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Cutbacks Complete, CuraGen Reports Lower Revenues, Higher Losses

NEW YORK, Jan. 30-Cutbacks in service offerings and a new focus on drug development meant that CuraGen reported lower revenues and increased for the fourth quarter of 2002, the company said in an earnings report today.

 

For the quarter ended Dec. 31, 2002, CuraGen collected $3.8 million in revenue, down 32 percent from the $5.5 million it gathered in the equivalent quarter of 2001. The company said that the shortfall was an expected result of its decision to retool its business away from services and toward later-stage clinical development.

 

R&D expenditures fell 10 percent from $20 million in the fourth quarter of 2001 to $18 million in the quarter just ended.

 

In November, the company announced a planto lay off staff, rein in early drug discovery costs and push later-stage drug candidates forward.

 

Net loss for the quarter was $28.9 million or $0.59 per share, including an $11 million restructuring charge. Losses for the final quarter of last year were $16.1 million or $0.33 per share.

 

CuraGen held $414.8 million in cash and investments as of Dec. 31, 2002.

 

In the remainder of 2003, CuraGen hopes to begin phase I clinical trials for a mucositis treatment and add new management in clinical development. The company's instrumentation subsidiary, 454 Corporation, plans to begin commercializing its technology in the second half of the year.

 

CuraGen expects that its 2003 revenues will be roughly $11 million, down 60 percent from 2002 revenues. It forecasts R&D and SG&A expenses to decline by about 5 to 10 percent, and for overall net losses for 2003 to be about 8 to 12 percent less than 2002. The company predicts an annual cash burn for 2003 of $85 million to $95 million.

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