Second Quarter Results

PYROSEQUENCING AB Six months ended June 30, 2000 Company Completes Successful IPO and Reports Continued Order Growth "We are extremely gratified by the acceptance the PSQ@ 96 System has received worldwide", said Erik Walldén, President and CEO. "To date we have received more than 25 orders for our system from 17 different customers in Europe, the United States and Japan. Customers from large Pharma, Biotechnology and Academia are using the PSQ@ 96 System to advance applied genomics in both human health care and agricultural biotech." * IPO completed - raised 875 MSEK or $99 million * Rapid increase in orders for purchase of PSQ@ 96 System - 25 orders received to date * Global acceptance as revenue is recognized from Europe, the US and in Japan * Preferred Technology Program (PTP@) announced - a system for ultra high throughput SNP analysis * Strong pipeline of prospective customers from successful marketing campaign * Distribution agreements signed with B&L Systems and Paul Bucher AG for BeNeLux and Switzerland * Distribution agreement signed with Sumitomo Corporation for the Japanese market Pyrosequencing AB (PYRO Stockholm) today reported a 91% increase in net sales for the quarter ended June 30, 2000, over the first quarter of 2000, and an increase in PSQ@ 96 System orders of 100% for the same period. Additionally the Company announced its first sale in Japan in the second quarter. The Company reported a net loss of $ 3.0 million, or $ 0.18 per share, for the quarter ended June 30, 2000, compared to net loss of $ 2.2 million or $ 0.19 per share, for the same period last year. Revenue for the second quarter of 2000 was $ 0.7 million and was generated by sales of the PSQ@ 96 System and related reagent kits. The PSQ@ 96 System is an instrument, reagent kits and soft ware, used in applied genomics and was launched by Pyrosequencing AB in February 2000. Operating expenses increased from $ 2.2 million in the second quarter of 1999 to $ 3.6 million in the second quarter of 2000. The increase in operating expenses reflects the costs associated with the company's development of a worldwide sales organization. During June the Company completed its public offering and raised $ 99 million net of expenses. Pyrosequencing AB will use the proceeds of the offering to expand it sales and marketing organization and to maintain a technology leadership position in the market place. Pyrosequencing AB has it's own sales force in Scandinavia, Germany, the United Kingdom and in the United States. The Company has distribution agreements with Sumitomo Corporation for Japan, B&L Biosystems for Benelux and Paul Bucher for Switzerland, which significantly increases the Companys´ access to the market. Pyrosequencing AB develops, manufactures and sells complete systems for applied genetic analysis. In February 2000 the PSQ@ 96 System was launched to the market. The system includes an instrument, reagent kits, software and sample preparation tool for SNP analysis. The system is sold to research groups at pharmaceutical companies, academia, genomics and biotech firms, as well as to the ag/biotech industry. The Company believes it is the leading supplier of these systems based on the fact that it has sold 12 instruments this year, including nine in the second quarter, and has firm orders for another thirteen instruments. Marketing and Sales The global launch campaign initiated in February this year has generated a strong response from the market with over 2000 inquiries on Pyrosequencing@ technology and PSQ@96 System for SNP analysis and genotyping. Approximately 50% have been generated in the US and the rest primarily from Europe and Japan. Specifically strong demand has been seen from major pharmaceutical companies, leading genomics companies, contract research organizations, companies in agricultural biotech and prestigious academic institutes. A fully trained organization in North America, Europe and Japan is actively following up a rapidly increasing bank of prospective customers for PSQ@96 System. Research and Development The Company plans to enhance PSQ@96 System which currently includes to a SNP kit and dedicated software for automatic SNP scoring, by the addition of a kit including reagents and software for Tag sequencing. Expected to be commercially available early next year, this product will address a new market segment with a rapidly increasing demand for using short stretches of DNA (Tags) as means of identifying genes and genomes. The development of a system for ultra high throughput SNP analysis under the program of PTP@, based on Pyrosequencing@ reactions on 384 micro well plates, is well under way. The system is expected to have the capacity to score 100.000 SNP per day, in a fully automated operation. The first PTP@ System is expected to be installed in December 2000. A new application (allele frequency) was released as an application note in June and will be available as separate Software product later this year. An updated version of the SNP software V1.1 was released in August. Financial Position At June 30, cash, cash equivalents and short-term investments totaled $ 104.3 million as compared to $ 11.4 million at December 31, 1999. Pyrosequencing has no debt financing and total equity amounted to $ 105.8 million and $ 12.2 million at June 30, 2000 and December 31, 1999, respectively, providing an equity to assets ratio of 96.7% (80.2%) Pyrosequencing AB raised $ 99 million in a public offering in June 2000. Shares were offered to institutional investors worldwide and to retail investors in Sweden, resulting in significant geographic broadening of our shareholder base. Deutsche Bank acted as global co-ordinator and bookrunner of the Offering, with Alfred Berg and SG Cowen as co-lead managers. Capital expenditures during the period amounted to $ 0.3 million (0.4). New members of the Board of Directors At the ordinary Annual General Meeting in April the following new Board members were elected: Björn Svedberg, Dr. hc (chairman), Urban Jansson, Bengt Samuelsson, M.D., Ph.D. Strengthening of the management On May 24, 2000 Harry Wilcox joined Pyrosequencing AB as Executive Vice President and Chief of Finance and Corporate Development. Mr. Wilcox is based at the company's subsidiary in Westborough, MA, USA. Harry Wilcox comes most recently from Cambridge Neuroscience, Inc. where he served as CEO. Human resources At the end of the period the total number of employees in Pyrosquencing AB, including subsidiaries, was 65. This report has not been subject to examination by the Company's auditors. Next Report rd The 3 quarters results will be published on Wednesday, October 25,2000. Pyrosequencing AB (publ) Erik Walldén, President and CEO Pyrosequencing AB develops, manufactures and markets complete systems for applied genetic analysis based on its proprietary Pyrosequencing@ technology. Applied genetic analysis may be used for drug development, drug selection and diagnostics. Pyrosequencing's technology addresses the increasing demand for applied genetic analysis across various markets, including research and clinical routine testing and large-scale customized industrial applications such as drug development by pharmaceutical companies. Pyrosequencing AB Media Erik Wallden Sören Densjö President and CEO Densjö Communications AB +46 18 56 59 02 +46 70 585 0525 +46 70 326 98 70 Harry W. Wilcox Theresa McNeely Executive Vice President Vice President Chief of Finance and Corporate Development Feintein Kean Partners +1 508 389 9911 ext. 120 +1 617 577 8110 Certain statements in this press release are forward-looking. These may be identified by the use of forward-looking words or phrases such as "believe," "expect," "intend," "anticipate," "should," "planned," "estimated," and "potential," among others. These forward-looking statements are based on Pyrosequencing's current expectations. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for such forward-looking statements. In order to comply with the terms of the safe harbor, Pyrosequencing notes that a variety of factors could cause actual results and experience to differ materially from the anticipated results or other expectations expressed in such forward-looking statements. Such uncertainties and risks include, but are not limited to, risks associated with management of growth and international operations (including the effects of currency fluctuations), variability of operating results, the commercial development of the DNA sequencing and genomics market, nucleic acid-based molecular diagnostics market, and genetic vaccination and gene therapy markets, competition, rapid or unexpected changes in technologies, fluctuations in demand for Pyrosequencing's products (including seasonal fluctuations), difficulties in successfully adapting the Company's products to integrated solutions and producing such products, and the Company's ability to identify and develop new products and to differentiate its products from competitors. ------------------------------------------------------------ This information was brought to you by BIT The following files are available for download: The full report The full report