Hopkinton, Massachusetts, August 10, 1998—Creative BioMolecules Inc. (Nasdaq: CBMI) today announced financial results for the second quarter of fiscal 1998, ended June 30, 1998. Revenues were $2,281,000 and expenses were $8,389,000, resulting in a net loss of $6,108,000 or $0.19 per share. Comparable numbers for the quarter ending June 30, 1997 were revenues of $3,916,000, expenses of $8,140,000 and a net loss of $4,223,000, or $0.13 per share. For the six months ended June 30, 1998, the Company reported revenues of $5,699,000 compared to $7,563,000 for the same period in 1997. Net loss for the six month period ended June 30, 1998 was $11,027,000 or $0.33 per share, compared to $7,972,000 or $0.24 per share in 1997. The differences between 1998 and 1997 reflect primarily the timing of revenue recognition and charges associated with a recent financing. Revenues have historically varied on a quarterly basis. Revenues during the second quarter of 1998 included funding from Stryker Corporation for work associated with the PreMarket Approval application (PMA) for the OP-1 bone graft device and preparations for the Pre-Approval Inspection, and funding from Biogen, Inc. for renal therapy research.
Expenses during the second quarter included activities related primarily to the preparation of the Company’s manufacturing facilities for the Pre-Approval Inspection by the U.S. Food and Drug Administration, and the continuing work with Stryker to support the PMA review activities. The facility inspection will be conducted in association with the Pre-Market Approval application process, which was initiated by Stryker in April of this year.
In May of 1998, the Company completed a $25 million private placement of convertible preferred stock. The Company plans to use the proceeds for general purposes, including the development of new therapies based on its proprietary technology in tissue and organ regeneration and repair. Accretion on convertible preferred stock represents an amount equal to a 5% annual conversion premium and the amortization of fees and expenses associated with the placement.
Program HighlightsOrthopaedic Reconstruction
Activities related to Stryker’s modular filing of a PMA application for the OP-1 bone graft device are ongoing. Stryker began the modular PMA submission to the FDA in April of this year. As the OP-1 device moves toward commercialization, the Company’s activities have been increasingly focused on its role as the commercial manufacturer of the OP-1 bone graft device. The Company anticipates that much of the time in its manufacturing facility during the remainder of 1998 will be dedicated to manufacturing OP-1 devices for additional clinical trials in orthopaedic reconstruction and inventory for the anticipated product launch.
Renal Therapy
Biogen and the Company are conducting extensive preclinical studies to understand questions associated with the development of OP-1 as a therapy for acute and chronic renal failure. Following these studies, the Company and Biogen expect to determine the appropriate future development plans and timeline for the renal program. Data published in the May 7, 1998, edition of The American Society for Clinical Investigation demonstrated that the administration of OP-1 in animal models of acute renal failure preserved kidney function and increased survival rate.
Stroke Therapy
Data published in the May 11, 1998, edition of NeuroReport demonstrated that animals that received OP-1 at one and four days following stroke experienced enhanced motor skill recovery compared to animals in the control group. Most therapies currently in development for stroke attempt to limit the size of the infarct and thus require intervention within hours of the stroke onset. The published results demonstrate OP-1’s ability to enhance recovery when administered a full 24 hours after the stroke.
Creative BioMolecules, Inc. and Subsidiary |
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Consolidated Statements of Operations |
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Three Months Ended |
Six Months Ended |
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June 30, |
June 30, |
June 30, |
June 30, |
||||
1998 |
1997 |
1998 |
1997 |
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| REVENUE: | |||||||
| Research and development contracts | $1,800,615 |
$3,137,593 |
$4,803,474 |
$5,889,065 |
|||
| Manufacturing contracts | 0 |
161,687 |
0 |
393,926 |
|||
| Interest and other | 480,175 |
616,951 |
895,435 |
1,280,177 |
|||
| Total revenues | 2,280,790 |
3,916,231 |
5,698,909 |
7,563,168 |
|||
| COSTS AND EXPENSES: | |||||||
| Research and development | 6,130,923 |
6,437,127 |
12,428,790 |
12,016,180 |
|||
| Cost of manufacturing contracts | 0 |
112,720 |
0 |
273,758 |
|||
| General and administrative | 2,171,785 |
1,536,937 |
4,138,395 |
3,139,853 |
|||
| Interest | 86,633 |
52,882 |
159,143 |
105,354 |
|||
| Total costs and expenses | 8,389,341 |
8,139,666 |
16,726,328 |
15,535,145 |
|||
| NET LOSS | (6,108,551) |
(4,223,435) |
(11,027,419) |
(7,971,977) |
|||
| ACCRETION ON SERIES PREFERRED STOCK | 152,043 |
0 |
152,043 |
0 |
|||
| NET LOSS APPLICABLE TO COMMON STOCKHOLDERS | ($6,260,594) |
($4,223,435) |
($11,179,462) |
($7,971,977) |
|||
| BASIC AND DILUTED LOSS PER SHARE | ($0.19) |
($0.13) |
($0.33) |
($0.24) |
|||
| SHARES FOR BASIC AND DILUTED | 33,507,137 |
33,016,188 |
33,474,918 |
32,934,903 |
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Balance Sheet Data |
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June 30, |
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1998 |
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| Cash, Cash Equivalents and Marketable Securities | $45,899,194 |
||||||
| Total Assets | $72,971,142 |
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| Total Stockholders' Equity | $42,120,567 |
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The statements in this news release that are not historical facts include forward-looking statements that involve risks and uncertainties. Factors which could cause actual results to differ from the Company’s expectations include, without limitation, the achievement of product development milestones by the Company, the impact of competitive products, the timely receipt of regulatory clearances required for clinical testing, manufacturing and marketing of products and the other risks and uncertainties detailed from time to time in the Company’s periodic reports.
Creative BioMolecules is a discovery and development company focused on proprietary protein-based therapeutics for human tissue regeneration and restoration. The Company’s therapeutics are based on proteins that act as signals in initiating and regulating the cellular events involved in cell and tissue formation.
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