TEMPE, Ariz., Oct. 25 /PRNewswire-FirstCall/ -- OrthoLogic Corp.
(NASDAQ:OLGC) today announced financial results for the third
quarter ended September 30, 2005. OrthoLogic reported a net loss of
$7.6 million, or $(0.20) per share, for the third quarter of 2005,
compared to a net loss of $29.4 million, or $(0.80) per share in
the third quarter of 2004. Third quarter operating expenses totaled
$8.3 million, compared to operating expenses of $31.8 million in
the third quarter of 2004. Third quarter expenses for continuing
operations for the prior year included $25.8 million of In-Process
Research and Development costs related to the asset acquisition of
Chrysalis Biotechnology, Inc. (CBI). At September 30, 2005,
OrthoLogic had cash, cash equivalents, and investments of $83.5
million. "We continue to make progress in our late stage programs
for Chrysalin(R) in the accelerated fracture repair and diabetic
foot ulcer indications, both of which represent significant,
underserved markets," stated James M. Pusey, M.D., president and
chief executive officer of OrthoLogic. "We are looking forward to
advancing our pipeline with the finalization of a gel formulation
of Chrysalin for use in diabetic foot ulcers, as well as advancing
our preclinical compound addressing cartilage defect repair."
Company Highlights Fracture Repair: Enrollment is ongoing in the
company's Phase 2b dosing trial in patients with unstable and/or
displaced distal radius fractures. This study is intended to
establish the lower dose range of Chrysalin versus a placebo
control and will include 500 patients in 60 U.S. and Canadian
centers. OrthoLogic expects the patient enrollment for this trial
to be faster than the Phase 3 study. Enrollment is complete in the
company's Phase 3 trial indication with data collection ongoing and
efficacy results expected in the first half of 2006. Diabetic Ulcer
Healing: OrthoLogic submitted final study results from the Phase
1/2 trial of Chrysalin in diabetic ulcer healing to a peer-reviewed
journal during the third quarter. These results showed significant
efficacy and a dose response curve in the foot ulcer sub-population
of 35 patients and will be the basis for further studies of
Chrysalin in diabetic foot ulcer patients. Supportive Preclinical
Data: During the third quarter, OrthoLogic announced findings from
a study in the online version of the Journal of Cellular
Physiology, showing that Chrysalin enhances neovascularization, or
the growth of new blood vessels that have already sprouted, which
can be an advantage for bone and tissue repair. These results
further support the Chrysalin clinical development program
currently underway in fracture repair and diabetic foot ulcer
healing. Business Development: Yesterday, OrthoLogic announced the
hiring of Dana B. Shinbaum to the position of Vice President of
Business Development. He joins OrthoLogic from Savient
Pharmaceuticals, Inc. where he held positions of increasing
responsibility in marketing, strategic planning and new product
development, with responsibilities including creating and
developing new business opportunities, leading global project teams
and managing product launches. Dana holds a BA in economics and
business from Lafayette College, and an MBA in finance and
accounting from Drexel University. In his new position at
OrthoLogic, Dana Shinbaum will be responsible for identifying,
evaluating and negotiating potential in-licensing opportunities,
marketing and development partners and other possible
collaborations for the company. "With the addition of Dana Shinbaum
and continued positive news on Chrysalin in our two major
indications of fracture repair and diabetic foot ulcers, we are
strengthening the infrastructure necessary to become a fully
integrated and rapidly growing biotechnology drug development
company," concluded Dr. Pusey. Conference Call Information As
previously announced, management will host a conference call and
webcast today at 4:30 p.m. EDT (1:30 p.m. PDT). To access the call,
participants may dial 800-946-0706 (domestic) or 719-457-2638
(international) and provide the access code 6958949. A replay of
the call will be available beginning October 25, 2005, at 7:30 p.m.
EDT until November 23, 2005, at 12:59 a.m. EST. To access the
replay, please dial 888-203-1112 (domestic) or 719-457-0820
(international) and provide the access code 6958949. Additionally,
the conference call will be webcast on the Investor Relations
section of the company's website, http://www.orthologic.com/. About
Chrysalin(R) Chrysalin (TP508) is a synthetic 23-amino acid peptide
that represents the receptor-binding domain of the human thrombin
molecule, the naturally occurring agent responsible for blood
clotting and initiating the natural healing cascade of cellular
events responsible for tissue repair -- both soft tissue and bone.
Thrombin acts as a signaling molecule to initiate the early stages
of tissue repair. Since all cells contain high-affinity thrombin
receptors, it is widely accepted that thrombin plays a larger role
in the natural healing cascade than just forming blood clots.
Scientists began developing Chrysalin in 1985, when a class of
synthetic peptides was developed representing a specific
receptor-binding domain of thrombin that activates specific tissue
repair signals. Today, OrthoLogic is exclusively developing several
drug candidates based on the Chrysalin peptide, which mimic part of
the thrombin response without stimulating blood clotting, and
therefore have the potential to accelerate the natural healing
cascade. About OrthoLogic OrthoLogic is a biotechnology company
focused on the development and commercialization of the novel
synthetic peptide Chrysalin(R) (TP508) in three lead indications,
all of which represent areas of significant unmet medical need --
fracture repair, diabetic foot ulcer healing and cartilage defect
repair. Based on the Company's pioneering scientific research of
the natural healing cascade, OrthoLogic has become the leading
company focused on tissue and bone repair. OrthoLogic is committed
to developing a pipeline of novel peptides and other molecules
aimed at helping patients with equally under-served conditions. The
Company maintains exclusive worldwide rights for Chrysalin.
