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Trubion Pharmaceuticals Inc. Reports Third Quarter and Nine Months 2008 Results

Tuesday, November 11, 2008 General News
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SEATTLE, Nov. 10 Trubion Pharmaceuticals Inc.(Nasdaq: TRBN) announced today financial results for its third quarter andnine months ended Sept. 30, 2008.
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Third Quarter and Nine Months Financial Results

Revenue for the third quarter and nine months ended Sept. 30, 2008, was$3.8 million and $12.2 million respectively, compared with $4.6 million and$14.5 million respectively in 2007. Revenue in the third quarter and ninemonths ended Sept. 30, 2008, was earned through Trubion's strategiccollaboration with Wyeth Pharmaceuticals, including research and developmentservices. The three- and nine-month decreases in earned revenue were due to adecrease in reimbursement revenue related to the Phase 2b clinical trial forour lead product candidate, TRU-015, for the treatment of rheumatoid arthritis(RA), and an extension of the recognition of the upfront fee from Wyeth.Currently, Trubion's clinical development obligations under the agreement arelimited to conducting ongoing re-treatment studies for TRU-015. The ongoingsecond Phase 2b study and future studies will be conducted by Wyeth.
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The $12.2 million recognized in the nine months ended Sept. 30, 2008,consists of $4.1 million for amortization of the $40 million upfront feereceived from Wyeth and $8.1 million for collaborative research funding fromthe Wyeth partnership. This is compared with revenue of $14.5 millionrecognized in the nine months ended Sept. 30, 2007, which was composed of$5.5 million for the amortization of the $40 million upfront fee received fromWyeth and $9.0 million for collaborative research funding from the Wyethpartnership.

Total operating expenses for the third quarter and nine months ended Sept.30, 2008, were $10.4 million and $32.3 million respectively, compared with$11.5 million and $35.9 million respectively in 2007. The decrease inoperating expenses in the third quarter and first nine months of 2008 wereprimarily due to decreased costs related to our Phase 2b clinical trial forTRU-015, lower outside manufacturing costs for TRU-016, lower lab supply costsand lower contract licensing fees. The decrease in operating expenses waspartially offset by an increase in personnel-related expenses.

Net loss for the third quarter and nine months ended Sept. 30, 2008, was$6.6 million, or $0.37 per diluted common share, and $19.2 million, or $1.07per diluted common share, respectively, compared with a net loss of $5.9million, or $0.33 per diluted common share, and $18.4 million, or $1.04 perdiluted common share, respectively, in 2007.

Trubion had $61.6 million in cash, cash equivalents and investments as ofSept. 30, 2008, compared with $65.4 million as of June 30, 2008.

"In the third quarter, we continued to advance TRU-015, our lead productcandidate. We're encouraged by the positive data we've seen to-date in theongoing Phase 2a and Phase 2b re-treatment studies and look forward toreporting information as new milestones are reached," said Peter Thompson,M.D., FACP, Trubion's president, CEO, and chairman. "In addition to TRU-015,we are also pleased with the clinical progress of SBI-087 for RA, as well asour proprietary asset, TRU-016 for CLL, and we look forward to reporting theresults of these studies."

Recent Milestones

In October, Trubion announced positive data for TRU-015 for RA from twore-treatment studies demonstrated that repeat administration with TRU-015continued to produce persistent responses and significant improvements in RAsigns and symptoms based on American College of Rheumatology criteria.

-- In September, Trubion announced that the Opposition Division of theEuropean Patent Office (EPO) revoked European Patent 1176981 in its entirety.The patent, owned by Genentech and Biogen Idec, was related to the use of ananti-CD20 antibody for the treatment of RA. Trubion was one of several partiesthat filed an opposition proceeding and believes the patent revocationsupports the continued development of new therapies that have the potential toimprove patient outcomes for autoimmune and inflammatory diseases. Genentechand Biogen Idec have the right to appeal the EPO's decision.

-- In August, Trubion appointed Scott C. Stromatt, M.D., as senior vicepresident and chief medical officer (CMO). Stromatt will be responsible forleading the company's clinical development activities and has extensiveexperience in the areas of rheumatology and oncology drug development.

2008 Financial Guidance

The company has revised its 2008 guidance after taking steps to reduce itsoperating cash requirements. As a result, the company has lowered itsanticipated annual burn rate from $35-$40 million to $23-$28 million and itsanticipated operating expenses from $53-$58 million to $44-$49 million. Therevised guidance is as follows:

-- Trubion anticipates 2008 revenues to be in the range of $15 million to$20 million earned through the company's Wyeth collaboration.

