Deltagen Reports 2012 Third Quarter Financial Results

  Deltagen Reports 2012 Third Quarter Financial Results

Business Wire

SAN MATEO, Calif. -- January 30, 2013

Deltagen, Inc. (Pink Sheets: DGEN), a leading provider of drug discovery tools
and services to the biopharmaceutical industry, today reported unaudited
consolidated financial results for the three months ended September 30, 2012.

Revenues: The Company’s consolidated revenues for the three months ended
September 30, 2012 totaled $0.211 million. The revenues in the third quarter
of 2012 were attributable primarily to license fees associated with the
provision of knockout mice and related phenotypic data pursuant to orders
placed by customers under the Company’s DeltaOne^TM program. The consolidated
revenues for the period included $0.010 million for Xenopharm, Inc.
(“Xenopharm”), a wholly-owned subsidiary of the Company. Benten BioServices'
revenues and expenses are no longer consolidated with those of Deltagen and
its wholly-owned subsidiaries, Xenopharm and Deltagen Research Laboratories,
L.L.C. The application of the Equity Method of Accounting now reports Benten
BioServices' operating results as a single line in Deltagen's financial
statements, which reflect Deltagen's 43.8% ownership interest in Benten
BioServices. The Equity Method of Accounting is described in the Company's
Notes to Consolidated Financial Statements and Management’s Discussion and
Analysis of Financial Conditions and Results of Operations, which are posted
on the Company's website (

Expenses: Total consolidated expenses for the three months ended September 30,
2012 were $0.258 million. The expenses in the third quarter of 2012 were
attributable primarily to labor costs and other general and administrative
expenses, including $0.061 million in royalty and commission expenses. As of
September 30, 2012, the Company had incurred aggregate total royalties to
Lexicon Pharmaceuticals, Inc. (“Lexicon”) of $5.702 million to a March 2005
settlement agreement between Lexicon and the Company. Under the settlement,
the maximum aggregate amount of royalty payments due to Lexicon is $6.00
million. Accordingly, up to $0.298 million in contingent royalty payments
remained owed to Lexicon as of September 30, 2012.

Net Income/Losses: Consolidated net losses before provision for income taxes
for the three months ended September 30, 2012 were $0.581 million, which
included a net loss of $0.047 million from operations and a recognized net
loss of $0.534 million (43.8% of Benten BioServices' Net Operating Results)
from investments made by the Company in Benten BioServices, Inc. ("Benten
BioServices"), which was accounted for using the Equity Method of Accounting.

Cash, Cash Equivalents and Accounts Receivable: As of September 30, 2012, the
Company had $0.187 million in consolidated cash and cash equivalents and
$0.063 million in accounts receivable.

Major Events during Q3 2012:

Benten BioServices: Benten BioServices had received an aggregate total of
$2.940 million in secured bridge financing between January and August 2012
("Series A"). The Series A financing was led by Life Sciences Green House of
Central Pennsylvania and closed on August 15, 2012, at which time Benten
BioServices ceased being a wholly-owned subsidiary of Deltagen. Following the
Series A closing, excluding Benten BioServices' stock options, Deltagen held
43.8% of the outstanding shares of Benten BioServices. Deltagen shall retain a
seat on the board of directors of Benten BioServices solely representing
Deltagen so long as it beneficially owns at least 10% of the outstanding
common stock of Benten BioServices.

The unaudited consolidated financial statements for the third quarter of 2012,
accompanying notes, and Management’s Discussion and Analysis of Financial
Conditions and Results of Operations for such period will be posted on
Deltagen’s website (

About Deltagen

Deltagen, Inc. is a provider of drug discovery tools to the biopharmaceutical
industry, and offers access to its inventory of knockout mouse lines and
related phenotypic data to enhance the efficiency of target validation and
drug discovery. In addition, Deltagen offers target validation data in the
areas of immunology and metabolic diseases. Deltagen's products and programs
have been validated by customers and partners such as Eli Lilly & Co.,
GlaxoSmithKline, Merck & Co., Inc. and Pfizer Inc. Benten BioServices, Inc.,
based in Malvern, Pennsylvania, offers regulatory-compliant services designed
to address specific requirements for critical stages in product development,
including biosafety testing, raw materials testing, assay and process
validation services, cell banking and characterization services, and
technology platform-specific R&D support and consulting services. For more
information on Deltagen, visit the Company's website at

