ANN ARBOR, Mich., Sept. 8 /PRNewswire-FirstCall/ -- Aastrom
Biosciences, Inc. (NASDAQ:ASTM) today reported financial results
for the fourth quarter and fiscal year ended June 30, 2005. The
Company also reported significant clinical and operational
achievements of the last quarter and fiscal year. For the quarter
ended June 30, 2005, these achievements included: * Clinical
progress: -- Announced positive results from its feasibility
clinical trial conducted in Barcelona, Spain to evaluate the use of
Aastrom's Tissue Repair Cells (TRCs) for the treatment of severe
long bone non-union fractures. All of the patients treated with
TRCs, an autologous bone marrow-derived cell product, exhibited
clinical and functional healing, with 5 of 6 treatments showing
bone regeneration at the fracture site as determined by
radiographic imaging by 6 months. The results were notable in that
each patient had failed prior treatment with standard of care
methodologies and had a poor prognosis for healing. This
feasibility trial suggests that Aastrom's autologous TRCs may offer
a new way to achieve local bone regeneration for bone grafting and
other clinical indications for bone repair. * New management
appointment: -- Appointed Gerald D. Brennan, Jr., JD, as Vice
President Administrative and Financial Operations and Chief
Financial Officer. Mr. Brennan has almost two decades of strong
financial and operational expertise gained from his experience in
senior management level positions. * Other notable event: -- Added
to the Russell 3000(R) Index which measures the performance of the
3,000 largest U.S. companies based on total market capitalization.
Commenting on the year, R. Douglas Armstrong, Ph.D., Chief
Executive Officer and Chairman of Aastrom, said, "We made
significant strides in fiscal year 2005 and demonstrated our
continued commitment to achieve progressive corporate milestones.
Of particular note has been the movement of our TRCs into the
clinic, and the interim results we have achieved in these patient
treatments. The support and interest that we are receiving from the
medical field as well as regulatory agencies, should further our
clinical progress as we expand our trials and move toward a
registration (Phase III) trial." Dr. Armstrong continued, "As the
Company continues to transform from a development company to a
company focused on the commercialization of its products, we are
strengthening our board and management leadership with new officers
and personnel who bring additional expertise in the clinical and
product development areas. These activities, combined with the
successful financings of the past year, should assist us in
delivering on our milestones throughout the coming fiscal year."
The Company also recently announced changes on the board of
directors, including the additions of Stephen G. Sudovar and
Timothy M. Mayleben, both of whom bring a wealth of biotechnology
and pharmaceutical business experience at the executive and board
level. Mr. Sudovar was the President of Roche Laboratories, Inc.,
U.S., a division of Hoffman La Roche, as well as the CEO of EluSys
Therapeutics, Inc., a development stage biotech company, and the
founder, President, CEO and Chairman of Pracon Incorporated, a
healthcare consulting and communications firm. Mr. Mayleben is an
active executive in the biotechnology field, with most recent roles
as the CFO, and then COO of Esperion Therapeutics, Inc., now a
division of Pfizer Global Research and Development. Mr. Mayleben
qualifies as a financial expert for the audit committee under the
SEC rules, and meets the NASDAQ financial sophistication
requirements. With new members joining the board, two of our
long-term directors, Arthur F. Staubitz and Joseph Taylor, have
chosen to retire. Each of these gentlemen served on Aastrom's board
for over 6 years. We thank both of them for their contributions and
service to the Company. In the coming months, the Company will
continue to seek senior executives who could bring medical products
industry or other desired experience to Aastrom's board. Other
significant highlights from fiscal year 2005 include the following:
* Clinical progress: -- Expanded U.S. Phase I/II clinical trial of
the Company's TRC product for severe long bone fractures to include
a third and fourth site: the Department of Orthopedic Surgery at
William Beaumont Hospital, Royal Oak, MI and Lutheran Medical
Center, Brooklyn, NY. -- Achieved an FDA-required early clinical
safety benchmark for the Phase I/II U.S. clinical trial of the
Company's TRC product intended for the treatment of severe long
bone fractures permitting the Company to now treat appendicular, or
fresh, non-union fractures, opening the trial to a larger patient
population. -- Signed a clinical trial agreement with the Heart and
Diabetes Center North Rhine-Westphalia, located in Bad Oeynhausen,
Germany. The clinical trial will evaluate the safety and effect of
Aastrom's TRCs in the regeneration of peripheral vascular tissue to
treat lower limb ischemia in diabetic patients. -- Aastrom and the
Institut de Terapia Regenerativa Tissular announced the initiation
of patient enrollment in a pilot clinical trial with Instituto de
Cirugia Maxilofacial e Implantologia in Barcelona, Spain to
determine the safety and effect of Aastrom's TRCs in maxillary
sinus lift bone graft procedures necessary for dental implants. *
Patents: -- Received a patent from the U.S. Patent and Trademark
Office that provides expanded coverage for the Company's
proprietary single-pass perfusion technology to cover enhancing the
biological functionality of human dendritic cells produced in cell
culture. * Management: -- James A. Cour was appointed as President
and Chief Operating Officer. Prior to accepting his position with
Aastrom, Mr. Cour held executive level management positions with
several companies, including Baxter International, Windsor
VanGelder Limited and Cytomedix. -- Janet M. Hock, B.D.S., Ph.D.
