Medgenics, Inc. (NYSE Amex: MDGN and AIM: MEDU, MEDG)
(the “Company”), the developer of a novel technology for the
sustained production and delivery of therapeutic proteins in
patients using their own tissue, today reported financial results
for the three and six months ended June 30, 2011 and the filing
with the U.S. Securities and Exchange Commission of the Company’s
Quarterly Report on Form 10-Q. The Form 10-Q includes unaudited
interim consolidated financial statements containing the
information highlighted below, as well as additional information
regarding the Company. The Form 10-Q is available at www.sec.gov or
www.medgenics.com.
Second Quarter Financial Results
The Company’s net research and development expense for the
second quarter of 2011 was $1.04 million, compared with $0.40
million for the second quarter of 2010. This increase is due to
costs associated with the ongoing Phase I/II clinical trial with
EPODURE, preparation of INFRADURE for a Phase I/II clinical trial,
further development of HEMODURE to produce Factor VIII and
decreases in participations in R&D costs by third parties,
partially offset by increases to participations in R&D costs
from the Israeli Office of the Chief Scientist.
General and administrative expense for the second quarter of
2011 increased to $1.05 million from $0.44 million for second
quarter of 2010, due primarily to higher professional fees.
The net loss for the second quarter of 2011 was $2.32 million or
$0.26 per share, compared with a net loss of $1.95 million or $0.47
per share for the second quarter of 2010.
Six Month Financial Results
For the six months ended June 30, 2011 net research and
development expense increased to $2.22 million from $0.70 million
for the comparable prior-year period due to ongoing clinical
development of the Biopump™ platform, partially offset by increases
to participations in R&D costs from the Israeli Office of the
Chief Scientist. General and administrative expense for the first
six months of 2011 was $1.83 million compared with $1.11 million
for the first six months of 2010, with the increase due primarily
to higher professional fees. The Company’s net loss for the first
six months of 2011 was $2.66 million or $0.37 per share, compared
with a net income of $0.35 million or $0.09 per share for the same
period of 2010.
Medgenics ended the second quarter of 2011 with $10.12 million
in cash and cash equivalents, compared with $2.86 million as of
December 31, 2010. In April 2011, the Company raised $13.2 million
of gross proceeds (approximately $10.4 million net) in its U.S.
initial public offering (“IPO”).
Commenting on the second quarter, Andrew L. Pearlman, Ph.D.,
President and Chief Executive Officer of Medgenics, said, “We were
heartened by the positive investment community response as we
successfully completed our IPO in the U.S., raising approximately
$10.4 million (net) in equity capital. These funds will support the
ongoing development of our proprietary Biopump technology platform
for the sustained manufacture and delivery of therapeutic proteins
in patients using their own dermis tissue.”
About Medgenics
Medgenics is developing and commercializing Biopump, a
proprietary tissue-based platform technology for the sustained
production and delivery of therapeutic proteins using the patient's
own skin biopsy for the treatment of a range of chronic diseases
including anemia, hepatitis C and hemophilia. Medgenics believes
this approach has multiple benefits compared with current
treatments, which include regular and costly injections of
therapeutic proteins.
Medgenics has three long-acting protein therapy products in
development based on this technology:
- EPODURE (now completing a Phase I/II
dose-ranging trial) to produce and deliver erythropoietin for many
months from a single administration, has demonstrated elevation and
stabilization of hemoglobin levels in anemic patients for 6 to more
than 24 months;
- INFRADURE (to commence a Phase I/II
trial in Israel in 2011) to produce a sustained therapeutic dose of
interferon-alpha for use in the treatment of hepatitis C;
- HEMODURE is a sustained Factor VIII
therapy for the prophylactic treatment of hemophilia, now in
development.
Medgenics intends to develop its innovative products and bring
them to market via strategic partnerships with major pharmaceutical
and/or medical device companies. Since October 2009, HEMODURE has
been the focus of cooperation between Medgenics and a major
healthcare company, a market leader in hemophilia.
In addition to treatments for anemia, hepatitis C and
hemophilia, Medgenics plans to develop and/or out-license a
pipeline of future Biopump products targeting the large and rapidly
growing global protein therapy market, which is forecast to reach
$132 billion in 2013. Other potential applications for Biopumps
include multiple sclerosis, arthritis, pediatric growth hormone
deficiency, obesity and diabetes.
