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Array BioPharma Reports Financial Results for the First Quarter of Fiscal 2003

BOULDER, Colo., Nov. 4 /PRNewswire-FirstCall/ -- Array BioPharma Inc. (Nasdaq: ARRY) today reported financial results for the first quarter of fiscal 2003, ended September 30, 2002.

During the first quarter of fiscal 2003, total revenue reached $10.5 million, up 46% from $7.2 million during the same period in fiscal 2002. Net loss was $1.2 million, or ($0.04) per share for the first quarter, compared to a net loss of $1.5 million, or ($0.06) per share for the comparable quarter in fiscal 2002. Array ended the first quarter of fiscal 2003 with $52.1 million in cash and marketable securities.

"During the first quarter we continued to execute our business strategy of funding our proprietary research programs primarily through the earnings generated from our collaborations. We again demonstrated significant growth in revenue, collaborations, investment in proprietary research, scientific staff and laboratory facilities," said Robert E. Conway, Chief Executive Officer. "Array continues to build a sustainable drug discovery company that is not dependent on continually accessing the capital markets for additional funding."

Highlights during the first quarter of fiscal 2003 include:

  • Increased revenue by 46% compared to the same period in the last fiscal year, primarily as a result of new and expanded collaborations.

  • Initiated a drug discovery collaboration with InterMune, Inc. to create small molecule therapeutics for hepatitis using the Array Discovery Platform. InterMune will fund drug discovery research conducted by Array based on the number of Array scientists working on the research phase of the agreement. Array will be entitled to receive milestone payments based on the selection and progress of clinical drug candidates, as well as royalties on net sales of products derived from the collaborative efforts.

  • Increased investment in Array's proprietary research to $2.0 million for the current quarter compared to $862,000 for the same period in the last fiscal year. Array currently has three programs in the lead optimization phase for inflammation and oncology indications and expects one or more of these programs to enter preclinical development next year.

  • Acquired and renovated 9,000 square feet of laboratory space for discovery biology in Array's Boulder, Colorado facilities, bringing the total biology space to 17,500 square feet. The new space is dedicated to robotics screening, cell imaging and mechanistic enzymology. Additionally, Array increased its discovery biology scientific staff by more than 50% over the past year to a current headcount of 29.

  • Completed construction of 29,000 square feet of additional laboratory space connected to Array's existing Longmont, Colorado facilities, which will house 45 additional scientists and consolidate the shipping and receiving facilities for most of its research tools.

  • Completed validation of Array's current Good Manufacturing Practices (cGMP) facility in accordance with FDA regulations. Array anticipates being able to initiate its first cGMP manufacturing campaign in this fiscal year. This capability will allow Array to produce cGMP material for Phase I clinical testing.

  • Achieved the fourth consecutive positive quarterly earnings before interest, taxes, depreciation and amortization (EBITDA) of $627,000, compared to a negative EBITDA of $355,000 for the first quarter of fiscal 2002, realizing a $982,000 improvement.

Subsequent to the first quarter of fiscal 2003:

  • Appointed Gil J. Van Lunsen, a former Managing Partner with KPMG LLP, to Array's Board of Directors, following the resignation of Robert Overell from the Board. Mr. Van Lunsen was appointed to the Board's Audit Committee, serving as Chair.

Array will hold a conference call on Tuesday, November 5, 2002, at 9:00 a.m. eastern time to discuss these results. Robert E. Conway, Chief Executive Officer, and Michael Carruthers, Chief Financial Officer, will lead the call.

CONFERENCE CALL INFORMATION

Date: Tuesday, November 5, 2002

Time: 9:00 a.m. eastern time
Toll-Free: (800) 967-7134

Toll: (719) 457-2625

Web Cast: www.arraybiopharma.com

There will be a replay of the conference call for one week, which can be accessed in the United States by dialing toll-free (888) 203-1112, and outside the United States (719) 457-0820. The access code is 146603. Replay of the call will also be available as a web cast on Array's web site at www.arraybiopharma.com .

About Array BioPharma:

Array BioPharma is a drug discovery company creating new small molecule drugs through the integration of chemistry, biology and informatics. Our experienced scientists use an integrated set of drug discovery technologies, which we call the Array Discovery Platform, to invent small molecule drugs in collaboration with leading pharmaceutical and biotechnology companies and to build our own pipeline of proprietary drug candidates. For more information on Array BioPharma, please visit our web site at www.arraybiopharma.com .

About EBITDA:

EBITDA means earnings before interest, taxes, depreciation and amortization. EBITDA should be considered in addition to, but not as a substitute for, loss from operations, net loss and other measures of financial performance prepared in accordance with generally accepted accounting principles that are presented in Array's financial statements. Array's calculation of EBITDA may be different from the calculation used by other companies and therefore, may not be comparable to similarly titled measures reported by other companies.

Array Forward-Looking Statement:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve significant risks and uncertainties, including those discussed in our annual report filed on Form 10-K for the fiscal year ended June 30, 2002, and in other reports filed by Array with the Securities and Exchange Commission. Because these statements reflect our current expectations concerning future events, our actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors. These factors include, but are not limited to, our ability to achieve and maintain profitability, the extent to which the pharmaceutical and biotechnology industries are willing to collaborate with third parties on their drug discovery activities, the ability of our collaborators and of Array to meet drug discovery objectives tied to milestones and royalties, our ability to continue to fund internal research efforts, and our ability to attract and retain experienced scientists and management. We are providing this information as of November 4, 2002. We undertake no duty to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements or of anticipated or unanticipated events that alter any assumptions underlying such statements.


                             Array BioPharma Inc.
                      Condensed Statement of Operations
                   (in thousands, except per share amounts)


                                                       Three Months Ended
                                                          September 30,
                                                      2002            2001
                                                           (unaudited)

    Revenue                                          $10,504         $7,192
    Cost of revenue*                                   5,735          4,262
    Gross profit                                       4,769          2,930

    Research and development for collaborations*       1,661          1,743
    Research and development for proprietary
     drug discovery*                                   2,050            862
    Selling, general and administrative expenses*      1,952          1,580
    Compensation related to stock option grants          576            700
      Total operating expenses                         6,239          4,885

      Loss from operations                            (1,470)        (1,955)
    Interest income                                      256            461
    Net loss                                         $(1,214)       $(1,494)

    Basic and diluted net loss per share              $(0.04)        $(0.06)
    Number of shares used to compute per share data   27,558         23,351

    Earnings before interest, taxes, depreciation
     and amortization:
      Net loss as reported                           $(1,214)       $(1,494)
      Minus: interest income                             256            461
      Plus: depreciation                               1,521            900
      Plus: compensation related to option grants        576            700
    EBITDA                                              $627          $(355)

  • Excludes compensation related to option grants


                            Summary Balance Sheet Data
                                  (in thousands)


                                                  September 30,     June 30,
                                                      2002            2002
                                                   (unaudited)

    Cash, cash equivalents and marketable
     securities                                      $52,096        $59,598
    Property, plant and equipment, net                38,924         35,788
    Working capital                                   54,207         57,350
    Total assets                                     105,907        107,915
    Stockholders' equity                              93,899         93,901

                     

SOURCE Array BioPharma Inc.

-0- 11/04/2002

/CONTACT: Tricia Haugeto of Array BioPharma Inc., +1-303-386-1193, thaugeto@arraybiopharma.com/