SAN DIEGO, Nov. 10 /PRNewswire-FirstCall/ -- Cardium Therapeutics
(NYSE Amex: CXM) today reported its financial results for its third
quarter ended September 30, 2009, and on recent developments and
future outlook. Cardium made significant progress since its second
quarter 2009 financial report and highlights included: -- Sale of
Cardium's InnerCool Therapies business to Royal Philips
Electronics; -- Completion and announcement of data from the Matrix
Phase 2b clinical trial of Excellarate(TM) for the potential
treatment of non-healing diabetic ulcers and the Company's plans to
meet with the FDA to review the data and proposed outline for a
Phase 3 clinical study; -- Plans for the commercial development of
a new product candidate Excellagen(TM), a collagen-based topical
gel, through a FDA 510(k) clearance pathway for potential use by
physicians in patients with topical wounds, which include diabetic
ulcers as well as pressure ulcers, venous ulcers, surgical and
trauma wounds, second degree burns, and other types of wounds; --
Publication of positive findings from the open label multi-center
Phase 1/2 Excellarate clinical study in the October 2009 issue of
Wound Repair and Regeneration, a peer-reviewed journal of the Wound
Healing Society; -- Plans to develop a DNA-based orthobiologics
product portfolio based on a reformulation of the Company's
Excellarate product candidate that will initially focus on
non-union bone fractures and spinal fusions; -- Publication of
preclinical research published in the scientific journal, Gene
Therapy, demonstrating the potential benefits of the Cardium's Gene
Activated Matrix technology for accelerating and enhancing
periodontal tissue repair and oral implant osseointegration; --
Completion of two registered direct investments of Cardium's common
stock by institutional investors with gross proceeds totaling $10.5
million; -- Listing compliance with the NYSE Amex. Sale of
InnerCool Therapies to Royal Philips Electronics During third
quarter 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. Report on Matrix Phase 2b Clinical Trial Cardium
recently reported on data from the Matrix Phase 2b clinical trial
of Excellarate(TM) for the potential treatment of patients with
chronic non-healing diabetic foot ulcers based on our Gene
Activated Matrix technology platform. Nearly half of patients (48%)
receiving a one-time Excellarate treatment had complete wound
closure by 12 weeks, compared to a 31% wound closure rate for
standard of care. Among combined one and two dose groups of
Excellarate approximately 41% of patients achieved complete closure
by 12 weeks. In addition to overall wound closures by 12 weeks, the
Phase 2b study also evaluated wound closure rates and trajectories
following product administration in order to assess the timing and
extent of bioactivity. The data indicated that patients receiving
Excellarate exhibited early and rapid wound healing responses as
evidenced by very substantial reductions in wound radius over the
first several weeks following product administration, which
responses were both greater and faster than those observed among
patients that had received standard of care. For example, a 108%
relative improvement (decrease in ulcer radius) compared to
standard of care was observed over the first week following
administration of Excellarate, and a 50% relative improvement was
observed as an average over the first four weeks. The Company plans
to schedule a meeting with the FDA in early 2010 to review the
complete integrated data set and outline plans for a Phase 3
clinical study program designed to confirm the safety and
effectiveness of Excellarate as compared to standard of care, since
PDGF-B is known to contribute to the biologic process of wound
healing and is itself an approved protein product for use in
advanced wound care. The Company believes that the combination of
collagen and PDGF-B as provided by the Excellarate product
candidate holds the potential to further promote wound healing in
non-healing diabetic foot ulcers and other difficult-to-treat
wounds. Plans for Commercial Development of Excellagen(TM) The
Company plans to submit a 510(k) premarket notification with the
U.S. Food and Drug Administration (FDA) seeking marketing clearance
of its ExcellagenXL(TM) product candidate. ExcellagenXL is an
advanced wound care device composed of highly-refined, soluble
bovine dermal collagen (Type I), which is modified to reduce
immunogenicity and promote its usefulness in wound settings.
ExcellagenXL is designed for use by physicians in patients with
topical wounds, which include diabetic ulcers as well as pressure
ulcers, venous ulcers, surgical and trauma wounds, second degree
burns, and other types of wounds. The Company expects to submit its
FDA 510(k) application for ExcellagenXL during fourth quarter 2009.
The planned 510(k) filing is based in part on positive findings
from the Company's Phase 2b Matrix clinical study, reported October
14, 2009, indicating that substantial improvements in wound healing
responses were observed in patients with non-healing diabetic foot
ulcers following one or two applications of ExcellagenXL. The
ExcellagenXL topical gel wound care product is designed to promote
a favorable environment for effective wound management by providing
a moist protective barrier as well as a micro-scaffold that
promotes cell migration and capillary in-growth. The Company plans
to develop additional new product opportunities by incorporating
other agents into Excellagen formulations, including
antimicrobials, DNA and/or other biologics, which are designed to
address particular wound healing and other tissue repair
applications. Phase 1/2 Excellarate(TM) Study Published in Wound
Repair and Regeneration Positive findings from the open label
multi-center Phase 1/2 Excellarate clinical study were published in
the October 2009 issue of Wound Repair and Regeneration, a
peer-reviewed journal of the Wound Healing Society. The principal
findings of the Phase 1/2 clinical study concluded that Excellarate
appeared to be both safe and well tolerated and that complete wound
closure was observed at 14 weeks in 10 of the 15 patients (67%),
seven of whom had received only a single application of the
Excellarate product candidate. In addition, Excellarate appeared to
be associated with early rapid healing responses (around half of
the patients achieved a 50-99% reduction in wound size by week 2).
