GenVec reports net loss of $4.2M for second-quarter 2010

Aug 6 2010

GenVec, Inc. (Nasdaq: GNVC) today announced its financial results for the second quarter ended June 30, 2010.  

GenVec reported a net loss of $4.2 million ($0.03 per share) for the three months ended June 30, 2010 compared to a net loss of $4.8 million ($0.05 per share) in the comparable quarter of 2009. For the six months ended June 30, 2010, GenVec's net loss was $8.9 million ($0.07 per share) compared to a net loss of $10.5 million ($0.12 per share) for the six months ended June 30, 2009.  

Revenues for the three-month and six-month periods ended June 30, 2010 were $3.2 million and $6.1 million, respectively, compared to revenues of $3.8 million and $7.6 million in the comparable prior year periods. The decrease for the three and six month periods ended June 30, 2010 is primarily due to decreased revenue associated with our agreement with the Department of Homeland Security (DHS) for the Foot and Mouth Disease (FMD) program of $928,000 and $2.2 million, respectively.  The lower revenue under the DHS agreement is a result of the decreased work scope and effort in 2010 as compared to the 2009 periods.  Revenue associated with our HIV program also decreased $692,000 and $856,000 in the three-month and six-month periods ended June 30, 2010, respectively, as compared to the prior year periods.  The lower revenue under the HIV agreements is a result of decreased work scope and effort as compared to the 2009 periods.  The decreased revenue associated with our FMD and HIV programs have been partially offset by increased revenue of $799,000 and $1.3 million, respectively, under our hearing loss and balance disorder program with Novartis that began in January 2010.

Operating expenses were $7.4 million and $15.1 million for the three-month and six-month periods ended June 30, 2010, respectively, representing decreases of 13 percent and 15 percent as compared to $8.5 million and $17.8 million in the comparable prior year periods. The decrease in both periods is primarily due to lower manufacturing cost and to a lesser extent a decrease in outside clinical costs related to our TNFerade™ program.  These decreases are partially offset in both periods by increases related to higher professional and facility costs.

GenVec ended the second quarter of 2010 with $39.0 million in cash, cash equivalents, and investments.

"We anticipate revenues for 2010 will be between $14.0 million and $16.0 million. We currently project our cash burn to be between $10.0 million and $12.0 million for the 12 months ending June 30, 2011," commented GenVec's Senior Vice President and Chief Financial Officer, Douglas J. Swirsky.

The Company previously announced that it has engaged Wells Fargo Securities, LLC to conduct a comprehensive review of strategic alternatives aimed at enhancing shareholder value. Strategic alternatives the Company may pursue could include, but are not limited to, execution of the Company's operating plan, sale of Company assets, partnering or other collaboration agreements, or a merger, sale of the Company or other strategic transaction. There can be no assurance that the exploration of strategic alternatives will result in any agreements or transactions, or that, if completed, any agreements or transactions will be successful or on attractive terms. The Company does not intend to disclose developments with respect to this process unless and until the evaluation of strategic alternatives has been completed or the board of directors has approved a specific transaction.