ANN ARBOR, Mich., Feb. 8 /PRNewswire-FirstCall/ -- Aastrom
Biosciences, Inc. (NASDAQ:ASTM) today reported financial results
for the second fiscal quarter ended December 31, 2005. The Company
also reported several clinical and operational achievements during
the quarter ended December 31, 2005, including: * The enrollment of
patients at The Heart and Diabetes Center North Rhine- Westphalia,
located in Bad Oeynhausen, Germany, into a controlled clinical
trial for diabetic limb ischemia using Tissue Repair Cells (TRCs).
The aim of this human study is to evaluate the safety and efficacy
of Aastrom's TRCs in the regeneration of functioning blood vessels
in the legs of diabetic patients with limb ischemia. * The U.S.
Phase I/II bone graft clinical trial for severe fractures has
enrolled and treated all 20 of the first stage patients. This trial
was expanded to include an additional 16 patients per an
Investigational New Drug (IND) amendment approved by the FDA. The
Company expects to report interim trial results from the first
stage patients in the late second or early third quarter of
calendar year 2006. * The announcement of a human clinical trial in
the U.S. to evaluate the formation of new bone tissue in the spine
using TRCs (posterior-lateral lumbar spinal fusions for treatment
of degenerative spondylolisthesis). The Phase I/II trial will be
conducted under an IND application approved by the FDA, and
initially conducted at a single clinical center, the William
Beaumont Hospital in Royal Oak, MI. After treating approximately
five initial patients, the safety and effect of the TRC treatment
will be assessed, and if acceptable it is expected that the trial
will expand to multiple centers. This treatment approach will
evaluate the use of TRCs in combination with a carrier matrix to
induce sufficient bone growth to fuse or merge two vertebrae in the
lower back. * The initiation of a new bone grafting clinical trial
in the EU for the use of TRCs to repair severe non-union fractures
of long bones. The Phase I/II multi-center clinical trial has been
approved by the Spanish Drug Agency (AEMPS) and is designed to
further demonstrate the safety and effectiveness of TRCs to
regenerate new, healthy bone in the repair of long bone fractures.
The center participants located in Barcelona, Spain include:
Fundacion Teknon and Institut de Terapia Regenerativa Tisular at
Hospital de Barcelona S.C.I.A.S., Hospital General de l'Hospitalet
and Centro Medico Teknon. * The report of positive interim results
from the feasibility clinical trial conducted with the Teknon
Hospital Maxillofacial Clinic in Barcelona, Spain, to evaluate the
use of TRCs for maxillary (upper jaw) bone reconstruction in 5
patients, performed to support placement of dental implants. The
study results showed clinical safety, and that the TRC treatment
sites all exhibited bone growth and had the desired initial
integration with preexisting bone. This is the second clinical bone
graft trial to also report that surgical sites treated with TRCs
appear to exhibit less inflammation or swelling than sites treated
without TRCs. "During the second fiscal quarter, Aastrom continued
to make significant advancements in its clinical and corporate
programs in both the U.S. and Europe. We have met our corporate
objective of initiating clinical trials to address three types of
bone regeneration: long bone, facial or jaw bone, and now spine.
Our recently announced U.S. Phase I/II clinical trial will evaluate
the ability of our TRCs to grow new bone in patients requiring a
spine fusion. Perhaps of most importance, we are now reporting
initial results from our studies, which indicate the exciting
potential of using TRCs for bone regeneration," said R. Douglas
Armstrong, Ph.D., Chief Executive Officer and Chairman of Aastrom.
"The proof of concept results we are gathering from our studies are
very encouraging for the prospects of our TRC bone marrow stem
cells to regenerate human tissues in certain clinical indications."
Dr. Armstrong continued, "We have also continued to make progress
in our pipeline programs as we explore extending the use of TRCs to
specific clinical indications and different human tissues. This is
illustrated by our new clinical trial in which diabetic patients
receive TRCs to potentially regenerate functional blood vessels in
their limbs, therefore improving circulation and mobility. We are
also preparing a new clinical trial design to draw upon the bone
and vascular regenerating potential of TRCs for the treatment of
femur osteonecrosis, a condition that often requires hip
replacements. The upcoming months should be an exciting time for
Aastrom, and I am enthusiastic about our planned clinical and
corporate milestones." Fiscal Year 2006 Second Quarter Ended
December 31, 2005 Results Total revenues for the quarter and six
months ended December 31, 2005, consisting of product sales and
grant funding, were $117,000 and $297,000, respectively, compared
to $374,000 and $561,000 for the same periods in fiscal year 2005.
