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Sales of Xolair Boost Results at Tanox


Posted on 2006-02-28 09:24:00



Tanox, Inc., Houston, today reported revenues for the fourth quarter of 2005 were $23.0 million compared to $5.6 million for the fourth quarter of 2004. Net royalty revenue from sales of Xolair (omalizumab) was $8.5 million for the fourth quarter of 2005, compared to $5.5 million for the fourth quarter of 2004. The company reported net income of $9.8 million for the fourth quarter of 2005, compared to a net loss of $3.8 million for the fourth quarter of 2004.

"Tanox experienced a year of considerable success in 2005," said Tanox president and chief executive officer Danong Chen, Ph.D. "We continued with our vision to evolve from a research and development organization into a product-focused company, with the long-term goal of commercializing our proprietary antibodies and achieving profitability for our shareholders. We made significant progress toward that objective last year, with achievements in all areas of our business."

Revenues for the fourth quarter of 2005 were $23.0 million compared to $5.6 million for the fourth quarter of 2004. Net royalty revenue from sales of Xolair® (omalizumab) was $8.5 million for the fourth quarter of 2005, compared to $5.5 million for the fourth quarter of 2004.

In addition to Xolair royalty revenue, Tanox recorded net profit-sharing revenue of $1.1 million in the fourth quarter, which included $562,000 previously reported as deferred revenue in the third quarter of 2005. The profit-sharing revenue represented Tanox's share of Novartis Pharma AG's U.S. net profits from 2005 sales of Xolair through the third quarter. The company also recorded manufacturing-rights revenue of $474,000 in the fourth quarter from Genentech, Inc. and Novartis based on the quantity of Xolair produced in the third quarter of 2005. Both profit-sharing and manufacturing-rights payments are calculated and recorded one quarter in arrears. Tanox also recorded $12.8 million in net milestone revenue in the fourth quarter, based on Xolair achieving annual sales of more than $300 million for the first time in 2005.

For the year, sales more than doubled to $44.7 million. The 118 percent increase in 2005 revenues is attributed to higher Xolair royalty revenue, profit-sharing revenue from Novartis based on U.S. sales of Xolair, manufacturing-rights revenue based on the quantity of Xolair produced, and the $12.8 million net milestone payment earned in the fourth quarter. Net royalty revenue from sales of Xolair was $29.4 million in 2005, compared to $13.3 million in 2004.

Still, the company reported a net loss of $19.4 million,  compared to a net loss of $10.3 million  for 2004. The increased net loss is attributed primarily to in-process research and development costs related to the company's acquisition of an anti-tissue factor program in the first quarter and expenses associated with re- commissioning activities at the company's manufacturing facility in San Diego.


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