SAN DIEGO, Aug. 11 /PRNewswire-FirstCall/ -- Cardium Therapeutics
(NYSE Amex: CXM) today reported its financial results for its
second quarter ended June 30, 2009, and on recent developments and
future outlook. (Logo:
http://www.newscom.com/cgi-bin/prnh/20051018/CARDIUMLOGO) Cardium
made significant progress since first quarter 2009 financial report
and highlights included (1) the sale of its InnerCool Therapies
business to Royal Philips Electronics; (2) the completion of
enrollment of the MATRIX 2b clinical trial of Excellarate for the
potential treatment of diabetic ulcers with full data to be
announced in late September 2009; and (3) the announcement of the
Company's new orthobiologics initiative which is designed to build
on and extend the underlying technology that has been developed by
the Tissue Repair Company for soft tissue injuries such as diabetic
ulcers to hard tissue applications such as bone. The Company's new
orthobiologics initiative combines (i) proprietary Gene Activated
Matrix(TM) or GAM(TM) delivery and ligand targeting; (ii) use of
GAM to locally produce proteins capable of stimulating bone and
other tissue growth; and (iii) a substantial body of pre-clinical
research and development supporting the use of GAM to deliver bone
growth factors. It was also reported that the Company regained its
listing compliance with the NYSE Amex. In addition, as initially
reported in November 2008, Cardium instituted several important
strategic actions intended to focus its overall operating structure
and generate cost efficiencies. Based on these actions, cost
savings have begun to be reflected in the Company's operating
results. In particular, for the first six months of 2009, Cardium's
loss from operations was reduced by 49.9% compared to the same
period a year ago. With the recent sale of InnerCool Therapies to
Philips, the Company has further substantially reduced its employee
headcount. The second quarter 2009 financial results also include
substantial non-cash charges to adjust for the fair market value of
certain common stock warrants required as a result of the adoption
of Emerging Issues Task Force EITF 07-05 entitled "Determining
Whether an Instrument (or Embedded Feature) is indexed to an
Entity's Own Stock" by the Financial Accounting Standards Board. In
accordance with this guidance, common stock warrants with certain
price protection clauses that were previously accounted for as
equity instruments are now required to be recorded as a derivative
liability with quarterly adjustments of their fair value recorded
on the income statement. Since the price of Cardium's common stock
increased by approximately 19% during the second quarter, this
resulted in a $4.8 million "Change in Fair Value of Derivative
Liabilities" reflecting the substantially higher values associated
with outstanding warrants to purchase the Company's stock.
InnerCool Therapies On July 23, 2009, Cardium announced the
completion of the sale of its InnerCool Therapies business to Royal
Philips Electronics. The asset purchase transaction was for $11.25
million, as well as the transfer of approximately $1.5 million in
trade payables. The acquisition of InnerCool by Philips represents
an important step forward in Cardium's overall business strategy
which is focused on the acquisition, strategic repositioning and
partnering or sale of businesses. With a significantly reduced cost
structure, the proceeds from the transaction will be used to
enhance Cardium's balance sheet and for working capital to support
the further development of the Company's biomedical investment
portfolio and product development pipeline, particularly its
Excellarate(TM) Tissue Repair product candidate. Tissue Repair
Company Cardium recently provided an update on the MATRIX Phase 2b
clinical study and plans to provide detailed safety and efficacy
data for the Excellarate(TM) product candidate around the end of
September 2009. The MATRIX trial, a prospective, randomized,
double-blind, placebo-controlled study, has enrolled 124 diabetic
patients with non-healing, lower extremity neuropathic ulcers. More
than 90% of the patients enrolled into the MATRIX study have now
completed their initial 12-week evaluation period with respect to
key safety and efficacy criteria. The Company is completing data
collection and review of key efficacy endpoints for this novel
regenerative medicine product candidate, in preparation for a
detailed report of overall safety and efficacy data that is
expected to be announced around the end of September 2009. During
the course of the MATRIX trial, the Company has observed some
remarkable healing responses as reported in the media by our
medical centers from around the nation. The Excellarate product
candidate is designed to require only one or two
physician-administered treatments, in contrast to most diabetic
wound healing agents or devices in use that require repeated
administrations over a long term (weeks to months). Based on
recently reported advancements, Excellarate is also expected to be
re-formulated as an easy-to-use single syringe, which would be
pre-mixed and ready to be applied to patients' wounds. The
reformulation will allow Excellarate to be maintained in a
physician's office using a standard refrigerator (at a temperature
of about 4 degrees C) and is expected to have a shelf life of 12-18
months. On July 30, 2009, Cardium announced its plans to develop a
DNA-based orthobiologics product portfolio based on research and
development by Cardium's Tissue Repair Company that will initially
focus on non-union bone fractures for medically-compromised
patients, and spinal fusions for patients with degenerative disc
disease. Orthobiologics is a rapidly growing segment of the
