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Incyte Annual Report, Year Ended Dec 31, 1999

Filing Date
Filed March 22, 2000
Period End
December 31, 1999
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 22, 2000. Cited figures are marked; the original filing is the authoritative source.

Incyte Pharmaceuticals, Inc. reported a 1999 net loss of $26.8 milliona, or $0.95 per share, on revenues of $157.0 million, compared with net income of $3.5 million on revenues of $134.8 million in 1998.

Revenue came primarily from non-exclusive database access fees paid by more than 20 database collaborators, while research and development expense rose to $146.8 millionb from $97.2 million, driven by genomic sequencing, mapping, and SNP discovery initiatives. The Company stated it expects to report a net loss at least through 2000 as it increases investment in sequencing, bioinformatics, expression database development, and SNP discovery. The balance sheet shows cash, cash equivalents and marketable securities of $66.9 million at December 31, 1999, down from $111.2 million a year earlier, and an accumulated deficit of $55.2 million.

In February 2000, the Company strengthened its capital position by issuing $200.0 millionc of 5.5% convertible subordinated notes due 2007 (net proceeds about $196.8 million) and 2,000,000 shares of common stock in a private placement for $422.0 million gross (net proceeds $398.3 million). The Company also faces Affymetrix patent infringement lawsuits against Incyte and its Synteni subsidiary, for which it cannot reasonably estimate a possible range of loss.

The Company's 50-50 joint venture with SmithKline Beecham, diaDexus, LLC, is developing molecular diagnostics, and Incyte recorded $5.6 milliond of losses from that venture in 1999. Management expects cash requirements to increase in 2000 and states that existing resources are adequate to satisfy capital needs for at least the next twelve months.

02—Key points

Key Highlights

  1. 1999 revenues of $157.0 million, up from $134.8 million in 1998, driven primarily by expanded database agreements and new database customers
  2. 1999 net loss of $26.8 million ($0.95 per share), compared with 1998 net income of $3.5 million ($0.12 diluted per share)
  3. Research and development expense rose to $146.8 million in 1999 from $97.2 million in 1998, reflecting sequencing, mapping and SNP discovery initiatives
  4. Cash, cash equivalents and marketable securities fell to $66.9 million at year-end 1999 from $111.2 million at year-end 1998
  5. February 2000 financings: $200.0 million of 5.5% convertible subordinated notes due 2007 and a $422.0 million private placement of 2,000,000 common shares
  6. Affymetrix lawsuits alleging patent infringement by Incyte and Synteni remain pending; the Company cannot reasonably estimate the possible range of loss
  7. Over 20 database collaborators, including Abbott, Pfizer, Novartis and Eli Lilly, with no single customer contributing 10% or more of 1999 revenues

03—Questions

Frequently Asked Questions

  1. Why did Incyte swing from profit in 1998 to a loss in 1999?

    The filing attributes the change primarily to investments in genomic sequencing, mapping, bioinformatics and SNP discovery, which resulted in a net loss in 1999. Research and development expense increased to $146.8 million from $97.2 million, and selling, general and administrative expense rose to $37.2 million from $25.4 million.

  2. Does Incyte expect to return to profitability soon?

    The Company states it expects to report a net loss at least through 2000 because it intends to continue investing in sequencing, bioinformatics, expression database development and SNP discovery. It also notes that it may incur further losses from strategic investments.

  3. How is Incyte funding its operations after the 1999 cash decline?

    In February 2000 Incyte issued $200.0 million of 5.5% convertible subordinated notes due 2007, with net proceeds of about $196.8 million, and sold 2,000,000 common shares for $422.0 million gross, with net proceeds of $398.3 million. The Company believes existing resources will be adequate for at least the next twelve months.

  4. What is the main legal risk facing Incyte?

    Affymetrix has sued Incyte and its Synteni subsidiary for alleged patent infringement, seeking injunctions, damages and trebled damages for alleged willful infringement. Incyte believes it has meritorious defenses but states that it cannot reasonably estimate the possible range of any loss, and that litigation is expected to continue to cause substantial expenses.

  5. How does Incyte generate revenue?

    Revenue comes primarily from non-exclusive annual database access fees paid by collaborators such as pharmaceutical and biotechnology companies. Milestone and royalty payments may be received if collaborators develop products from database information, but the Company does not expect these to contribute substantially to revenues for several years.

04—Continue

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