Gene Activated Matrix Technology Orthobiologics Initiative During
the third quarter, the Company announced plans to develop a
DNA-based orthobiologics product portfolio based on research and
development 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 the Excellarate wound
healing product candidate. 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. In addition, Cardium
recently announced the results of preclinical research published in
the scientific journal, Gene Therapy, demonstrating the potential
benefits of its Gene Activated Matrix technology for accelerating
and enhancing periodontal tissue repair and oral implant
osseointegration. This research further supports Cardium's decision
to expand the Company's focus of its regenerative medicine
technologies to include the emerging new high growth market segment
of orthobiologics. Financial Report For the third quarter ended
September 30, 2009, the Company reported net income for the current
period of $4.9 million or $0.10 per share, compared to a net loss
of $6.2 million, or $0.13 per share for third quarter 2008. During
the quarter, the Company recorded a gain on the sale of InnerCool
Therapies in the amount of $6.4 million. The third quarter 2009
financial results also includes a $2.0 million favorable adjustment
to income for the non-cash change in fair market value of certain
common stock warrants recorded as derivative liabilities, required
as a result of the adoption of Emerging Issues Task Force EITF
07-05, recorded in "Change in Fair Value of Derivative
Liabilities." Grant revenue for the third quarter 2009 was
$236,000. There was no revenue from the grant recorded during the
third quarter of 2008. Research and development costs for the three
months ended September 30, 2009 totaled $1.2 million and selling,
general and administrative expenses were $1.3 million, compared to
$2.6 million and $1.7 million, respectively, for the same period
last year. Interest expense for the three months ended September
30, 2009 was $1.3 million and includes $1.1 million representing
the non-cash amortization of the fair market value of warrants
issued with the notes and amortized over the term of the notes and
other debt costs. Cash and cash equivalents as of September 30,
2009 were $4.4 million compared to cash and cash equivalents of
$1.1 million as of December 31, 2008. Derivative liabilities at
September 30, 2009 was $16.3 million, this non-cash liability
represents the fair market value of warrants which were previously
issued with down round price protection provisions and therefore
recorded as derivative liabilities. These non-cash liabilities are
reported as a result of the adoption of Emerging Issues Task Force
EITF 07-05 The Company recently announced completion of two
registered direct offerings of common stock to institutional
investors under the Company's shelf registration statement totaling
$10.5 million. The $4.5 million direct offering was completed
during third quarter 2009 and is included in this financial report.
The $6.0 million direct offering that was announced on October 15,
2009 occurred subsequent to the end of quarter 2009 and was not
included in the financial results. 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 total liabilities
including certain non-cash derivative liabilities and corresponding
reported net losses arising from changes in the underlying market
value of Cardium's common stock, Cardium 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 and liabilities.
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. As a result of this accounting, the balance
sheet reports non-cash derivative liabilities of $16.3 million
attributable to the fair market value of certain warrants. This
liability represents a non-cash obligation and will be adjusted
accordingly as warrants are exercised, changes in stock price
occur, or when the warrants price protection provision expires.
This non-cash liability has not been included as a liability in the
non-GAAP reporting presentation that is included with this press
release. 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 had 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 wound healing, bone repair, and
cardiovascular indications. In July 2009, Cardium completed the
sale of its InnerCool Therapies medical device business to Royal
Philips Electronics, the first asset monetization from the
Company's biomedical investment portfolio. 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 Excellagen, Excellarate or our other
candidates will prove to be sufficiently safe and effective, or
that results or trends observed in one clinical study or procedure
will be reproduced in subsequent studies or procedures, or that
clinical studies even if successful will lead to product
advancement or partnering; that the Excellagen or Excellarate
product candidate offers the potential for simpler or more
cost-effective treatment for physicians and patients than other
FDA-approved products that currently are or will be on the market;
that the Matrix clinical study program or other human clinical
trials can be conducted and completed in an efficient and
successful manner; that we can develop a DNA-based orthobiologics
product portfolio; 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® are trademarks of Cardium
Therapeutics, Inc. Tissue Repair(TM), Gene Activated Matrix(TM),
GAM(TM), Excellagen(TM), Excellarate(TM) and Osteorate(TM) are
trademarks of Tissue Repair Company. Cardium Therapeutics, Inc.
