-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MZ+qdU9yx/Qogpa5ycib/YNCRu9HPKxaeYLYASAyViVUyKTbSP1B2wwPyoTMV1MQ fezPlOZ6qMsdmIDAUl+19g== 0001157523-04-007450.txt : 20040806 0001157523-04-007450.hdr.sgml : 20040806 20040805183125 ACCESSION NUMBER: 0001157523-04-007450 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040805 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040806 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ZYMOGENETICS INC CENTRAL INDEX KEY: 0001129425 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 911144498 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-33489 FILM NUMBER: 04955865 BUSINESS ADDRESS: STREET 1: 1201 EASTLAKE AVENUE E CITY: SEATTLE STATE: WA ZIP: 98102 BUSINESS PHONE: 206-442-6600 MAIL ADDRESS: STREET 1: 1201 EASTLAKE AVENUE E CITY: SEATTLE STATE: WA ZIP: 98102 8-K 1 a4696108.txt ZYMOGENETICS, INC. 8-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 August 5, 2004 Date of Report (Date of earliest event reported) ----------------- ZymoGenetics, Inc. (Exact name of registrant as specified in its charter) Washington 0-33489 91-1144498 (State or other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification Number) 1201 Eastlake Avenue East Seattle, Washington 98102-3702 (Address of principal executive offices) (Zip Code) 206-442-6600 (Registrant's telephone number, including area code) N/A (Former Name or Former Address, if Changed Since Last Report) Item 7. Financial Statements, Pro Forma Financial Information And Exhibits. (c) Exhibits. Exhibit 99.1 - Press Release dated August 5, 2004 of ZymoGenetics, Inc. Item 12. Results of Operations and Financial Condition On August 5, 2004, the Registrant issued a press release announcing its results of operations and financial condition for the three and six months ended June 30, 2004. The full text of the press release is set forth in Exhibit 99.1 attached hereto. The press release should be read in conjunction with the note regarding forward-looking statements, which is included in the text of the press release. The information in this Current Report on Form 8-K, including the exhibits, will not be treated as "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section. This information will not be incorporated by reference into any filing under the Securities Act of 1933, or into another filing under the Exchange Act, unless that filing expressly incorporates this information by reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ZYMOGENETICS, INC. Date: August 5, 2004 By: /s/ JAMES A. JOHNSON --------------------------------- Name: James A. Johnson Title: Senior Vice President and Chief Financial Officer EXHIBIT INDEX Exhibit Document Description Number - ------- -------------------- 99.1 Press release dated August 5, 2004 of ZymoGenetics, Inc. EX-99.1 2 a4696108ex991.txt PRESS RELEASE EXHIBIT 99.1 ZymoGenetics Reports Second Quarter 2004 Financial Results SEATTLE--(BUSINESS WIRE)--Aug. 5, 2004--ZymoGenetics, Inc. (Nasdaq:ZGEN) today reported its financial results for the quarter ended June 30, 2004. The company reported a net loss for the quarter of $24.5 million, or $0.46 per share. For the comparable quarter of 2003, ZymoGenetics had a net loss of $13.8 million, or $0.30 per share. The increase versus the prior-year period was anticipated, reflecting the Company's increasing investment in its pipeline of product candidates. Revenues for the quarter ended June 30, 2004 increased to $8.4 million, compared to $5.7 million for the same period in 2003, largely due to higher license fees and milestone payments. During the quarter the company earned a license fee under an agreement with Amgen granting rights to certain patents covering a metabolic disease target. Additionally, a milestone payment was earned from BioMimetic Pharmaceuticals related to regulatory progress of its product incorporating a protein licensed from ZymoGenetics. Excluded from quarterly revenues are the upfront license fees received under three protein licenses with Novo Nordisk, which are expected to be recognized as revenue later this year upon completion of certain administrative contract requirements. Operating expenses for the quarter increased according to plans to $32.1 million, compared to $19.9 million for the second quarter of 2003. The increase was primarily attributable to higher research and development expenses in support of the company's product development programs. ZymoGenetics is developing a broad pipeline of proprietary therapeutic protein product candidates, four of which are now in clinical development. The company has continued to ramp up its development efforts significantly over the past year. Expense increases were largely driven by the addition of experienced personnel and an increase in outsourced development work, primarily process development and manufacturing. Also contributing to the increase was a one-time charge of $3.2 million to noncash stock-based compensation expense related to the repayment by certain employees of loans using shares of the company's common stock. The company ended the quarter in a strong financial position, with $271.5 million of cash and investments. This balance was augmented during the quarter through the sale of approximately $10 million of common stock to Amgen in conjunction with a protein licensing agreement. "The past several months have been marked by significant progress in our development programs, including the start of an IL-21 cancer clinical trial, the start of a TACI-Ig clinical trial in lupus patients and accrual of patients in our four rhThrombin Phase 2 clinical studies," commented Bruce L.A. Carter, president and CEO. "At the same time, business development activity has accelerated, providing