was named Vice President Global Research and Chief Scientific
Officer, responsible for Aastrom's biological research and clinical
development programs. Dr. Hock has worked in academic, government
and industry settings and has broad experience in the fields of
bone formation and skeletal diseases, along with the development of
new therapeutic treatments. -- Gunter Rosskamp, Ph.D. was named as
Managing Director of Aastrom's wholly owned German subsidiary,
Aastrom Biosciences GmbH (formerly Zellera AG), which supports
Aastrom's business operations in the EU. Fourth Quarter and Twelve
Months ended June 30, 2005 Results Total revenues for the quarter
ended June 30, 2005 were $96,000, compared to $210,000 for the same
period in fiscal year 2004. Total revenues for the twelve months
ended June 30, 2005 were $909,000 compared to $1,302,000 for the
same period in fiscal year 2004. Product sales and rentals revenues
increased to $10,000 for the quarter ended June 30, 2005 from
$4,000 in the same period in fiscal year 2004. Product sales and
rentals revenues increased to $387,000 for the twelve months ended
June 30, 2005 from $49,000 for the same period in fiscal year 2004.
The increase is primarily the result of additional therapy kit
sales for clinical trials and research by others, and revenue of
$120,000 from the sale of an AastromReplicell System in fiscal year
2005. Product sales and rentals revenues include rental revenue of
$37,000 and $0 from the fiscal years ended June 30, 2004 and 2005,
respectively. This revenue was generated from AastromReplicell
System rental agreements that have since expired or have been
terminated. Based upon our current business strategy we do not
expect to generate rental revenues in future periods. Our plan is
to limit our marketing efforts promoting the AastromReplicell
System as a stand-alone product. Rather, we intend to focus on
utilizing the AastromReplicell System technology in cell
manufacturing facilities to support our TRC development programs.
At such time as we satisfy applicable regulatory approval
requirements, we expect the sales of our TRC and related cell-based
products will constitute nearly all of our product sales revenues.
Revenues for fiscal year 2004 also include $75,000 in research and
development agreements compared to $0 for fiscal year 2005. This
decrease is the result of a one-time $50,000 fee from our
sublicense agreement with Corning Inc. in fiscal year 2004, and an
additional fee of $25,000 in fiscal year 2004 from a development
agreement with a European institution. Grant revenues decreased to
$86,000 for the quarter ended June 30, 2005 from $206,000 in the
same period in fiscal year 2004. Grant revenues decreased to
$522,000 in fiscal year 2005 from $1,178,000 in fiscal year 2004.
Grant revenues in fiscal year 2005 decreased from fiscal year 2004
as a result of decreased activity on the collaborative grant with
the Defense Advanced Research Projects Agency (DARPA), and reduced
activity on grants from the National Institutes of Health. Grant
revenues accounted for 57% of total revenues for fiscal year 2005
and 90% for fiscal year 2004, and are recorded on a
cost-reimbursement basis. Grant revenues may vary in any period
based on timing of grant awards, grant-funded activities, level of
grant funding and number of grants awarded. Total costs and
expenses were $3.7 million for the quarter ended June 30, 2005,
compared to $3.0 million for the same period in fiscal year 2004.
