CuraGen Corporation – ‘8-K’ for 10/24/02 – EX-99.1

On:  Thursday, 10/24/02, at 4:47pm ET   ·   For:  10/24/02   ·   Accession #:  927016-2-5032   ·   File #:  0-23223

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                         3      9K 
 2: EX-99.1     Press Release                                          4     20K 

EX-99.1   —   Press Release

EX-99.1
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[CURAGEN CORPORATION LOGO APPEARS HERE]                                         

Contact:                                                                        
--------                                                                        
Mark R. Vincent                                                                 
Director of Corporate Communications & Investor Relations                       
mvincent@curagen.com                                                            
1-888-GENOMICS                                                                  
www.curagen.com                                                                 

FOR IMMEDIATE RELEASE                                                           
---------------------                                                           

CuraGen Reports Third Quarter 2002 Financial Results

 Pipeline Advancements, Technology Developments, and
Management Additions Highlight Quarter

New Haven, CT - October 24, 2002 - CuraGen Corporation (NASDAQ: CRGN), a        
genomics-based pharmaceutical company, today reported financial results for the 
third quarter ended September 30, 2002.                                         

During the third quarter of 2002, revenue decreased to $6 million, as compared  
to $6.1 million for the same period in 2001. Third quarter 2002 revenue included
a milestone payment of $2.9 million from Bayer AG. Research and development     
expenditures increased 22.4% to $21.3 million during the third quarter of 2002, 
as compared to $17.4 million for the same period in 2001. CuraGen's net loss for
the third quarter of 2002 was $19.9 million or $.41 per common share, as        
compared to $11.1 million or $.23 per common share for the same period in 2001. 

As of September 30, 2002, CuraGen had available cash and investments of         
approximately $431 million, and convertible debentures of $150 million due in   
February 2007.                                                                  

"During the quarter, CuraGen scientists made significant progress in advancing  
our emerging pipeline and strengthening our ability to monetize this progress.  
CuraGen is in a strong financial position, and with recent additions to our     
senior management team and Board of Directors, we believe that the necessary    
resources are in place to advance our preclinical candidates into a robust      
clinical pipeline," stated Jonathan M. Rothberg, Ph.D., Founder, Chairman, and  
CEO of CuraGen Corporation. "We are culturally best suited to turn the current  
biotech financing environment into an opportunity and to continue distinguishing
ourselves through the depth of our pipeline, our focus, our performance, and our
commitment to making a difference," added Dr. Rothberg.                         

Third Quarter 2002 Accomplishments                                              
----------------------------------                                              

Protein, Antibody, and Small Molecule Drug Pipeline                             
---------------------------------------------------                             

o    To date, CuraGen scientists have initiated approximately 200 projects based
     upon newly discovered drug targets. Projects underway at CuraGen include 57
    protein projects, of which 5 have been advanced into validated therapeutic
candidates; 96 antibody projects, from which 28 fully human monoclonal
 antibodies are being evaluated in conjunction with Abgenix as potential
  therapeutics; and 55 small molecule projects, of which 17 screens are in
progress or have been completed with Bayer.                           

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o    CuraGen researchers published a study demonstrating that CG53135 (FGF-20), 
  a potential protein therapeutic under development at CuraGen, stimulates
  cell growth, reduces tissue inflammation and degeneration, and minimizes
     the severity and extent of mucosal tissue damage associated with intestinal
  inflammation. These research findings, titled, "A Novel Human Fibroblast
    Growth Factor Treats Experimental Intestinal Inflammation", were published
in the October 2002 edition of Gastroenterology.                      

o    During the third quarter, seven additional patents were issued to CuraGen  
     covering gene-related discoveries and core functional genomic and proteomic
technologies. CuraGen has filed approximately 400 patent applications 
  covering greater than 3,500 pharmaceutically tractable gene transcripts,
proteins, and their related utility for treating diseases.            

Technology Update                                                               
-----------------                                                               

o    CuraGen and Bayer scientists completed the development of an innovative    
technology capable of predicting drug toxicity with a high degree of  
 accuracy and have successfully evaluated more than 150 preclinical drug
  compounds. The Predictive Toxicogenomics Screen(TM) (PTS) evaluates drug
compound toxicities using very small quantities of compounds that are 
available immediately after high-throughput drug screening and well in
advance of the expensive drug scale-up required for mammalian safety  
 experiments. By applying the PTS early in the drug development process,
scientists are able to rank-order compounds by their predicted safety 
profiles. By providing additional insight into a drug's toxicity, this
 pioneering technology is capable of generating information that enables
scientists to focus resources on the most promising projects.         

o    Scientists from 454 Corporation, CuraGen's technology development          
  subsidiary, discussed the initial results from their rapid analysis of a
     viral genome at TIGR's Genome Sequencing and Analysis Conference in Boston,
MA on October 2, 2002. 454 scientists are developing technologies to  
  analyze entire genomes within days, instead of years. These technologies
 have applications across biodefense, agriculture, drug development, and
personalized medicine.                                                

Management and Board of Directors Additions                                     
-------------------------------------------                                     

o    Timothy Shannon, M.D., former Senior Vice President of Global Medical      
Development at Bayer, joined CuraGen's management team as Senior Vice 
   President of R&D and Chief Medical Officer in September 2002. Dr. Shannon
is an experienced scientist, physician, and manager with the skills to
     prioritize and manage CuraGen's emerging pipeline of protein, antibody, and
     small molecule drugs. Most recently, Tim held global responsibility for all
    strategic and operational aspects of clinical development, drug safety and
    pharmacovigilance at Bayer, while managing ten vice presidents who oversaw
operations in four countries and 1,000 people worldwide.              

