Interleukin Genetics Reports Third Quarter 2008 Financial Results

Friday, November 14, 2008 General News
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WALTHAM, Mass., Nov. 13 Interleukin Genetics,Inc. (Amex: ILI) today announced financial and business results for the thirdquarter ended September 30, 2008.

The Company reported a net loss of $1.6 million, or $(.05) per basic anddiluted common share, for the third quarter of 2008 compared to a net loss of$1.1 million, or $(.04) per basic and diluted common share, for the sameperiod last year.

"Collaborations are an important element of Interleukin Genetics'strategic plan to distribute and develop new, high value genetic tests, and wewere pleased to lay significant groundwork for new partnerships this quarter,"commented Lewis H. Bender, Chief Executive Officer. "Our revised agreementwith Access Business Group International, the product development group atAlticor, now provides us with the opportunity to pursue new partners to helpdistribute our genetic tests and to form additional collaborations around ourintellectual property. In addition, we executed a new license agreement withOralDNA to market our PST Genetic Test as an assessment of risk forperiodontal disease and established a research collaboration with GeisingerHealth System to explore the role of genetics in obesity."

Revenue for the third quarter of 2008 was $2.2 million, compared to $2.6million for the same period last year. The decrease in revenue isattributable to a decrease in consumer product sales and lower contractresearch and development revenue from Alticor.

Research and development expenses were $933,000 for the third quarter of2008 compared to $786,000 for the same period last year. The increase isprimarily attributable to expenses relating to the Company's sponsoredresearch agreement with Yonsei University offset by a decrease in consultingrelated expenses.

Selling, general and administrative expenses were $1.6 million for thethird quarter of 2008 compared to $1.2 million for the same period last year.The increase is primarily attributable to increased promotional andadvertising activities in both the personalized health segment and theconsumer products segment, in addition to increased compensation expenses dueto increased headcount.

On September 30, 2008, the Company had cash and cash equivalents of $5.9million compared to $7.6 million of cash and cash equivalents on December 31,2007. In addition, the Company has access to $10.3 million under creditfacilities with Alticor, which permit borrowing until March 31, 2009.

Third Quarter and Recent Highlights

-- Entered into a Research and License Agreement with Geisinger HealthSystem: In September 2008, Interleukin Genetics and Geisinger announced acollaboration permitting Interleukin Genetics to utilize Geisinger's databasesto develop a series of genetic tests that will help physicians betterunderstand an individual's inherited resistance to weight loss and gauge apatient's likelihood of success with diet and other weight loss techniques.

-- Revised Exclusive License Agreement with Alticor Corporation's AccessBusiness Group International, LLC (ABG): In September 2008, InterleukinGenetics and ABG amended the companies' existing agreement to expandInterleukin Genetics' distribution network for genetic tests jointly developedby the two companies. The revised agreement permits the Company to sellproducts through additional channels of its choosing.

-- Licensed PST Genetic Test to OralDNA Labs, Inc.: In August 2008,Interleukin Genetics announced a marketing, sales and distribution agreementfor its proprietary PST genetic risk assessment test for use in the diagnosisof periodontal disease. As compensation, the Company will receive a paymentfrom OralDNA Labs for each product it sells, with minimum sales requirements.

-- Won International Award for Outstanding Research Published in Journal,Nutrition: In September 2008, the researchers at Interleukin Geneticsreceived the 12th John M. Kinney Award for Nutrition and Metabolism at theannual Congress of the European Society of Parenteral and Enteral Nutrition inFlorence, Italy. The award was given for the paper, "Interleukin-1genotype-selective inhibition of inflammatory mediators by a botanical: anutrigenetics proof of concept."

-- Presented findings at 2008 World Congress on Osteoarthritis: InSeptember 2008, Kenneth Kornman, Ph.D., the Company's Chief ScientificOfficer, presented important new research findings on the genetics ofosteoarthritis (OA) in Rome, demonstrating that Interleukin Genetics' genetictest appears to identify knee OA patients likely to develop more severe jointdestruction as they age.

-- Enhanced Heart Health Genetic Test Report Format: In July 2008, theCompany launched an enhanced test report format and information package forthe company's Heart Health Genetic Test, currently marketed under the brandname Gensona(R) by Amway Global. The new report includes quantified riskinformation on heart attack and coronary artery disease generated fromclinical studies and provides individuals and their physicians with morecomplete information about a person's inflammation-based genetic risk for aheart attack, along with preventive measure guidance and scientificeducational materials.

-- Expanded Board of Directors: In July 2008, the Company added three newdirectors to the Board: Mary E. Chowning, Glenn S. Armstrong, Ph.D., and ChiefExecutive Officer Lewis H. Bender. Ms. Chowning also will serve as theChairperson of the Audit Committee of the Board.

