MINNEAPOLIS, Nov. 2 /PRNewswire-FirstCall/ -- CABG Medical, Inc.
(NASDAQ:CABG), the developer of an innovative drug-eluting graft
for coronary artery bypass surgery, today reported results for the
third quarter of fiscal 2005. Net loss for the third quarter of
2005 was $1.3 million, or $0.07 per share, compared to a net loss
of $0.8 million, or $0.08 per share, for the third quarter of 2004.
For the nine months ended September 30, 2005, the Company had a net
loss of $8.2 million, or $0.45 per share, compared to a net loss of
$2.2 million or $0.23 per share for the first nine months of 2004.
The 2005 year-to-date net loss included research and development
expense of $7,510,000 of which $4,363,000 was related to the
Company's March 22, 2005 paclitaxel license agreement with
Angiotech Pharmaceuticals, Inc (NASDAQ:ANPI). The license agreement
expense included a non-cash charge of $4,335,000 related to the
issuance of equity securities to Angiotech. The Company was
required to expense the license agreement equity consideration due
to the development stage of the Company's operations and its Holly
Graft System (HGS). Excluding these costs, the proforma loss for
the nine months ended September, 30 2005 would have been $3.8
million, or $0.21 per share. (Logo:
http://www.newscom.com/cgi-bin/prnh/20050114/CGF013LOGO ) As
previously reported, the Company made modifications to the HGS
device and its clinical trial protocol in response to failures of
its HGS device in initial clinical work conducted in Australia.
After completion and testing of these modifications, the Company
resumed clinical trials of the HGS on September 8, 2005, in
Germany. In total, the Company has enrolled 32 patients in two
clinical centers in Germany and one in Australia. It has been
determined that three of these implants have occluded, including
one of the previously reported occlusions in Australia.
Additionally, one patient died from causes unrelated to the
performance of the device. One patient had the device removed prior
to the completion of the procedure. Based on the data collected by
its investigating centers, the Company believes the remaining 27
patients continue to be symptom free and in good health. "We are
extremely pleased with the enrollment in our clinical trials during
the third quarter," commented Manny Villafana, Chairman and CEO.
"We were able to add multiple investigational sites in Germany,
which should enhance and maintain our ability to enroll patients
and collect the clinical data required for our regulatory
approvals. Furthermore in October, we expanded our clinical trial
to include all appropriate patients based on our Scientific Advisor
Board's review of our safety data. During the fourth quarter we
believe that we will continue to add clinical investigational sites
in the European Union." The Company continues to believe it will
approach the FDA on initiating a clinical trial during the first
half of 2006 and believes a trial could start during the second
half of 2006. Additionally, the Company announced that abstracts on
the Holly Graft System were accepted for presentation at two
medical conferences in early December 2005. The Prince Charles
Hospital, Brisbane, Australia has been accepted to present a
summary of human clinical results at the Fourth Annual Pioneering
Techniques in Cardiac Surgery Congress, in Leipzig, Germany on
December 2, 2005. Additional information on the Congress can be
obtained at http://promedicacme.com/conf_leipzig2005.htm . The
Medizinische Hochschule Hannover, Germany, will present at the
Winter Workshop of The International Society for Minimally Invasive
Cardiothoracic Surgery in Shanghai, China on December 2, 2005.
