LA JOLLA, Calif., Aug. 12 /PRNewswire/ -- Advanced Tissue Sciences, Inc.
(Nasdaq: ATIS) today announced its financial results for the three and six
months ended June 30, 1999. Total revenues were $11.1 million for the three
months ended June 30, 1999 as compared to $4.4 million for the three months
ended June 30, 1998. Revenues for the six months ended June 30, 1999 and 1998
were $22.0 million and $9.7 million, respectively. Revenues in the three and
six month periods ended June 30, 1999 include the recognition of $4.4 million
and $9.4 million, respectively, related to a $15 million payment received in
January 1999 in conjunction with an expansion of the Company's Dermagraft
Joint Venture with Smith & Nephew. The payment is being recognized into
revenues as costs are incurred in support of the joint venture.
The Company reported a net loss to common stockholders for the quarter
ended June 30, 1999 of $5.1 million or $0.11 per common share compared to
$12.0 million or $0.30 per common share for the quarter ended June 30, 1998.
The net loss for the six months ended June 30, 1999 was $10.7 million or $0.25
per common share compared to $22.9 million or $0.59 per common share for the
first half of 1998.
Separately, the Dermagraft Joint Venture reported sales of TransCyte(TM)
and Dermagraft(R) to customers of $561,000 and $1,028,000, respectively, for
the three and six months ended June 30, 1999, compared to sales of $344,000
and $646,000, respectively, in the corresponding periods of 1998. TransCyte
sales were $498,000 for the three months ended June 30, 1999 compared to
$293,000 for the three months ended June 30, 1998. Total TransCyte sales for
the six months ended June 30, 1999 and 1998 were $892,000 and $520,000,
respectively. As previously reported, Dermagraft product sales will be
affected throughout 1999 by the availability of funding through international
healthcare systems.
"We continued to make solid advances during the second quarter," said
Arthur J. Benvenuto, Chairman and Chief Executive Officer of Advanced Tissue
Sciences. "The strategic alliance formed with Inamed to market several of our
products for aesthetic and certain reconstructive applications is a good
example of how the Company can leverage existing competencies and expand
previously developed products into additional product indications."
As of June 30, 1999, the Company had cash, cash equivalents and short-term
investments of approximately $22 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 $3.5 million under a joint
venture agreement with Smith & Nephew. The strategic alliance with Inamed
Corporation will provide the Company with an additional $4 million in 1999 for
license fees and from the sale of the Company's common stock. Further, should
Inamed exercise the option to license rights to use extracellular matrix,
including human collagen, for wrinkle and cosmetic correction and as a bulking
agent for the treatment of urinary incontinence, Advanced Tissue Sciences
would receive an additional $4 million in license fees and from the sale of
Advanced Tissue Sciences' 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) 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. The Company is also developing products for
cardiovascular applications.
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. The Company may not successfully
complete the additional clinical trial, the clinical trial may not be
completed within any specific timeframe, the data from the trial may not be
statistically significant or otherwise consistent with the results of the
Company's earlier pivotal trial and the Company may not obtain FDA or other
regulatory approvals of Dermagraft or any other products at all or on a timely
basis, scale up manufacturing processes, or successfully commercialize any
such products. Further, sources of funds may not be available when needed,
under existing arrangements or otherwise, and such funding may not 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, subsequent
Form 10-Qs, and a Registration Statement on Form S-3 filed on July 12, 1999.
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 June 30, Six Months Ended June 30,
1999 1998 1999 1998
Revenues:
Product sales
Related parties (a) $3,617 $2,063 $6,688 $4,478
Others (b) -- 293 -- 520
Contracts and fees (c) 7,505 2,077 15,304 4,741
Total revenues 11,122 4,433 21,992 9,739
Costs and expenses:
Research and
development 3,958 3,844 8,127 7,765
Selling, general and
administrative 2,791 4,343 6,171 8,216
Cost of goods sold (a) 3,617 3,032 6,688 6,960
Total costs and
expenses 10,366 11,219 20,986 22,941
Income (loss) from
operations before
equity in losses of
joint ventures 756 (6,786) 1,006 (13,202)
Equity in losses of
joint ventures (4,998) (4,637) (10,455) (8,889)
Loss from operations (4,242) (11,423) (9,449) (22,091)
Other expense, net (684) (564) (783) (851)
Net loss (4,926) (11,987) (10,232) (22,942)
Dividends on
preferred stock (176) -- (431) --
Net loss applicable
to common stock $(5,102) $(11,987) $(10,663) $(22,942)
Basic and diluted
loss per share $(.11) $(.30) $ (.25) $ (.59)
Weighted average
shares 45,522 39,324 43,252 39,128
Condensed Consolidated Balance Sheets
(In thousands)
June 30, December 31,
1999 1998
(Unaudited)
Assets:
Cash, cash equivalents
and short-term investments $21,966 $23,054
Other current assets 7,087 5,776
Property, net 18,606 20,624
Other assets 4,619 4,531
Total assets $52,278 $53,985
Liabilities and stockholders' equity:
Current liabilities $22,982 $8,388
Long-term liabilities 10,602 28,070
Redeemable preferred stock 5,040 5,000
Stockholders' equity (d) 13,654 12,527
Total liabilities and
stockholders' equity $52,278 $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 include sales of TransCyte to outside
customers in the United States by the Company in the three and six months
ended June 30, 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.
(c) Contract revenues include the recognition of $4.4 million and
$9.4 million, respectively, in the three and six month periods ended June 30,
1999 related to a $15 million payment received in January 1999 in conjunction
with an expansion of the Company's Dermagraft Joint Venture with Smith &
Nephew. The payment is being recognized into revenues as costs are incurred
in support of the joint venture.
(d) In July 1999, the Company filed a registration statement with the
Securities and Exchange Commission for an offering of 5,000,000 shares of
common stock. The common stock is being offered directly by the Company.
SOURCE Advanced Tissue Sciences, Inc.
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http://www.prnewswire.com/comp/532975.html or fax,
800-758-5804, ext. 532975
CONTACT:
Beth Kriegel, Senior Director, Financial
Planning and Analysis, of Advanced Tissue Sciences, Inc.,
858-713-7991
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