BG Medicine Reports 2014 Fourth Quarter and Year End Financial Results
March 31 2015 - 7:00AM
Net Loss Reduced by 49% and Operating
Cash Burn Cut by 47% From 2013
First Automated Galectin-3 Testing
Expected to Launch in U.S. in Mid-2015
BG Medicine, Inc. (Nasdaq:BGMD), the developer of
the BGM Galectin-3® Test, today reported financial results for the
three months and year ended December 31, 2014.
Full Year 2014 Results
The Company reported net loss for the full year of $8.1 million,
a 49% improvement from the $15.8 million net loss reported in 2013,
on total revenues of $2.8 million versus total revenues of $4.1
million in 2013. Operating expenses for 2014 declined by 46% from
the prior year. Net loss per share at year end of 2014 was $0.25 as
compared to $0.58 in 2013. Operating cash burn decreased by $7.1
million, a 47% decrease, to $8.2 million compared to $15.3 million
in 2013.
"In 2014, we continued to build the case for galectin-3 while
managing our operating expenses aggressively and reducing our
operating cash burn," said Paul R. Sohmer, M.D., President and
Chief Executive Officer of BG Medicine.
2014 Highlights
- In December 2014, Abbott received U.S. FDA clearance for its
ARCHITECT galectin-3 assay, the first automated method for
galectin-3 testing to receive regulatory clearance in the United
States, which we expect will be launched in mid-2015.
- 19 full-length and original articles were published in which
galectin-3 levels were measured in clinical research studies with
our BGM Galectin-3 Test or the galectin-3 tests of our automated
partners. These clinical studies explored the association of
galectin-3 levels with adverse events associated with both systolic
and diastolic heart failure, including hospitalization and
re-hospitalization, device and drug interventions, cardiac
remodeling and associated complications of fibrosis such as atrial
fibrillation, and heart failure related end-organ disorders such as
renal insufficiency and renal failure.
- 56 oral and poster presentations relating to the utility of
galectin-3 testing in heart failure and related disorders were
delivered at U.S. and international meetings.
- In March 2014, the U.S. Patent and Trademark Office issued BG
Medicine a patent relating to the prediction of responsiveness to
cardiac resynchronization therapy by the measurement of galectin-3
levels in blood. The results of a clinical research study published
in 2014 provided clinical research evidence of the potential
utility of the application described by this newly issued
patent.
- Interest in galectin-3 as a therapeutic target heightened as
clinical trials of galectin-3 inhibitors were initiated by several
independent pharmaceutical companies developing therapies for
diseases that are associated with galectin-3 and fibrosis.
4th Quarter 2014 Results
The Company reported net loss for the fourth quarter of 2014 of
$1.3 million, a 32% improvement from the $1.9 million net loss
reported in the fourth quarter of 2013, on total revenues of
$554,000 versus total revenues of $1.1 million in 2013. The
decrease in total revenues reflected a $330,000 decrease in product
revenues and a $265,000 decrease in service revenues from the prior
year quarter. The decrease in product revenues resulted from a
$188,000 decline in orders from our largest clinical laboratory
customer and a $143,000 decline in purchases relating to
independent research studies. The reduction in service revenues
resulted from the planned completion of the High Risk Plaque
initiative in 2013 and our decision to close our research
facilities in 2013 as part of our initiative to streamline the
operations of the Company.
Operating expenses for the fourth quarter of 2014 declined by
37% or $927,000, from the prior year quarter. This net reduction in
operating expenses resulted from an increase in research and
development-related expense of $344,000 offset by a decrease in
sales and marketing expense of $690,000, and a decrease of $581,000
in general and administrative expense. Net loss per share for the
fourth quarter of 2014 was $0.04 as compared to $0.06 in 2013.
Operating cash burn for the fourth quarter 2014 decreased by $1.4
million, a 57% decrease, to $1.1 million compared to an operating
cash burn of $2.5 million in 2013.
Outlook for 2015
"FDA clearance of the first automated assay for galectin-3
represents a significant commercial milestone for BG Medicine," Dr.
Sohmer continued. "Our commercial strategy will increasingly rely
on the success of our automated partners to commercialize automated
testing for galectin-3."
"We anticipate that beginning in the second half of 2015 our
growth in revenues will depend on the timing and extent to which
our automated partners are successful in gaining adoption of their
automated tests for galectin-3. Concurrently, we will continue to
manage aggressively our operating expenses and cash burn. We also
expect that we will require additional capital in the near future
to continue our operations and grow our business."
Conference Call and Web Cast
The Company will host a conference call and webcast today, March
31, 2015, beginning at 8:30 am Eastern Time. The conference call
may be accessed by dialing (877) 845-1016 from the U.S. and Canada,
or (708) 290-1155 from international locations. The conference call
will also be available via the Internet at www.bg-medicine.com.
Listeners are encouraged to login at least 15 minutes prior to the
start of the scheduled presentation to register, download and
install any necessary audio software.
