Creative BioMolecules, Inc. Reports Third Quarter Results

Hopkinton, MA, November 11, 1998—Creative BioMolecules, Inc. (Nasdaq: CBMI) today announced financial results for the third quarter of fiscal 1998, ended September 30, 1998. Revenues for the three month period were $2,827,000 and expenses were $8,503,000, and a net loss of $5,676,000 or $0.18 per share. Comparable numbers for the quarter ending September 30, 1997 were revenues of $4,319,000, expenses of $7,863,000 and a net loss of $3,544,000, or $0.11 per share. The Company has focused its efforts this quarter on accelerating the commercialization of its lead product, the OP-1 bone graft device, and developing new therapeutic opportunities based on its proven technology which uses proteins that stimulate new tissue formation and repair.

Revenues during the third quarter of 1998 include funding from Stryker Corporation for work preformed by the Company in conjunction with the Pre-Market Approval (PMA) application for the OP-1 bone graft device and research revenues from Biogen in support of the development of a therapy for the treatment of renal disease. In the third quarter 1997, significant revenues were received from the sale of OP-1 to Biogen. These revenues were not repeated this quarter. The increase in expenses compared with the third quarter of 1997 relate primarily to preparations for the Food and Drug Administration’s Pre-Approval Inspection (PAI) of the Company’s manufacturing facilities and continued work with Stryker to support PMA-related activities.

In October, the Company restructured its partnership with Stryker to accelerate the commercialization of the OP-1 bone graft device and maximize its return to Creative’s shareholders. Under the agreement, Stryker will assume full responsibility for the OP-1 device manufacturing. Creative will receive from Stryker approximately $20 million plus substantially increased royalties on product sales. The transaction, which is expected to close and to be accounted for in the fourth quarter of 1998, will significantly reduce the Company’s expenses in 1999.

Program Highlights

Orthopaedic Reconstruction

The majority of the Company’s focus and expenses during the second quarter were devoted to preparing the manufacturing facilities for the anticipated Pre-Approval Inspection (PAI) of the facilities in conjunction with the Modular Pre-Market Approval (PMA) application initiated by Stryker earlier this year. The PMA review is ongoing.

Stryker recently presented positive clinical data in support of the OP-1 bone graft device at scientific and clinical conferences, including: the Annual Meeting of the Orthopaedic Trauma Association and the First European Conference on Bone Morphogenetic Proteins. Data from the 122 patient U.S. pivotal trial demonstrated that the OP-1 device group had comparable clinical success to the autograft group in healing non-union fractures of the tibia without the need for a second invasive procedure to harvest bone from the hip.

Stryker’s increased financial investment, expanded clinical program and newly presented clinical data provide continued support for the Company’s confidence in the future commercial success for OP-1 products in the fields of orthopaedic and dental reconstruction.

Renal Therapy

In October the Company announced that it had modified its renal disease partnership with Biogen. Under the revised terms, Creative will assume primary responsibility for the development of an OP-1-based therapy for the treatment of chronic renal failure. Biogen will pay Creative $4.75 million and will retain an option to resume responsibility for the program until the end of 1999. Creative will assume, independent of Biogen, all responsibilities for the development of a therapy for acute renal failure.

Stroke Therapy

The Company is developing a potential therapy for the enhancement of motor skills recovery following stroke. New preclinical data presented at the November meeting of the Society for Neuroscience indicate that OP-1 enhances motor skill recovery in rodent models when administered up to three days following stroke. This significant time window for intervention expands the potential therapeutic and commercial opportunity—current treatment requires patients to receive medical attention within hours of the stroke’s onset, and often before they have reached the hospital. The studies were conducted by collaborators at the Massachusetts General Hospital and Harvard Medical School.

In addition to its stroke therapy, the Company is exploring the potential of its proprietary proteins in spinal cord injury, traumatic brain injury, and Parkinson’s Disease. In the third quarter, the Company expanded its collaborations to include The Miami Project to Cure Paralysis and the University of Colorado.

Creative BioMolecules is a biopharmaceutical company focused on the development of therapies for human tissue regeneration and repair.

This news release includes 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 course of the research and development programs, including the achievement of development milestones by the Company and completion of clinical testing, 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.

NOTE: Creative BioMolecules, Inc. makes available its latest news releases on the Internet at http://www.creativebio.com and http://www.prnewswire.com or by facsimile by calling Fax On Demand at 1-800-758-5804, extension 212213.

 

Creative BioMolecules, Inc. and Subsidiary

Consolidated Statements of Operations

(Unaudited)

Three Months Ended

Nine Months Ended

9/30/98

9/30/97

9/30/98

9/30/97

REVENUE:
Research and development contracts

$2,198,000

$3,763,000

$7,001,000

$9,652,000

Manufacturing contracts

394,000

Interest and other

629,000

556,000

1,525,000

1,836,000

Total revenues

2,827,000

4,319,000

8,526,000

11,882,000

COSTS AND EXPENSES:
Research and development

6,354,000

6,343,000

18,935,000

18,359,000

Cost of manufacturing contracts

274,000

General and administrative

2,049,000

1,468,000

6,035,000

4,607,000

Interest

100,000

52,000

259,000

158,000

Total costs and expenses

8,503,000

7,863,000

25,229,000

23,398,000

NET LOSS

(5,676,000)

(3,544,000)

(16,703,000)

(11,516,000)

ACCRETION ON SERIES PREFERRED STOCK

(422,000)

0

(574,000)

0

NET LOSS APPLICABLE TO COMMON STOCKHOLDERS

($6,098,000)

($3,544,000)

($17,277,000)

($11,516,000)

BASIC AND DILUTED LOSS PER COMMON SHARE

($0.18)

($0.11)

($0.52)

($0.35)

SHARES FOR BASIC AND DILUTED

33,620,764

33,110,299

33,523,588

32,993,795

 

Balance Sheet Data (Unaudited)

9/30/98

Cash, Cash Equivalents and Marketable Securities

$39,773,000

Total Assets

$67,899,000

Total Stockholders' Equity

$36,609,000

###

For additional information on this news release, please contact the Company.


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Last modified: November 12, 1998
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