EXTON, Pa., March 14 /PRNewswire-FirstCall/ -- Isolagen, Inc.
(AMEX:ILE) today reported on its results for the fiscal year ended
December 31, 2005. Total revenue for fiscal 2005 increased by 109%
to $8.8 million compared with $4.2 million for fiscal 2004. The
increase in revenue was primarily attributable to the growth of
Isolagen's operations in the United Kingdom. Costs of sales
increased to $9.2 million for the year ended December 31, 2005, as
compared to $5.5 million for the year ended December 31, 2004. The
increase in cost of sales resulted from increases in essentially
all categories of costs as the United Kingdom operation increased
its commercialization of the Isolagen process. For the year ended
December 31, 2005, Isolagen's cost of sales exceeded revenue as the
development and implementation of improved manufacturing processes
has not yet achieved all of the cost efficiencies Isolagen
anticipates during the reported period. As a percentage of revenue,
cost of sales were approximately 106% for the year ended December
31, 2005 and approximately 131% for the year ended December 31,
2004. The change in this percentage is primarily the result of the
lower level of sales activity during 2004, Isolagen's early stage
of commercial development and the associated lower level of
operational activity. As product volumes have increased, fixed
costs have been spread over a greater number of units, thereby
lowering cost of sales as a percentage of revenue. In addition, as
a result of certain manufacturing initiatives, Isolagen has
experienced improvements regarding the quantity of certain
materials utilized in the manufacturing process, thereby lowering
the cost of sales as a percentage of revenue. Isolagen has been
using the commercialization of the Isolagen Process in the UK
market as a means aimed at improving and/or automating its
manufacturing process, which would be used to produce commercial
quantities of injections on a profitable basis in the future.
Operating expenses increased to $34.5 million, or approximately
71%, for the year ended December 31, 2005, as compared to $20.2
million for the year ended December 31, 2004. The increase in
operating expenses is primarily due to an increase in selling,
general and administrative costs of $7.9 million as Isolagen's
business significantly expanded (see revenue discussion above)
during 2005. As such, Isolagen's headcount and related salaries
have increased, promotional expenses have increased and general
costs, including legal, facility and other costs, have increased.
Further, a $1.4 million impairment charge related to certain third
party developed software costs was recorded during the year ended
December 31, 2005 as such software was taken out of service and not
expected to provide future value. Research and development expenses
have increased $6.4 million as a result of increased research and
development efforts during 2005. Such efforts included increased
clinical trial and consulting costs, increased headcount and
related salaries, and increased facilities costs. Net loss for the
year ended December 31, 2005 was $35.8 million as compared to a net
loss of $21.5 million for the year ended December 31, 2004. This
increase in net loss of $14.3 million represents the effects of the
increases in selling, general and administrative expenses, research
and development expenses and interest expense, partially offset by
the increase in interest income and improvement in gross margin. At
December 31, 2005, the Company had cash, cash equivalents,
restricted cash and available-for-sale investments of $67.0 million
and working capital of $61.1 million (including our cash, cash
equivalents, restricted cash and available-for-sale investments).
Susan Ciallella, the Company's CEO, will be issuing an open letter
to shareholders commenting upon the 10-K later this week. About
Isolagen, Inc. Isolagen specializes in the development and
commercialization of autologous cellular therapies for soft and
hard tissue regeneration. The company's product candidates are
based on its proprietary Isolagen Process. Based on the accumulated
experience of the company through its retrospective study, clinical
trials and treatment of patients in the United Kingdom, the company
believes that the Isolagen Process utilizes the patient's own cells
to create safe and effective therapies to treat the underlying
cause of the patient's condition. Autologous cellular therapy is
the process whereby a patient's own cells are extracted, allowed to
multiply and then injected into the patient. Isolagen's product
candidates are designed to be minimally invasive and non-surgical.
For additional information, please visit: http://www.isolagen.com/
. All statements in this news release that are not based on
historical fact are "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995 and the
provisions of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. While management has based any forward-looking statements
contained herein on its current expectations, the information on
which such expectations were based may change. These
forward-looking statements rely on a number of assumptions
concerning future events and are subject to a number of risks,
uncertainties, and other factors, many of which are outside of
Isolagen's control, that could cause actual results to materially
differ from such statements. Such risks, uncertainties, and other
factors include, but are not necessarily limited to, those set
forth under the caption "Item 1A. Risk Factors" in the Company's
most recent Form 10-K filings. In addition, Isolagen operates in a
highly competitive and rapidly changing environment, and new risks
may arise. Accordingly, investors should not place any reliance on
forward-looking statements as a prediction of actual results.
