LA JOLLA, Calif., May 11 /PRNewswire/ -- Advanced Tissue Sciences, Inc.
(Nasdaq: ATIS) today announced its financial results for the quarter ended
March 31, 2000. Total revenues were $7.4 million for the three months ended
March 31, 2000 compared to $10.9 million for the three months ended March 31,
1999. The Company reported a net loss to common stockholders for the three
months ended March 31, 2000 of $8.3 million or $0.14 per share compared to
$5.6 million or $0.14 per share for the three months ended March 31, 1999.
The decrease in revenues in the three months ended March 31, 2000 as
compared to the corresponding period in 1999 principally reflects the
recognition in the three months ended March 31, 1999 period of $5 million of a
$15 million milestone payment received in January 1999 from Smith & Nephew
associated with an expansion of the partners' Dermagraft Joint Venture. The
payment was recognized into revenues as costs were incurred in support of the
joint venture throughout 1999. This decrease was partially offset by the
recognition of $899,000 in the three months ended March 31, 2000 of licensing
payments previously received from Inamed Corporation in 1999.
Separately, the Dermagraft Joint Venture reported sales of TransCyte(TM)
and Dermagraft(R) to customers of $732,000 for the three months ended March
31, 2000 compared to $467,000 in the three months ended March 31, 1999.
TransCyte sales were $669,000 for the three months ended March 31, 2000
compared to $394,000 for the three months ended March 31, 1999.
"We are continuing our cost reduction efforts while leveraging our
technology with the goal of developing and commercializing new products," said
Arthur J. Benvenuto, Chairman and Chief Executive Officer of Advanced Tissue
Sciences. "Our business strategy focuses on spreading the cost of developing
and manufacturing products across a wide variety of indications and payers, to
maximize the adoption of our technology. Scientific presentations on human
injectable collagen and the development of bioengineered products for
potential use as cosmeceuticals or wound healing agents will be presented at
the Society of Investigative Dermatology meetings being held this week in
Chicago. These are excellent examples of how we are developing new product
applications from our existing technology using common cell sourcing and
manufacturing processes." Information from these and other presentations is
available on our web site at http://www.advancedtissue.com.
As of March 31, 2000, the Company had cash, cash equivalents and
short-term investments of approximately $29 million. This includes $5 million
that previously had been restricted for the redemption of outstanding shares
of the Company's Convertible Series B Preferred Stock. All of the Company's
Convertible Series B Preferred Stock outstanding at December 31, 1999 was
converted into common stock in March 2000. As a result of this conversion,
the $5 million became available to support the Company's operations. Also
included is $7 million from the exercise of warrants to purchase 1,750,000
shares of common stock at $4.00 per share. These warrants were a component of
the units sold in the Company's November 1999 public offering.
Advanced Tissue Sciences is a tissue engineering company utilizing its
proprietary core technology to develop and manufacture human-based tissue
products for tissue repair and transplantation. The Company has two joint
ventures with Smith & Nephew. The first covers the application of Advanced
Tissue Sciences' tissue engineering technology for skin wounds and includes
Dermagraft for the treatment of diabetic foot ulcers, TransCyte for the
temporary covering of second and third-degree burns, and future developments
for venous ulcers, pressure ulcers, burns and other non-aesthetic wound care
treatments. The second joint venture is developing tissue-engineered
orthopedic cartilage, initially focusing on the repair of cartilage in knee
joints. The Company also has a strategic alliance with Inamed Corporation for
the development and marketing of several of Advanced Tissue Sciences'
human-based, tissue-engineered products for aesthetic and certain
reconstructive applications. In addition, the Company is developing products
for cardiovascular applications.
Statements in this press release that are not strictly historical may be
"forward-looking" statements which involve risks and uncertainties. No
assurances can be given that the Company will successfully implement its
business strategy, develop its products, complete clinical trials, obtain
regulatory approvals (or that any such approvals will be obtained on a timely
basis), or be able to manufacture or successfully commercialize such products.
