LA JOLLA, Calif., Nov. 7 /PRNewswire/ -- Advanced Tissue Sciences, Inc.
(Nasdaq: ATIS) today announced its financial results for the quarter ended
September 30, 2000. Total revenues were $5.8 million for the three months
ended September 30, 2000 compared to $11.9 million for the three months ended
September 30, 1999. The Company reported a net loss to common stockholders
for the three months ended September 30, 2000 of $5.5 million or $0.09 per
share compared to $3.0 million or $0.06 per share for the three months ended
September 30, 1999. Revenues for the quarter ended September 30, 1999
included $4.4 million of a $15 million milestone payment received in January
1999 from Smith & Nephew. Revenues in the current quarter include the
recognition of $0.9 million of licensing payments received from Inamed
Corporation in 1999.
Total revenues were $19.5 million for the nine months ended September 30,
2000 compared to $33.9 million for the nine months ended September 30, 1999.
The Company also reported a net loss to common stockholders for the nine
months ended September 30, 2000 of $21.2 million or $0.36 per share compared
to $13.7 million or $0.29 per share for the nine months ended September 30,
1999. Revenues for the nine months ended September 30, 1999 included
$13.6 million of the $15 million Smith & Nephew milestone payment received in
January 1999. Revenues in the current year to date include recognition of
$2.7 million of licensing payments received from Inamed Corporation in 1999.
Separately, the Dermagraft Joint Venture reported sales of TransCyte(TM)
and Dermagraft(R) to customers of $1.4 million for the three months ended
September 30, 2000 compared to $0.9 million in the three months ended
September 30, 1999. Combined sales for TransCyte and Dermagraft for the nine
months ended September 30, 2000 totaled $3.1 million compared to sales of
$1.9 million for the nine months ended September 30, 1999. TransCyte sales
were $2.9 million of the total sales reported for the nine months ended
September 30, 2000 as compared to $1.7 million for the nine months ended
September 30, 1999.
As of September 30, 2000, the Company had cash, cash equivalents and
short-term investments of approximately $38 million.
"Advanced Tissue Sciences has achieved several significant objectives
through the first nine months of this year," said Arthur J. Benvenuto,
Chairman and Chief Executive Officer of Advanced Tissue Sciences. "We have
strengthened our balance sheet through the completion of a private placement,
as well as implemented cost management programs, achieved statistical
significance in an additional Dermagraft diabetic foot ulcer clinical trial,
and submitted a PreMarket Approval (PMA) application to the U.S. Food and Drug
Administration (FDA) which is currently under review. In addition, we have
also expanded the focus of innovation at our Company which is the basis of our
diversified product pipeline."
"While innovation at Advanced Tissue Sciences has expanded significantly,
our focus has been to develop multiple products from two cell types:
fibroblasts (connective tissue cells) and chondrocytes (cartilage cells),"
said Gail K. Naughton, Ph.D., President of Advanced Tissue Sciences. "Using
these two cell types we are continuing to advance programs in our four areas
of therapeutic focus which include wound care, aesthetic and reconstructive,
orthopedic and cardiovascular applications."
Wound Care
Our PreMarket Approval application for Dermagraft for the treatment of
diabetic foot ulcers was submitted to the FDA in August 2000, and we are
preparing to launch Dermagraft in the United States subject to FDA approval.
Additional wound care applications currently being evaluated in human clinical
trials include treatments for venous and pressure ulcers. Pilot human
clinical trials using Dermagraft in the treatment of venous ulcers have been
completed and pivotal human clinical trials will be initiated by the end of
the year. Pilot human clinical studies using Dermagraft and TransCyte for the
treatment of pressure ulcers are in progress and we are currently evaluating
plans for next steps in terms of clinical trial activities in the treatment of
pressure ulcers.
Aesthetic & Reconstructive
In the aesthetic and reconstructive area we continue to identify
opportunities for leveraging our technology into new indications and for
developing products with near-term commercial potential. Along with Inamed,
we are continuing to address the clinical/regulatory requirements for
commercialization of human injectable collagen and anticipate launch in the
second half of next year. In addition, we are also conducting pilot clinical
studies of LaserDerm(TM) for use after chemical peels or laser resurfacing to
enhance healing, and are planning to expand into further clinical studies.