Safe Harbor Statement

This press release contains “forward-looking statements,” including statements
about Deltagen’s future revenues, cash flows and operating results,
first-party royalty obligations and first-party licenses and intellectual
property, fund-raising efforts, Benten BioServices' business plans, as well as
other matters that are not historical facts or information. These
forward-looking statements are based on management’s current assumptions and
expectations and involve risks, uncertainties and other important factors,
specifically including those relating to Deltagen’s ability to achieve its
operational objectives and revenue projections, that may cause Deltagen’s
actual results to be materially different from any future results expressed or
implied by such forward-looking statements. Information identifying such
important risk factors is contained in the Company's annual financial
disclosure's “Management’s Discussion and Analysis of Financial Conditions and
Results of Operations”, which can be found at Deltagen’s website at Deltagen undertakes no obligation to update or revise any
such forward-looking statements, whether as a result of new information,
future events or otherwise.




Consolidated Balance Sheet                                      
As of 9/30/12
(In Thousands)                                                    9/30/12
Current assets:
Cash and cash equivalents                                         $ 187
Accounts receivable, net                                            63
Prepaid expenses, deposits and deferred tax assets                 69       
Total current assets                                              $ 319
Property and equipment, net                                         29
Investment in Benten BioServices, Inc. accounted for using the      5,109
Equity Method
Goodwill                                                            -
Non-current portion of deferred tax assets                         1,586    
Total assets                                                      $ 7,044    
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable                                                  $ 299
Accrued expenses                                                   16       
Total liabilities                                                 $ 314
Non-Current liabilities:
Deferred rent                                                     $ -
Convertible note                                                   -        
Total long-term liabilities                                       $ -
Stockholders' equity:
Common stock                                                        39
Treasury Stock                                                      (867     )
Additional paid-in capital                                          232,533
Retained Earnings                                                   (225,378 )
Foreign currency translation adjustment                            402      
Total stockholders' equity                                        $ 6,729    
Total liabilities and stockholders' equity                        $ 7,044    




Consolidated Income Statements and

Statements of Retained Earnings
For Quarter ended 9/30/12
(In Thousands)                                                      9/30/12
Revenue                                                           $ 211
Royalty and Commission Costs                                        61
Other Operating Costs                                              196      
Income From Operations                                            $ (47      )
Income (Loss) from Benten BioServices, Inc. accounted for using     (534     )
the Equity Method
Interest Income                                                     -
Loss on disposal of assets                                         -        
Total Other Income (Loss)                                          (534     )
Income before provision for income taxes                          $ (581     )
Provision for income taxes
Current income tax expense                                          -
Deferred income tax expense                                         -
Adjustment for valuation allowance                                 -        
Total income tax expense                                            -
Net Income (Loss)                                                 $ (581     )
Retained earnings at beginning of period                           (224,797 )
Retained earnings at end of period                                $ (225,378 )




Consolidated Cash Flows
For Quarter ended 9/30/12                                        Unaudited
(In Thousands)                                                    Consolidated
Cash flows from operating activities:
Net Income (Loss)                                                 $   (581  )
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation                                                          3
Stock-based compensation expense                                      -
Loss on disposal of fixed assets                                      -
(Increase)/Decrease in operating assets
Accounts receivable                                                   108
Prepaid expenses, deposits and tax assets                             209
Purchase of assets                                                    -
Deferred tax assets                                                   -
Deferred rent                                                         -
Increase/(Decrease) in operating liabilities
Accounts payable                                                      (259  )
Accrued expenses                                                     (130  )
Change in goodwill                                                    -
Benten stock issuance                                                 -
Issuance of convertible note                                          -
Cumulative effect of equity method recognition                        481
Dividends paid                                                       1     
Net Increase/(Decrease) in cash                                   $   (167  )
Effect of foreign exchange rate change on cash and cash               -
Cash and cash equivalents, at beginning of period                    354   
Cash and cash equivalents, at end of period                          187   


Deltagen, Inc.
Robert J. Driscoll, 650-345-7601
President & CEO, Deltagen, Inc.
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