o    Patrick Zenner, the immediate past President and Chief Executive Officer of
    Hoffmann-La Roche Inc., North America, joined CuraGen's Board of Directors
in August 2002. Mr. Zenner is a 31-year veteran of the pharmaceutical 
    industry and has extensive experience in strategy, operations, and general
   management. This addition brings CuraGen's Board to seven members, six of
which are independent directors.                                      

CuraGen Corporation (NASDAQ: CRGN) is a genomics-based pharmaceutical company.
CuraGen's integrated, functional genomic technologies and Internet-based      
bioinformatic systems are designed to generate comprehensive information about
 genes, human genetic variations, gene expression, protein interactions, protein
pathways, and potential drugs that affect these pathways. CuraGen is applying 
its industrialized genomic technologies, informatics, and validation          
technologies to develop protein, antibody, and small molecule therapeutics to 
treat obesity and diabetes, cancer, inflammatory diseases, and central nervous
system (CNS) disorders. CuraGen is headquartered in New Haven, CT. Additional 
information is available at www.curagen.com.                                  

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This press release may contain forward-looking statements that are subject to   
risks and uncertainties, including statements about CuraGen's ability to turn   
the current biotech financing environment into an opportunity to continue       
distinguishing ourselves through the depth of our pipeline, our focus, our      
performance, and our commitment to making a difference; CuraGen's belief that it
has the necessary resources to advance preclinical candidates into a robust     
clinical pipeline; the capability of the Predictive Toxicogenomics Screen       
technology to generate information that enables scientists to focus on the most 
promising projects; and the ability of 454 Corporation's technologies to analyze
entire genomes within days, instead of years. Such statements are based on      
management's current expectations and are subject to a number of factors and    
uncertainties that could cause actual results to differ materially from those   
described in the forward-looking statements. CuraGen cautions investors that    
there can be no assurance that actual results or business conditions will not   
differ materially from those projected or suggested in such forward-looking     
statements as a result of various factors, including, but not limited to, the   
following: CuraGen's stage of development as a genomics-based pharmaceutical    
company, uncertainties of clinical trials, government regulation and healthcare 
reform, technological uncertainty and product development risks, product        
liability exposure, uncertainty of additional funding, CuraGen's history of     
incurring losses and the uncertainty of achieving profitability, reliance on    
research collaborations and strategic alliances, competition, CuraGen's ability 
to protect its patents and proprietary rights and uncertainties relating to     
commercialization rights. Please refer to our Annual Report on Form 10-K for the
fiscal year ended December 31, 2001 for a description of these risks. We        
disclaim any intention or obligation to update or revise any forward-looking    
statements, whether as a result of new information, future events, or otherwise,
unless required by law.                                                         

 - (Financial Table to Follow) -

EX-99.1
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CURAGEN CORPORATION AND SUBSIDIARY
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands, except per share data)
 (unaudited)

                                                        [Enlarge/Download Table]

                                                       Three Months Ended            Nine Months Ended      
                                                          September 30,                September 30,        
                                                   --------------------------   --------------------------- 
                                                      2002              2001       2002              2001   
                                                   --------          --------   --------           -------- 
                                                                                                            
Revenue:                                                                                                    
   Collaboration revenue                           $  6,019          $  6,084   $ 14,490           $ 17,986 
                                                   --------          --------   --------           -------- 
    Total revenue                                     6,019             6,084     14,490             17,986 
                                                   --------          --------   --------           -------- 

Operating expenses:                                                                                         
   Research and development                          21,295            17,388     63,667             45,861 
   General and administrative                         6,207             4,830     17,394             13,989 
                                                   --------          --------   --------           -------- 
    Total operating expenses                         27,502            22,218     81,061             59,850 
                                                   --------          --------   --------           -------- 

Loss from operations                                (21,483)          (16,134)   (66,571)           (41,864)
Interest income, net                                    528             2,860      1,407             11,583 
                                                   --------          --------   --------           -------- 
Net loss before income taxes and minority                                                                   
 interest in subsidiary loss                        (20,955)          (13,274)   (65,164)           (30,281)

Income tax benefit (expense)                            (28)            1,750        857              2,550 
Minority interest in subsidiary loss                  1,101               407      2,773                982 
                                                   --------          --------   --------           -------- 
Net loss                                           $(19,882)         $(11,117)  $(61,534)          $(26,749)
                                                   --------          --------   --------           -------- 

Basic and diluted net loss per share               $  (0.41)         $  (0.23)  $  (1.26)          $  (0.56)
                                                   ========          ========   ========           ======== 

Weighted average number of shares used in                                                                   
   computing basic and diluted net loss per share    48,989            48,651     48,898             48,041 
                                                   ========          ========   ========           ======== 

SELECTED BALANCE SHEET INFORMATION    

                                                                [Download Table]

                             September 30,  December 31,
                                 2002          2001     
                              --------       --------   
                             (unaudited)     (audited)  
                                                        
Cash and investments          $431,474       $508,349   
Working capital                423,535        496,131   
Total assets                   476,535        538,701   
Total long-term liabilities    150,547        152,297   
Accumulated deficit            186,126        124,592   
Stockholders' equity           299,313        355,945   

Dates Referenced Herein   and   Documents Incorporated by Reference

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Filed on / For Period End:		10/24/02		1
		10/2/02		2
		9/30/02		1					10-Q
		12/31/01		3					10-K
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