Highlights
-- Q3 sales $1.1 million, net loss ($6.9) million for the quarter
-- Preliminary safety and roll-in data from Phase II Axcis(TM) PMR trial
compares favorably to the surgical ITMR data
-- Steven Oesterle, M.D., CardioGenesis' principal investigator, reports
encouraging data on PMR at the TCT meeting in Washington, D.C.
-- Fiscal year-end priorities at FDA result in request from agency to
defer submission of final clinical module for the company's surgical
CardioSync(TM) ITMR System
-- Management team strengthened with VP of Sales and VP of Operations
SUNNYVALE, Calif., Oct. 22 /PRNewswire/ -- CardioGenesis Corporation
(Nasdaq: CGCP), a leader in transmyocardial revascularization (TMR)
technology, today reported results for the third quarter and nine months ended
September 30, 1998.
Sales for the third quarter were $1.1 million, resulting from sales of the
company's Intraoperative Transmyocardial Revascularization (ITMR) and
Percutaneous Myocardial Revascularization (PMR) Systems, including disposable
components, to international customers and to clinical trial sites in the
United States. Third quarter 1998 sales decreased slightly from sales of
$1.2 million for the third quarter of 1997. Net loss for the quarter ended
September 30, 1998 was ($6.9) million, or a net loss of ($0.57) per share,
versus a net loss of ($5.1) million, or a net loss of ($0.42) per share, for
the third quarter of 1997. (All per share amounts are presented on a diluted
basis.) The increase in the net loss is due primarily to additional R&D
expenditures and higher clinical expenses for increased activity in clinical
trials as well as higher marketing expenses. At September 30, 1998, the
company had cash, cash equivalents and available-for-sale securities of
$25.4 million.
"Although sales were basically flat with last year, we are pleased with
the progress of PMR and the reception to the PMR results reported by Steven
Oesterle, M.D., at the Transcatheter Cardiovascular Therapeutics (TCT)
conference in Washington, D.C. this month. As reported by Bloomberg news
service, Dr. Oesterle's conclusion that the CardioGenesis Axcis(TM) PMR(TM)
System provides patients a clinical benefit is encouraging," said Allen W.
Hill, CardioGenesis President and CEO.
Hill continued, "We are eager to complete our modular Pre-Market Approval
(PMA) submission of data to the Food and Drug Administration (FDA) on the
surgical CardioSync System. The FDA has requested that we delay submission of
the final clinical package until they catch up with their September 30, 1998
fiscal year end backlog. Our relationship with the FDA remains strong, and we
are not aware of any issues with our modular submissions to date and do not
believe that this request will slow our progress toward the panel date or
ultimate FDA approval."
For the nine months ended September 30, 1998, sales decreased to
$3.0 million from $5.5 million in the same period a year ago. This reduction
in sales is due primarily to constraints on capital equipment purchases
resulting from hospital budgets and government overview outside the U.S., and
by the limited current availability of reimbursement for TMR procedures in
Europe. The net loss for the nine-month period was ($19.5) million compared
to a net loss of ($12.4) million for the first nine months of 1997. The net
loss per share for the nine months ended September 30, 1998 was ($1.60)
compared to a net loss of ($1.03) per share for the comparable period in 1997.
Management Team Strengthened With the Appointment of Two Executives to VP
Level
CardioGenesis announced today the appointment of Nathaniel (Nat) L.
Bowditch to Vice President of Sales. Mr. Bowditch will be responsible for the
management of CardioGenesis' Worldwide sales, excluding Europe, and will be
reporting to Richard P. Powers, Executive Vice President and CFO of
CardioGenesis. Mr. Bowditch has been with the company for approximately three
years in various marketing and sales capacities, and has over twelve years
experience in the medical and cardiovascular medical device field. He was
most recently Director of U.S. Sales and Emerging Markets for CardioGenesis.
Mr. Bowditch received a B.A. in biology at Cornell University, an M.S. in
Biology at Stanford and an MBA from the University of Chicago. "Nat has
played a key role in the early development of our marketing and sales strategy
and is well qualified to lead the U.S. sales organization as we approach
commercialization of our CardioSync surgical system," said Powers.