Selected Condensed Consolidated Results of Operations Three Months
Ended September 30, (Unaudited) GAAP Financials Non-GAAP Proforma
--------------- ----------------- Pro forma Pro Forma 2009 2008
Results 2009* Results 2008* ---- ---- ------------- -------------
Revenues $235,917 $- $235,917 $- -------- --- -------- --- Research
and development (1,176,942) (2,612,414) (1,158,324) (1) (2,377,517)
(1) Selling, general and administrative (1,309,332) (1,678,500)
(1,203,821) (1) (1,399,399) (1) ---------- ---------- ----------
---------- Loss from operations (2,250,357) (4,290,914) (2,126,228)
(3,776,916) ---------- ---------- ---------- ---------- Interest
income (expense), net (1,335,511) 8,028 (249,833) (5) 8,028 Change
in fair value of derivative liabilities 1,964,663 - - (2) -
--------- --- --- --- Loss from continuing operations (1,621,205)
(4,282,886) (2,376,061) (3,768,888) Income (loss) from discontinued
operations 95,576 (1,868,629) 95,576 (1,868,629) Gain on sale of
business unit 6,408,603 - 6,408,603 - ========= === ========= ===
Net Income (loss) $4,882,974 $(6,151,515) $4,128,118 $(5,637,517)
========== =========== ========== =========== Net loss per common
share - basic $0.10 $(0.13) $0.09 $(0.12) ===== ====== ===== ======
Net loss per common share - diluted $0.10 $(0.13) $0.08 $(0.12)
===== ====== ===== ====== Weighted average common shares
outstanding - basic 47,771,609 46,603,700 47,771,609 46,603,700
Weighted average common shares outstanding - diluted 49,629,079
46,603,700 49,629,079 46,603,700 Nine Months Ended September 30,
(Unaudited) GAAP Financials Non-GAAP Proforma ---------------
----------------- 2009 2008 Pro forma Pro forma Actual Actual
Results 2009* Results 2008* ------ ------ -------------
------------- Revenues $261,549 $374,633 $261,549 $374,633 --------
-------- -------- -------- Research and development (3,528,249)
(9,032,104) (3,340,256) (1) (8,292,846) (1) Selling, general and
adminis- trative (3,819,473) (4,939,281) (3,512,716) (1)
(4,060,906) (1) ---------- ---------- ---------- ---------- Loss
from operations (7,086,173) (13,596,752) (6,591,423) (5)
(11,979,119) ---------- ----------- ---------- ----------- Interest
income (expense), net (5,878,853) 95,664 (1,664,225) 95,664 Change
in fair value of derivative liabilities (12,509,518) - - (2) -
----------- --- --- --- Loss from continuing operations
(25,474,544) (13,501,088) (8,255,648) (11,883,455) Loss from
discontinued operations (1,930,636) (6,019,017) (1,930,636)
(6,019,017) Gain on sale of business unit 6,408,603 - 6,408,603 -
========= === ========= === Net loss $(20,996,577) $(19,520,105)
$(3,777,681) $(17,902,472) ============ ============ ===========
============ Net loss per common share - basic and diluted $(0.44)
$(0.44) $(0.08) $(0.40) ====== ====== ====== ====== Weighted
average common shares outstanding - basic and diluted 47,214,142
44,322,663 47,214,142 44,322,663 Selected Condensed Consolidated
Balance Sheet Data GAAP Financials Non-GAAP Proforma Pro forma Pro
Forma September 30, December 31, Results Results 2009 2008
September 30, December 31, (Unaudited) (Audited) 2009* 2008*
---------- ---------- ------------- ------------ Cash and cash
equivalents $4,418,910 $1,102,894 $4,418,910 $1,102,894 Accounts
receivable, 278,157 42,279 278,157 42,279 Prepaid expenses and
other current assets 80,260 509,168 80,260 509,168 Property and
equipment, net 379,646 746,169 379,646 746,169 Other long-term
assets 1,704,938 532,438 1,704,938 532,438 Assets of business held
for sale - 7,363,973 - 7,363,973 --- --------- --- --------- Total
assets $6,861,911 $10,296,921 $6,861,911 $10,296,921 ==========
=========== ========== =========== Accounts payable and accrued
liabilities $4,300,035 $4,691,600 $4,300,035 $4,691,600 Short-term
debt 3,635,661 4,036,776 3,984,467 (3) 6,000,000 Current
liabilities of business held for sale - 2,127,986 - (2) 2,127,986
Derivative liabilities 16,343,503 - - (4) - Long-term liabilities
192,672 195,315 192,672 195,315 ------- ------- ------- -------
Total liabilities 24,471,871 11,051,677 8,477,174 13,014,901
---------- ---------- --------- ---------- Stockholder's deficiency
(17,609,960) (754,756) (15,339,085) (2,717,980) -----------
-------- ----------- ---------- Total liabilities and stockholder's
deficiency $6,861,911 $10,296,921 $6,861,911 $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. Non-cash stock based compensation is excluded. 2. The
non-cash change in the fair market of derivative liabilities is
excluded. 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. 3. Debt discount (non cash) was
added back to reflect the actual amount of debt owed at the end of
each period reported. 4. Non cash derivative liabilities were
excluded. 5. Non cash charges for the amortization of the debt
discount were removed. * 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 and balance sheet information
prepared and provided in accordance with GAAP. (Logo:
http://www.newscom.com/cgi-bin/prnh/20051018/CARDIUMLOGO)
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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