Submitted Final PMA Supplement to FDA for
New U.S. Manufacturing Site
Sientra, Inc. (NASDAQ:SIEN) (“Sientra” or the “Company”), a medical
aesthetics company, today announced its financial results for the
fourth quarter and full year ended December 31, 2016.
Jeffrey M. Nugent, Chairman and Chief Executive
Officer of Sientra, said, “As promised, we have made significant
progress on a number of strategic and operational initiatives over
the last several months and met an important milestone today with
the submission of our final PMA Supplement to the FDA for our new
U.S. based manufacturing facility. I want to acknowledge our
entire organization and especially our regulatory and R&D teams
that have worked diligently to get us to this significant milestone
and keep us on track for FDA approval of our new manufacturing site
by the end of the year. 2017 is a pivotal year for us as we
prepare to move into 2018 and beyond with our breast implant supply
chain back and intact. We also put in place financing to
access up to $20 million in additional capital to go along with our
current solid cash position to ensure we have the flexibility to
support our working capital and inventory needs as we ramp up
toward re-supply along with supporting any strategic
initiatives.”
Mr. Nugent concluded, “As we move through 2017,
we remain laser focused on meeting our previously stated
manufacturing timelines to achieve FDA approval and resupply by the
end of 2017. I am also committed to maintaining our elite
sales force and board certified plastic surgeon customers, and also
to continue building our strong corporate culture, which has been a
key priority since I started just over a year ago. And
finally, we remain confident in our ability to re-establish our
earlier market share position and growth strategy. We have made
several additions to our team that will add to our ability to
expedite our return to the competitive position we had previously
achieved.”
Fourth Quarter and Full Year 2016
Financial Review
Total net sales for the fourth quarter 2016 were
$6.5 million, compared to total net sales of $1.5 million for the
same period in 2015. Total sales for the year ended December 31,
2016 were $20.7 million, compared to total sales of $38.1 million
for the full year 2015. This decrease was driven by our controlled
market re-entry designed to optimize the availability of our Breast
Product inventory as we established our supply options following
the voluntary hold on the sale and implanting of all Sientra
devices manufactured by our former manufacturing contractor between
October 9, 2015 and March 1, 2016.
Breast Products accounted for 82% of our total
net sales for the fourth quarter 2016 and 79% for the full year
2016 and bioCorneum®, or our Scar Management Products, accounted
for 17% of our total net sales for fourth quarter 2016 and 18% for
the full year 2016.
Gross profit for the fourth quarter of 2016 was
$3.9 million, or 61% of sales, compared to gross profit of $1.0
million, or 64% of sales, for the same period in 2015. The
decrease in gross margin was driven primarily by an incremental
reserve for obsolete inventory, offset by lower fixed overhead as a
percentage of total sales.
Gross profit for the year ended December 31,
2016 was $13.9 million, or 67% of sales, compared to gross profit
of $27.5 million, or 72% of sales, for the full year 2015. The
decrease in gross margin for full year 2016 was primarily due to an
incremental reserve for obsolete inventory.
Operating expenses for the fourth quarter of
2016 were $12.0 million, a decrease of $17.2 million, compared to
operating expenses of $29.2 million for the same period in
2015. The fourth quarter of 2015 included a non-cash
impairment charge of $14.3 million related to the write down of
goodwill as a result of the significant decline in our stock
price. Excluding the goodwill impairment, operating expense
for the fourth quarter 2016 were $2.9 million lower than fourth
quarter of 2015, primarily due to transition costs for certain
former executives incurred during 2015.
Operating expenses for the full year 2016
totaled $53.9 million, a decrease of $12.1 million, compared to
operating expenses of $66.0 million for full year 2015. The
decrease is primarily due to the goodwill impairment charge of
$14.3 million recorded in 2015, offset by an increase in legal
expenses.
Net loss for the fourth quarter of 2016 was $8.1
million, compared to $28.3 million for the same period in 2015. Net
loss for the full year ended December 31, 2016 was $40.2 million,
compared to $41.2 million for the same period in 2015.
Net cash and cash equivalents were $67.2 million
as of December 31, 2016.
Additionally, the Company announced that it has
added a $15 million secured line of credit and a $5 million
available secured credit facility with Silicon Valley Bank which
will be used for general corporate purposes, working capital needs
related to inventory as the Company prepares for final
manufacturing site approval, as well as strategic initiatives.
