LA JOLLA, Calif., Nov. 12 /PRNewswire/ -- Advanced Tissue Sciences, Inc.
(Nasdaq: ATIS) today announced its financial results for the three and nine
months ended September 30, 1998. Total revenues were $4.5 million for the
three months ended September 30, 1998 compared to $3.3 million for the three
months ended September 30, 1997. Revenues for the nine months ended September
30, 1998 and 1997 were $14.2 million and $9.5 million, respectively.
Revenue increases in the 1998 periods relate primarily to increases in
sales of Dermagraft(R) and TransCyte(TM) (formerly Dermagraft-TC(R)) to the
Company's joint venture with Smith & Nephew plc. TransCyte sales to customers
in the United States during the third quarter of 1998 were $515,000 compared
to $293,000 in the second quarter of 1998. For the nine months ended
September 30, 1998, TransCyte sales totaled $1,035,000 compared to $623,000 in
the corresponding 1997 period. As previously reported, TransCyte marketing
and sales in the United States were transferred to the joint venture in
October 1998.
The Company reported a net loss to common stockholders for the quarter
ended September 30, 1998 of $11.9 million or $.30 per share compared to
$9.0 million or $.24 per share for the quarter ended September 30, 1997. The
net loss to common stockholders for the nine months ended September 30, 1998
was $34.9 million or $.89 per share compared to $24.6 million or $.66 per
share for the first nine months of 1997. The increases in net loss to common
stockholders for the three and nine-month periods in 1998 were primarily
attributable to increased manufacturing costs and the Company's share of the
joint venture's costs associated with commercialization of Dermagraft and
TransCyte.
"We are very pleased with our progress over the last several months," said
Arthur J. Benvenuto, Chairman and Chief Executive Officer of Advanced Tissue
Sciences. "We initiated a new multi-site clinical trial for Dermagraft for
diabetic foot ulcers, successfully completed a reinspection of our
manufacturing facilities by the U.S. Food and Drug Administration (FDA),
received FDA approval of our Treatment Investigational Device Exemption (IDE)
for Dermagraft for diabetic foot ulcers, and expanded our joint venture with
Smith & Nephew to include TransCyte sales for full and partial-thickness burns
in the United States."
Commenting on the Company's financial resources, Mr. Benvenuto said,
"Current cash balances of $32.1 million, a $15 million payment due from Smith
& Nephew in January 1999, borrowing capacity of $4.7 million under our joint
venture agreements, and a $50 million equity line all combine to provide us
with flexibility in meeting future financing needs as we move forward with the
commercialization of Dermagraft and TransCyte. In addition, we are continuing
development of human-based products for cartilage and cardiovascular
applications."
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, through its
Dermagraft Joint Venture with Smith & Nephew, currently has two products on
the market, TransCyte, a temporary covering for full and partial-thickness
burns, and Dermagraft, a living dermal replacement, for the treatment of
diabetic foot ulcers (currently available in Canada and the United Kingdom).
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. 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. No assurance can be given that the
Company will successfully complete the additional clinical trial, the clinical
trial will be completed within any specific timeframe, that the data from the
trial will be statistically significant or otherwise consistent with the
results of the Company's earlier pivotal trial or that the Company will obtain
FDA 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 the Company will successfully enroll centers and
patients, or obtain adequate reimbursement, if any, under the Treatment IDE
for Dermagraft. Further, 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. 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 Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
Revenues:
Product sales (a) $2,722 $896 $7,720 $1,568
Contracts and fees 1,736 2,372 6,477 7,968
Total revenues 4,458 3,268 14,197 9,536
Costs and expenses:
Research and development 3,613 4,212 11,270 13,677
Selling, general and
administrative 3,585 3,702 10,965 10,463
Cost of goods sold (a) 4,114 1,090 11,066 1,798
Professional and
consulting 795 671 1,747 2,023
Total costs and
expenses 12,107 9,675 35,048 27,961
Loss from operations before
equity in losses of joint
ventures (7,649) (6,407) (20,851) (18,425)
Equity in losses of
joint ventures (3,817) (2,571) (12,706) (6,920)
Loss from operations (11,466) (8,978) (33,557) (25,345)
Other income (expense),
net (186) (10) (1,037) 712
Net loss (11,652) (8,988) (34,594) (24,633)
Dividends on preferred
stock (281) -- (281) --
Net loss applicable
to common stock $(11,933) $(8,988) $(34,875) $(24,633)
Basic and diluted
loss per share $(.30) $(.24) $(.89) $(.66)
Weighted average shares 39,324 37,568 39,194 37,525
Condensed Consolidated Balance Sheets
(In thousands)
September 30, December 31,
1998 1997
(Unaudited)
Assets:
Cash, cash equivalents and
short-term investments $32,076 $17,086
Other current assets 6,253 6,038
Property, net 23,098 23,190
Other assets 3,088 4,146
Total assets $64,515 $50,460
Liabilities and stockholders' equity:
Current liabilities $10,019 $9,908
Long-term liabilities 28,350 26,586
Redeemable preferred stock 5,000 --
Stockholders' equity 21,146 13,966
Total liabilities and
stockholders' equity $64,515 $50,460
(a) Product sales for the three months ended September 30, 1998 and 1997
include sales of Dermagraft(R) and TransCyte(TM) (formerly Dermagraft-TC(R))
to a related party at cost in the amounts of $2,207,000 and $723,000,
respectively. For the nine months ended September 30, 1998 and 1997, such
sales totaled $6,685,000 and $945,000, respectively. Sales of TransCyte to
others totaled $515,000 and $173,000 for the three months ended September 30,
1998 and 1997, respectively, and $1,035,000 and $623,000 for the nine months
ended September 30, 1998 and 1997, respectively.
SOURCE Advanced Tissue Sciences, Inc.
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CONTACT:
Jack D. Strube, Executive Director, Finance,
of Advanced Tissue Sciences, Inc., 619-450-5802
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