been found to confers
an
approximately 40% increase in risk of T2D in those
who carry one copy of the at-risk variant compared
to controls,
and
approximately double the risk in those who carry
two copies.
Prostate
cancer.
In May, deCODE reported the discovery of a common
genetic variant that predisposes to prostate cancer.
It is
one
of the first genetic risk factors ever found to confer
risk
of a common type of cancer in the general population.
The
variant was discovered in Iceland and confirmed in
several American
and Swedish cohorts; it has since been confirmed
in
several other populations by independent research
groups. About
19% of men of European ancestry with prostate cancer
carry
at least one copy of the variant, which confers
an approximately 60% increase
in risk of the disease and accounts for approximately
8% of cases. The variant confers roughly the same
increase in risk
among African Americans but is twice as common.
The variant
thus accounts for approximately 16% of prostate
cancer among
African American men and thereby contributes to
the higher incidence of the disease among African
Americans. The
variant
is also associated with more aggressive forms of
prostate cancer,
and deCODE is utilizing the discovery as the basis
for developing a diagnostic test that may aid in
identifying
individuals
at high risk and those who would benefit from more
aggressive therapy.
Breast cancer. deCODE has linked
a variant within a gene called BARD1 (BRCA1-associated
RING domain 1) to increased
risk
of breast cancer in the general population. In a
study of a total of more than 2000 patients and controls
in Iceland,
the
variant was found in 5.4% of breast cancer patients
and 3.1% of controls, corresponding to an 80% increase
in risk
for
carriers of the variant in the general population.
Among women who carry this variant as well as the
Icelandic founder
risk
mutation in the BRCA2 gene, the likelihood of developing
breast
cancer may approach certainty. Carriers of the BARD1
variant,
with or without the BRCA2 mutation, also had an increased
risk
of subsequent primary breast tumors after the first
breast cancer diagnosis. deCODE is applying this
finding to develop
a DNA-based
diagnostic test.
Corporate
Alliances
DNA-based diagnostics. deCODE and Illumina last year
formed a strategic alliance to co-develop and commercialize
DNA-based
risk
predisposition test kits in several major disease areas.
The alliance
will employ Illumina’s platform for high-multiplex single-nucleotide
polymorphism (SNP) genotyping to develop
tests
for gene variants deCODE has previously shown to have
impact
on the risk of a growing number of common diseases with
major public health impact. The alliance is focusing
initially
on the development of diagnostic tests for variants
in genes
involved in heart attack, type 2 diabetes, and breast
cancer.
Early last year deCODE acquired of privately-held Icelandic
cancer
research firm Urdur, Verdandi Skuld (UVS), enabling
deCODE to broaden and enhance its cancer programs by
expanding
its population-based
resources in oncology.
Personnel
Jakob Sigurdsson. In November, deCODE appointed
Jakob Sigurdsson as Senior Vice President, Corporate
Development. Mr. Sigurdsson
holds
a BS degree in chemistry from the University of Iceland
and
an MBA from the Kellogg School of Management at Northwestern
University.
He previously held senior positions in the United
States
and Europe for Rohm and Haas Company, and served
for two years as CEO and President of Alfesca, a
multinational
foods group.
Peter Goodfellow. In September deCODE appointed
Dr. Peter Goodfellow to its Board of Directors. Dr.
Goodfellow was until
recently
Senior Vice President for Discovery Research at GlaxoSmithKline,
a position
he held for the past six years.
Birgit
Stattin Norinder.
In June, deCODE
appointed Birgit
Stattin Norinder
to the company’s
Board of
Directors. Ms Norinder
has held senior
clinical development
and regulatory affairs
positions at
Pfizer, Astra,
Glaxo and
Pharmacia & Upjohn,
and was CEO and
Chairman of UK-based
Prolifix Ltd.
She is currently
Chairman of the
Board of Betagenon
AB.
Earl
Collier. In
July, deCODE
appointed Earl
M. “Duke” Collier,
Jr, to its Board
of Directors. Mr. Collier
is Executive Vice
President of
Genzyme Corporation.
About deCODE
deCODE
is a biopharmaceutical company applying its discoveries
in human genetics to the development of drugs and diagnostics
for common diseases. deCODE is a global leader in gene discovery
— our population approach and resources have enabled us
to isolate key genes contributing to major public health
challenges from cardiovascular disease to cancer, genes
that are providing us with drug targets rooted in the basic
biology of disease. deCODE is also leveraging its expertise
in human genetics and integrated drug discovery and development
capabilities to offer innovative products and services in
DNA-based diagnostics, bioinformatics, genotyping, structural
biology, drug discovery and clinical development. deCODE
is delivering on the promise of the new genetics.SM Visit
us on the web at www.decode.com.
Any statements contained in this presentation that relate to future
plans, events or performance are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to a number of risks
and uncertainties that could cause actual results, and the timing
of events, to differ materially from those described in the forward-looking
statements. These risks and uncertainties include, among others,
those relating to technology and product development, integration
of acquired businesses, market acceptance, government regulation
and regulatory approval processes, intellectual property rights
and litigation, dependence on collaborative relationships, ability
to obtain financing, competitive products, industry trends and other
risks identified in deCODE’s filings with the Securities and Exchange
Commission. deCODE undertakes no obligation to update or alter these
forward-looking statements as a result of new information, future
events or otherwise.
Condensed
Consolidated Statement of Operations 