ANN ARBOR, Mich., Nov. 9 /PRNewswire-FirstCall/ -- Aastrom
Biosciences, Inc. (NASDAQ:ASTM) today reported financial results
for the first quarter of fiscal year 2006 ended September 30, 2005.
The Company also reported several clinical and operational
achievements during the quarter ended September 30, 2005,
including: * The expansion of our U.S. Phase I/II clinical trial of
our adult stem cell-based Tissue Repair Cells (TRCs) in the
treatment of severe long bone open or non-union fractures to
include the University of Nebraska Medical Center (UNMC) in Omaha,
NE. UNMC is the fifth site engaged in this U.S. multi-center trial,
which is currently underway at Lutheran General Hospital, Park
Ridge, IL, the University of Michigan Health System, Ann Arbor, MI,
William Beaumont Hospital, Royal Oak, MI, and Lutheran Medical
Center, Brooklyn, NY. * The election to the Company's Board of
Directors of both Stephen G. Sudovar, former President and CEO of
EluSys Therapeutics, Inc. and former President of Roche
Laboratories, Inc., and Alan L. Rubino, recently appointed
President and Chief Operating Officer of Pharmos Corporation. * The
receipt of a Small Business Innovation Research Phase II grant from
the National Institutes of Health (NIH) entitled "Clinical-Scale
Production of Osteoprogenitor Cells." The two-year grant award from
the National Institute of Diabetes and Digestive and Kidney
Diseases totals $740,000, of which $324,000 has been received for
the first year of this study. This Phase II grant award follows a
Phase I grant issued to Aastrom in 2003 by the NIH's National
Institute of Arthritis and Musculoskeletal and Skin Diseases.
Following the end of the first quarter of fiscal year 2006, ended
September 30, 2005, the Company also achieved these additional
milestones: * Patient enrollment has been initiated at The Heart
and Diabetes Center North Rhine-Westphalia, located in Bad
Oeynhausen, Germany, for a controlled clinical trial for diabetic
limb ischemia. This trial followed the Diabetes Center's receipt of
the licenses and the Investigational Medicinal Product Dossier
(IMPD) necessary to manufacture and use cells for clinical trials
in compliance with the new European Union directives. * The Phase
I/II U.S. bone graft clinical trial for severe fractures has
enrolled and treated all 20 of the first stage patients. This trial
has been expanded to include an additional 16 patients per an IND
amendment approved by the FDA. * The Company received permission
from the Spanish Drug Agency (AEMPS) to commence another non-union
fracture bone grafting trial in Barcelona. The Company will provide
further details on this study in a subsequent release. "Since the
beginning of the first fiscal quarter we have continued to make
progress in developing our therapeutic product candidates and, most
importantly, delivered another significant clinical milestone with
the initiation of our first clinical trial utilizing Aastrom's
proprietary TRCs to treat limb ischemia in diabetic patients,"
commented R. Douglas Armstrong, Ph.D., Chief Executive Officer and
Chairman of Aastrom. "We are now active in multiple Phase II level
trials utilizing our proprietary TRCs to generate bone and vascular
tissue, and we expect to continue to foster opportunities for
growth across our business during fiscal year 2006 as we begin to
report on the patient data from other clinical trials." First
Quarter Fiscal Year 2006 Ended September 30, 2005 Results Total
revenues for the quarter ended September 30, 2005 were $180,000,
compared to total revenues of $187,000 for the same period in
fiscal year 2005. Product sales for the quarter ended September 30,
2005 remained unchanged at $15,000 from the same period in fiscal
year 2005, resulting from the sale of therapy kits for clinical
trials and research by others. As previously disclosed, this small
commercial area has not shown promise, and we have limited our
formal marketing efforts promoting the AastromReplicell(R) System
as a stand-alone product. The AastromReplicell System technology
continues to be used to manufacture our TRC cell products. Grant
revenues decreased slightly to $165,000 for the quarter ended
September 30, 2005 from $172,000 for the same period in fiscal year
2005. This decrease is the result of slightly lower grant program
activities; however, we continue to pursue grant-funded programs.
Grant revenues accounted for 92% of total revenues for both
quarters ended September 30, 2005 and 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 grant awards received. Total costs and
expenses increased to $3,974,000 for the quarter ended September
30, 2005, from $2,896,000 for the same period in fiscal year 2005.