both near-term cash flow we can devote to our development programs and the potential for enhanced long-term value," added Dr. Carter. Recent Highlights Second quarter 2004 and more recent company highlights include the following: Product Development -- Began Phase 2 clinical studies of rhThrombin to evaluate safety and the control of bleeding in four different surgical settings: liver resection, spinal surgery, lower extremity peripheral artery bypass surgery, and formation of vascular access grafts for dialysis. -- Began treating patients in a Phase 1 clinical study evaluating the safety of IL-21 as a potential therapy for metastatic melanoma and renal cell carcinoma. -- Together with our collaborator Serono, began a Phase 1 clinical trial of TACI-Ig, examining the effects of treatment in systemic lupus erythematosus (SLE) patients. Business Development -- Completed a license agreement with Amgen granting worldwide rights to ZymoGenetics' patents covering a metabolic disease target discovered using its genomics-based discovery platform; in a related transaction, Amgen made an investment of $10 million in ZymoGenetics common stock. -- Exercise by Novo Nordisk A/S of its right to extend an existing option and licensing agreement to November 2006, under which it will pay ZymoGenetics an option fee of $7.5 million per year for two years in return for the right to exclusively license a limited number of proteins outside North America. -- Completed license agreements with Novo Nordisk A/S, granting exclusive rights outside North America to ZymoGenetics' patents covering IL-28A, IL-29 and IL-31, proteins with antiviral and anti-inflammatory disease therapeutic potential. -- Earned a milestone payment related to the filing of a license application by BioMimetic Pharmaceuticals on its GEM 21S product for the treatment of periodontal disease, which contains PDGF-BB under license from ZymoGenetics. On July 13, an FDA Dental Products Advisory Panel unanimously recommended approval of GEM 21S. About ZymoGenetics ZymoGenetics is a biopharmaceutical company focused on the discovery, development and commercialization of therapeutic proteins for the prevention or treatment of human diseases. The Company is developing a diverse pipeline of potential proprietary product candidates that are moving into and through clinical development. These span a wide array of clinical opportunities that include bleeding, autoimmune diseases and cancer. ZymoGenetics intends to commercialize these product candidates through internal development, collaborations with partners and out-licensing of patents from its extensive patent portfolio. For further information, visit www.zymogenetics.com. This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the current intent and expectations of the management of ZymoGenetics. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. ZymoGenetics' actual results and the timing and outcome of events may differ materially from those expressed in or implied by the forward-looking statements because of risks associated with our unproven discovery strategy, preclinical and clinical development, regulatory oversight, intellectual property claims and litigation and other risks detailed in the company's public filings with the Securities and Exchange Commission, including the company's Annual Report on Form 10-K for the year ended December 31, 2003. Except as required by law, ZymoGenetics undertakes no obligation to update any forward-looking or other statements in this press release, whether as a result of new information, future events or otherwise. ZYMOGENETICS, INC. STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited) Three Months Ended Six Months Ended June 30, June 30, --------------------------------------- 2004 2003 2004 2003 -------- -------- -------- -------- Revenues: Royalties $ 2,364 $ 2,364 $ 4,774 $ 4,760 Option fee 1,875 1,875 3,750 3,750 License fees and milestone payments 4,114 1,482 5,518 3,444 -------- -------- -------- -------- Total revenues 8,353 5,721 14,042 11,954 Operating expenses: Research and development, excluding noncash stock-based compensation 23,879 14,893 43,912 30,568 General and administrative, excluding noncash stock-based compensation 3,427 3,079 6,392 6,173 Noncash stock-based compensation expense 4,760 1,898 6,332 3,664 -------- -------- -------- -------- Total operating expenses 32,066 19,870 56,636 40,405 -------- -------- -------- -------- Loss from operations (23,713) (14,149) (42,594) (28,451) Other income (expense), net (753) 321 (769) 1,153 -------- -------- -------- -------- Net loss $(24,466) $(13,828) $(43,363) $(27,298) ======== ======== ======== ======== Basic and diluted net loss per share $ (0.46) $ (0.30) $ (0.82) $ (0.59) ======== ======== ======== ======== Weighted-average number of shares used in computing net loss per share 53,207 46,016 52,954 45,944 ======== ======== ======== ======== BALANCE SHEETS (in thousands) (unaudited) June 30, December 31, 2004 2003 ------------ ------------ Cash, cash equivalents and short-term investments $ 271,543 $ 299,892 Other current assets 10,346 8,652 Property and equipment, net 69,035 62,341 Other assets 5,393 5,024 ----------- ----------- Total assets $ 356,317 $ 375,909 =========== =========== Current liabilities $ 20,955 $ 21,131 Lease obligation 65,662 50,570 Construction advance from landlord -- 7,918 Other non-current liabilities 8,258 8,375 Shareholders' equity 261,442 287,915 ----------- ----------- Total liabilities and shareholders' equity $ 356,317 $ 375,909 =========== =========== CONTACT: ZymoGenetics, Inc. Investor Relations: John Q. Calhoun, 206-442-6744 or Media Relations: Susan W. Specht, 206-442-6592 -----END PRIVACY-ENHANCED MESSAGE-----