Forward-looking Statements
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, Section 21E
of the Securities Exchange Act of 1934 and as that term is defined
in the Private Securities Litigation Reform Act of 1995, which
include all statements other than statements of historical fact,
including (without limitation) those regarding the Company's
financial position, its development and business strategy, its
product candidates and the plans and objectives of management for
future operations. The Company intends that such forward-looking
statements be subject to the safe harbors created by such laws.
Forward-looking statements are sometimes identified by their use of
the terms and phrases such as "estimate," "project," "intend,"
"forecast," "anticipate," "plan," "planning, "expect," "believe,"
"will," "will likely," "should," "could," "would," "may" or the
negative of such terms and other comparable terminology. All such
forward-looking statements are based on current expectations and
are subject to risks and uncertainties. Should any of these risks
or uncertainties materialize, or should any of the Company's
assumptions prove incorrect, actual results may differ materially
from those included within these forward-looking statements.
Accordingly, no undue reliance should be placed on these
forward-looking statements, which speak only as of the date made.
The Company expressly disclaims any obligation or undertaking to
disseminate any updates or revisions to any forward-looking
statements contained herein to reflect any change in the Company's
expectations with regard thereto or any change in events,
conditions or circumstances on which any such statements are based.
As a result of these factors, the events described in the
forward-looking statements contained in this release may not
occur.
CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in
thousands (except share and per share data) Six months
ended
June 30,
Three months ended
June 30,
2011 2010 (*) 2011 2010
(Unaudited)
Research and development expenses
$ 2,718 $ 1,366 $ 1,544 $ 811 Less - Participation by the
Office of the Chief Scientist (503) (238) (503) (147) U.S.
Government grant - - - - Participation by third party -
(432) - (265) Research and development
expenses, net 2,215 696 1,041 399 General and administrative
expenses 1,832 1,111 1,052 441 Other income: Excess amount
of participation in research and development from third party
- (1,292) - (688) Operating loss
(4,047) (515) (2,093) (152) Financial expenses (133) (106)
(232) (1,830) Financial income 1,521 975 4
31 Income (loss) before taxes on income (2,659) 354
(2,321) (1,951) Taxes on income 2 - 2
- Net income (loss) $ (2,661) $ 354 $ (2,323) $
(1,951) Basic earnings (loss) per share $ (0.369) $ 0.091 $
(0.257) $ (0.472) Diluted earnings per share $ (0.369) $ 0.041 $
(0.257) $ (0.472) Weighted average number of shares of
Common stock used in computing basic earnings/loss per share
7,212,074 3,884,541 9,033,672 4,133,859
Weighted average number of shares of Common stock used in computing
diluted earnings per share 7,212,074 8,641,369
9,033,672 4,133,859
CONSOLIDATED BALANCE SHEET
U.S. dollars in thousands
June 30,
December 31, 2011 2010
2010 (Unaudited) ASSETS CURRENT ASSETS:
Cash and cash equivalents $ 10,116 $ 1,363 $ 2,859 Accounts
receivable and prepaid expenses 1,026 321 983
Total current assets 11,142 1,684 3,842
LONG-TERM ASSETS: Restricted lease deposits 49 32 46 Severance pay
fund 353 247 318 Total long-term assets
402 279 364 PROPERTY AND EQUIPMENT, NET
378 253 243 DEFERRED ISSUANCE EXPENSES -
- 672 Total assets $ 11,922 $ 2,216 $ 5,121
LIABILITIES AND STOCKHOLDERS’ DEFICIT CURRENT
LIABILITIES: Trade payables $ 869 $ 824 $ 743 Advance
payment - 678 - Other accounts payable and accrued expenses 1,272
1,198 1,235 Convertible debentures - - 5,460
Total current liabilities 2,141 2,700
7,438 LONG-TERM LIABILITIES: Accrued severance pay
1,146 995 1,087 Convertible debentures - 992 - Liability in respect
of warrants 1,321 2,430 3,670 Total
long-term liabilities 2,467 4,417 4,757
Total liabilities 4,608 7,117 12,195
(*) Restated see Note 4 in 10-Q
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