GenVec, Inc. (NASDAQ: GNVC) today reported financial results for the fourth quarter and year ended December 31, 2014. For the year ended December 31, 2014, the company reported a net loss of $2.5 million, or $0.16 per share, compared with a net loss of $10.0 million, or $0.77 per share, for the year ended December 31, 2013. The company ended the year with $14.7 million in cash, cash equivalents, and short-term investments.
"The significant progress we made in 2014 has set the stage for an exciting new chapter in our evolution. Most notably, a Phase 1/2 clinical trial commenced for CGF166, GenVec's lead product candidate which is partnered with Novartis, in patients with severe to profound hearing loss," said Douglas J. Swirsky, president and CEO of GenVec. "At the same time, our recently announced agreement with TheraBiologics underscores our strategy to build value through the creation of a portfolio of opportunities that leverage our proprietary adenovector technology. We anticipate a cash burn between $5 million and $7 million for 2015 and believe our existing resources are sufficient to fund the company's operations into 2017."
2014 Financial Results
For 2014, revenue increased 64% to $6.0 million from $3.7 million in 2013. The increase in revenue in 2014 was primarily due to increased revenue of $4.6 million generated by our hearing loss and balance disorders program versus the prior year as a result of our achievement of milestones totaling $5.0 million in revenue in 2014 offset by a $0.4 million reduction in revenues received for services performed in connection with this program. This revenue increase was partially offset by a $1.5 million decrease in revenue in 2014 associated with our malaria program, primarily due to the termination of our September 2012 agreement with the U.S. Naval Logistics Command, as compared to the comparable prior year period and $0.4 million reduction in revenues received for services performed in connection with the hearing program. We also experienced reduced revenues of $0.4 million, $0.2 million, and $0.2 million as a result of reduced work scope for research performed under grants, for our foot and mouth disease (FMD) and for our HIV programs, respectively, in 2014 as compared to 2013.
Operating expenses for 2014 decreased 39% to $8.6 million from $14.0 million in 2013. Research and development expenses decreased 59% to $2.3 million in 2014 from $5.5 million in 2013. In 2014, we experienced lower research and development costs than in the prior year due primarily to decreased personnel costs due to the reductions in force that occurred in 2013 and a decreased allocation of facility costs to research and development in 2014 as compared to 2013.
General and administrative expenses decreased 26% to $6.3 million in 2014 from $8.5 million in 2013. General and administrative expenses were lower in 2014 primarily due to lower personnel, professional and facility overhead costs. Included in general and administrative personnel expenses for 2013 is approximately $1.5 million for non-recurring severance costs. There were no such costs in 2014. The reduced costs were partially offset by an increased allocation of facility costs to general and administrative in 2014 as compared to 2013.
Fourth Quarter 2014 Results
For the fourth quarter ended December 31, 2014, GenVec reported net income of $1.7 million, or $0.11 per share, compared with a net loss of $0.9 million, or $0.07 per share, for the comparable prior year period. The company reported revenues of $3.5 million in the fourth quarter of 2014 compared to $0.1 million for the same period in 2013. This increase was primarily due to the milestone payment of $3 million resulting from the October 28, 2014 achievement of the fourth milestone in our collaboration with Novartis on the discovery and development of novel treatments for hearing loss and balance disorders. There were no milestones achieved in the comparable prior year period. Additionally, we achieved revenue increases related to our FMD program, $0.2 million, and our malaria program, $0.1 million. Increased revenue in each case is attributable to increased work scope and laboratory capabilities in the 2014 period as compared to the same period in 2013. Research and development expenses increased 295% in 2014 from $0.1 million in the fourth quarter of 2013 to $0.6 million in the fourth quarter of 2014 resulting mainly from increased personnel and material costs. General and administrative expenses in the fourth quarter of 2014 increased 9% to $1.3 million from $1.1 million in the comparable period in 2013 primarily as a result of increased personnel costs.
As of March 20, 2015, the company had $13.0 million in cash, cash equivalents, and investments (unaudited).
Conference Call Information
GenVec will hold a conference call today at 10:00 a.m. EDT to discuss the company's financial results and 2015 business outlook.