Conference Call
Sientra will hold a conference call on Tuesday,
March 14, 2017 at 1:30 p.m. PT/4:30 p.m. ET to discuss the
results.
The dial-in numbers are (844) 464-3933 for
domestic callers and (765) 507-2612 for international callers. The
conference ID is 77604092. A live webcast of the conference
call will be available on the Investor Relations section of the
Company's website at www.sientra.com.
About Sientra
Headquartered in Santa Barbara, California,
Sientra is a medical aesthetics company committed to making a
difference in patients’ lives by enhancing their body image,
growing their self-esteem and restoring their confidence. The
Company was founded to provide greater choice to board-certified
plastic surgeons and patients in need of medical aesthetics
products. The Company has developed a broad portfolio of products
with technologically differentiated characteristics, supported by
independent laboratory testing and strong clinical trial outcomes.
The Company sells its breast implants and breast tissue expanders
exclusively to board-certified and board-admissible plastic
surgeons and tailors its customer service offerings to their
specific needs. The Company also offers a range of other
aesthetic and specialty products including bioCorneum®, the
professional choice in scar management.
Forward-looking statementsThis press release
contains “forward-looking statements” within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended, based on
management’s current assumptions and expectations of future events
and trends, which affect or may affect the Company’s business,
strategy, operations or financial performance, and actual results
may differ materially from those expressed or implied in such
statements due to numerous risks and uncertainties.
Forward-looking statements include, but are not limited to,
statements regarding the success of the Company’s market re-entry,
its ability to transition the business back to historical revenue
and growth levels and create a world class, diversified aesthetics
organization, the Company’s development of a long-term
manufacturing solution, including the timing and ability to qualify
a manufacturing facility for the manufacture of product for the
Company’s customers, and the integration of and expected
contributions from new additions to the Company’s management
team. Such statements are subject to risks and uncertainties,
including the dependence on positive reaction from plastic surgeons
and their patients in order to successfully re-enter the market,
future profitability depending on the success of the Company’s
breast products, and risks associated with contracting with Vesta
or any third-party manufacturer and supplier, including
uncertainties that the development and validation of Vesta’s
manufacturing facility will be timely completed, that a PMA
Supplement or other regulatory requirements will be timely approved
by the FDA or other applicable regulatory authorities, and that the
integration of recently acquired product lines will not achieve the
anticipated benefits or will divert attention of management from
the operation of the existing business. Additional factors
that could cause actual results to differ materially from those
contemplated in this press release can be found in the Risk Factors
section of Sientra’s most recently filed Quarterly Report on Form
10-Q and and its Annual Report on Form 10-K for the year ended
December 31, 2016 which Sientra expects to file with the Securities
and Exchange Commission on March 14, 2017. All statements
other than statements of historical fact are forward-looking
statements. The words ‘‘believe,’’ ‘‘may,’’ ‘‘might,’’ ‘‘could,’’
‘‘will,’’ ‘‘aim,’’ ‘‘estimate,’’ ‘‘continue,’’ ‘‘anticipate,’’
‘‘intend,’’ ‘‘expect,’’ ‘‘plan,’’ or the negative of those terms,
and similar expressions that convey uncertainty of future events or
outcomes are intended to identify estimates, projections and other
forward-looking statements. Estimates, projections and other
forward-looking statements speak only as of the date they were
made, and, except to the extent required by law, the Company
undertakes no obligation to update or review any estimate,
projection or forward-looking statement.