-- Total operating expenses are expected to be approximately $44 millionto $49 million for 2008. The planned increase in 2008 operating expensescompared with 2007 is primarily attributable to the re-treatment clinicaltrial being completed by Trubion for its lead product candidate, TRU-015;manufacturing and clinical costs associated with its TRU-016 productcandidate; and increased research and development expenses.

-- Revised operating cash requirements in 2008 are now expected to beapproximately $23 million to $28 million.

Conference Call Details

Trubion will host a conference call and webcast to discuss its thirdquarter and nine months ended Sept. 30, 2008, financial results. The call willbe held today at 2 p.m. Pacific time (5 p.m. Eastern time). The live eventwill be available on Trubion's website athttp://investors.trubion.com/events.cfm, or by calling (877) 440-5804 or(719) 325-4881. A replay of the discussion will be available beginning latertoday on Trubion's website or by calling (888) 203-1112 or (719) 457-0820, andentering 8489656. The telephone replay will be available through Nov. 17,2008.

About Trubion

Trubion is a biopharmaceutical company that is creating a pipeline ofnovel protein therapeutic product candidates to treat autoimmune andinflammatory diseases and cancer. The company's mission is to develop avariety of first-in-class and best-in-class product candidates, customized foroptimal safety, efficacy and convenience that it believes may offer improvedpatient experiences. Trubion's current product candidates are novelsingle-chain protein, or SMIP(TM), therapeutics, and are designed using itscustom drug assembly technology. Trubion's product pipeline includesCD20-directed SMIP therapeutics such as TRU-015 and SBI-087 for autoimmune andinflammatory diseases, developed under the company's Wyeth collaboration.Trubion's product pipeline also includes Trubion's proprietary productcandidate, TRU-016, a novel CD37-targeted therapy for the treatment of B-cellmalignancies that is currently in Phase 1/2 clinical evaluation. In additionto Trubion's current clinical stage product pipeline, the company is alsodeveloping additional product candidates that build on its product developmentexperience. More information is available in the investors section ofTrubion's website: http://www.trubion.com/investors.

Forward-Looking Statements

Certain statements in this release may constitute "forward-lookingstatements" within the meaning of Section 21E of the Securities Exchange Actof 1934 and Section 27A of the Securities Act of 1933. These statementsinclude, but are not limited to, those related to the company's futureclinical development programs and the timing thereof, the company's futureregulatory filings and the timing and outcome thereof and the company'sexpected financial and operating results. These statements are based oncurrent expectations and assumptions regarding future events and businessperformance and involve certain risks and uncertainties that could causeactual results to differ materially. These risks include, but are not limitedto, risks associated with the company's Wyeth collaboration, including Wyeth'scontrol over development timelines, the risks that the Company is unable toadvance its clinical development programs and regulatory applications andaction at the rate it expects, the risk that the Company does not achieve thefinancial and operating results it expects, and such other risks as identifiedin the company's quarterly report on Form 10-Q for the period ended Sept. 30,2008, and from time to time in other reports filed by Trubion with the U.S.Securities and Exchange Commission. These reports are available on theInvestors page of the company's corporate Web site at http://www.trubion.com.Trubion undertakes no duty to update any forward-looking statement to conformthe statement to actual results or changes in the company's expectations.TRBN-G -FINANCIAL TABLES FOLLOW- TRUBION PHARMACEUTICALS. INC. STATEMENTS OF OPERATIONS (In thousands, except per share data) (unaudited) Three months ended Nine months ended September 30, September 30, 2008 2007 2008 2007 Revenue $3,766 $4,635 $12,197 $14,450 Operating expenses: Research and development 7,397 8,877 23,302 28,201 General and administrative 2,987 2,578 8,985 7,652 Total operating expenses 10,384 11,455 32,287 35,853 Loss from operations (6,618) (6,820) (20,090) (21,403) Interest income 370 1,120 1,585 3,582 Interest expense (334) (213) (677) (566) Net loss $(6,582) $(5,913) $(19,182) $(18,387) Basic and diluted net loss per share $(0.37) $(0.33) $(1.07) $(1.04) Shares used in computation of basic and diluted net loss per share 17,859 17,758 17,847 17,654 September 30, December 31, 2008 2007 Balance Sheet Data: Cash and cash equivalents $34,749 $41,827 Investments 26,804 36,688 Total assets 74,977 95,174 Deferred revenue 20,712 24,854 Total stockholders' equity 36,915 53,313

SOURCE Trubion Pharmaceuticals Inc.
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