Monogram Reports Preliminary 2008 Results

Published: 15-Jan-2009

Monogram Biosciences, Inc. (Monogram) has declared its preliminary fourth quarter and full-year 2008 revenues. For the full year 2008, the company now expects revenues of about $62 million, up 44%, compared with the prior year. The company established 2009 revenue outlook of between $66 million and $70 million based on expected growth which, in conjunction with reduction in costs, should achieve cash flow breakeven by the fourth quarter of 2009.

Three separate sources of growth are expected to drive Monogram's 2009 revenues:

Increased sales of Trofile due to its clinically proven high level of sensitivity for selecting appropriate patients for CCR5 therapy and an increasingly positive profile for Selzentry, Pfizer's CCR5 antagonist, as a treatment option for a broad group of treatment-experienced HIV patients.

Sales of HERmark for assessment of breast cancer patients' HER2 status, and later in 2009, for assessment of Herceptin resistance pathways for HER2 positive patients.

Use of VeraTag assays for our expanded portfolio in drug development programs focused on EGFR/HER targets.

"We are pleased to achieve revenues for 2008 that are substantially increased over last year and consistent with our prior guidance," said Bill Young, Monogram's chief executive officer. Although 2009 revenue guidance is established at $66-70 million, deferred revenue of $4-5 million from sales of Trofile assays to Pfizer outside of the U.S. could put non-GAAP revenue at $70-75 million. "We expect further revenue growth in 2009 in both HIV and oncology," continued Young. "Our plan for 2009 is tightly focused on those key programs and deliverables that we believe will drive the most significant shareholder value. Capitalizing on the proven strong clinical utility of Trofile and the outstanding progress in our oncology programs are important priorities, as is close management of our cash flow."

Cash flow target

"A key financial goal for Monogram is to achieve cash flow breakeven by the fourth quarter of 2009 and then to remain cash flow positive on a sustainable basis," said Alfred Merriweather, Monogram's chief financial officer. "We expect to attain this goal at the low end of our full year revenue guidance range of $66-$70 million."

"We have taken a number of steps to reduce our use of cash," continued Merriweather. "These include reduction of costs related to personnel, programs and overhead activities. Additional steps will be taken if necessary to achieve our goal of cash flow breakeven. Together, our cost reductions have taken over $10 million out of our planned 2009 expenses. These actions have also significantly reduced the level of revenues at which cash flow breakeven is projected from $23-25 million per quarter to less than $20 million per quarter."

Monogram had $16 million in cash at December 31, 2008. "Our goal is to reduce our use of cash to approximately $6-8 million for the year," noted Merriweather.

HIV update

"We've seen significant progress in our HIV franchise during 2008," commented Young. "In particular, the introduction and clinical validation of our enhanced Trofile Assay has solidified Trofile's role as the only clinically validated way to select the appropriate patients for CCR5 antagonists, such as Pfizer's Selzentry. Looking to the future, we believe that the CCR5 class of HIV drugs has an important role to play in HIV treatment and we anticipate increased use of Trofile for assessment of treatment-experienced patients for Selzentry therapy. Pfizer's reanalysis of their earlier phase III trial in treatment-naive patients suggests that, in time and after regulatory review and approval, Selzentry may have even broader applicability."

"We are excited about the multiple opportunities for establishing VeraTag as an important tool in the development and use of targeted cancer therapies," continued Young. "Clinically validating HERmark and extending it from measurements of HER2 status to a broader assessment of tumor status has the potential to make HERmark a very important tool for oncologists. Similarly, the availability of an expanded range of VeraTag assays has the potential to open up opportunities across multiple cancer types and therapies."

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