The company also announced that Larry Strauss has been appointed to the
position of Vice President of Operations. Mr. Strauss will be responsible for
all of CardioGenesis manufacturing, service and facilities, reporting to Allen
W. Hill, President and CEO CardioGenesis. Mr. Strauss joined CardioGenesis in
April 1996 as Corporate Controller and was appointed to Director of Operations
in late 1997. Mr. Strauss holds a B.S. degree in mathematics from Claremont
Men's College and an M.S. in Industrial Engineering and Operations Research
from University of California at Berkeley. "Larry has done an exceptional job
running the operations activities this past year. His broad experience in
both finance and operations will provide important management and leadership
capabilities as we prepare to ramp up manufacturing for a potential U.S.
launch," commented Hill.
CardioGenesis Corporation, based in Sunnyvale, Calif., develops,
manufactures and markets proprietary systems including disposable products,
to perform intraoperative transmyocardial revascularization (ITMR),
catheter-based percutaneous myocardial revascularization (PMR), and
thoracoscopic transmyocardial revascularization (TTMR), to treat patients
afflicted with debilitating angina. CardioGenesis catheter systems and probes
deliver laser energy to create channels in oxygen-deprived (ischemic) regions
of the heart muscle (myocardium). CardioGenesis holds patents for
Percutaneous Myocardial Revascularization, U.S. Patent Number 5,389,096, and
Intraoperative Transmyocardial Revascularization, U.S. Patent Numbers
5,380,316; 5,554,152; 5,728,091; and other patents in the field of
Transmyocardial Revascularization with a number of U.S. and international
patent applications pending. For more information on the company and its
products, visit the CardioGenesis website at http://www.cardiogenesis.com.
Please note: Except for the historical information contained herein, the
matters discussed in this release contain forward-looking statements that
involve risk and uncertainties, including: approval for and final results of
clinical studies; timing of regulatory approvals; reliance on Boston
Scientific Corporation as the exclusive distributor outside of the U.S. for
the company's products and pricing; potential third-party patent infringement
claims; the management of growth; and the effectiveness of the company's ITMR,
TTMR and PMR Systems, and of related procedures. For further information,
refer to risk factors under the caption "Management's Discussion and Analysis
of Financial Condition and Results of Operations - Risk Factors" and elsewhere
in the company's 1997 Form 10-K and the company's first quarter and second
quarter 1998 Form 10-Q as filed with the Securities and Exchange Commission.
CARDIOGENESIS CORPORATION
BALANCE SHEETS
(in thousands)
(unaudited)
September 30, December 31,
1998 1997
ASSETS
Current assets:
Cash and cash equivalents $6,901 $6,047
Available-for-sale securities 2,783 24,469
Accounts receivable, net 1,633 3,293
Inventories 1,829 1,109
Other current assets 1,614 1,751
Total current assets 14,760 36,669
Available-for-sale
securities, non-current 15,676 10,019
Long term assets 1,605 1,552
Total assets $32,041 $48,240
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $6,410 $3,944
Deferred revenue 295 150
Total liabilities 6,705 4,094
Stockholders' equity 25,336 44,146
Total liabilities and stockholders'
equity $32,041 $48,240
Total cash and cash equivalents,
available-for-sale securities,
current and available-for-sale
securities, non-current $25,360 $40,535
CARDIOGENESIS CORPORATION
STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Sept. 30 Nine Months Ended Sept. 30
1998 1997 1998 1997
Sales $1,053 $1,225 $2,979 $5,509
Cost of sales 1,028 856 2,657 3,448
Gross profit 25 369 322 2,061
Operating expenses:
Research and
development 4,080 3,699 12,257 10,203
General and
administrative 1,312 1,071 4,221 2,762
Sales and marketing 1,979 1,395 4,816 3,693
Operating expenses 7,371 6,165 21,294 16,658
Operating loss (7,346) (5,796) (20,972) (14,597)
Interest income, net 405 697 1,463 2,188
Net loss ($6,941) ($5,099) ($19,509) ($12,409)
Net loss per common share
and per common share
-- assuming dilution ($0.57) ($0.42) ($1.60) ($1.03)
Shares used in computing
net loss per common share
and per common share
-- assuming dilution 12,234 12,039 12,189 12,008
SOURCE CardioGenesis Corporation
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Related links:
http://www.cardiogenesis.com
CONTACT:
Allen W. Hill, President and CEO, or Richard
P. Powers, Executive Vice President and CFO, of CardioGenesis,
408-328-8500; Ann Trunko, general information, or Kate Rajeck,
analyst contact, 415-986-1591, both of The Financial Relations
Board
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