Additional information on the Workshop is available at
http://www.ismics.org/workshop.cgi . In connection with these
presentations, the Company will be announcing a summary of the
human clinical results. However, the Company will not be able to
assess the efficacy of these grafts until all of the data has been
gathered and reviewed, and this assessment is not expected to be
completed before June 2006. 2006 Guidance For fiscal 2006, the
Company expects to incur a net loss before the impact of the stock
option expensing provisions of Statement of Financial Accounting
Standards No. 123R of approximately $12 to $14 million and expects
to utilize approximately $12 to $15 million of cash. Any news
related to the results of the Company's clinical trial, either
positive or negative, could have a significant impact on
management's guidance for 2006. Conference Call Today CABG Medical
management will host a conference call and web cast today, November
2, 2005 at 4:30 p.m. Eastern Standard Time (3:30 p.m. Central
Standard Time) to discuss its third quarter financial results,
outlook for the remainder of 2005 and current clinical
developments. The dial in number for the conference call is
1-800-475-3716. A live webcast of the call can be accessed at
http://www.cabgmedical.com/ by clicking on the "Investor Relations"
icon. An archive of the webcast will be available on the company's
website for at least 90 days following. About CABG Medical CABG
Medical, Inc. is a medical technology company developing
technologies and therapies to improve the treatment of coronary
heart disease by advancing conventional bypass surgery. We have
designed our first product, the Holly Graft(TM) System, by
leveraging our understanding of flow dynamics, material sciences
and drug combinations to create a drug-eluting graft system. Safe
Harbor Certain statements in this release that are not historical
facts, including, without limitation, those relating to our
expectation of clinical results, our belief in the paclitaxel
franchise as a drug combination capable of preventing restenosis
following the surgical implantation of devices such as the Holly
Graft(TM) System, our clinical and regulatory efforts, and our
anticipation that we will be able to present in 2005 the first
follow-up results from such clinical trials, are forward-looking
statements that involve risks and uncertainties. Such statements
are based upon the current beliefs and expectations of our
management. Actual results may vary materially from those contained
in such forward-looking statements based on a number of factors
including, without limitation, our need to obtain regulatory
approval in each relevant jurisdiction, the completion of such
trials and cases, and other factors disclosed from time to time in
our filings with the U.S. Securities and Exchange Commission. The
complete occlusion in the Company's first two graft implants will
result in delays in getting regulatory approvals for clinical
testing in the United States and other countries, and may impact
the Company in other ways not yet capable of assessment. It will be
of critical importance to the Company that the new coating
procedure and drug regimens effectively prevent occlusion in future
graft implants. Investors should take such risks into account when
making investment decisions. Shareholders and other readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date on which they are made.
We undertake no obligation to update any forward-looking
statements. CABG Medical, Inc. Statements of Operations (unaudited)
Three Months Ended Nine Months Ended September 30, September 30,
2004 2005 2004 2005 (In thousands, except share and per share data)
Revenue $- $34 $- $34 Expenses: Research and development 648 1,124
1,640 7,510 Marketing, general and administrative 195 488 596 1,500
Total 843 1,578 2,236 8,976 Interest income 13 296 25 779 Net loss
$(830) $(1,282) $(2,211) $(8,197) Basic and diluted net loss per
share $(0.08) $(0.07) $(0.23) $(0.45) Weighted average shares
outstanding - basic and diluted 10,228,639 19,361,242 9,810,264
18,413,596 CABG Medical, Inc. Balance Sheets (unaudited) December
31, September 30, 2004 2005 (In thousands) Assets Current assets:
Cash and short term investments $28,936 $30,280 Other current
assets 291 131 Total current assets 29,227 30,411 Long-term
investments - 3,965 Property and equipment, net 199 335 Total
assets $29,426 $34,711 Liabilities & Stockholders' Equity
Current liabilities: Accounts payable $841 $443 Accrued liabilities
19 102 Total current liabilities 860 545 Total stockholders' equity
28,566 34,166 Total liabilities and stockholders' equity $29,426
$34,711 CABG Medical, Inc. Statements of Operations Reconciliation
of GAAP Results from Operations to Proforma Results from Operations
(unaudited) Nine Months Ended September 30, Proforma Proforma 2004
2005 Adjustment(1) 2005 (In thousands, except share and per share
amounts) Revenue $- $34 $34 Expenses: Research and development
1,640 7,510 (4,363) 3,147 Marketing, general and administrative 596
1,500 1,500 Total expenses 2,236 8,976 (4,363) 4,613 Interest
income 25 779 779 Net loss $(2,211) $(8,197) (4,363) $(3,834) Basic
and diluted net loss per share $(0.23) $(0.45) $(0.21) Weighted
average shares outstanding - basic and diluted 9,810,264 18,413,596
18,413,596 (1) Proforma adjustment is provided to illustrate the
impact of the issuance of equity securities to Angiotech in
exchange for an exclusive license to certain drug eluting
technologies. The proforma adjustment is comprised of a $4,335,000
non-cash charge related to the fair value of the equity securities
issued to Angiotech and $28,000 in related legal expenses.
http://www.newscom.com/cgi-bin/prnh/20050114/CGF013LOGO
http://photoarchive.ap.org/ DATASOURCE: CABG Medical, Inc. CONTACT:
Manny Villafana, Chairman & CEO, or John L. Babitt, President,
COO & CFO, of CABG Medical, Inc., +1-763-258-8005, Fax,
+1-763-258-8008 Web site: http://www.cabgmedical.com/
http://promedicacme.com/conf_leipzig2005.htm
http://www.ismics.org/workshop.cgi
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