Total costs and expenses were $13.3 million for the twelve months
ended June 30, 2005, compared to $12.0 million for the same period
in fiscal year 2004. Cost of product sales and rentals were $8,000
for the quarter ended June 30, 2005, compared to $5,000 for the
same period in fiscal year 2004. Cost of product sales and rentals
increased to $139,000 for the twelve months ended June 30, 2005
from $27,000 for the same period in fiscal year 2004. For the
fiscal year, the fluctuation in cost of product sales and rentals
is due to the changes in the volume of product sales. The non-cash
provision for excess AastromReplicell System inventories was $9,000
in fiscal year 2005 and $253,000 in 2004. As of June 30, 2005, the
carrying value of our AastromReplicell System inventories was
reduced to zero. Based upon our current business strategy, we do
not expect to generate revenues from the sale of AastromReplicell
System inventories in future periods. Research and development
expenses increased slightly to $1.9 million for the quarter ended
June 30, 2005 from $1.8 million for the same period in fiscal year
2004. Research and development expenses increased to $7.2 million
for the twelve months ended June 30, 2005 from $6.3 million for the
same period in fiscal year 2004. These increases reflect expanded
research activities to support regulatory submissions and
anticipated product registrations, product development activities
in the area of tissue regeneration, development of product
distribution processes, and ongoing and planned bone grafting
trials in the U.S. and the EU. Research and development expenses in
2005 also include a non-cash charge of $101,000 relating to stock
options awarded to an employee whose status changed to a
consultant. Selling, general and administrative expenses increased
to $1.7 million for the quarter ended June 30, 2005 from $1.2
million for the same period in fiscal year 2004. Selling, general
and administrative expenses increased to $6.0 million for the
twelve months ended June 30, 2005 from $5.4 million for the same
period in 2004. These increases are due to additional staffing,
consulting and pre-marketing activities in the U.S. and
internationally, and increased costs required for financial
internal controls compliance and certification. Selling, general
and administrative costs in fiscal year 2005 include a non-cash
charge of $59,000 related to a variable stock option that was
exercised. Selling, general and administrative costs in fiscal year
2004 include a non-cash charge of $53,000 relating to certain
warrants issued for public and investor relations services, and a
$372,000 non-cash charge related to an employee performance-based
stock option that vested. Net loss for the quarter ended June 30,
2005 was $3.4 million, or $.03 per share, compared to a net loss of
$2.7 million, or $.03 per share for the same period in fiscal year
2004. Net loss for the twelve months ended June 30, 2005, was $11.8
million, or $.13 per share, compared to $10.5 million, or $.14 per
share for the same period in fiscal year 2004. At June 30, 2005,
the Company had $32.4 million in cash, cash equivalents and
short-term investments as compared to $16.9 million in cash, cash
equivalents and marketable securities at June 30, 2004. "The
Company's strong balance sheet position should allow us to fund the
anticipated significant increases in clinical trial expenses in the
coming fiscal year. Largely as a result of these anticipated
increases, we expect our monthly cash utilization to increase from
approximately $1.0 million per month at the end of fiscal year
2005, to approximately $1.5 million per month on average during
fiscal year 2006," said Gerald D. Brennan, Jr., Vice President
Administrative and Financial Operations and Chief Financial Officer
of Aastrom. Outlook for the Coming Year Aastrom entered fiscal year
2006 with sufficient funding to support planned clinical and
operational goals and objectives, including: * The Heart and
Diabetes Center North Rhine-Westphalia, located in Bad Oeynhausen,
Germany recently received the licenses necessary to proceed with
TRC cell manufacturing. Therefore, we expect to initiate the Phase
II-level clinical trial for diabetic limb ischemia in first quarter
of fiscal year 2006. * We anticipate obtaining a license to
establish our own centralized cell manufacturing facility in
Europe. * We expect to report on results from the five patients
enrolled in the clinical trial in Barcelona, Spain to determine the
safety and effectiveness of Aastrom's TRCs in maxillary sinus lift
bone graft procedures necessary for dental implants in the first
half of fiscal year 2006. * With five sites in the Phase I/II U.S.
