Ecogen Inc., a leading developer of natural microbial biopesticides, today announced
financial results for the second quarter and the first half of its fiscal year ending October 31, 2000.
Net product sales increased 33% in the second quarter ended April 30, 2000 from $1.8 million for the three months ended April 30, 1999 to $2.4 million in the current three-month period. Operating expenses, comprising research and development and selling, general and administration expenses, decreased 7% in the second quarter of fiscal 2000 when compared to the prior year's second quarter. Gross margins on product sales declined from 32% in the second quarter of fiscal 1999 to 16% for the same period in fiscal 2000. 

During the second quarter of fiscal 2000, the Company, as previously announced, acquired the sprayable Bt bioinsecticide business of Mycogen Corporation. The increase in product sales is principally due to sales of Mattch and MVP, the two principal products acquired from Mycogen. The Company did not incur any significant incremental costs in integrating the acquired Mycogen products into the Company's portfolio of products. Gross margins declined as a result of international sales of AQ10 to the Company's distributor in Italy at reduced prices to support commercialization of this product in Europe.

The Company's net loss available to common stockholders for the three months ended April 30, 2000 was ($2.3) million compared to ($1.8) million for the year-ago period. The increase in the net loss allocable to common stockholders is substantially due to an assumed incremental yield on preferred stock of $.3 million recorded during the second quarter of fiscal 2000 and higher interest expense. The net loss per basic and diluted share for the three months ended April 30, 2000 was ($0.19), compared to ($0.20) for the second quarter of fiscal 1999. Weighted average common shares outstanding were 12.0 million in the second quarter of fiscal 2000 compared to 9.1 million
in the year-ago period.

Net product sales for the first half of fiscal 2000 were $3.5 million, consistent with the $3.5 million level of product sales in the year-ago period. Fiscal 2000 results include $1.3 million of sales of the acquired Mycogen products. The increase in product sales, due to the acquired Mycogen
products, was offset by a decrease in Ecogen product sales, principally Lepinox, the Company's BT bioinsecticide for the control of caterpillars. Fiscal 1999 sales included $.8 million in sales of Lepinox to FMC Corporation upon the signing of a distribution agreement in fiscal 1999. No similar sale occurred in the first six months of fiscal 2000.

Operating expenses for the first six months of fiscal 2000 were $3.7 million, representing a decrease of 17% when compared with the year-ago period. Gross margins on product sales were 17% for the first half of fiscal 2000 compared to 21% in fiscal 1999. Operating loss in the first half of fiscal 2000 improved marginally. The Company was able to offset the lower contract research revenue of $.6 million from Monsanto through improved operating results in fiscal 2000.

The Company's consolidated balance sheet at April 30, 2000 included working capital of $1.3 million, long-term debt of $1.1 million and stockholders' equity of $2.1 million. The Company is continuing to pursue strategic initiatives to improve its working capital and capital structure. 

Ecogen is a leader in the development of natural microbial pesticide products for the control of plant disease and insect pests. Ecogen's growing portfolio of products has been developed to address the concerns of pest management, with the added assurance of environmental compatibility. The Company's products include: biofungicides -- Aspire(R) for post-harvest rot disease and AQ10(R) for powdery mildew as well as its Bt bioinsecticides -- CRYMAX(R), Lepinox(R) and Condor(R) and the recently acquired Bt's -- Mattch(TM), MVP(R) and MVP(R)II to control caterpillars. Additional bioinsecticides under development include Cruiser(R), an insecticidal nematode product for soil applications and CryStar(TM), a Bt bioinsecticide for mosquito control.

Company news release
N2800