Safeguard Scientifics, Inc. (NYSE: SFE), a holding company that builds value in growth-stage life sciences and technology companies, today announced that third quarter consolidated net loss from continuing operations attributable to Safeguard common shareholders was $11.6 million, or $0.57 per share, compared with a net loss of $4.1 million, or $0.20 per share, in the same period of 2008. As of September 30, 2009, Safeguard had $131 million of cash, excluding cash held in escrow, to pursue its operating activities, including the support of existing partner companies, and to deploy capital in new, exciting, high-potential growth life sciences and technology companies.
Third quarter results reflect a loss of $7.3 million on the sale of 18.4 million shares in Safeguard’s partner company Clarient, Inc., a cancer diagnostic services provider, based on net proceeds received compared to the market value at the end of the second quarter. Safeguard also recognized a gain of $15.1 million on the mark-to-market of the remaining Clarient shares held by Safeguard and recognized impairment losses totaling $9.7 million in the third quarter 2009.
“Safeguard gained substantial momentum in the third quarter through a variety of value-creating initiatives and remains well-positioned for continued growth due to the strength of our balance sheet and exciting developments in our partner companies,” said Peter J. Boni, President and Chief Executive Officer of Safeguard Scientifics. “Capital markets are beginning to thaw after more than a year of unprecedented volatility. In addition, Safeguard deal teams continue to evaluate the life sciences and technology landscapes in search of well-timed exit opportunities for our existing companies and new, high-potential businesses with efficient capital requirements that address our strategic themes.”
During the third quarter, Safeguard announced that it deployed capital in a new technology partner company, MediaMath, a leading online media trading company that offers agencies and their advertisers unprecedented reach and performance through a combination of algorithmic bidding and unique data integration. The two year old company is on track to be cash flow positive for the year.
Subsequent to the quarter ended September 30, 2009, Safeguard deployed $5 million as part of a $17.4 million Series B financing round in Quinnova Pharmaceuticals, and up to an additional $1 million in debt. Quinnova is a specialty pharmaceutical company that is currently developing and marketing novel prescription dermatology drugs based on innovative delivery platforms for the treatment of skin disorders such as dermatitis, fungal infections, psoriasis and acne. With growing market penetration and a strong pipeline of products, Quinnova is on track to tap into the $6.4 billion therapeutic dermatology market, which is projected to grow to $8.9 billion in 2013.