Separately, the Company has entered into agreements with Biozhem
Cosmeceuticals, Inc. and SkinMedica, Inc. to help further explore using a
nutrient solution derived from Advanced Tissue Sciences' tissue engineering
manufacturing process as an active ingredient in skin care products for the
cosmeceutical marketplace.
Orthopedic
In the orthopedic area, our main focus is on developing tissue-engineered
cartilage for articular resurfacing of the knee joint through our NeoCyte
Joint Venture with our partner, Smith & Nephew. We are continuing to conduct
and evaluate data from preclinical studies for further input into designing
human clinical trials. An Investigational Device Exemption (IDE) was
submitted to the FDA requesting approval to begin pilot human clinical
studies. The FDA has raised agency jurisdictional issues as to whether or not
this product should be regulated as a medical device or biologic, as well as
questions about the preclinical studies. We continue to work closely with the
FDA to address these issues.
Cardiovascular
While still in preclinical stages of development, the products in our
cardiovascular portfolio are designed to address the large number of patients
who currently suffer from cardiovascular disease. As part of our business
strategy, we are working toward establishing a strategic alliance with a
leader in the field. As reported earlier this year, preclinical studies using
Dermagraft as an epicardial angiogenesis patch to stimulate blood vessel
formation in damaged heart tissue demonstrated positive results. We are
continuing to conduct and evaluate data from preclinical studies for further
input into designing human clinical trials which may begin in late 2001. A
significant portion of our cardiovascular research program is currently funded
by government grants and awards, allowing us to explore additional medical
applications for our technology. Among others, awards received to date
include funding from both the National Institutes of Health (NIH) and the
National Institute of Standards and Technology (NIST).
"We believe our versatile and broadly applicable core technology provides
a foundation that is currently unmatched in the tissue engineering industry,"
added Arthur J. Benvenuto. "Together with our strong patent position and
automated manufacturing processes we have developed the fundamentals to
transition research into current and future high quality commercial stage
products. As you can see from the overview of our current programs, we are
developing an extensive pipeline of products to heal or replace diseased,
damaged or aging tissue that includes what we believe is a desirable mix of
near, medium and long-term opportunities in growth markets. We have also
formed strong alliances to effectively move those products into the market."
A conference call will be held on Monday, November 13, 2000, at 11:00 a.m.
Eastern Standard Time (EST) to discuss the Company's financial results and
other recent developments and to answer questions from analysts. To
participate in the conference call from the United States, please dial
(800) 777-4529; international callers, please dial (212) 896-6070; all callers
should ask to be connected to the Advanced Tissue Sciences investor call.
A continuous replay of the call will be available after the conclusion of
the call until 8:00 p.m. EST on Friday, November 17, 2000. To listen to the
replay, please dial (800) 633-8284. International callers, please dial
(858) 812-6440. The reservation number that you will need to access the
replay is 16851156.
Additionally, you may listen to the conference call over the Internet by
visiting our web site at http://www.advancedtissue.com. For those who cannot listen
to the live broadcast, a replay will be available on our web site until
8:00 p.m. EST on Friday, November 17, 2000.
In addition to the release of the third quarter results and conference
call, Advanced Tissue Sciences is scheduled to present at the Second Annual
Conference on Tissue Repair Replacement and Regeneration sponsored by
Techvest, LLC. The meeting will be held at the New York Marriott East Side
Hotel on November 8-9, 2000. Management will present an overview of the
Company's business strategy and programs on Wednesday, November 8, 2000 at
11:30 a.m. EST.
You may view and listen to the presentation over the Internet by visiting
our web site at http://www.advancedtissue.com. For those who cannot listen to the
live broadcast, a replay will be available on our web site until 8:00 p.m. EST
on Wednesday, November 15, 2000.
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 for the treatment of diabetic foot ulcers, TransCyte 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. In addition, the Company is developing products for
cardiovascular applications. For more information on Advanced Tissue Sciences
visit our web site at http://www.advancedtissue.com.