|
SIENTRA, INC. |
Condensed Statements of Operations |
(In thousands, except per share and share
amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
|
|
|
|
|
|
|
December
31, |
|
|
December
31, |
|
|
|
|
|
|
|
|
|
2016 |
|
|
2015 |
|
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
|
|
$ |
6,488 |
|
$ |
1,537 |
|
|
$ |
20,734 |
|
$ |
38,106 |
|
|
Cost of
goods sold |
|
2,561 |
|
|
547 |
|
|
|
6,880 |
|
|
10,654 |
|
|
|
|
|
|
|
Gross
profit |
|
3,927 |
|
|
990 |
|
|
|
13,854 |
|
|
27,452 |
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing |
|
4,074 |
|
|
5,675 |
|
|
|
20,607 |
|
|
25,762 |
|
|
|
Research
and development |
|
2,334 |
|
|
2,304 |
|
|
|
9,704 |
|
|
7,199 |
|
|
|
General and
administrative |
|
5,633 |
|
|
6,933 |
|
|
|
23,577 |
|
|
18,738 |
|
|
|
Goodwill
Impairment |
|
— |
|
|
14,278 |
|
|
|
— |
|
|
14,278 |
|
|
|
|
|
|
|
Total
operating expenses |
|
12,041 |
|
|
29,190 |
|
|
|
53,888 |
|
|
65,977 |
|
|
|
|
|
|
|
Loss from
operations |
|
(8,114 |
) |
|
(28,200 |
) |
|
|
(40,034 |
) |
|
(38,525 |
) |
|
Other
income (expense), net |
|
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
16 |
|
|
13 |
|
|
|
63 |
|
|
32 |
|
|
|
Interest
expense |
|
20 |
|
|
(149 |
) |
|
|
(98 |
) |
|
(3,097 |
) |
|
|
Other
(expense) income, net |
|
18 |
|
|
86 |
|
|
|
(36 |
) |
|
360 |
|
|
|
|
|
|
|
Total other
income (expense), net |
|
54 |
|
|
(50 |
) |
|
|
(71 |
) |
|
(2,705 |
) |
|
|
|
|
|
|
Loss before
income taxes |
|
(8,060 |
) |
|
(28,250 |
) |
|
|
(40,105 |
) |
|
(41,230 |
) |
|
Income
taxes |
|
|
13 |
|
|
— |
|
|
|
61 |
|
|
— |
|
|
|
|
|
|
|
Net
loss |
$ |
(8,073 |
) |
$ |
(28,250 |
) |
|
$ |
(40,166 |
) |
$ |
(41,230 |
) |
|
Basic and
diluted net loss per share attributable to common stockholders |
$ |
(0.43 |
) |
$ |
(1.57 |
) |
|
$ |
(2.20 |
) |
$ |
(2.61 |
) |
|
Weighted
average outstanding common shares used for net loss per |
|
|
|
|
|
|
|
|
|
|
|
share
attributable to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted |
|
18,595,286 |
|
|
17,993,400 |
|
|
|
18,233,177 |
|
|
15,770,972 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SIENTRA, INC. |
Condensed Balance Sheets |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
|
2016 |
|
2015 |
|
Assets |
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
67,212 |
$ |
112,801 |
|
|
Accounts
receivable, net |
|
3,082 |
|
4,249 |
|
|
Inventories, net |
|
18,484 |
|
20,602 |
|
|
Insurance
recovery receivable |
|
9,375 |
|
— |
|
|
Prepaid
expenses and other current assets |
|
1,852 |
|
1,473 |
|
|
|
Total
current assets |
|
100,005 |
|
139,125 |
|
Property
and equipment, net |
|
2,986 |
|
1,404 |
|
Goodwill |
|
|
|
|
4,878 |
|
— |
|
Other
intangible assets, net |
|
6,186 |
|
53 |
|
Other
assets |
|
|
|
228 |
|
223 |
|
|
|
Total
assets |
$ |
114,283 |
$ |
140,805 |
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
Accounts
payable |
$ |
3,555 |
$ |
4,069 |
|
|
Accrued and
other current liabilities |
|
6,507 |
|
6,959 |
|
|
Legal
settlement payable |
|
10,900 |
|
— |
|
|
Customer
deposits |
|
6,559 |
|
9,488 |
|
|
|
Total
current liabilities |
|
27,521 |
|
20,516 |
|
Warranty
reserve and other long-term liabilities |
|
3,145 |
|
1,418 |
|
|
|
Total
liabilities |
|
30,666 |
|
21,934 |
|
Stockholders’ equity: |
|
|
|
|
|
|
|
Total
stockholders’ equity |
|
83,617 |
|
118,871 |
|
|
|
Total
liabilities and stockholders’ equity |
$ |
114,283 |
$ |
140,805 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor Contacts:
Patrick F. Williams
Sientra, Chief Financial Officer
(619) 675-1047
patrick.williams@sientra.com
Nick Laudico / Brian Johnston
The Ruth Group
(646) 536-7030 / (646) 536-7028
IR@Sientra.com
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