bone graft clinical trial for severe fractures, we have targeted
the accrual and treatment of the first 20 patients by the end of
the second quarter of fiscal year 2006. Aastrom Conference Call
Information R. Douglas Armstrong, Ph.D., Chief Executive Officer
and Chairman and Gerald D. Brennan, Jr., Vice President
Administrative & Financial Operations and Chief Financial
Officer of Aastrom Biosciences, Inc., will review and discuss the
fourth quarter fiscal year 2005 financial results and the Company's
recent progress and future goals today, September 8, 2005, at 11:00
a.m. (EDT) when they will host a conference call. Interested
parties should call toll-free (877) 407-9205, or from outside the
U.S. (201) 689-8054, fifteen minutes before the start of the call
to register and identify themselves as registrants of the 'Aastrom
Conference Call'. The call will be simulcast on the web at
http://www.vcall.com/ClientPage.asp?ID=94806 , and the entire call
will be archived for replay at the same site for 60 days. About
Aastrom Biosciences, Inc. Aastrom Biosciences, Inc. (NASDAQ:ASTM)
is developing patient-specific products for the repair or
regeneration of human tissues, utilizing the Company's proprietary
adult stem cell technology. Aastrom's strategic position in the
tissue regeneration sector is enabled by its proprietary Tissue
Repair Cells (TRCs), a mix of bone marrow-derived adult stem and
progenitor cells, and the AastromReplicell(R) System, an
industry-unique automated cell production platform used to produce
cells for clinical use. TRCs are the core component of the products
Aastrom is developing for severe bone fractures, ischemic vascular
disease, jaw reconstruction and spine fusion, with Phase I/II level
clinical trials active in the U.S. and EU for some of these
indications. For more information, visit Aastrom's website at
http://www.aastrom.com/. This document contains forward-looking
statements, including without limitation, statements concerning
clinical trial plans and expectations, intended product development
and commercialization objectives, the expected adequacy of capital
resources to support planned activities, expected milestones,
anticipated components of revenue, plans for the current fiscal
year and potential product applications, which involve certain
risks and uncertainties. The forward-looking statements are also
identified through use of the words "intended," "plan," "expect,"
"should," "could," "seek," "anticipated," "may," and other words of
similar meaning. Actual results may differ significantly from the
expectations contained in the forward-looking statements. Among the
factors that may result in differences are the inherent
uncertainties associated with clinical trial and product
development activities, regulatory approval requirements, the
availability of resources and the allocation of resources among
different potential uses. These and other significant factors are
discussed in greater detail in Aastrom's Annual Report on Form 10-K
and other filings with the Securities and Exchange Commission.
AASTROM BIOSCIENCES, INC. CONSOLIDATED STATEMENT OF OPERATIONS
DATA: Quarter ended June 30, Year ended June 30,
--------------------- ------------------ 2004 2005 2004 2005 -----
----- ----- ----- (Unaudited) REVENUES: Product sales and rentals
$4,000 $10,000 $49,000 $387,000 Research and development agreements
- - 75,000 - Grants and other 206,000 86,000 1,178,000 522,000
---------- ----------- ---------- ---------- Total revenues 210,000
96,000 1,302,000 909,000 COSTS AND EXPENSES: Cost of product sales
and rentals 5,000 8,000 27,000 139,000 Cost of product sales and
rentals - provision for excess inventories - - 253,000 9,000
Research and development 1,818,000 1,948,000 6,289,000 7,206,000
Selling, general and administrative 1,190,000 1,745,000 5,390,000
5,972,000 ---------- ----------- ---------- ---------- Total costs
and expenses 3,013,000 3,701,000 11,959,000 13,326,000 OTHER INCOME
56,000 245,000 169,000 606,000 ---------- ----------- ----------
---------- NET LOSS $(2,747,000) $(3,360,000) $(10,488,000)
$(11,811,000) ========== =========== ========== ========== NET LOSS
PER SHARE (Basic and Diluted) $(.03) $(.03) $(.14) $(.13)
========== =========== ========== ========== Weighted average
number of common shares outstanding 80,713,000 102,036,000
73,703,000 93,541,000 ========== =========== ========== ==========
CONSOLIDATED BALANCE SHEET DATA: June 30, 2005 -------------
ASSETS: Cash and cash equivalents $14,408,000 Short-term
investments 18,006,000 Other current assets 730,000 Property, net
753,000 ----------- Total assets $33,897,000 ===========
LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities $869,000
Shareholders' equity 33,028,000 ----------- Total liabilities and
shareholders' equity $33,897,000 =========== CONTACTS: Kris M. Maly
or Becky Anderson Investor Relations Department Aastrom
Biosciences, Inc. Phone: (734) 930-5777 Cameron Associates Kevin
McGrath - Institutions Phone: (212) 245-4577 Alyson Nikulicz -
Media Phone: (212) 554-5464 DATASOURCE: Aastrom Biosciences, Inc.
CONTACT: Kris M. Maly, or Becky Anderson, both of Aastrom
Biosciences, Inc., +1-734-930-5777; or Kevin McGrath,
+1-212-245-4577, or Alyson Nikulicz, +1-212-554-5464, both of
Cameron Associates for Aastrom Biosciences, Inc. Web site:
http://www.aastrom.com/
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