-----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, TuR69VJ5Snr4X9StOXqI4CqbbVdTahNULcKURPJQegymflhi92CYOVRUNA0TSmsn +pYRsMck0imNWVAadQfYwA== 0001157523-04-010531.txt : 20041110 0001157523-04-010531.hdr.sgml : 20041110 20041109162218 ACCESSION NUMBER: 0001157523-04-010531 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041104 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041109 DATE AS OF CHANGE: 20041109 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: 041129920 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 a4762428.txt ZYMOGENETICS, INC. 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 November 4, 2004 -------------------------------------------- Date of Report (Date of earliest event reported) ZYMOGENETICS, INC. ------------------------------------------------------------------------------ (Exact Name of Registrant as Specified in Charter) Washington 000-33489 91-1144498 ------------------------------------------------------------------------------ (State or Other Jurisdiction (Commission File No.) (IRS Employer of Incorporation) Identification No.) 1201 Eastlake Avenue East, Seattle, Washington 98102-3702 ------------------------------------------------------------------------------ (Address of Principal Executive Offices, including Zip Code) (206) 442-6600 ------------------------------------------------------------------------------ (Registrant's Telephone Number, Including Area Code) ------------------------------------------------------------------------------ (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 1 Item 2.02. Results of Operations and Financial Condition. On November 4, 2004, ZymoGenetics, Inc. issued a press release announcing its financial results for the third quarter and nine months ended September 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. Item 9.01. Financial Statements and Exhibits. (c) 99.1 Press Release dated November 4, 2004. 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ZYMOGENETICS, INC. Dated: November 8, 2004 By /s/ James A. Johnson --------------------------------- James A. Johnson Chief Financial Officer 3 EX-99.1 2 a4762428ex991.txt PRESS RELEASE Exhibit 99.1 ZymoGenetics Reports Third Quarter 2004 Financial Results; Major Business Development Initiatives Enable Greater Focus on Genomics-Based Pipeline SEATTLE--(BUSINESS WIRE)--Nov. 4, 2004--ZymoGenetics, Inc. (Nasdaq:ZGEN) today reported its financial results for the third quarter and nine months ended September 30, 2004. The company reported a net loss of $22.0 million, or $0.41 per share, for the quarter ended September 30, 2004, compared to a net loss of $15.0 million, or $0.32 per share, in the prior year period. For the nine months ended September 30, 2004, the company's net loss was $65.4 million, or $1.23 per share, versus a net loss of $42.3 million, or $0.92 per share, in the comparable 2003 period. The company's financial condition remained strong, with cash, cash equivalents and short-term investments totaling $250.4 million as of September 30, 2004. This reported amount does not reflect approximately $96 million of net proceeds receivable in the fourth quarter from two transactions completed in October: a strategic alliance with Serono and a license of recombinant Factor XIII to Novo Nordisk. "ZymoGenetics successfully accomplished a number of critical events over the past several months. In keeping with our strategy of monetizing our broad pipeline while retaining U.S. rights for our core products, we signed two significant alliance and licensing agreements, and each offers sizeable financial rewards," said Bruce L.A. Carter, Ph.D., President and Chief Executive Officer of ZymoGenetics. "In addition, we began clinical development of TACI-Ig as a treatment for B-cell malignancies. Clinical trials with our lead candidates for treating cancer, autoimmune diseases and surgical bleeding continue to move ahead. Finally, we hired a well-known industry veteran, Doug Williams, as our new Chief Scientific Officer and Executive Vice President." Revenues for the quarter increased to $11.9 million versus $8.2 million for the same period in the prior year. The increase was primarily attributable to several license fees and milestone payments earned in the current year period. These included a milestone payment from Novo Nordisk related to the start of IL-21 clinical trials outside North America; fees earned from Novo Nordisk related to the license of IL-28, IL-29 and IL-31 outside North America; and continued recognition of IL-20 license fee revenue received from Novo Nordisk earlier this year. An increase in royalty revenues also contributed to the overall revenue increase. Research and development expenses for the quarter increased to $27.0 million, compared to $17.5 million for the comparable quarter of 2003. The increase was primarily attributable to increased clinical development costs, including those resulting from higher development staffing levels and external contracts for process development and manufacturing of the company's product candidates, as well as increased payments to Serono to cover the company's share of TACI-Ig development costs. Also contributing to the increase were cost reimbursements in the prior year earned from Novo Nordisk related to the preclinical development of IL-21, which were