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Incyte Annual Report, Year Ended Dec 31, 1998

Filing Date
Filed March 25, 1999
Period End
December 31, 1998
Security
INCY
In the record · 2016–202610-K1510-Q348-K107

INCY filed 15 annual reports (10-K), 34 quarterly reports (10-Q) and 107 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Dec ’16Dec ’16
  2. FY2018 annual report10-K · Feb ’19Feb ’19
  3. Leadership change8-K · Jan ’22Jan ’22
  4. Leadership change8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K filed March 25, 1999. Cited figures are marked; the original filing is the authoritative source.

Incyte Pharmaceuticals, Inc. reported total 1998 revenues of $134.8 milliona, up from $90.0 million in 1997, and net income of $3.5 million, or $0.12 diluted per share, compared with $6.9 million in 1997.

Results were held down by a one-time $11.0 millionb charge for purchased in-process R&D tied to the September 1998 Hexagen acquisition and $1.2 million in acquisition-related charges. Revenue came primarily from non-exclusive database access fees under agreements with 22 companies as of December 31, 1998, and the company's database modules span human, microbial and animal genomic data, plus microarray gene expression services and SNP discovery. Management guided to heavier spending in 1999, with about $45 million planned for genomic sequencing, mapping and SNP discovery programs and an expected net loss of approximately $20 million for 1999.

The company does not expect positive operating cash flow in 1999 but says existing resources and cash flow should be adequate for at least the next twelve months. It held $111.2 millionc in cash, cash equivalents and marketable securities at year-end 1998, and stockholders' equity was $179.6 million.

The filing highlights material risks, including Affymetrix patent infringement lawsuits against Incyte and its Synteni subsidiary, a preliminary injunction hearing scheduled for April 30, 1999, and a company statement that it cannot reasonably estimate a possible range of loss. Other risks include dependence on a limited number of database collaborators, uncertain patent protection for gene sequences and SNPs, and an unproven SNP business that has generated no revenues to date.

02—Key points

Key Highlights

  1. Total revenues rose to $134.8 million in 1998 from $90.0 million in 1997 and $41.9 million in 1996.
  2. Net income was $3.5 million ($0.12 diluted per share) in 1998, down from $6.9 million ($0.26 diluted per share) in 1997, after a $11.0 million in-process R&D charge from the Hexagen acquisition.
  3. Research and development expenses were $97.2 million in 1998, up from $72.5 million in 1997.
  4. Twenty-two companies had database agreements as of December 31, 1998; one collaborator contributed 12% of 1998 revenues.
  5. Management expects a net loss of approximately $20 million in 1999 and plans about $45 million of spending on sequencing, mapping and SNP discovery programs, with a return to profitability projected in the second half of 2000.
  6. Cash, cash equivalents and marketable securities totaled $111.2 million at December 31, 1998.
  7. Affymetrix lawsuits alleging patent infringement by Synteni and Incyte are pending; a preliminary injunction hearing is scheduled for April 30, 1999.

03—Questions

Frequently Asked Questions

  1. How did Incyte perform financially in 1998?

    Revenues grew to $134.8 million from $90.0 million, but operating income was only $32 thousand after a $11.0 million in-process R&D charge and $1.2 million in acquisition-related charges. Net income was $3.5 million, or $0.12 per diluted share.

  2. What is the company's outlook for 1999?

    The company intends to invest approximately $45 million in genomic sequencing, mapping and SNP discovery programs in 1999 and expects a net loss of about $20 million for the year. It does not expect positive cash flow from operations in 1999.

  3. What are the main risks flagged in the filing?

    Key risks include the Affymetrix patent lawsuits, for which the company cannot reasonably estimate a possible range of loss; dependence on renewing database collaborations; uncertain patent protection for gene sequences and SNPs; and an unproven SNP business with no revenues to date from Hexagen.

  4. How much cash does Incyte have and will it need more?

    Cash, cash equivalents and marketable securities were $111.2 million at December 31, 1998. The company believes existing resources and cash flow will be adequate for at least the next twelve months but says it may need additional funding, which may not be available on favorable terms.

  5. What is diaDexus?

    diaDexus, LLC is a 50-50 joint venture formed in September 1997 with SmithKline Beecham Corporation to develop molecular diagnostic products. Incyte's equity investment in it was $8.2 million at December 31, 1998, and it recorded losses from the venture of $1.5 million in 1998.

04—Continue

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