Isolagen disclaims any intention to, and undertakes no obligation
to, update or revise any forward-looking statement. Readers are
also urged to carefully review and consider the various disclosures
in Isolagen's annual report on Form 10-K, filed with the SEC on
March 14, 2006, as well as other public filings with the SEC.
Isolagen, Inc. (A Development Stage Company) Consolidated
Statements of Operations For the Year Ended December 31, 2005 2004
2003 Revenue Product sales $8,753,684 $4,179,247 $445,689 License
fees --- --- --- Total revenue 8,753,684 4,179,247 445,689 Cost of
sales 9,249,615 5,491,008 2,197,222 Gross loss (495,931)
(1,311,761) (1,751,533) Selling, general and administrative
expenses 23,012,458 15,127,365 6,311,774 Research and development
11,440,322 5,057,149 3,301,341 Operating loss (34,948,711)
(21,496,275) (11,364,648) Other income (expense) Interest income
2,820,388 566,526 40,691 Other income 285,451 91,956 55,663
Interest expense (3,934,712) (636,676) --- Net loss $(35,777,584)
$(21,474,469) $(11,268,294) Deemed dividend associated with
beneficial conversion of preferred stock --- --- (1,244,880)
Preferred stock dividends --- --- (1,087,200) Net loss attributable
to common shareholders $(35,777,584) $(21,474,469) $(13,600,374)
Per share information Net loss-basic and diluted $(1.18) $(0.71)
$(0.58) Deemed dividend associated with beneficial conversion of
preferred stock --- --- (0.06) Preferred stock dividends --- ---
(0.06) Net loss per common share -basic and diluted $(1.18) $(0.71)
$(0.70) Weighted average number of basic and diluted common shares
outstanding 30,245,283 30,116,827 19,297,865 Isolagen, Inc. (A
Development Stage Company) Consolidated Balance Sheets December 31,
2005 2004 Assets Current assets: Cash and cash equivalents
$41,554,203 $64,329,356 Restricted cash 2,459,456 ---
Available-for-sale investments 23,000,000 51,809,660 Accounts
receivable, net of allowance for doubtful accounts of $100,639 and
$50,533, respectively 719,000 1,516,591 Inventory 394,693 1,010,768
Other receivables 234,006 350,861 Prepaid expenses 901,582 769,984
Total current assets 69,262,940 119,787,220 Property and equipment,
net of accumulated depreciation and amortization of $2,188,519 and
$2,421,822, respectively 17,277,172 3,634,992 Other assets, net of
amortization of $874,112 and $124,873, respectively 3,639,810
4,698,926 Total assets $90,179,922 $128,121,138 Liabilities and
Shareholders' Equity (Deficit) Current liabilities: Accounts
payable $2,011,712 $2,360,363 Accrued expenses 3,884,594 3,441,805
Deferred revenue 2,235,764 2,923,328 Total current liabilities
8,132,070 8,725,496 Long term debt 90,000,000 90,000,000 Other long
term liabilities 144,749 410,217 Total liabilities 98,276,819
99,135,713 Commitments and contingencies Shareholders' equity
(deficit): Preferred stock, $.001 par value; 5,000,000 shares
authorized --- --- Common stock, $.001 par value; 100,000,000
shares authorized 34,260 34,195 Additional paid-in capital
109,879,125 109,935,174 Treasury stock, at cost, 4,000,000 shares
(25,974,000) (25,974,000) Accumulated other comprehensive income
(loss) (784,644) 464,110 Accumulated deficit during development
stage (91,251,638) (55,474,054) Total shareholders' equity
(deficit) (8,096,897) 28,985,425 Total liabilities and
shareholder's equity (deficit) $90,179,922 $128,121,138 DATASOURCE:
Isolagen, Inc. CONTACT: Susan Ciallella, Chief Executive Officer of
Isolagen, Inc., +1-484-713-6000; or Lee M. Stern of The Trout
Group, +1-212-477-9007 x22 or x27, for Isolagen, Inc. Web site:
http://www.isolagen.com/
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