LA JOLLA, Calif., Nov. 11 /PRNewswire/ -- Advanced Tissue Sciences, Inc.
(Nasdaq: ATIS) today announced its financial results for the third quarter of
1997. The Company reported revenues of $3.3 million for the three months
ended September 30, 1997, including $173,000 in sales of Dermagraft-TC(TM).
Dermagraft-TC, the Company's first therapeutic product, was launched in the
United States in April of this year. Revenues for the third quarter of 1996
totaled $1.4 million. For the nine months ended September 30, 1997, revenues
were $9.5 million compared to $13.4 million for the same period in 1996.
Revenues for the nine-month period of 1996 included a $10 million up front
payment from Smith & Nephew plc upon the formation of a fifty-fifty joint
venture to commercialize Dermagraft(R) for the treatment of diabetic foot
ulcers.
The Company reported a net loss for the three months ended September 30,
1997 of $9.0 million, or $.24 per share, compared to a net loss of $9.1
million, or $.24 per share, for the quarter ended September 30, 1996. The net
loss for the nine months ended September 30, 1997 was $24.6 million, or $.66
per share, compared to a loss of $14.2 million, or $.39 per share, for the
nine months ended September 30, 1996. Excluding the effect of the $10 million
payment in 1996, the Company had a net loss of $24.2 million, or $.67 per
share, for the nine months ended September 30, 1996.
"During the last several months, we announced a number of significant
accomplishments, including the approval and launch of Dermagraft in Canada and
the United Kingdom," said Arthur J. Benvenuto, Chairman and Chief Executive
Officer of Advanced Tissue Sciences. "In addition, we reported data from the
Company's supplemental clinical trial of Dermagraft, received marketing
approval in the United States for Dermagraft-TC for use on partial-thickness
burns and were awarded a $2 million Advanced Technology Program grant for
cardiovascular research from the National Institute of Standards and
Technology."
As of September 30, 1997, the Company had cash and investments of $26.1
million. In August 1997, a subsidiary of the Company entered into a term loan
agreement with The Chase Manhattan Bank for up to $16 million to finance costs
associated with the expansion of its Dermagraft manufacturing facility. To
date, $12.6 million has been drawn under the loan agreement, and the Company
expects to draw the remaining balance by early 1998. In addition, the Company
has borrowed $12.6 million from Smith & Nephew to fund the Company's costs
associated with its Dermagraft and cartilage joint ventures. Under the terms
of the joint venture agreements, the Company may borrow up to an additional
$7.4 million from Smith & Nephew. The Company can also 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 1998.
Advanced Tissue Sciences is a tissue engineering company utilizing its
proprietary core technology to develop and manufacture human tissue products
for tissue repair and transplantation. The Company is currently marketing
Dermagraft-TC, a temporary covering for severe and partial-thickness burns,
under approvals from the Food and Drug Administration (FDA). In addition,
Advanced Tissue Sciences has filed a premarket approval application for
Dermagraft for the treatment of diabetic foot ulcers under the FDA's expedited
review process. 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 FDA approval of Dermagraft (or that any
such approval will be obtained on a timely basis), scale up manufacturing
processes, obtain capital when needed or on favorable terms or successfully
commercialize any such products. These and other risks are detailed in the
Company's publicly available filings with the Securities and Exchange
Commission, including its Annual Report on Form 10-K for the year ended
December 31, 1996. 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,
1997 1996 1997 1996
Revenues:
Product sales (a) $ 896 $ 237 $ 1,568 $ 892
Contracts and fees (b) 2,372 1,127 7,968 12,532
Total revenues 3,268 1,364 9,536 13,424
Costs and expenses:
Research and development 4,212 6,426 13,677 17,719
Selling, general and
administrative 3,877 3,387 11,001 7,635
Professional and consulting 671 976 2,023 2,771
Cost of goods sold (a) 1,090 373 1,798 1,269
Total costs and expenses 9,850 11,162 28,499 29,394
Loss from operations before
equity in losses of
joint ventures (6,582) (9,798) (18,963) (15,970)
Equity in losses of
joint ventures (2,571) -- (6,920) --
Loss from operations (9,153) (9,798) (25,883) (15,970)
Other income, net 165 731 1,250 1,754
Net loss $ (8,988) $ (9,067) $(24,633) $ (14,216)
Net loss per share $ (.24) $ (.24) $ (.66) $ (.39)
Weighted average shares 37,568 37,407 37,525 36,252
Condensed Consolidated Balance Sheets
(In thousands)
September 30, December 31,
1997 1996
(Unaudited)
Assets:
Cash, cash equivalents and
short-term investments $ 26,060 $ 40,217
Other current assets 6,295 3,827
Property, net 19,433 9,734
Other assets 5,984 2,723
Total assets $ 57,772 $ 56,501
Liabilities and stockholders' equity:
Current liabilities $ 8,630 $ 8,060
Long-term liabilities (c) 24,448 61
Stockholders' equity 24,694 48,380
Total liabilities and
stockholders' equity $ 57,772 $ 56,501
(a) Product sales in the three and nine-month periods ended September 30,
1997 include sales of Dermagraft-TC of $173,000 and $623,000, respectively,
and sales of Dermagraft at cost to a related party in the amounts of $723,000
and $945,000, respectively. Product sales and cost of goods sold in 1996 are
for sales of the Company's Skin2(R) laboratory testing kits. The Company
discontinued sales of its Skin2 laboratory testing kits in October 1996.
(b) Contracts and fees for the nine-month period ended September 30, 1996
include a $10 million up front payment from Smith & Nephew upon the formation
of a joint venture for the commercialization of Dermagraft for the treatment
of diabetic foot ulcers. Excluding the $10 million payment, the Company would
have had a net loss of $24.2 million, or $.67 per share, for the nine months
ended September 30, 1996.
(c) Through September 1997, the Company has borrowed $12.6 million from
its joint venture partner, Smith & Nephew, as provided under its joint venture
agreements. An additional $7.4 million remains available to the Company under
these loan facilities. In August 1997, a subsidiary of the Company entered
into a term loan agreement with The Chase Manhattan Bank for up to $16
million. The Company has drawn $12.6 million under the loan agreement as of
September 30, 1997, and expects to draw the remaining balance by early 1998.
SOURCE Advanced Tissue Sciences, Inc.
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CONTACT:
Beth A. Kriegel, Director, Investor Relations
of Advanced Tissue Sciences, Inc., 619-450-5802
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