The cost of product sales decreased to $5,000 for the quarter ended
September 30, 2005 from $15,000 for the same period in fiscal year
2005. Research and development expenses increased to $1,953,000 for
the quarter ended September 30, 2005 from $1,567,000 for the same
period in fiscal year 2005. This increase reflects continued
expansion of our research activities to support product utility and
future regulatory submissions, product development activities in
the area of tissue regeneration, development of centralized
facilities for product manufacturing and distribution processes,
and on-going and planned bone grafting and vascular repair trials
in the U.S. and EU. Research and development expenses for the
quarter ended September 30, 2005, also include a non-cash charge of
$78,000 relating to the adoption of Financial Accounting Standards
Board Statement No. 123R, "Share-Based Payment" (SFAS 123R) on July
1, 2005, which requires us to measure the value of all employee
share-based payments and recognize that value as an operating
expense. Selling, general and administrative costs increased for
the quarter ended September 30, 2005 to $2,016,000 from $1,314,000
for the same period in fiscal year 2005. This increase is due to
additional employee costs of approximately $325,000 that include:
bonuses paid to certain employees, an accrual for future
performance bonuses and the salary and fringe benefits for a
marketing director position that was vacant during the quarter
ended September 30, 2004. Costs also increased for the quarter
ended September 30, 2005 by approximately $211,000 due to
additional required activities for financial internal controls
compliance and certification. In addition, selling, general and
administrative expenses for the quarter ended September 30, 2005,
included a non-cash charge of $118,000 relating to the adoption of
SFAS 123R on July 1, 2005. Interest income was $306,000 for the
quarter ended September 30, 2005 compared to $60,000 for the same
period in fiscal year 2005. The fluctuations in interest income are
due primarily to corresponding changes in the level of cash, cash
equivalents and short-term investments during the periods and
improved yields from our investments in 2005. Net loss for the
quarter ended September 30, 2005 was $3,488,000, or $.03 per common
share compared to $2,649,000 or $.03 per common share for the same
period in fiscal year 2005. The increase in net loss is primarily
the result of increased costs and expenses offset on a per share
basis by an increase in the weighted average number of common
shares outstanding resulting from the sale of our common shares to
investors in fiscal year 2005. At September 30, 2005, the Company
had $29.2 million in cash, cash equivalents and short-term
investments as compared to $32.4 million at June 30, 2005. 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 first quarter fiscal year 2006 financial results and
the Company's recent progress and future goals today, November 9,
2005, at 11:00 a.m. (EST) when they will host a conference call.
Interested parties should call toll- free (877) 407-9205 fifteen
minutes before the start of the call to register and identify
themselves as registrants of the 'Aastrom Conference Call'. Any
registered caller on the toll-free line may ask to be placed in the
queue for the Question & Answer session. The call will be
simulcast on the web at
http://www.investorcalendar.com/IC/CEPage.asp?ID=96864. If you are
unable to participate during the live webcast, the call will be
available for replay at http://www.investorcalendar.com/ 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 manufactured in the
AastromReplicell(R) System, an industry- unique automated cell
production system. 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, 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 "planned," "expect," "should," "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. (Unaudited)
CONSOLIDATED STATEMENT OF OPERATIONS DATA: Quarter ended September
30, -------------------------- 2004 2005 ----- ----- REVENUES:
Product sales $15,000 $15,000 Grants and other 172,000 165,000
----- ----- Total revenues 187,000 180,000 ----- ----- COSTS AND
EXPENSES: Cost of product sales 15,000 5,000 Cost of product sales
and rentals - provision for obsolete and excess inventory - -
Research and development 1,567,000 1,953,000 Selling, general and
administrative 1,314,000 2,016,000 ----- ----- Total costs and
expenses 2,896,000 3,974,000 ----- ----- OTHER INCOME 60,000
306,000 ----- ----- NET LOSS $(2,649,000) $(3,488,000) ===== =====
NET LOSS PER COMMON SHARE (Basic and Diluted) $(.03) $(.03) =====
===== Weighted average number of common shares outstanding
82,738,000 102,483,000 ===== ===== CONSOLIDATED BALANCE SHEET DATA:
June 30, September 30, 2005 2005 ----- ----- ASSETS Cash and cash
equivalents $14,408,000 $23,107,000 Short-term investments
18,006,000 6,055,000 Receivables, net 193,000 169,000 Inventories
116,000 21,000 Other current assets 421,000 874,000 Property and
equipment, net 753,000 1,100,000 ----- ----- Total assets
$33,897,000 $31,326,000 ===== ===== LIABILITIES AND SHAREHOLDERS'
EQUITY Current liabilities $869,000 $1,309,000 Shareholders' equity
33,028,000 30,017,000 ----- ----- Total liabilities and
shareholders' equity $33,897,000 $31,326,000 ===== ===== CONTACTS:
Kris M. Maly or Cameron Associates Becky Anderson Kevin McGrath -
Institutions Investor Relations Department Phone: (212) 245-4577
Aastrom Biosciences, Inc. Alyson Nikulicz - Media Phone: (734)
930-5777 Phone: (212) 554-5464 DATASOURCE: Aastrom Biosciences,
Inc. CONTACT: Investor Relations, Kris M. Maly or Becky Anderson,
both of Aastrom Biosciences, Inc., +1-734-930-5777; or Kevin
McGrath - Institutions, +1-212-245-4577, or Alyson Nikulicz -
Media, +1-212-554-5464, both of Cameron Associates for Aastrom
Biosciences, Inc. Web site: http://www.aastrom.com/
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