Mar 9 2012
Maxygen, Inc. (Nasdaq:MAXY), a biopharmaceutical company, today announced financial and business results for the quarter and year ended December 31, 2011.
Fourth Quarter 2011 Financial Results
Maxygen reported a net loss attributable to Maxygen, Inc. of $2.2 million, or $0.08 per basic and diluted share, for the fourth quarter of 2011, compared to net income attributable to Maxygen, Inc. of $69.9 million, or $2.40 per basic share and $2.39 per diluted share, for the same period in 2010. The net loss for the fourth quarter of 2011 primarily reflects a loss from continuing operations before income taxes of $2.8 million, plus a net tax benefit of $559,000. The net tax benefit consists of a $1.2 million tax benefit reported within continuing operations, partially offset by a $593,000 tax expense recorded within discontinued operations. The net income for the 2010 period primarily reflects a gain of $53.2 million Maxygen recognized in connection with its distribution to stockholders of shares of Codexis, Inc. common stock in December 2010 and a gain of $20.0 million recognized in connection with Maxygen's sale to Codexis of the intellectual property assets associated with the MolecularBreeding™ directed evolution platform. These gains were partially offset by a $2.4 million loss from operations.
Maxygen had total revenue of $3,000 in the fourth quarter of 2011, compared to $529,000 of revenue for the same period in 2010. Revenue in the 2011 period consisted of miscellaneous licensing fees. Revenue in the 2010 period consisting primarily of a $525,000 payment received from Altravax, Inc. in December 2010 in connection with its acquisition of substantially all of the company's vaccines assets in January 2010.
Total operating expenses from continuing operations for the fourth quarter of 2011 were $2.8 million, compared to operating expenses of $2.9 million for the same period in 2010. The decrease in operating expenses primarily reflects a decreases in stock based compensation expense and external legal costs, partially offset by a lower allocation of administrative costs charged to Perseid Therapeutics LLC, the company's former majority-owned subsidiary, under a transition service agreement. For the fourth quarter of 2010, Maxygen reported a negative research and development expense of $129,000 primarily due to a credit related to the reclassification of research and development expenses associated with discontinued operations from a prior period.
As a result of the acquisition of Maxygen's interests in Perseid by Astellas Pharma Inc. in May 2011, Maxygen has reclassified the operating results of Perseid and its related business activities to discontinued operations in the condensed consolidated financial statements for the three months and year ended December 31, 2010 and 2011. The assets, liabilities and results of operations and cash flows of Perseid have been reported separately as discontinued operations in Maxygen's condensed consolidated financial statements for all periods presented. There was no income or loss from discontinued operations before income taxes reported for the fourth quarter of 2011.
At December 31, 2011, Maxygen held approximately $159.6 million in cash, cash equivalents and short-term investments and remains eligible for a contingent payment of up to $30.0 million from Bayer HealthCare LLC related to the sale of Maxygen's hematology assets to Bayer in July 2008. At December 31, 2011, Maxygen had 27,398,829 shares of common stock outstanding for accounting purposes, which excludes 636,523 shares underlying unvested restricted stock awards.
Full Year 2011 Results
Maxygen reported net income attributable to Maxygen, Inc. of $51.4 million, or $1.80 per basic and diluted share, for the year ended December 31, 2011, as compared to net income attributable to Maxygen, Inc. of $68.9 million, or $2.30 per basic share and $2.29 per diluted share, for the prior year.
Total revenues from continuing operations for 2011 were $561,000, compared to total revenues from continuing operations of $3.6 million for the same period in 2010. Revenue in the 2011 period consisted primarily of the final payment Maxygen received in July 2011 from Altravax Inc. in connection with its acquisition of substantially all of Maxygen's vaccine assets in January 2010. Revenue in the 2010 period consisted of $2.0 million received under Maxygen's prior licensing arrangement with Codexis, which was terminated in October 2010 in connection with the acquisition by Codexis of the intellectual property rights associated with the MolecularBreeding™ directed evolution platform, and $1.0 million related to the sale of Maxygen's vaccine assets to Altravax. The 2010 period also included a $500,000 non-refundable option fee Maxygen received from Cangene Corporation which was recognized as a result of the termination of the company's prior option and license agreement with Cangene in July 2010.
Total operating expenses from continuing operations for 2011 were $12.3 million, compared to operating expenses of $11.3 million for the same period in 2010. The increase in operating expenses primarily reflects a lower allocation of administrative costs charged to Perseid under a transition service agreement and an increase in costs for consultants who assisted Maxygen in the preparation of the proposal it submitted to BARDA in May 2011.
The 2011 period included a $62.2 million gain related to the sale of Perseid to Astellas, while the 2010 period included a gain of $53.2 million Maxygen recognized in connection with its distribution to stockholders of shares of Codexis, Inc. common stock in December 2010 and a gain of $20.0 million recognized in connection with Maxygen's sale to Codexis of the intellectual property assets associated with the MolecularBreeding™ directed evolution platform.
Business Update
In May 2011, a subsidiary of Astellas Pharma Inc. acquired all of Maxygen's interests in Perseid Therapeutics LLC for $76.0 million in cash. Perseid, a former majority-owned subsidiary, included substantially all of Maxygen's research and development operations and personnel. As a result of the acquisition of Perseid by Astellas, Maxygen has no further interests or obligations with respect to the business and operations of Perseid, except for the ongoing technology license agreement between the companies entered into as a part of the 2009 joint venture arrangement.
The acquisition of Perseid by Astellas largely completed a multi-year strategic process to maximize stockholder value through sales, distributions and other arrangements involving the company's various assets. Maxygen retains all rights to its MAXY-G34 program for development of all therapeutic areas, including the chemotherapy-induced neutropenia and Acute Radiation Syndrome (ARS) indications, and the company's current focus is to create value from this program for its stockholders, either through the potential further development of the product candidate for one or both indications, or through a sale, licensing, partnering or other transaction involving the program. Maxygen also continues to evaluate potential strategic options for the company as a whole, including a strategic business combination or other transaction.
In October 2011, the United States Patent and Trademark Office (PTO) issued a Right of Appeal Notice in the inter partes reexamination proceeding for Amgen's U.S. Pat. No. 7,381,804 that includes a final rejection of all claims in the Amgen patent. Amgen's patent includes certain claims to mutated granulocyte colony stimulating factor (G-CSF) molecules that potentially cover Maxygen's MAXY-G34 product candidate, a next-generation, pegylated G-CSF. Maxygen submitted the request to the PTO for an inter partes reexamination of the Amgen patent in 2009. Amgen has appealed the decision to the PTO's Board of Patent Appeals and Interferences.
In November 2011, Maxygen was advised by the Biomedical Advanced Research and Development Authority, an agency within the U.S. Department of Health and Human Services (BARDA), that the company's proposal for a contract award for the development of its MAXY-G34 product candidate as a potential medical countermeasure for ARS was rejected. In a subsequent notification, BARDA indicated that its decision with respect to Maxygen's proposal was primarily based on BARDA's availability of funding.
In January 2012, Maxygen announced a new stock repurchase program under which the company may purchase up to $10.0 million of its common stock through December 31, 2012. From December 2009 through December 2011, Maxygen has repurchased approximately 12.2 million shares of its common stock at an aggregate cost of approximately $66.3 million.
Source: Maxygen
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