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Richmond, California
October 18, 2001
Sangamo BioSciences, Inc. (Nasdaq: SGMO) today reported
financial results for the third quarter ended September 30,
2001. The consolidated core net loss, which excludes non-cash
charges, was $3.4 million, or $0.14 per share. In the comparable
quarter of 2000, Sangamo reported a consolidated core net loss
of $561,000, or $0.03 per share. Non-cash charges were $14.1
million in the third quarter of 2001, including a $13.1 million
charge for in-process research and development expense related
to the acquisition of Gendaq, Ltd in July 2001, and a $1.0
million charge related to deferred compensation expenses.
Non-cash charges in the third quarter of 2000 related to
deferred compensation expenses were $1.3 million. Including the
non-cash charges, the net loss in the third quarter of 2001 was
$17.4 million, or $0.72 per share, as compared to a net loss of
$1.8 million, or $0.08 per share, in the same period last year.
Revenues for the third quarter of 2001 were $739,000 as compared
to third quarter 2000 revenues of $823,000. The principal
components of third quarter 2001 revenues were Universal
GeneTools(TM) revenues and revenues from Sangamo's partnerships
in the areas of human therapeutics and plant agriculture.
Excluding the non-cash charges, total theriod last year.
Net interest income for the third quarter of 2001 was $783,000
as compared to $1.3 million in the comparable period last year.
At September 30, 2001, the company had cash, cash equivalents,
and investments of $63.9 million. Total shares outstanding at
September 30, 2001 were 24.4 million.
Third-Quarter 2001 Highlights
Highlights of the quarter included:
-- Carl Pabo, Ph.D., formerly professor of biophysics and
structural biology at the Massachusetts Institute of
Technology and investigator at the Howard Hughes Medical
Institute , joined the company as senior vice president and
chief scientific officer.
-- Sangamo entered into a small molecule screening collaboration
with Pharmacia Corporation under which Sangamo scientists will
engineer a cell line to overproduce a specific protein of
therapeutic importance for Pharmacia's drug discovery screening
program. The agreement includes an upfront payment, research
funding, product development milestones, and royalties on
product sales.
-- Sangamo and Charles River Laboratories, Inc. entered into a
technology partnership agreement to apply Sangamo's novel gene
regulation technologies to the creation of "transgenic," or
genetically engineered, rat research models. The collaboration
initially involves the application of Sangamo's technology to
the creation of a novel rat model for use in developing new
drugs and therapies for cancer.
-- Sangamo completed the acquisition of Gendaq Ltd., a privately
held company located in London, England focused on the
regulation of gene expression using engineered zinc finger
DNA-binding protein transcription factors (ZFP TFs).
In addition, Sangamo today announced that it has achieved a
significant milestone in its strategic alliance with Edwards
Lifesciences Corporation to use gene regulation to treat
cardiovascular disease. Sangamo has provided to Edwards a lead
ZFP TF therapeutic product candidate that activates the vascular
endothelial growth factor (VEGF) gene. This achievement results
in a payment to Sangamo of $1.4 million. (See separate press
release issued today for further details.)
Nine-Month Results
For the nine-month period ended September 30, 2001 the net loss
attributable to common stockholders was $21.9 million, or $0.96
per share. Included in the nine-month net loss were non-cash
charges totaling $15.6 million; excluding these charges, the
core operating loss was $6.3 million, or $0.28 per share.
Revenues for the first nine months of 2001 were $2.7 million as
compared to $2.4 million in the same period of 2000. Excluding
non-cash charges and a deemed dividend upon issuance of
convertible preferred stock, total expenses for the nine months
ended September 30, 2001 and 2000 were $11.6 million and $6.7
million, respectively.
Sangamo recognizes revenues in accordance with the Securities
and Exchange Commission (SEC) Staff Accounting Bulletin No. 101,
which summarizes the SEC's views on applying generally accepted
accounting principles to revenue recognition and specifically
addresses revenue recognition for upfront non-refundable fees
earned in connection with research collaboration
agreements. Upfront fees are required to be recognized over the
term of the individual contract rather than at the time of
receipt.
Sangamo is focused on the research and development of novel
transcription factors for the regulation of gene expression.
Sangamo's Universal Gene Recognition(TM) technology enables the
engineering of transcription factors known as zinc finger
DNA-binding proteins, or ZFPs. By engineering ZFPs so that they
can recognize a specific gene, Sangamo has created ZFP
transcription factors (ZFP TFs) that can control gene expression
and, consequently, cell function. The company intends to
establish Universal Gene Recognition as a widely used technology
for commercial applications in pharmaceutical discovery, human
therapeutics, clinical diagnostics, agriculture, and industrial
biotechnology. Over twenty leading pharmaceutical and
biotechnology companies have utilized ZFP TFs. In addition,
Sangamo is developing novel ZFP-based therapeutics for the
treatment of cardiovascular disease. For more information about
Sangamo, visit the company's web site at
www.sangamo.com.
Company news release
N3892
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