orthopedics market and represents biologically-active products
designed to enhance musculo-skeletal repair and regeneration. The
initial orthobiologics focus will be on the development of
Osteorate(TM), a DNA-based non-surgical injectable bone graft gel
to repair bone fractures and regenerate tissue in certain
medically-compromised patient populations. Osteorate will be based
on a reformulation of Cardium's DNA-based Excellarate wound healing
product candidate, which is designed to stimulate localized and
sustained cellular production of platelet-derived growth factor-B
(PDGF-B) protein, as a treatment for patients with non-healing
diabetic foot ulcers. The Gene Activated Matrix technology allows
for a broad spectrum of formulations which would include, but not
be limited to, collagen, demineralized bone matrices, allograft and
synthetic graft materials. Financial Report For the second quarter
ended June 30, 2009, the Company reported a loss from operations of
$2.3 million, compared to $4.6 million for the same quarter in
2008, representing a 48% reduction from year ago levels, as a
result of various strategic actions initiated in the fourth quarter
2008. The second quarter 2009 financial results also include
substantial non-cash charges to adjust for the fair market value of
certain common stock warrants required as a result of the adoption
of Emerging Issues Task Force EITF 07-05, as noted above. Since the
price of Cardium's common stock increased by about 19% during the
second quarter, this resulted in a $4.8 million "Change in Fair
Value of Derivative Liabilities," and resulted in a reported net
loss for the current period of $11.1 million, or $0.24 per share,
compared to a net loss of $6.6 million, or $0.15 per share for
second quarter 2008. Grant revenue for the second quarter 2009 was
$6,996 compared to $262,430 for the same quarter last year.
Research and development costs for the three months ended June 30,
2009 totaled $1.1 million and selling, general and administrative
expenses were $1.2 million, compared to $3.5 million and $1.4
million respectively for the same period last year. Cash and cash
equivalents as of June 30, 2009 were $773,084, compared to cash and
cash equivalents of $1,102,894 as of December 31, 2008. Interest
expense for the three months ended June 30, 2009 was $3 million and
includes $2.5 million representing the amortization of the fair
market value of warrants issued with the notes and amortized over
the term of the notes and other debt costs. The Company continues
to provide information in accordance with GAAP. However, with the
adoption of EITF 07-05 and its very substantial impact on our
overall reported net losses, varying substantially based on changes
in the underlying market value of Cardium's common stock, the
Company believes it is also helpful for investors to receive
additional information relating more specifically to the Company's
operating results. Accordingly, the Company additionally provides a
pro forma income statement and pro forma balance sheet which
excludes the non-cash effects of EITF 07-05, amortization of the
value of warrants issued with debt, and stock-based compensation on
its financial results. The Company presents this information to
investors as an additional tool for evaluating the Company's
financial results in a manner that reflects ongoing operations and
facilitates comparisons with operating results from prior periods.
The presentation of this additional non-GAAP information is
intended to provide investors with additional incremental tools for
their review of the Company's results and is not meant to be
considered in isolation or as a substitute for net income
information prepared and provided in accordance with GAAP. On July
27, 2009 Cardium reported that the NYSE Amex, based upon a review
of publicly available information, including Cardium's press
release dated July 24, 2009 regarding completion of the sale of
Cardium's InnerCool business to Royal Philips Electronics, the
Company has resolved the continued listing deficiencies referenced
in the NYSE Amex LLC's letters dated December 23, 2008 and April 9,
2009. However, pursuant to Section 1009(f) of the NYSE Amex Company
Guide, the Company's Plan Period will remain open until it has been
able to demonstrate compliance with the continued listing standards
for two consecutive quarters. If the company does not demonstrate
compliance for two consecutive quarters and/or by the end of the
Plan Period, June 23, 2010, the Exchange Staff may initiate
delisting procedures. The exchange indicated that its conclusion is
based upon a review of available information with respect to the
Company, including its Securities and Exchange Commission filings
and that its letter is subject to changes in the NYSE Amex Rules
that could require the exchange to re-evaluate its position and
other qualifications. About Cardium Cardium is focused on the
acquisition and strategic development of new and innovative
bio-medical product opportunities and businesses that have the
potential to address significant unmet medical needs and definable
pathways to commercialization, partnering and other economic
monetizations. Cardium's investment portfolio includes the Tissue
Repair Company and Cardium Biologics, medical technology companies
primarily focused on the development of innovative therapeutic
products for tissue repair and cardiovascular indications. In May
2009, Cardium announced completion of the enrollment for the Matrix
Phase 2b clinical study to evaluate the Excellarate product
candidate as a treatment for patients with non-healing diabetic
ulcers. News from Cardium is located at http://www.cardiumthx.com/.