Statements in this press release that are not strictly historical may be
"forward-looking" statements which involve risks and uncertainties. In
addition, results for interim periods are not necessarily indicative of
results to be expected for the full year. No assurances can be given, for
example, that the Company will successfully implement its business strategy,
develop its current products, or any new products it may pursue, complete
clinical trials, obtain regulatory approvals (or that any such approvals will
be obtained on a timely basis), or be able to manufacture or successfully
commercialize such products. In particular, the Company will need to obtain
FDA approval of its PMA application for Dermagraft in the treatment of
diabetic foot ulcers. Actual results may differ materially from those
described in this press release due to risks and uncertainties that exist in
the Company's operations, including, without limitation, uncertainties related
to clinical trials, the ability to obtain the appropriate regulatory
approvals, the ability to obtain additional financing to continue operations
when needed, a history of operating losses and accumulated deficits, market
acceptance of products, the Company's reliance on collaborative relationships,
patent protection as well as other risks detailed from time to time in
publicly available filings with the Securities and Exchange Commission
including, without limitation, Advanced Tissue Sciences' Quarterly Report on
Form 10-Q for the quarter ended June 30, 2000. The Company undertakes no
obligation to release publicly the results of any revision to these forward-
looking statements to reflect events or circumstances arising after the date
hereof.
Advanced Tissue Sciences, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
Revenues:
Product sales to related
parties (1) $2,879 $3,496 $9,497 $10,184
Contracts and fees (2) 2,901 8,415 9,956 23,719
Total revenues 5,780 11,911 19,453 33,903
Costs and expenses:
Research and development 2,659 4,165 10,259 12,292
Cost of goods sold (1) 2,879 3,496 9,497 10,184
Selling, general
and administrative 2,512 2,457 7,996 8,628
Compensation related
to variable stock option (3) (137) -- 2,558 --
Total costs and expenses 7,913 10,118 30,310 31,104
Income (loss) from operations
before equity in losses
of joint ventures (2,133) 1,793 (10,857) 2,799
Equity in losses of
joint ventures (3,137) (4,894) (10,392) (15,349)
Loss from operations (5,270) (3,101) (21,249) (12,550)
Other income (expense), net (243) 163 9 (620)
Net loss (5,513) (2,938) (21,240) (13,170)
Dividends on preferred stock -- (63) (48) (494)
Net loss applicable
to common stock $(5,513) $(3,001) $(21,288) $(13,664)
Basic and diluted loss
per common share $(.09) $(.06) $(.36) $(.29)
Weighted average shares 60,066 52,451 59,367 46,352
Condensed Consolidated Balance Sheets
(In thousands)
September 30, December 31,
2000 1999
(Unaudited)
Assets:
Cash, cash equivalents
and short-term investments $38,257 $26,079
Other current assets 8,391 8,144
Property, net 14,515 16,627
Other assets 5,478 8,536
Total assets $66,641 $59,386
Liabilities and
stockholders' equity:
Current liabilities $9,307 $23,572
Long-term liabilities 14,540 9,351
Redeemable preferred stock -- 5,040
Stockholders' equity 42,794 21,423
Total liabilities and
stockholders' equity $66,641 $59,386
(1) 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.
(2) Contracts and fees for the three and nine-month periods ended
September 30, 2000 includes the recognition of $0.9 million and
$2.7 million, respectively, of revenue related to licensing payments
previously received from Inamed Corporation in 1999. Contracts and
fees for the three and nine-month periods ended September 30, 1999
includes the recognition of $4.3 million and $13.6 million,
respectively, of a $15 million milestone payment received from Smith &
Nephew in 1999 related to the expansion of the Dermagraft Joint
Venture. These payments were recognized into revenue in 1999 as the
related financial commitments were met.
(3) Compensation related to variable stock option represents a non-cash
compensation expense related to stock options exercised through the
issuance of a loan being accounted for as a variable stock option. As
a result of the variable option treatment, variability in the market
price of the Company's common stock can result in significant
increases and decreases in compensation expense from period to period.
SOURCE Advanced Tissue Sciences, Inc.
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Related links:
http://www.advancedtissue.com
Company News On-Call:
http://www.prnewswire.com/comp/532975.html or fax,
800-758-5804, ext. 532975
CONTACT:
Jana Stoudemire, Senior Director, Corporate
Communications of Advanced Tissue Sciences, Inc., 858-713-7802
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