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Launch of DeltaBase Propels DeltaGen Q4, 2000 Revenue Growth

NEW YORK, Feb 6 – Deltagen said Tuesday its fourth quarter revenue shot up to $1.3 million, compared with $318,000 in the corresponding quarter last year, while revenue for the year rose 68 percent to $2.1 million, due to new subscriptions to its DeltaBase gene function database.

During the year Deltagen of Menlo Park, Calif., launched DeltaBase and signed subscription agreements with GlaxoSmithKline and Pfizer. Deltagen charged Pfizer $15 million for a three-year subscription and said it signed a similar deal with GlaxoSmithKline.

Costs and expenses for the fourth quarter surged 98 percent to $10.6 million, compared with $5.4 million in the 1999 fourth quarter. For the full year, costs and expenses were up 148 percent to $37.3 million. The company attributed the increase to its investments in expanding the production pipeline of gene targets for DeltaBase as well as development costs for DeltaXpress, a therapeutic protein discovery program.

The company increased its number of employees to 212 from 113 at the end of 1999.

Deltagen posted a net loss of $7.5 million, or 26 cents a share, compared with a net loss of $5.1 million, or $4.02 a share a year ago. For the year, Deltagen recorded a net loss of $54.6 million or $4.32 a share, compared with a net loss of $13.8 million, or $12.82 a share in 1999.

The company, which had cash, cash equivalents, and short-term investments totaling $118.3 million at the end of 2000, following its IPO last year, expects its cash outflow to reach about $30 million to $35 million before capital expenditures and financing activities in 2001. The company does not foresee profitability for this year.

" Although we do not expect to achieve positive cash flow overall in 2001, due primarily to our increased research and development investments in our DeltaXpress and secreted protein programs, we believe that this quarter highlights our ability to achieve positive cash flow from the DeltaBase program as a source of funding our line extension and drug discovery efforts," Bill Matthews, CEO of Deltagen, said in a statement.

Deltagen said that it expects an R&D collaboration in the secreted protein field sometime in 2001 as well as new DeltaBase agreements.

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