Recent Highlights:
-- Company announces intention to enter into a business combination with
Eclipse Surgical Technologies, Inc.
-- HFCA confirms Medicare will provide reimbursement coverage for TMR.
-- Blue Cross/BlueShield TEC finds that TMR improves net health outcomes.
-- CardioGenesis and PLC Medical Systems, Inc. announce settlement of all
patent disputes.
-- 12 laser systems delivered to sites worldwide in Q4.
-- Company and Boston Scientific in discussions to terminate International
Distribution Agreement.
SUNNYVALE, Calif., Feb. 9 /PRNewswire/ -- CardioGenesis Corporation
(Nasdaq: CGCP), a leader in transmyocardial revascularization (TMR)
technology, today reported results for the fourth quarter and year-ended
December 31, 1998.
Sales for the fourth quarter of 1998 were $98,000, resulting from sales of
the company's Intraoperative Transmyocardial Revascularization (ITMR) and
Percutaneous Myocardial Revascularization (PMR) Systems, including disposable
components, to international customers and to clinical trial sites in the
United States. Fourth quarter 1998 sales decreased from sales of $2.1 million
in the fourth quarter of 1997. Although 12 laser systems were shipped to
customers in the fourth quarter of 1998, the percutaneous site revenue was
deferred pending consolidation of PMR clinical trial sites after closing of
the Company's proposed business combination with Eclipse Surgical Technologies
discussed below.
Net loss for the quarter ended December 31, 1998 was ($7.9) million, or a
net loss of ($0.64) per share, versus a net loss of ($5.6) million, or a net
loss of ($0.46) per share, for the fourth quarter of 1997.
At December 31, 1998, the company had cash, cash equivalents and
available-for-sale securities of $19.4 million.
"We are pleased with the high level of laser shipments to our customers in
the fourth quarter, even though a portion of the sales revenue had to be
deferred until such time as we can consolidate PMR clinical trials after
completion of the merger with Eclipse Surgical Technologies, Inc.," said Allen
W. Hill, CardioGenesis President and CEO. Hill continued, "We are also
encouraged by HCFA's favorable TMR reimbursement decision and by the Blue
Cross and Blue Shield Technology Evaluation Center's finding that TMR improves
health outcomes."
For the year ended December 31, 1998, sales decreased to $3.1 million from
$7.6 million in the same period a year ago. The reduction in sales is due to
constraints on capital equipment purchases resulting from hospital budgets and
government overview outside the U.S., current limited availability of
reimbursement for TMR procedures in Europe, and by constraints on revenue
recognition from U.S. clinical programs. For the twelve months ended December
31, 1998, the company reported a net loss of ($27.4) million compared to a net
loss of ($18.0) million for the year ended December 31, 1997. The net loss
per share for the year ended December 31, 1998 was ($2.24) compared to a net
loss per share of ($1.49) for the comparable period in 1997. (All per share
amounts are presented on a diluted basis.)
As previously announced by the company on October 22, 1998, CardioGenesis
agreed to a proposed business combination with Eclipse Surgical Technologies,
Inc. (Nasdaq: ESTI), with CardioGenesis shareholders to receive 0.8 of a share
of Eclipse stock for every share of CardioGenesis owned. The proposed
combination is subject to shareholder approval from both companies.
On January 6, 1999, the company and PLC Medical Systems, Inc., a
subsidiary of PLC Systems, Inc. (Amex: PLC) announced settlement of all patent
litigation between them, pursuant to a Settlement and License Agreement. This
Agreement calls for the company to pay PLC a license fee and minimum royalties
totaling $2.5 million over an approximately forty-month period, with a running
royalty credited against the minimums. PLC has no rights to CardioGenesis
intellectual property under the agreement.
