Human Genome Sciences ( HGSI) reported a greater loss in the fourth quarter as the biotech firm spent more on research and development of new drugs and wrote off collaboration expenses. The Rockville, Md.-based company lost $55.2 million, or 43 cents per share, in the fourth quarter ended Dec. 31, compared to a net loss of $6 million, or 5 cents per share, in the fourth quarter of 2000.
On a pro forma basis, HGS reported a net loss of $32.9 million, or 26 cents per share. This figure excludes a one-time charge of 17 cents per share to write down the value of a collaborative agreement. The pro forma net loss was one cent better than the Wall Street consensus estimate of a net loss of 27 cents per share, as compiled by Thomson Financial/First Call. Revenue during the fourth quarter dropped sharply to $600,000 from $5.3 million in the year-ago period as a result of the June 2000 termination of a genetic discovery agreement with five large pharmaceutical companies. Also, operating expenses in the fourth quarter rose more than 48% to $51.8 million, as HGS spent more on early clinical trials for experimental drugs, as well as laboratory research on possible drug candidates. At the end of 2001, HGS had cash and short-term investments of $1.69 billion, down from $1.77 billion at the end of 2000. Just under $145 million of its cash at the end of 2001 is restricted as collateral on a synthetic lease for new manufacturing and research facilities currently under construction. HGS says that restricted cash could grow to $540 million as those facilities are completed by the end of the first quarter in 2004. For 2001, HGS reported a net loss of $117.2 million, or 92 cents per share. These losses will widen in 2002 to a range of $180 million to $200 million, or $1.38 per share to $1.54 per share. Shares of HGS were down 75 cents, or 2.7%, to $27.10 per share in recent Thursday trading.