In particular, the Company will need to successfully complete an additional
controlled clinical trial for Dermagraft in the treatment of diabetic foot
ulcers and submit a revised premarket approval application to the U.S. Food
and Drug Administration. Actual results may differ from those described in
this press release due to risks and uncertainties that exist in the Company's
operations, including, without limitation, a history of operating losses and
accumulated deficits, uncertainties related to clinical trials, the ability to
obtain additional financing to continue operations when needed, the ability to
obtain the appropriate regulatory approvals, patent protection, and market
acceptance, the Company's reliance on collaborative relationships, as well as
other risks detailed from time to time in publicly available filings with the
Securities and Exchange Commission such as Advanced Tissue Sciences' Annual
Report on Form 10-K for the year ended December 31, 1999. Actual results may
differ materially from those currently anticipated as a result of such risks,
and results for interim periods are not necessarily indicative of results to
be expected for the full year. The Company undertakes no obligation to
release publicly the results of any revision to these
forward-looking statements to reflect events or circumstances arising after
the date hereof.
Advanced Tissue Sciences, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended March 31,
2000 1999
Revenues:
Product sales to related parties (1) $3,622 $3,071
Contracts and fees (2) 3,788 7,799
Total revenues 7,410 10,870
Costs and expenses:
Research and development 3,901 4,169
Cost of goods sold (1) 3,622 3,071
Selling, general and administrative 2,624 3,380
Compensation related to
variable stock option (3) 1,991 --
Total costs and expenses 12,138 10,620
Income (loss) from operations
before equity in losses of joint ventures (4,728) 250
Equity in losses of joint ventures (3,713) (5,457)
Loss from operations (8,441) (5,207)
Other income (expense), net 142 (99)
Net loss (8,299) (5,306)
Dividends on preferred stock (48) (255)
Net loss applicable to common stock $(8,347) $(5,561)
Basic and diluted loss per common share $(.14) $(.14)
Weighted average shares 58,183 40,957
Condensed Consolidated Balance Sheets
(In thousands)
March 31, December 31,
2000 1999
(Unaudited)
Assets:
Cash, cash equivalents and
short-term investments $29,273 $26,079
Other current assets 10,430 8,144
Property, net 15,643 16,627
Other assets 3,338 8,536
Total assets $58,684 $59,386
Liabilities and stockholders' equity:
Current liabilities $22,224 $23,572
Long-term liabilities 8,615 9,351
Redeemable preferred stock -- 5,040
Stockholders' equity 27,845 21,423
Total liabilities and
stockholders' equity $58,684 $59,386
(1) Product sales to related parties include sales of Dermagraft(R) and
TransCyte(TM) to a joint venture between the Company and Smith &
Nephew plc (the "Dermagraft Joint Venture") at cost.
(2) Contracts and fees for the three months ended March 31, 2000 includes
the recognition of $899,000 of revenue related to licensing payments
received from Inamed Corporation in 1999. Contracts and fees for the
three months ended March 31, 1999 includes the recognition of
$5 million of a $15 million milestone payment received from Smith &
Nephew in 1999 related to the expansion of the Dermagraft Joint
Venture. These payments are recognized into revenue as the related
financial commitments are met.
(3) Compensation related to variable stock option represents a non-cash
compensation expense related to stock options exercised through the
issuance of a loan being accounted for as a variable stock option.
As a result of the variable option treatment, variability in the
market price of the Company's common stock can result in significant
increases and decreases in compensation expense from period to
period.
SOURCE Advanced Tissue Sciences, Inc.
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Related links:
http://www.advancedtissue.com
Company News On-Call:
http://www.prnewswire.com/comp/532975.html or fax,
800-758-5804, ext. 532975
CONTACT:
Jana Stoudemire, Senior Director, Corporate
Communications of Advanced Tissue Sciences, Inc., 858-713-7802
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