The company also announced today that in early January it took steps to
terminate the International Distribution Agreement with Boston Scientific
Corporation (NYSE: BSX) entered into in January 1997. The companies are in
discussions with respect to such termination. Due to the early developing
stage of the international markets for the company's products, and the state
of development of its own international sales and marketing staff, the company
believes that termination of this agreement and the subsequent transition will
not have a material adverse effect on the company, whether or not the business
combination with Eclipse is consummated. For further information refer to the
company's S-4 filed with the SEC.
CardioGenesis Corporation, based in Sunnyvale, Calif., develops,
manufactures and markets proprietary systems including disposable products, to
perform intraoperative transmyocardial revascularization (ITMR),
catheter-based percutaneous myocardial revascularization (PMR), and
thoracoscopic transmyocardial revascularization (TTMR), to treat patients
afflicted with debilitating angina. CardioGenesis catheter systems and probes
deliver laser energy to create channels in oxygen-deprived (ischemic) regions
of the heart muscle (myocardium). CardioGenesis holds patents for
Percutaneous Myocardial Revascularization, U.S. Patent Number 5,389,096, and
Intraoperative Transmyocardial Revascularization, U.S. Patent Numbers
5,380,316; 5,554,152; 5,728,091; and other patents in the field of
Transmyocardial Revascularization with a number of U.S. and international
patent applications pending. For more information on the company and its
products, visit the CardioGenesis website at http://www.cardiogenesis.com.
Please note: Except for the historical information contained herein, the
matters discussed in this release contain forward-looking statements that
involve risk and uncertainties, including: approval for and final results of
clinical studies; timing of regulatory approvals; potential third-party patent
infringement claims; the management of growth; and the effectiveness of the
company's ITMR, TTMR and PMR Systems, and of related procedures. For further
information, refer to risk factors under the caption "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Risk Factors"
and elsewhere in the company's 1997 Form 10-K, 1998 Form S-4, and the
company's first quarter and second quarter and third quarter 1998 Form 10-Q's
as filed with the Securities and Exchange Commission.
CARDIOGENESIS CORPORATION
BALANCE SHEETS
(in thousands)
(unaudited)
December 31, December 31,
1998 1997
ASSETS
Current assets:
Cash and cash equivalents $2,590 $6,047
Available-for-sale securities 14,037 24,469
Accounts receivable, net 2,063 3,293
Inventories 2,713 1,109
Other current assets 1,525 1,751
Total current assets 22,928 36,669
Available-for-sale securities,
non-current 2,761 10,019
Long term assets 1,046 1,552
Total assets $26,735 $48,240
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $7,871 $3,944
Deferred revenue 1,315 150
Total liabilities 9,186 4,094
Stockholders' equity 17,549 44,146
Total liabilities and stockholders'
equity $26,735 $48,240
Total cash and cash equivalents,
available-for-sale securities,
current and available-for-sale
securities, non-current $19,388 $40,535
CARDIOGENESIS CORPORATION
STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
1998 1997 1998 1997
Sales $98 $2,050 $3,078 $7,559
Cost of sales 788 1,544 3,445 4,991
Gross profit (690) 506 (367) 2,568
Operating expenses:
Research and development 3,429 4,007 15,686 14,210
General and administrative 1,713 960 5,935 3,722
Sales and marketing 2,385 1,733 7,201 5,426
Total operating expenses 7,527 6,700 28,822 23,358
Operating loss (8,217) (6,194) (29,189) (20,790)
Interest income, net 312 632 1,776 2,819
Net loss $(7,905) $(5,562) $(27,413) $(17,971)
Net loss per common share
and per common share
- assuming dilution $(0.64) $(0.46) $(2.24) $(1.49)
Shares used in computing
net loss per common share
and per common share
- assuming dilution 12,297 12,061 12,216 12,029
SOURCE CardioGenesis Corporation
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Related links:
http://www.cardiogenesis.com
CONTACT:
Allen W. Hill, President and CEO, or Richard
P. Powers, Executive Vice President and CFO, 408-328-8500; or
general information, Ann Trunko, analysts, Kate Rajeck, or media
inquiries, Scott Marx, all of The Financial Relations Board,
415-986-1591
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