Forward-Looking Statements Except for statements of historical
fact, the matters discussed in this press release are forward
looking and reflect numerous assumptions and involve a variety of
risks and uncertainties, many of which are beyond our control and
may cause actual results to differ materially from stated
expectations. For example, there can be no assurance that the
MATRIX study or other human clinical trials can be conducted and
completed in an efficient and successful manner, that product
formulation enhancements will be successful or will effectively
simplify or expand the use of product candidates or technologies,
that the GAM technology can be successfully broadened or applied to
additional wound healing or tissue repair opportunities, that
Excellarate or our other candidates will prove to be sufficiently
safe and effective, that results or trends observed in one clinical
study or procedure will be reproduced in subsequent studies or
procedures, that clinical studies even if successful will lead to
product advancement or partnering, that our products or product
candidates will not be unfavorably compared to competitive products
that may be regarded as safer, more effective, easier to use or
less expensive, that FDA or other regulatory clearances or other
certifications, or other commercialization efforts will be
successful or will effectively enhance our businesses or their
market value, that our products or product candidates will prove to
be sufficiently safe and effective after introduction into a
broader patient population, or that third parties on whom we depend
will perform as anticipated. Actual results may also differ
substantially from those described in or contemplated by this press
release due to risks and uncertainties that exist in our operations
and business environment, including, without limitation, risks and
uncertainties that are inherent in the development of complex
biologics and in the conduct of human clinical trials, including
the timing, costs and outcomes of such trials, our ability to
obtain necessary funding, regulatory approvals and expected
qualifications, our dependence upon proprietary technology, our
history of operating losses and accumulated deficits, our reliance
on collaborative relationships and critical personnel, and current
and future competition, as well as other risks described from time
to time in filings we make with the Securities and Exchange
Commission. We undertake no obligation to release publicly the
results of any revisions to these forward-looking statements to
reflect events or circumstances arising after the date hereof.
Copyright 2009 Cardium Therapeutics, Inc. All rights reserved. For
Terms of Use Privacy Policy, please visit
http://www.cardiumthx.com/. Cardium Therapeutics(TM) and Generx(R)
are trademarks of Cardium Therapeutics, Inc. Tissue Repair(TM),
Gene Activated Matrix(TM), GAM(TM), Excellarate(TM) and
Osteorate(TM) are trademarks of Tissue Repair Company. Other
trademarks are the property of their respective owners. - Continued
- Cardium Therapeutics, Inc. Selected Condensed Consolidated
Results of Operations Three Months Ended June 30, (Unaudited) 2009
2008 2009* 2008* Actual Actual Pro forma Pro Forma ------ ------
--------- --------- Revenues $6,996 $262,430 $6,996 $262,430 ------
-------- ------ -------- Operating expenses Research and
development 1,107,147 3,501,841 1,052,029 (1) 3,249,196 (1)
Selling, general and administrative 1,222,417 1,400,387 1,156,927
(1) 1,100,199 (1) --------- --------- ----------- ----------- Loss
from operations (2,322,568) (4,639,798) (2,201,960) (4,086,965)
---------- ----------- ---------- ---------- Interest income
(expense), net (2,970,043) 15,447 (464,259) (2) 15,447 Change in
fair value of derivative liabilities (4,817,552) - - (3) -
---------- --- --- --- Loss from continuing operations (10,110,163)
(4,624,351) (2,666,219) (4,071,518) Loss from discontinued
operations (1,032,511) (2,010,111) (1,032,511) (2,010,111)
----------- ----------- ----------- ----------- Net loss
$(11,142,674) $(6,634,462) $(3,698,730) $(6,081,629) ============
=========== =========== =========== Net loss per common share -
basic and diluted $(0.24) $(0.15) $(0.08) $(0.14) ====== ======
====== ====== Weighted average common shares outstanding - basic
and diluted 46,931,134 43,629,975 46,931,134 43,629,975 Selected
Condensed Consolidated Results of Operations Six Months Ended June
30, (Unaudited) 2009 2008 2009* 2008* Actual Actual Pro forma Pro
Forma ------ ------ --------- --------- Revenues $25,632 $374,633
$25,632 $374,633 ------- -------- ------- -------- Operating