OrthoLogic's corporate headquarters are in Tempe, Arizona. For more
information, please visit the company's website:
http://www.orthologic.com/. Forward-Looking Statements Statements
in this press release or otherwise attributable to OrthoLogic
regarding our business that are not historical facts are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements,
which include the timing and acceptability of FDA filings and the
efficacy and marketability of potential products, involve risks and
uncertainties that could cause actual results to differ materially
from predicted results. These risks include: delays in obtaining or
inability to obtain FDA, institutional review board or other
regulatory approvals of preclinical or clinical testing;
unfavorable outcomes in our preclinical and clinical testing; the
development by others of competing technologies and therapeutics
that may have greater efficacy or lower cost; delays in obtaining
or inability to obtain FDA or other necessary regulatory approval
of our products; our inability to successfully and cost effectively
develop or outsource manufacturing and marketing of any products we
are able to bring to market; changes in FDA or other regulations
that affect our ability to obtain regulatory approval of our
products, increase our manufacturing costs or limit our ability to
market our products; our inability to raise additional capital in
the future needed to fund the continued development of our
Chrysalin Product Platform; and other factors discussed in our Form
10-K for the fiscal year ended December 31, 2004, our Form 10-Q for
the quarter ended June 30, 2005, and other documents we file with
the Securities and Exchange Commission. OrthoLogic Corp. (A
Development Stage Company) Statements of Operations (in thousands,
except per share data) (Unaudited) Three months Nine months As a
Development ending ending Stage Company September 30, September 30,
8/5/2004 - 2005 2004 2005 2004 9/30/2005 OPERATING EXPENSES General
and administrative $1,027 $1,226 $3,210 $2,397 $5,088 Research and
development 7,266 4,803 18,660 12,163 26,740 CPM divestiture and
related gains 0 (79) (250) (272) (375) CBI in process research and
development 0 25,840 0 25,840 25,840 Total operating expenses 8,293
31,790 21,620 40,128 57,293 Other income, net 700 344 1,906 950
2,657 Loss from continuing operations (7,593) (31,446) (19,714)
(39,178) (54,636) Income tax benefit 0 (411) (12) (705) (654) Net
loss from continuing operations (7,593) (31,035) (19,702) (38,473)
(53,982) Discontinued operations Net gain on the sale of the bone
device business, net of taxes of $0, $0, $0, $0, ($363),
respectively 0 1,685 0 1,685 2,048 Net income from discontinued
operations 0 1,685 0 1,685 2,048 NET LOSS $(7,593) $(29,350)
$(19,702) $(36,788) $(51,934) Per Share Information: Net loss from
continuing operations Basic ($0.20) ($0.85) ($0.52) ($1.09) Diluted
($0.20) ($0.85) ($0.52) ($1.09) Net income from discontinued
operations Basic $0.00 $0.05 $0.00 $0.05 Diluted $0.00 $0.05 $0.00
$0.05 Net loss Basic ($0.20) ($0.80) ($0.52) ($1.04) Diluted
($0.20) ($0.80) ($0.52) ($1.04) Basic and diluted shares
outstanding 38,025 36,726 38,019 35,281 See notes to the financial
statements ORTHOLOGIC CORP. (A Development Stage Company) BALANCE
SHEETS (in thousands) (Unaudited) September 30, December 31, 2005
2004 ASSETS Current assets: Cash and cash equivalents $29,744
$38,377 Short-term investments 51,175 53,642 Prepaids and other
current assets 1,068 1,053 Escrow receivable, net 6,942 -- Total
current assets 88,929 93,072 Furniture and equipment, net 551 478
Escrow receivable, net -- 6,828 Long-term investments 2,623 11,558
Deferred income taxes - non-current 1,106 1,106 Trademarks and
patents 2,288 2,142 Total assets $95,497 $115,184 LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $1,315
$833 Accrued compensation 659 648 Accrued property taxes 174 114
Excess space reserve 99 559 Accrued clinical 765 1,236 Other
accrued liabilities 982 727 Total current liabilities 3,994 4,117
Deferred rent and capital lease obligation 83 137 Non-current
portion of excess space reserve 111 0 Other non-current liabilities
37 0 Total liabilities 4,225 4,254 Stockholders' Equity Common
stock, $.0005 par value; 100,000,000 and 50,000,000 shares
authorized; 38,024,742 and 38,011,642 shares issued and outstanding
19 19 Additional paid-in capital 170,949 170,905 Accumulated
deficit (79,696) (59,994) Total stockholders' equity 91,272 110,930
Total liabilities and stockholders' equity $95,497 $115,184 See
notes to the financial statements DATASOURCE: OrthoLogic Corp.
CONTACT: Sherry A. Sturman, Chief Financial Officer of OrthoLogic
Corp., +1-602-286-5436; or Melanie Friedman of Stern Investor
Relations, Inc., +1-212-362-1200, for OrthoLogic Corp. Web site:
http://www.orthologic.com/
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