Distribution Rights Expanded to Next Generation Universal PLAS+(R)SD
Company Previews Second Quarter Results
WATERTOWN, Mass., Aug. 1 /PRNewswire/ -- V.I. Technologies, Inc. (VITEX)
(Nasdaq: VITX) announced today that it has signed an agreement with the
American National Red Cross (ANRC) for a six year extension of its exclusive
distribution agreement for virally-inactivated transfusion plasma products.
Notably, the extension encompasses not only the current generation product,
PLAS+(R)SD, but also the next generation transfusion plasma product --
Universal PLAS+(R)SD (Universal) -- which is currently in Phase III clinical
trials and on track for market launch in late 2001 or early 2002. For the
period leading up to the launch, PLAS+(R)SD production will be adjusted to
manage inventory levels and optimize the uptake of Universal.
PLAS+(R)SD, the only virally-inactivated transfusion product licensed to
date by the FDA, reduces the risk of blood-borne infections from such common
enveloped viruses as HIV, hepatitis C and hepatitis B. Driven by the urgent
need for improved safety of the blood supply, PLAS+(R)SD has garnered roughly
a 15% market share since its launch.
Universal is expected to build on PLAS+(R)SD's leading market position by
eliminating the need to match the blood type of plasma donor and recipient.
This will provide blood bankers not only with improved safety, but also with
superior economics derived from dramatic reductions in inventory costs. As
such, Universal has the potential to become the product of choice by
transfusion medicine specialists in a relatively short period of time.
Highlights of the Agreement include:
-- $90 million in guaranteed minimum shipments during the agreement.
-- $11 million guaranteed minimum shipments during the next 12 months.
-- Universal pricing at a premium to PLAS+(R)SD.
-- A reduction of PLAS+(R)SD production and associated inventories in
preparation for the launch of Universal.
John Barr, President and CEO of VITEX commented, "Together, VITEX and the
ANRC are establishing a leadership position by making available the safest
blood products for hospitals, physicians and their patients. Having just
completed its two strongest customer shipment months since PLAS+(R)SD was
launched, the ANRC remains committed to PLAS+(R)SD and, more importantly, to
pathogen inactivation for blood safety, as evidenced by the extension of our
relationship."
Mr. Barr continued, "Our Company's mission is to revolutionize the safety
of blood products in the U.S. and around the world. Importantly, PLAS+(R)SD
and Universal will set the stage for our INACTINE(TM) red cell technology
which targets a significantly larger market opportunity for the Company.
INACTINE(TM) continues to make outstanding progress in the clinic."
Agreement Background. The American National Red Cross (ANRC) is the
largest U.S. manufacturer and distributor of blood components and is
responsible for approximately 45% of the domestic supply of blood components
for transfusion. Driven by its commitment to innovative technologies for a
safer blood supply, the ANRC has made a significant investment in PLAS+(R)SD.
During the second quarter of 2000, the ANRC experienced shortages of
plasma and corresponding difficulties in meeting its supply commitments to
VITEX. To accommodate these near-term supply shortages, and to pave the way
for an accelerated launch of Universal, VITEX worked with the Red Cross to
develop a long-term plan that cements the ANRC's commitment well into the
future. This plan includes a voluntary reduction in VITEX's production of
PLAS+(R)SD over the next 18 months.
Financial Implications. Implementation of this plan will impact VITEX's
financial results for the second quarter and near future. Total revenues for
the second quarter will be approximately $8.0 million with an expected net
loss of approximately $5.0 million, or $0.25 per share. This loss reflects
lower PLAS+(R)SD production and, to a lesser extent, increased R&D spending.
The Company intends to report its second quarter results on August 4, 2000.
As part of this plan, the Company has reduced its plasma operations
workforce to lower manufacturing costs and to better match its production
capability to the expected ANRC processing volumes. Severance and other costs
related to the workforce reduction will total approximately $1.0 million and
will be included in the third quarter results.
Going forward, Red Cross minimum volumes should result in VITEX reporting
total revenues of approximately $8.0 to $9.0 million per quarter. Losses are
expected to continue as the Company ramps up spending on its ambitious R&D
pipeline. The Company expects revenue to begin to increase toward the end of
2001 or in early 2002 as Universal moves through the clinic and into the
marketplace.
Outlook. The Company continues to be encouraged by the progress in its
most significant opportunity -- red blood cell pathogen inactivation. The
INACTINE(TM) program for pathogen inactivation of red blood cells is currently
in Phase I clinical trials and moving quickly. VITEX believes it will be the
first company to advance beyond Phase I in red cells and receive FDA approval
for Phase II/III clinical programs.
Red cells are the most commonly transfused blood component with over 40
million units of red cells transfused each year in the major pharmaceutical
markets worldwide for an estimated market of $2 billion. Currently there are
no treatments to inactivate pathogens in red cells. VITEX's INACTINE(TM)
pathogen inactivation treatment has been shown to inactivate enveloped viruses
such as HIV, CMV, model viruses for HCV and HBV, as well as non-enveloped
viruses such as Porcine Parvo and SV40. The recent results on bacteria
inactivation and the demonstration of large safety margins establishes
INACTINE(TM) as the most comprehensive pathogen inactivation treatment which,
upon approval, will significantly improve the safety of the blood supply.
VITEX is a leading developer and manufacturer of a broad portfolio of
blood products that utilize its patented viral inactivation technologies
designed to ensure product safety. The technologies are tailored for all
blood component applications and other blood-derived products, including
plasma, plasma derivatives, red blood cells and platelets. The first of
VITEX's virally inactivated products, PLAS+(R)SD, is the only FDA-approved
method for viral inactivation of plasma.
VITEX is collaborating with Pall Corporation (NYSE: PLL) on the red cell
pathogen inactivation program. Pall Corporation, the technology leader in the
filtration industry, offers the broadest range of advanced blood filtration
products and support services to help blood centers meet the challenges of
implementing routine, high volume, blood filtration. Pall has annual sales of
over $1 billion and operates directly in over 30 countries.
For further information, please visit the VITEX web site at
http://www.vitechnologies.com .
Except for the historical information contained herein, the matters
discussed are forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. These
statements involve risks and uncertainties, such as quarterly fluctuations in
operating results, the timely availability of new products, market acceptance
of the company's products, the impacts of competitive products and pricing,
government regulation of the company's products and other risks and
uncertainties set forth in the company's filings with the Securities and
Exchange Commission. These risks and uncertainties could cause actual results
to differ materially from any forward-looking statements made herein.
To receive additional information on V. I. Technologies, Inc., via fax, at
no charge, dial 1-800-PRO-INFO and enter code VITX.
SOURCE V.I.Technologies
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Related links:
http://www.vitechnologies.com
CONTACT:
John Barr, President and CEO of V.I.
Technologies, 617-926- 1551, ext. 7256, or e-mail,
http://www.vitechnologies.com; or Alison Ziegler, Cecelia Heer, or
Deanne Eagle, all of the Financial Relations Board, 212-661-8030
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