LA JOLLA, Calif., Aug. 13 /PRNewswire/ -- Advanced Tissue Sciences, Inc.
(Nasdaq: ATIS) today announced its financial results for the three and six
months ended June 30, 1998. Total revenues were $4.4 million for the three
months ended June 30, 1998 compared to $3.6 million for the three months ended
June 30, 1997. Revenues for the six months ended June 30, 1998 and 1997 were
$9.7 million and $6.3 million, respectively. Revenue increases in the 1998
periods relate primarily to increases in sales of Dermagraft(R) and
Dermagraft-TC(R) to the Company's Dermagraft joint venture with Smith & Nephew
plc. Sales to the joint venture at cost totaled $2.1 million for the second
quarter and $4.5 million for the first half of 1998 compared to $222,000 for
both corresponding periods in 1997. Dermagraft-TC sales to customers in the
United States during the second quarter of 1998 were $293,000 compared to
$227,000 in the first quarter of 1998.
The Company reported a net loss for the quarter ended June 30, 1998 of
$12.0 million or $.30 per share compared to $8.1 million or $.22 per share for
the quarter ended June 30, 1997. The net loss for the six months ended June
30, 1998 was $22.9 million or $.59 per share compared to $15.6 million or $.42
per share for the first half of 1997.
"In recent weeks, the Company has made several important announcements
relating to the design of an additional clinical trial for Dermagraft,
financing activities, the issuance of patents and the expansion of our
Dermagraft joint venture with Smith & Nephew to include Dermagraft-TC for
burns in the United States," said Arthur J. Benvenuto, Chairman and Chief
Executive Officer of Advanced Tissue Sciences. "Recent financing actions
provide us with substantial flexibility in meeting future financing needs, and
we are well positioned to move forward in our commercialization program for
both Dermagraft and Dermagraft-TC consistent with regulatory approvals. We
are also continuing to apply our unique human-based approach to cartilage and
cardiovascular applications and are preparing to pursue venous and pressure
ulcer indications for Dermagraft."
As of June 30, 1998, the Company had cash and investments of $17.0 million
and, in July 1998, the Company sold $25 million in Series B Convertible
Preferred Stock to a private investor group. The Company also has $5.7
million available under joint venture loan commitments, and the Company can
access, subject to certain conditions, up to $50 million through sales of its
Common Stock to an investor group under an equity line available through
February 2000. In addition, $15 million is due in January 1999 from Smith &
Nephew in connection with the Dermagraft joint venture.
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 currently has two
products on the market, Dermagraft-TC, a temporary covering for full and
partial-thickness burns, and Dermagraft, a living, permanent dermal
replacement for the treatment of diabetic foot ulcers (currently available in
Canada and the United Kingdom) through a joint venture with Smith & Nephew.
The Company is conducting a multi-center clinical trial for Dermagraft for
diabetic foot ulcers in the United States, and is preparing to pursue
additional indications for Dermagraft in venous and pressure ulcers through
the Dermagraft joint venture. The Company is also developing products for
cartilage and 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. No assurance can be given that
the Company will successfully obtain Food and Drug Administration 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. In addition,
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 or that the Company's patents will afford protection against
competitors with similar technologies or processes or that any such patents
will not be infringed upon or designed around by others. 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, 1997. 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.
Advanced Tissue Sciences, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
Revenues:
Product sales (a) $2,356 $672 $4,998 $672
Contracts and fees 2,077 2,947 4,741 5,596
Total revenues 4,433 3,619 9,739 6,268
Cost and expenses:
Research and development 3,803 4,497 7,657 9,465
Selling, general and
administrative 3,768 3,641 7,380 6,761
Professional and consulting 624 678 952 1,352
Cost of goods sold (a) 3,024 708 6,952 708
Total cost and expenses 11,219 9,524 22,941 18,286
Loss from operations before
equity in losses of joint
ventures (6,786) (5,905) (13,202) (12,018)
Equity in losses of joint
ventures (4,637) (2,642) (8,889) (4,349)
Loss from operations (11,423) (8,547) (22,091) (16,367)
Other income (expense), net (564) 434 (851) 722
Net loss $(11,987) $(8,113) $(22,942)$(15,645)
Basic and diluted loss
per share $(.30) $(.22) $(.59) $(.42)
Weighted average shares 39,324 37,519 39,128 37,504
Condensed Consolidated Balance Sheets
(In thousands)
June 30, December 31,
1998 1997
(unaudited)
Assets:
Cash, cash equivalents and short-term
investments (b) $16,965 $17,086
Other current assets 6,604 6,038
Property, net 23,222 23,190
Other assets 3,446 4,146
Total assets $50,237 $50,460
Liabilities and stockholders' equity:
Current liabilities $9,521 $9,908
Long-term liabilities 27,835 26,586
Stockholders' equity (c) 12,881 13,966
Total liabilities and stockholders'
equity $50,237 $50,460
(a) Product sales for the three months ended June 30, 1998 and 1997
include sales of Dermagraft(R) and Dermagraft-TC(R) to a related party at cost
in the amounts of $2,063,000 and $222,000, respectively. For the six months
ended June 30, 1998 and 1997, such sales totaled $4,478,000 and $222,000,
respectively. Sales of Dermagraft-TC to others totaled $293,000 and $450,000
for the three months ended June 30, 1998 and 1997, respectively, and $520,000
and $450,000 for the six months ended June 30, 1998 and 1997, respectively.
(b) In July 1998, the Company completed the sale of $25 million of Series
B Convertible Preferred Stock to a group of private investors.
(c) In January 1998, Smith & Nephew acquired 1,533,115 shares of Advanced
Tissue Sciences Common Stock for $20 million in conjunction with an expansion
of the parties' Dermagraft joint venture.
SOURCE Advanced Tissue Sciences, Inc.
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Company News On-Call: http://www.prnewswire.com or
fax, 800-758-5804, ext. 532975
CONTACT:
Jack D. Strube, Executive Director, Finance
of Advanced Tissue Sciences, 619-450-5802
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