expenses Research and development 2,351,307 6,419,690 2,181,933 (1)
5,915,328 (1) Selling, general and administrative 2,510,141
3,260,781 2,308,894 (1) 2,661,508 (1) --------- ---------
----------- ------------ Loss from operations (4,835,816)
(9,305,838) (4,465,195) (8,202,203) ---------- ----------
---------- ---------- Interest income (expense), net (4,543,342)
87,636 (725,942) (2) 87,636 Change in fair value of derivative
liabilities (14,474,181) - - (3) - ----------- --- --- --- Loss
from continuing operations (23,853,339) (9,218,202) (5,191,137)
(8,114,567) Loss from discontinued operations (2,026,212)
(4,150,388) (2,026,212) (4,150,388) ----------- -----------
----------- ----------- Net loss $(25,879,551) $(13,368,590)
$(7,217,349) $(12,264,955) ============ ============ ===========
============ Net loss per common share - basic and diluted $(0.55)
$(0.31) $(0.15) $(0.28) ====== ====== ====== ====== Weighted
average common shares outstanding - basic and diluted 46,930,788
43,169,611 46,930,788 43,169,611 -- Note: additional pro forma
information is included The Company presents this information to
investors as an additional tool for evaluating the Company's
financial results in a manner that reflects ongoing operations and
facilitates comparisons with operating results from prior periods.
The presentation of this additional non-GAAP information is
intended to provide investors with additional incremental tools for
their review of the Company's results and is not meant to be
considered in isolation or as a substitute for the actual net
income information prepared and provided in accordance with GAAP.
Selected Condensed Consolidated Balance Sheet Data June 30,
December 31, Pro Forma Pro Forma 2009 2008 June 30, December 31,
(Unaudited) (Audited) 2009* 2008* ---------- -------- ---- ----
Cash and cash equivalents $773,084 $1,102,894 $773,084 $1,102,894
Accounts receivable, 42,240 42,279 42,240 42,279 Prepaid expenses
and other current assets 256,403 509,168 256,403 509,168 Property
and equipment, net 583,489 746,169 583,489 746,169 Other long-term
assets 579,938 532,438 579,938 532,438 Assets held for sale
6,430,898 7,363,973 6,430,898 7,363,973 --------- ---------
--------- --------- Total assets $8,666,052 $10,296,921 $8,666,052
$10,296,921 ========== =========== ========== =========== Accounts
payable and accrued liabilities $6,049,377 $4,691,600 6,049,377
$4,691,600 Short-term debt 9,357,392 4,036,776 10,662,967 (4)
6,000,000 (4) Current liabilities of business held for sale
2,231,230 2,127,986 2,231,230 2,127,986 Derivative liabilities
20,382,056 - - (5) - Long-term liabilities 195,231 195,315 195,231
195,315 Stockholder's deficiency (29,549,234) (754,756)
(10,472,753) (2,717,980) ----------- -------- ------------
---------- Total liabilities and stockholder's deficiency
$8,666,052 $10,296,921 $8,666,052 $10,296,921 ==========
=========== ========== =========== -- The following pro forma
adjustments were made solely as supplemental financial information
to help investors and the financial community make meaningful
comparisons of operating results from one financial period to
another. 1. Stock based compensation was removed. This is the
effect of the non-cash expense associated with the value of
employee stock options recorded as compensation expense over the
vesting period of the options. 2. Warrant value was removed. This
is the effect of non-cash interest charge associated with the value
of warrants issued to note holders at note origination and expensed
over the term of the notes. 3. The change in the fair market of
derivative liabilities was removed. This is the effect of non-cash
charges associated with the treatment of the value of certain
derivative securities under newly-adopted EITF 07-05, which effects
can vary substantially each quarter along with changes to the price
of the underlying common stock during the quarter. 4. Debt discount
represents the unamortized value of the warrants issued at note
origination; and was added back to reflect the actual amount of
debt owed at the end of each period reported. 5. Derivative
liabilities represent the value of warrants the company has issued
in the past which offer down round price protection and under
newly-adopted EITF 07-05, are now required to be recorded as
derivative liabilities on the Balance Sheet and were removed as a
non-cash liability.
http://www.newscom.com/cgi-bin/prnh/20051018/CARDIUMLOGO
http://photoarchive.ap.org/ DATASOURCE: Cardium Therapeutics
CONTACT: Bonnie Ortega, Director, Investor/Public Relations of
Cardium Therapeutics, Inc. , +1-858-436-1018, Web Site:
http://www.cardiumthx.com/
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