recorded as reductions to expense. General and administrative expenses for the quarter increased to $4.8 million, compared to $3.8 million for the comparable 2003 quarter, reflecting costs associated with business development activities, compliance with the Sarbanes-Oxley Act, and growth in other areas supporting the company's business, particularly human resources and information technology. Recent Highlights Recent company highlights since the start of the third quarter of 2004 include the following: Product Development -- Together with our collaborator Serono, began clinical trials of TACI-Ig, examining the effects of treatment in systemic lupus erythematosus and rheumatoid arthritis patients. -- Received regulatory clearance to proceed with testing of TACI-Ig in patients with B-cell malignancies, and announced plans, together with our collaborator Serono, to begin two clinical trials of TACI-Ig in multiple myeloma patients and in patients with other forms of B-cell cancer. -- Earned a milestone payment related to the start of IL-21 clinical trials outside North America by Novo Nordisk A/S. -- Continued enrollment in the Phase 1 study of IL-21 in cancer patients and Phase 2 studies of recombinant human Thrombin in surgical bleeding. Business Development -- Entered into a broad strategic alliance with Serono involving both co-research and co-development of genomics-derived proteins, which is structured to enhance the company's ability to identify new development candidates, and to facilitate the clinical and commercial development of such candidates. The company receives $81.25 million from Serono upfront, including a $50 million investment in common stock. -- Completed a worldwide license of recombinant Factor XIII to Novo Nordisk A/S, facilitating the company's strategic product development objectives, while retaining a significant economic interest in the product candidate. The company receives $15 million upon signing, with $62 million of potential development milestone payments and potential royalties on sales. -- Announced 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 therapeutic potential. Corporate Leadership -- Hired Dr. Douglas E. Williams as Chief Scientific Officer and Executive Vice President, replacing Dr. Frank Collins, who is retiring. Dr. Williams brings to ZymoGenetics over fifteen years of experience within the biotechnology industry, including previous positions as Executive Vice President and Chief Technology Officer at Immunex Corporation and Chief Scientific Officer at Seattle Genetics. -- Appointed James A. Harper to the company's Board of Directors effective July 1, 2004. Mr. Harper has thirty years of global experience in the pharmaceutical and medical device industries, and recently retired from the post of Group Vice President of Global Marketing and Sales at Eli Lilly and Company. Upcoming Event ZymoGenetics senior management will hold an Analyst & Investor Briefing on Friday, December 10 from 9:30 am to 1:00 pm, at the Four Seasons Hotel in New York City. To attend this session, please contact Susan Specht at 206-442-6592 or spechts@zgi.com. 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 ZymoGenetics' public filings with the Securities and Exchange Commission, including ZymoGenetics' 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 Nine Months Ended September 30, September 30, ---------------------------------------- 2004 2003 2004 2003 -------- -------- -------- -------- Revenues: Royalties $ 3,408 $ 2,325 $ 8,181 $ 7,085 Option fee 1,875 1,875 5,625 5,625 License fees and milestone payments 6,653 4,012 12,171 7,456 -------- -------- -------- -------- Total revenues 11,936 8,212 25,977 20,166 Operating expenses: Research and development, excluding noncash stock- based compensation 26,963 17,504 68,871 46,471 General and administrative, excluding noncash stock- based compensation 4,758 3,821 13,153 11,595 Noncash stock-based compensation expense 1,490 1,707 7,822 5,371 -------- -------- -------- -------- Total operating expenses 33,211 23,032 89,846 63,437 -------- -------- -------- -------- Loss from operations (21,275) (14,820) (63,869) (43,271) Other (expense) income, net (727) (175) (1,496) 977 -------- -------- -------- -------- Net loss $(22,002) $(14,995) $(65,365) $(42,294) ======== ======== ======== ======== Basic and diluted net loss per share $ (0.41) $ (0.32) $ (1.23) $ (0.92) ======== ======== ======== ======== Weighted-average number of shares used in computing net loss per share 53,762 46,221 53,225 46,037 ======== ======== ======== ======== BALANCE SHEETS (in thousands) (unaudited) Sept. 30, Dec. 31, 2004 2003 -------- -------- Cash, cash equivalents and short-term investments $250,372 $299,892 Other current assets 10,033 8,652 Property and equipment, net 69,890 62,341 Other assets 5,372 5,024 -------- -------- Total assets $335,667 $375,909 ======== ======== Current liabilities $ 19,508 $ 21,131 Lease obligation 65,839 50,570 Construction advance from landlord -- 7,918 Other non-current liabilities 8,088 8,375 Shareholders' equity 242,232 287,915 -------- -------- Total liabilities and shareholders' equity $335,667 $375,909 ======== ======== CONTACT: ZymoGenetics John Calhoun, 206-442-6744 (Investor Relations) Susan W. Specht, 206-442-6592 (Media Relations) -----END PRIVACY-ENHANCED MESSAGE-----