Important note: Information in this article was accurate in 2001. The state of the art may have changed since the publication date.
PRNewswire - November 6, 2001
"Despite the effects of September 11th, we are pleased with our performance this quarter, particularly our patient testing business, which continues to grow steadily each quarter," said Bill Young, ViroLogic's Chairman and Chief Executive Officer. "Our business is now back on track, and we expect a solid fourth quarter with record revenue of over $6 million. In addition, with several new products being introduced over the next six to 12 months and an increasingly favorable insurance reimbursement environment for patient resistance testing, we continue to expect to achieve profitability by the end of 2002."
The Company also announced that the Blue Cross/Blue Shield (BC/BS) Association has established a medical policy for HIV phenotyping, making it a coverable benefit. This policy is significant because most of the BC/BS plans nationwide, which cover about 25 percent of privately insured HIV/AIDS patients, follow the policies put forth by the Association.
Gross margin improved to 36 percent in the third quarter of 2001 compared to 31 percent during the second quarter and 34 percent reported during the same quarter last year. Operating expenses for the third quarter were $11.1 million, compared to $8.4 million for the same period in 2000. The increase primarily reflects additional expansion of clinical laboratory operations, sales and marketing activities and corporate infrastructure. Net loss for the quarter was $6.6 million, or $0.33 per share, compared to a net loss of $5.9 million, or $0.30 per share, for the same period in 2000.
During the third quarter of 2001, the Company recorded a deemed dividend to preferred shareholders of $2.3 million, resulting from the sale of $16.25 million of convertible preferred stock. Net loss applicable to common shareholders was $0.45 per share in the third quarter. The Company had $19.5 million of cash, restricted cash, and short-term investments as of September 30, 2001.
Recent Highlights
During the third quarter of 2001, ViroLogic:
-- Completed $16.25 million private placement financing; -- Expanded agreement with Roche and Trimeris to utilize ViroLogic's new entry inhibitor technology to develop their fusion inhibitors, a new class of antiretroviral agents, for HIV; -- Entered into agreement with Triangle Pharmaceuticals to utilize ViroLogic's phenotypic drug resistance assay, PhenoSense(TM) HIV, to assess drug activity of new antiretroviral agents targeted against HIV; -- Reported that 44 of 50 U.S. state Medicaid programs now reimburse for ViroLogic's HIV drug resistance assays; and -- Conducted a successful pilot introduction of PhenoSense GT(TM), a novel combination resistance test developed in response to physician demand.
Conference Call Details
ViroLogic's third quarter 2001 financial results conference call is scheduled for today at 5:00 p.m. ET. The conference call will be open to all interested parties through a real-time audio web broadcast at the ViroLogic corporate web site, http://www.virologic.com. Interested parties may also participate in the teleconference by calling 800-360-9865 fifteen minutes before the conference begins and ask to be connected to the ViroLogic teleconference. International callers please dial 973-694-6836.
About ViroLogic
ViroLogic is a biotechnology company advancing the fields of individualized medicine and pharmacogenomics, helping to make them realities in healthcare around the world today. The Company discovers, develops and markets innovative products to guide and improve treatment of serious viral diseases such as AIDS and hepatitis. Its leading expertise in virology, molecular biology, clinical research, engineering, information systems, and quality assurance has resulted in technology to assess drug resistance and susceptibility in viruses that cause these diseases, which affect millions of people worldwide.
The Company's current products are designed to optimize HIV/AIDS treatment regimens, providing physicians with important information to help select appropriate drugs for their patients and leading to better outcomes and reduced costs. These products are also being used by nearly every major pharmaceutical company working to develop new and improved antiviral therapeutics that can be more effective in an increasingly drug-resistant environment.
Certain statements in this press release are forward-looking, including statements relating to the Company's product development efforts. These forward-looking statements are subject to risks and uncertainties and other factors, which may cause actual results to differ materially from the anticipated results or other expectations expressed in such forward-looking statements. These risks and uncertainties include, but are not limited to, whether ViroLogic's business will rebound sufficiently from September's tragic events, whether ViroLogic's products will achieve market acceptance, whether payers will authorize reimbursement for our products, whether we will be able to expand our sales and marketing capabilities, whether the FDA or any other agency will decide to regulate our products or services, whether we will encounter problems or delays in automating our process, whether we will successfully introduce new products using our PhenoSense technology, whether intellectual property underlying our technology is adequate, whether we are able to build brand loyalty, whether we will be able to raise sufficient capital and other risks and uncertainties detailed from time to time in our reports to the Securities and Exchange Commission, including our report on Form 10-K for the year ended December 31, 2000.
VIROLOGIC, INC. SELECTED FINANCIAL DATA (In thousands, except per share amounts)
Three months ended Nine months ended September 30, September 30, 2001 2000 2001 2000 (Unaudited) (Unaudited)
Statement of Operations Data: Revenue (a) $4,403 $1,885 $12,260 $4,709 ------- ------- -------- ------- Operating costs and expenses: Cost of product revenue 2,760 1,237 8,172 3,369 Research and development 3,106 2,898 8,750 7,558 General and administrative: Non-cash stock-based compensation expense 393 1,104 1,250 3,250 Other general and administrative expenses 2,458 1,679 7,173 4,659 Sales and marketing 2,354 1,498 7,026 3,386 ------- ------- -------- ------- Total operating costs and expenses 11,071 8,416 32,371 22,222 ------- ------- -------- ------- Loss from operations (6,668) (6,531) (20,111) (17,513) Interest income 223 661 980 1,290 Interest expense (111) (64) (323) (192) ------- -------- -------- -------- Net loss (6,556) (5,934) (19,454) (16,415) Deemed dividend to preferred stockholders (2,269) -- (2,269) (15,700) Dividend to preferred stockholders (103) -- (103) -- ------- ------- -------- ------- Net loss applicable to common stockholders $(8,928) $(5,934) $(21,826) $(32,115) ==== ==== ===== ===== Basic and diluted amounts per common share: Net loss $(0.33) $(0.30) $(0.97) $(0.97) Dividends to preferred stockholders (0.12) -- (0.12) (0.93) ------- ------- -------- ------- Net loss applicable to common stockholders $(0.45) $(0.30) $(1.09) $(1.90) ==== ==== ===== ==== Weighted average shares used in computing basic and diluted net loss per common share 20,033 19,743 19,956 16,883 (b)
Sept. 30, Dec. 31, 2001 2000 (c) (Unaudited) Balance Sheet Data Cash, cash equivalents and short-term investments $17,935 $23,794 Accounts receivable, net 3,143 2,404 Working capital 13,447 21,097 Restricted cash 1,600 2,029 Total assets 44,545 43,647
Long term obligations, less current portion 1,387 1,964 Total stockholders' equity $19,399 $33,643
(a) Revenue for the three and nine month periods ended September 30, 2001 includes $120,000 and $338,000, respectively, from NIH grants. The costs associated with these NIH grants are included in research and development expenses. (b) Weighted average shares include shares issued upon the automatic conversion of outstanding preferred stock upon the completion of the Company's initial public offering, assuming such shares were originally issued as common stock at their respective issuance dates. (c) The balance sheet data is derived from audited financial statements for the year ended December 31, 2000, included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission.
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