LA JOLLA, Calif., May 13 /PRNewswire/ -- Advanced Tissue Sciences, Inc.
(Nasdaq: ATIS) today announced its financial results for the quarter ended
March 31, 1999. Total revenues were $10.9 million for the three months ended
March 31, 1999 compared to $5.3 million for the three months ended March 31,
1998. The Company reported a net loss to common stockholders for the quarter
ended March 31, 1999 of $5.6 million or $0.14 per share compared to $11.0
million or $0.28 per share for the quarter ended March 31, 1998.
The increase in revenues in the first quarter of 1999 as compared to the
corresponding period in 1998 principally reflects the recognition of revenue
associated with a $15 million payment received in January 1999 from the
Company's joint venture partner in conjunction with an expansion of the
Dermagraft Joint Venture. The payment is being recognized into revenues as
costs are incurred in support of the joint venture. In the three-month period
ended March 31, 1999, the Company recognized revenues of approximately
$5 million related to this payment.
Product sales to related parties of $3.1 million and $2.4 million for the
three-month periods ended March 31, 1999 and 1998, respectively, reflect sales
of the Company's TransCyte(TM) and Dermagraft(R) products to the Dermagraft
Joint Venture with Smith & Nephew at cost. In the three-month period ending
March 31, 1998, product sales to others of $227,000 reflects sales of
TransCyte through the Company's direct sales force in the United States prior
to its transfer to the Dermagraft Joint Venture in October 1998. The
Dermagraft Joint Venture reported product sales of $467,000 (including
$394,000 from sales of TransCyte) for the three months ended March 31, 1999
and as compared to sales of Dermagraft alone of $75,000 in the three months
ended March 31, 1998.
"At the recent American Burn Association meeting, the Smith & Nephew sales
organization launched its marketing campaign which we believe will continue to
establish a solid foundation for advancing TransCyte," said Arthur J.
Benvenuto, Chairman and Chief Executive Officer. "In addition, good progress
is being made in developing strong customer support for Dermagraft in the
countries where it has been introduced. As anticipated, sales of Dermagraft
in these international markets will continue to be slow throughout 1999 until
funding can be secured through these countries' national healthcare systems.
Nevertheless, along with our partner, Smith & Nephew, we continue to have
confidence in the potential for both Dermagraft and TransCyte."
As of March 31, 1999, the Company had cash, cash equivalents and short-
term investments of approximately $28.1 million. In addition, the Company has
a $50 million equity line available through February 2000, subject to certain
conditions, and the ability to borrow an additional $4.3 million under a joint
venture agreement with Smith & Nephew. In May 1999, the Company entered into
a strategic alliance for the further development, manufacture and sale of
several aesthetic and reconstructive applications of its tissue engineering
technology. This alliance is scheduled to bring the Company $6 million and
could bring in up to $10 million in license fees and from sales of common
stock in 1999.
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(R) for the treatment of diabetic foot ulcers, TransCyte(TM)
temporary covering for third-degree (full-thickness) and second-degree
(partial-thickness) 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 discussion contained in this press release relating to
commercialization of the Company's products and the availability of capital
resources involves risks and uncertainties. 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 FDA. No assurance can be given that the
Company will successfully complete the additional clinical trial, the clinical
trial will be completed within any specific timeframe, that the data from the
trial will be statistically significant or otherwise consistent with the
results of the Company's earlier pivotal trial or that the Company will obtain
FDA or other regulatory approvals of Dermagraft or any other products (or that
any such approval will be obtained on a timely basis), scale up manufacturing
processes, or successfully commercialize any such products. Further, there
can be no assurance that sources of funds will be available when needed, under
existing arrangements or otherwise, or that any such funding will be on
favorable terms. These and other risks are detailed in publicly available
filings with the Securities and Exchange Commission such as the Company's
Annual Report on Form 10-K for the year ended December 31, 1998. Actual
results may differ materially from those currently anticipated as a result of
such risks.
Advanced Tissue Sciences, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended March 31,
1999 1998
Revenues:
Product sales -
Related parties (a) $3,071 $2,415
Others (b) -- 227
Contracts and fees 7,799 2,664
Total revenues 10,870 5,306
Costs and expenses:
Research and development 4,169 3,921
Selling, general and administrative 3,380 3,873
Cost of goods sold (a) 3,071 3,928
Total costs and expenses 10,620 11,722
Income (loss) from operations before
equity in losses of joint ventures 250 (6,416)
Equity in losses of joint ventures (5,457) (4,252)
Loss from operations (5,207) (10,668)
Other expense, net (99) (287)
Net loss (5,306) (10,955)
Dividends on preferred stock (255) --
Net loss applicable to common stock $(5,561) $(10,955)
Basic and diluted loss per common share $(.14) $(.28)
Weighted average shares 40,957 39,930
Condensed Consolidated Balance Sheets
(In thousands)
March 31, December 31,
1999 1998
(Unaudited)
Assets:
Cash, cash equivalents and
short-term investments $28,068 $23,054
Other current assets 7,144 5,776
Property, net 19,767 20,624
Other assets 4,033 4,531
Total assets $59,012 $53,985
Liabilities and stockholders' equity:
Current liabilities $29,063 $8,388
Long-term liabilities 17,728 28,070
Redeemable preferred stock 5,000 5,000
Stockholders' equity 7,221 12,527
Total liabilities and
stockholders' equity $59,012 $53,985
(a) 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.
(b) Product sales to others includes sales of TransCyte to outside
customers in the United States by the Company in the three months
ended March 31, 1998. Since October 1998, TransCyte has been sold to
outside customers exclusively through the Dermagraft Joint Venture
and, accordingly, sales since that time have been reflected in the
joint venture's separate financial statements and not included herein.
SOURCE Advanced Tissue Sciences, Inc.
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800-758-5804, ext. 532975
CONTACT:
Cheryl B. Monblatt, Director, Corporate
Communications and Investor Relations of Advanced Tissue
Sciences, Inc., 619-713-7802
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