Product sales for the quarter and six months ended December 31,
2005 decreased to $42,000 and $57,000, respectively, from $212,000
and $227,000 for the same periods in fiscal year 2005. The
decreases in product sales revenue are the result of reduced volume
of therapy kits for clinical trials and research by others. As
previously disclosed, we are not formally marketing the
AastromReplicell(R) System as a stand-alone product as this is a
limited commercial area. However, the AastromReplicell System
technology continues to be used to manufacture our proprietary TRC
cell products. Grant revenues for the quarter and six months ended
December 31, 2005 decreased to $75,000 and $240,000, respectively,
from $162,000 and $334,000 for the same periods in fiscal year
2005. These decreases are the result of lower grant program
activities; however, we continue to pursue grant-funded programs.
Grant revenues accounted for 81% of total revenues for the six
months ended December 31, 2005, compared to 60% for the same period
in fiscal year 2005, 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 for the
quarter and six months ended December 31, 2005 increased to
$4,456,000 and $8,430,000, respectively, from $2,924,000 and
$5,820,000 for the same periods in fiscal year 2005. The cost of
product sales for the quarter and six months ended December 31,
2005 decreased to $4,000 and $9,000, respectively, from $39,000 and
$54,000 for the same periods in fiscal year 2005. Research and
development expenses for the quarter and six months ended December
31, 2005 increased to $2,195,000 and $4,148,000, respectively, from
$1,596,000 and $3,163,000 for the same periods in fiscal year 2005.
These increases reflect the continued expansion of our research
activities, including additional staffing requirements, to support
future regulatory submissions, on-going and planned bone grafting
and vascular repair clinical trials in the U.S. and EU, product
development activities in the area of tissue regeneration and
development of centralized facilities for product manufacturing and
distribution processes. Research and development expenses for the
quarter and six months ended December 31, 2005, also include a non-
cash charge of $121,000 and $199,000, respectively, 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 for the quarter and six months
ended December 31, 2005 increased to $2,257,000 and $4,273,000,
respectively, from $1,289,000 and $2,603,000 for the same periods
in fiscal year 2005. These increases are due to additional employee
costs that include: recruitment and relocation expenses, 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 same periods in fiscal year
2005. Costs also increased for the quarter and six months ended
December 31, 2005 due to additional state filing fees required for
increasing our authorized common shares and required activities for
financial internal controls compliance and certification. In
addition, selling, general and administrative expenses for the
quarter and six months ended December 31, 2005, included non-cash
charges of $185,000 and $303,000, respectively, relating to the
adoption of SFAS 123R on July 1, 2005. Interest income for the
quarter and six months ended December 31, 2005 increased to
$197,000 and $503,000, respectively, from $97,000 and $157,000 for
the same periods 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 to improved yields from our investments in 2005. Net
loss for the quarter ended December 31, 2005 was $4,142,000, or
$.04 per share, compared to a net loss of $2,453,000, or $.03 per
share for the same period in fiscal year 2005. Net loss for the six
months ended December 31, 2005, was $7,630,000, or $.07 per share,
compared to $5,102,000, or $.06 per share for the same period in
fiscal year 2005. The increases in net loss are 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 December 31, 2005, the Company
had $26.2 million in cash, cash equivalents and short-term
investments as compared to $32.4 million in cash, cash equivalents
and short-term investments at June 30, 2005. "With the continued
expansion of our research and clinical trial programs in the field
of tissue regeneration, we expect our costs and expenses to
increase. Therefore, while our cash utilization for the first six
months of the fiscal year averaged approximately $1.2 million per
month, we anticipate our monthly cash utilization to increase to
approximately $1.5 million for the remainder of this fiscal year,"
said Gerald D. Brennan, Jr., Vice President Administrative and
Financial Operations and Chief Financial Officer of Aastrom.
