Paradigm Genetics, Inc. (Nasdaq: PDGM), a biotechnology company, today reported financial results for the first quarter ended March 31, 2003.

The company reported a first quarter 2003 net loss attributable to common stockholders of $4.1 million, or $0.13 per common share, compared to earlier guidance provided by the company of $0.15 to $0.17 loss per common share. This compares to a net loss attributable to common stockholders of $5.2 million, or $0.16 per common share for the first quarter 2002. The reduced loss compared to guidance was due to better than anticipated revenues from Bayer CropScience and the National Institute of Environmental Health Sciences (NIEHS) contract, greater throughput for the Monsanto contract, and continued cost savings within the company.

Total revenues for the first quarter 2003 decreased to $4.1 million compared to $5.6 million for the same period in 2002. This anticipated decrease was due to the contract with Bayer entering later stages with less associated revenue; and lower throughput than in 2002 with respect to the Monsanto contract, offset in part by revenue recognized from the NIEHS contract and Advanced Technology Program grant.

Offsetting this revenue decline, total operating expenses for the three months ended March 31, 2003 decreased to $8.1 million compared to $10.6 million for the first quarter 2002. The reduction in operating expenses is primarily attributable to reduced payroll expenses and other internal cost control measures.

Paradigm reported income from discontinued operations in the first quarter 2003 of $25,000 compared to a loss of $226,000 in the first quarter 2002. Due to the discontinuation in December 2002 and subsequent sale in February 2003 of its ParaGen plant genotyping business, the company is reporting all operations related to the unit as discontinued operations, in accordance with generally accepted accounting principles.

For the three months ended March 31, 2003, cash utilization decreased to $4 million compared to $10.6 million in the same period in 2002. This decrease was due to improved cash flow from operations, lower capital expenditures and lower debt payments.

"I am very pleased to report that we have done what we said we were going to do in terms of controlling our expenses and improving cash flow," said Heinrich Gugger, Ph.D., President and CEO of Paradigm Genetics. "As importantly, we are trending in the right direction. If you compare fourth quarter 2002 to this quarter, our revenues increased from $1.9 million to $4.1 million while our overall expense base decreased from $8.5 million to $8.1 million. Further our SG&A expenses declined while we kept investing in our human health platform."

Gugger continued, "We're on track with our business development activities and see near-term revenue opportunities, as evidenced by the recently signed $8.4 million addition to our $23.8 million contract, for a total of up to $32.3 million, with the National Institute of Environmental Health Sciences for additional toxicogenomic studies. We continue to see growing acceptance in the marketplace of our expertise and offerings."