LA JOLLA, Calif., Feb. 25 /PRNewswire/ -- Advanced Tissue Sciences, Inc.
(Nasdaq: ATIS) today announced its financial results for the year ended
December 31, 1997. Total revenues for the year were $13.2 million compared to
$14.6 million for the year ended December 31, 1996. Total revenues for 1996
included a $10.0 million payment from Smith & Nephew plc in connection with
the formation of a fifty-fifty joint venture for the worldwide
commercialization of Dermagraft(R) for the treatment of diabetic foot ulcers.
The net loss for 1997 was $36.1 million or $.96 per share compared to
$22.4 million or $.61 per share for 1996. Research and development expenses
decreased to $18.0 million in 1997 as compared to $23.7 million in 1996. The
decrease reflects lower costs for both clinical trials and production for
clinical trials of Dermagraft-TC(TM) and Dermagraft, and for costs associated
with developing commercial manufacturing systems. Selling, general and
administrative costs increased to $14.8 million in 1997 compared to $10.9
million in 1996 due to higher selling and marketing costs related to the
commercialization of Dermagraft-TC and costs associated with supporting the
Company's Dermagraft and Cartilage Joint Ventures.
"1997 has set the stage for an exciting 1998," said Arthur J. Benvenuto,
Chairman and Chief Executive Officer of Advanced Tissue Sciences. "We are
prepared for the launch of Dermagraft upon regulatory approval in the United
States. The recent expansion of the Dermagraft Joint Venture strengthens our
financial resources and allows us to aggressively pursue additional
indications for Dermagraft such as for the treatment of venous and pressure
ulcers."
As of December 31, 1997, the Company had cash and investments of $17.1
million. The Company raised an additional $20 million in January 1998 from
the sale of equity to Smith & Nephew in connection with the expansion of the
Dermagraft Joint Venture. In addition, funds available under loan commitments
totaled $8 million as of December 31, 1997. 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
1999.
Advanced Tissue Sciences, Inc. is a tissue engineering company utilizing
its proprietary core technology to develop and manufacture human tissue
products for tissue repair and transplantation. The Company currently has two
products in the market: Dermagraft, a living, permanent dermal replacement for
the treatment of diabetic foot ulcers, and Dermagraft-TC, a temporary covering
for full and partial-thickness burns. In addition to Dermagraft and
Dermagraft-TC, the Company also is developing products for cartilage and
cardiovascular applications.
Advanced Tissue Sciences and its partner, Smith & Nephew, recently
expanded their fifty-fifty joint venture pursuing the worldwide
commercialization of Dermagraft in the treatment of diabetic foot ulcers to
include venous and pressure ulcers, burns and other skin wounds. Under the
expanded agreement, the joint venture will market Dermagraft-TC for burns
outside the United States while Advanced Tissue Sciences will continue to
market Dermagraft-TC for the treatment of full and partial-thickness burns in
the United States under marketing approvals from the U.S. Food and Drug
Administration (FDA).
For the most current news on Advanced Tissue Sciences, visit the Company's
web site at http://www.advancedtissue.com.
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) or any other regulatory
approvals, 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.
Actual results may differ materially from those currently anticipated as a
result of such risks.
ADVANCED TISSUE SCIENCES, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
Year Ended December 31,
1997 1996
Revenues:
Product sales (A) $2,166 $1,018
Contracts and fees (B) 10,985 13,574
Total revenues 13,151 14,592
Costs and expenses:
Research and development 17,984 23,699
Selling, general and
administrative 14,773 10,911
Professional and consulting 2,941 3,378
Cost of goods sold (A) 2,636 1,369
Total costs and expenses 38,334 39,357
Loss from operations before
equity in losses
of joint ventures (25,183) (24,765)
Equity in losses of joint
ventures (11,990) --
Loss from operations (37,173) (24,765)
Other income, net 1,084 2,364
Net loss $(36,089) $(22,401)
Net loss per share (D) $(.96) $(.61)
Weighted average shares 37,548 36,556
Condensed Consolidated Balance Sheets
(In thousands)
December 31,
1997 1996
Assets:
Cash, cash equivalents
and short-term
investments (D) $17,086 $40,217
Other current assets 6,038 3,827
Property, net 23,190 9,734
Other assets 4,146 2,723
Total assets $50,460 $56,501
Liabilities and stockholders' equity:
Current liabilities $9,908 $8,060
Long-term liabilities (C) 26,586 61
Stockholders' equity (D) 13,966 48,380
Total liabilities and
stockholders' equity $50,460 $56,501
(A) Product sales for the year ended December 31, 1997 include sales of
Dermagraft-TC of $976,000 and sales of Dermagraft at cost to a
related party in the amount of $1,190,000. 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 year ended December 31, 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 $32.4 million, or
$.89 per share, for the year ended December 31, 1996.
(C) Through December 1997, the Company has borrowed $13.4 million from
its joint venture partner, Smith & Nephew, as provided under its
joint venture agreements. An additional $6.6 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 $14.6 million under the loan agreement as of December 31, 1997,
and expects to draw the remaining balance by early 1998.
(D) 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 Dermagraft Joint Venture. As the transaction
occurred subsequent to the end of the fiscal year, it is not
reflected in the statement of operations or balance sheet as of or
for the year ended December 31, 1997.
SOURCE Advanced Tissue Sciences, Inc.
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Related links:
http://www.advancedtissue.com
CONTACT:
Beth A. Kriegel, Director, Investor Relations
of Advanced Tissue Sciences, Inc., 619-450-5802
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