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 second quarter fiscal year 2006 financial results and
the Company's recent progress and future goals today, February 8,
2006, at 10:00 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.vcall.com/IC/CEPage.asp?ID=100120. A podcast of the call
may be downloaded from the web at the internet address above. If
you are unable to participate during the live call, the webcast
will be available for replay at http://www.investorcalendar.com/
for 60 days. Through February 18, 2006, an audio replay of the call
will be available by dialing toll-free (877) 660-6853; when
prompted on the phone line, the Account # is 286 and the Conference
ID# is 189683. 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 proprietary
Tissue Repair Cells (TRCs), a mix of bone marrow-derived adult stem
and progenitor cells, are manufactured in the AastromReplicell(R)
System, an industry-unique automated cell production system.
Aastrom's TRC cell products are in clinical trials for the
following therapeutic indications: severe bone fractures (U.S.:
Phase I/II - multi-center; EU: Phase I/II - multi-center), ischemic
vascular disease (EU: Phase I/II), jaw bone reconstruction (EU:
proof of concept) and spine fusion (U.S.: Phase I/II -
single-center). The Company has recently reported positive clinical
trial results for its TRCs demonstrating both the clinical safety
and ability of TRCs to induce healthy new tissue growth. 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, 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 "expects," "may,"
"planned," "potential," "should" "appear," "anticipate," 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. --
Financial Table Follows -- AASTROM BIOSCIENCES, INC. (Unaudited)
CONSOLIDATED STATEMENTS OF OPERATIONS DATA: Quarter ended Six
months ended December 31, December 31, ------------ -------------
2004 2005 2004 2005 ----- ----- ----- ----- REVENUES: Product sales
$212,000 $42,000 $227,000 $57,000 Grants 162,000 75,000 334,000
240,000 ----- ----- ----- ----- Total revenues 374,000 117,000
561,000 297,000 ----- ----- ----- ----- COSTS AND EXPENSES: Cost of
product sales 39,000 4,000 54,000 9,000 Research and development
1,596,000 2,195,000 3,163,000 4,148,000 Selling, general and
administrative 1,289,000 2,257,000 2,603,000 4,273,000 ----- -----
----- ----- Total costs and expenses 2,924,000 4,456,000 5,820,000
8,430,000 ----- ----- ----- ----- OTHER INCOME 97,000 197,000
157,000 503,000 ----- ----- ----- ----- NET LOSS $(2,453,000)
$(4,142,000) $(5,102,000) $(7,630,000) ----- ----- ----- -----
----- ----- ----- ----- NET LOSS PER COMMON SHARE (Basic and
Diluted) $(.03) $(.04) $(.06) $(.07) ----- ----- ----- ----- -----
----- ----- ----- Weighted average number of common shares
outstanding 89,485,000 102,681,000 86,112,000 102,582,000 -----
----- ----- ----- ----- ----- ----- ----- CONSOLIDATED BALANCE
SHEET DATA: June 30, December 31, 2005 2005 ----- ----- ASSETS Cash
and cash equivalents $ 14,408,000 $ 18,225,000 Short-term
investments 18,006,000 8,000,000 Receivables, net 193,000 123,000
Inventories 116,000 5,000 Other current assets 421,000 499,000
Property and equipment, net 753,000 1,124,000 ----- ----- Total
assets $ 33,897,000 $ 27,976,000 ----- ----- ----- -----
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities $869,000
$1,365,000 Shareholders' equity 33,028,000 26,611,000 ----- -----
Total liabilities and shareholders' equity $ 33,897,000 $
27,976,000 ----- ----- ----- ----- CONTACTS: Kris M. Maly Cameron
Associates Investor Relations Department Kevin McGrath -
Institutions Aastrom Biosciences, Inc. Phone: (212) 245-4577 Phone:
(734) 930-5777 Alyson Nikulicz - Media Phone: (212) 554-5464 First
Call Analyst: FCMN Contact: DATASOURCE: Aastrom Biosciences, Inc.
CONTACT: Kris M. Maly, Investor Relations Department 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 Web site: http://www.aastrom.com/
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