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Genitope Corporation Announces Financial Results for Quarter Ended March 31, 2006

Posted on: Thursday, 4 May 2006, 09:05 CDT

Genitope Corporation (Nasdaq: GTOP) today reported financial results for the quarter ended March 31, 2006.

Financial Results

For the first quarter of 2006, Genitope Corporation reported total operating expenses of $11.9 million and a net loss of $10.9 million, or $0.33 per share. This compares to total operating expenses of $7.6 million and a net loss of $7.0 million, or $0.25 per share, for the same quarter of 2005. During the first quarter of 2006, we adopted the provisions of, and now account for stock-based compensation in accordance with, the Financial Accounting Standards Board's Statement of Financial Accounting Standard No. 123--revised 2004 ("SFAS 123R"), "Share-Based Payment." Our higher operating expenses reported for the first quarter of 2006 were due in part to $1.5 million of stock option expense recognized as a result of the adoption of SFAS 123R, but also to higher expenses related to increased staffing levels, additional corporate infrastructure and other operating costs required to support the company's growth, as well as recognition of higher rent expense associated with the lease agreements for the company's new manufacturing facility and corporate headquarters. These expense increases for the quarter were partially offset by higher interest income in 2006, compared to 2005, due to higher average monthly balances for cash, cash equivalents and marketable securities and higher interest rates during 2006 relative to 2005.

As of March 31, 2006, Genitope Corporation had cash, cash equivalents and marketable securities of $119.7 million, including $34.6 million that secures a letter of credit related to the construction build-out costs of the company's new manufacturing facility and corporate headquarters and is restricted as to its use. The increase over the comparable balance at December 31, 2005 of $81.1 million is primarily due to the completion, in February of 2006, of a follow-on public offering of 7,360,000 shares of common stock at a public offering price of $8.50 per share, with net proceeds to the company of approximately $58.7 million.

Recent Corporate Progress

"Operationally, we took several steps forward in the first quarter of the year," said Dan W. Denney Jr., Genitope Corporation's Chairman and Chief Executive Officer, "We made terrific progress on the build-out of our new manufacturing facility and corporate headquarters, we initiated a Phase 2 clinical trial of MyVax(R) personalized immunotherapy in Chronic Lymphocytic Leukemia and we completed a follow-on public offering that raised over $58 million for the company."

About Genitope Corporation

Genitope Corporation (Redwood City, California) is a biotechnology company focused on the research and development of novel immunotherapies for the treatment of cancer. Genitope Corporation's lead product candidate, MyVax(R) personalized immunotherapy, is a patient-specific active immunotherapy based on the unique genetic makeup of a patient's tumor and is designed to activate the patient's immune system to identify and attack cancer cells. Genitope Corporation is conducting a pivotal phase 3 clinical trial using MyVax (R) personalized immunotherapy in previously untreated follicular non-Hodgkin's lymphoma patients.

Forward-Looking Statements

This news release contains "forward-looking statements." For this purpose, any statements contained in this press release that are not statements of historical fact may be deemed forward-looking statements. Words such as "believes,""anticipates,""plans,""expects,""will,""intends" and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause Genitope Corporation's results to differ materially from those indicated by these forward-looking statements, including without limitation, risks related to the progress, timing and results of Genitope Corporation's clinical trials, difficulties or delays in obtaining regulatory approval, competition from other pharmaceutical or biotechnology companies, the risks of growth and dependence on key personnel, risks relating to the completion of our new facility and to the manufacturing of MyVax(R) personalized immunotherapy, intellectual property matters, and other risks detailed in Genitope Corporation's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2005. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Genitope Corporation undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date hereof. GENITOPE CORPORATION (A DEVELOPMENT STAGE ENTERPRISE) UNAUDITED CONDENSED STATEMENTS OF OPERATIONS (in thousands, except per share data) Cumulative Period from Three Months Ended August 15, 1996 March 31, (date of inception) ------------------ to March 31, 2006 2005 2006 --------- -------- ------------------- Operating expenses: Research and development $8,686 $5,883 $109,619 Sales and marketing 834 475 8,261 General and administrative 2,367 1,274 19,889 --------- -------- ------------------- Total operating expenses 11,887 7,632 137,769 --------- -------- ------------------- Loss from operations (11,887) (7,632) (137,769) Loss on extinguishment of convertible notes and cancellation of Series E convertible preferred stock warrants - - (3,509) Interest expense (1) (1) (3,009) Interest and other income, net 1,026 637 6,619 --------- -------- ------------------- Net loss (10,862) (6,996) (137,668) Dividend related to issuance of convertible preferred shares and the beneficial conversion feature of preferred stock - - (18,407) --------- -------- ------------------- Net loss attributable to common stockholders $(10,862) $(6,996) $(156,075) ========= ======== =================== Basic and diluted net loss per common share attributable to common stockholders $(0.33) $(0.25) ========= ======== Shares used in computing basic and diluted net loss per share attributable to common stockholders 32,466 28,176 ========= ======== GENITOPE CORPORATION (A DEVELOPMENT STAGE ENTERPRISE) UNAUDITED CONDENSED BALANCE SHEETS (in thousands, except per share and share data) March 31, December 31, 2006 2005 ------------ ------------- ASSETS Current assets: Cash, cash equivalents and marketable securities $ 85,063 $ 42,358 Prepaid expenses and other current assets 2,727 2,210 ------------ ------------- Total current assets 87,790 44,568 Restricted cash and marketable securities 34,627 38,762 Property and equipment, net 49,022 31,065 Other assets 1,000 1,000 ------------ ------------- Total assets $ 172,439 $ 115,395 ============ ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,874 $ 4,084 Accrued and other current liabilities 10,694 4,128 Lease financing liabilities - current 4,446 4,400 Current lease obligations 24 24 ------------ ------------- Total current liabilities 17,038 12,636 Lease financing liabilities - noncurrent 18,099 14,997 Accrued interest - noncurrent 1,106 790 Noncurrent lease obligations 18 24 ------------ ------------- Total liabilities 36,261 28,447 ------------ ------------- Stockholders' equity Common stock, $0.001 par value, 65,000,000 shares authorized; Issued and outstanding: 35,815,524 shares at March 31, 2006 and 28,454,385 shares at December 31, 2005 36 28 Additional paid-in capital 292,650 232,620 Deferred stock compensation (112) (166) Accumulated other comprehensive loss (321) (321) Deficit accumulated during development stage (156,075) (145,213) ------------ ------------- Total stockholders' equity 136,178 86,948 ------------ ------------- Total liabilities and stockholders' equity $ 172,439 $ 115,395 ============ =============

Source: Business Wire

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