Conference Call and Webcast Information

Interleukin Genetics will host a live conference call and webcast today at4:30 pm. ET. To access the live call, dial 877-675-4756 (domestic) or719-325-4902 (international). The live webcast and replay access of theteleconference will be available in the Investors section of the Company'swebsite at

About Interleukin Genetics

Interleukin Genetics, Inc. (Amex: ILI), is a healthcare company thatspecializes in the development of genetic biomarker tests for sale to theemerging personalized health market. The Company is focused on the future ofhealth and medicine. Interleukin Genetics uses its leading genetics researchand scientific capabilities to develop and commercialize innovative diagnosticand risk assessment genetic tests. These products could help to improve anindividual's understanding of needed lifestyle changes or of therapeuticproducts that can be used to better manage their health. Interleukin Geneticshas developed and commercialized genetic tests for risk assessment of coronaryartery disease, periodontal disease, and general nutrition. Through its AJGsubsidiary, the Company also currently offers an array of Nutraceutical andOTCeuticals(R) products, including Ginkoba(TM), Ginsana(R) and Venastat(R)which are sold at the nation's largest food, drug and mass retailers.Interleukin Genetics is headquartered in Waltham, MA. For more informationabout Interleukin Genetics and its ongoing programs, please visit

Certain statements contained herein are "forward-looking" statementsincluding statements regarding the company's ability to develop diagnostic,personalized nutritional and therapeutic products to prevent or treat diseasesof inflammation and other genetic variations, the ability to screennutritional compounds for their effects on inflammatory responses and othergenetic variations, given specific genetic patterns and the ability to makeprogress in advancing the company's core technologies. Because such statementsinclude risks and uncertainties, actual results may differ materially fromthose expressed or implied by such forward-looking statements. Factors thatcould cause actual results to differ materially from those expressed orimplied by such forward-looking statements include, but are not limited to,the risk of market acceptance of the company's products, the risk oftechnology and product obsolescence, delays in product development, theperformance of commercial partners, the availability of adequate capital, theactions of competitors and other competitive risks, and those risks anduncertainties described in the company's annual report on Form 10-K, quarterlyreports on Form 10-Q and other filings furnished to the Securities andExchange Commission. The company disclaims any obligation or intention toupdate these forward-looking statements.INTERLEUKIN GENETICS, INC. AND SUBSIDIARIES FINANCIAL HIGHLIGHTS Balance Sheet Data : 30-Sep 31-Dec 2008 2007 (Unaudited) (Audited) Cash and cash equivalents $5,914,848 $7,646,468 Total current assets 7,858,834 10,012,508 Total assets $13,345,831 $16,385,949 Total current liabilities $3,435,943 $6,162,535 Total liabilities 7,435,943 6,193,535 Total shareholders' equity 5,909,888 10,192,414 Total liabilities and shareholders' equity $13,345,831 $16,385,949 Statement of Operations Data (Unaudited): Three Months Ended Nine Months Ended Sept 30, Sept 30, 2008 2007 2008 2007 Revenue: Genetic testing service revenue $102,782 $157,645 $295,527 $648,910 Net consumer products sales 1,626,001 1,792,688 5,593,267 5,173,555 Contract research revenue 441,467 609,234 1,380,759 1,558,205 Other 1,345 1,718 32,799 8,360 Total revenue 2,171,595 2,561,285 7,302,352 7,389,030 Operating costs and expenses: Cost of genetic testing services 235,795 211,953 679,036 721,090 Cost of consumer products sold 764,470 995,769 2,963,676 2,882,072 Research and development 933,004 785,942 2,455,230 2,246,340 Selling, general and administrative 1,562,400 1,163,531 5,451,137 4,821,032 Amortization of intangibles 334,955 413,209 996,669 1,236,074 Total operating costs and expenses 3,830,624 3,570,404 12,545,748 11,906,608 Loss from operations (1,659,029) (1,009,119) (5,243,396) (4,517,578) Total other income and expense, net (11,820) (68,540) 49,599 (188,680) Net loss before income taxes (1,670,849) (1,077,659) (5,193,797) (4,706,258) Provision for income taxes 29,000 (4,000) 10,500 (12,000) Net loss $(1,641,849) $(1,081,659) $(5,183,297) $(4,718,258) Net loss per basic and diluted common share $(0.05) $(0.04) $(0.17) $(0.17) Weighted average common shares outstanding 31,792,999 27,637,303 31,204,196 27,576,940

SOURCE Interleukin Genetics, Inc.

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