About BG Medicine
BG Medicine, Inc. (Nasdaq:BGMD), the developer of the BGM
Galectin-3® Test, is focused on the development and delivery of
diagnostic solutions to aid in the clinical management of heart
failure and related disorders. For additional information about BG
Medicine, heart failure and galectin-3 testing, please visit
www.bg-medicine.com. The BG Medicine Inc. logo is
available for download here
Forward Looking Statements
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995, including, but not limited to, statements made by Dr. Sohmer
in the section captioned "Outlook for 2015". Existing and
prospective investors are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
hereof. The Company undertakes no obligation to update or revise
the information contained in this press release, whether as a
result of new information, future events or circumstances or
otherwise. These forward-looking statements are neither promises
nor guarantees of future performance, and are subject to a variety
of risks and uncertainties, many of which are beyond the Company's
control, which could cause actual results to differ materially from
those contemplated in these forward-looking statements. In
particular, the risks and uncertainties include, among other
things, our cash position; our ability to raise sufficient capital
immediately to continue our operations and grow our business; our
ability to continue as a going concern; our history of operating
losses; the ability of our automated partners to successfully
develop, market, commercialize and achieve widespread market
penetration for their automated galectin-3 tests; our estimates of
future performance, including the expected timing of the launch of
automated galectin-3 tests by our automated partners; our ability
to conduct the clinical studies required for regulatory clearance
or approval and to demonstrate the clinical benefits and
cost-effectiveness to support commercial acceptance of our
products; the timing, costs and other limitations involved in
obtaining regulatory clearance or approval for any of our products;
our ability to obtain regulatory clearance or approval for any of
our products; our ability to maintain royalty rates from our
automated partners to generate sufficient profit margins; our
ability to provide sufficient evidence of clinical utility for our
galectin-3 test and to differentiate it from competing
cardiovascular diagnostics tests; our ability to successfully
market, commercialize and achieve widespread market penetration for
our cardiovascular diagnostic tests; our ability to generate
sufficient product revenue to sustain our commercial diagnostics
business; our expectations regarding the impact on our galectin-3
test sales as a result of focusing our sales efforts on the
hospital readmissions problem and associated penalties facing our
clients; the potential benefits of our products over current
medical practices or other diagnostics; our ability to successfully
develop, receive regulatory clearance or approval, commercialize
and achieve market acceptance for any of our products; willingness
of third-party payors to reimburse for the cost of our tests at
prices that allow us to generate sufficient profit margins; our
reliance on third parties to develop and distribute our products,
including our ability to enter into collaboration agreements with
respect to our products and the performance of our collaborative
partners under such agreements; our ability to protect our
intellectual property and operate our business without infringing
upon the intellectual property rights of others; the expected
timing, progress or success of our research and development and
commercialization efforts; our ability to successfully obtain
sufficient supplies of samples for our biomarker discovery and
development efforts; our ability to identify and contract with
laboratories who can support the needs of our biomarker discovery
and development efforts; our estimates regarding anticipated
operating losses, future revenue, expenses, capital requirements
and our needs for additional financing; our ability to retain
qualified personnel; the limited public float and trading volume
for our common stock and volatility in our stock price; our ability
to regain and maintain compliance with the continued listing
requirements of The NASDAQ Capital Market; and other factors
discussed in the Company's most recent Annual Report on Form 10-K
as well as other documents that may be filed by the Company from
time to time with the Securities and Exchange Commission or
otherwise made public. All information in this press release is as
of the date of the release, and BG Medicine undertakes no duty to
update this information unless required by law.
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BG Medicine, Inc. and
Subsidiary Consolidated Statements of
Operations |
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Three Months ended
December 31, |
Years ended December
31, |
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2014 |
2013 |
2014 |
2013 |
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(in thousands, except share and per share data) |
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(unaudited) |
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Revenues: |
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Product revenues |
$ 554 |
$ 884 |
$ 2,787 |
$ 3,683 |
Service revenues |
-- |
265 |
-- |
390 |
Total revenues |
554 |
1,149 |
2,787 |
4,073 |
Costs and operating expenses (1): |
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Product costs |
192 |
293 |
956 |
1,247 |
Service costs |
-- |
17 |
-- |
142 |
Research and development |
538 |
194 |
2,393 |
3,735 |
Selling and marketing |
224 |
914 |
2,293 |
6,193 |
General and administrative |
811 |
1,392 |
4,507 |
7,130 |
Total costs and operating expenses |
1,765 |
2,810 |
10,149 |
18,447 |
Loss from operations |
(1,211) |
(1,661) |
(7,362) |
(14,374) |
Non-cash consideration associated with stock
purchase agreement |
-- |
-- |
-- |
(329) |
Interest income |
-- |
2 |
2 |
15 |
Interest expense |
(130) |
(275) |
(728) |
(1,168) |
Other income (expense) |
22 |
(1) |
24 |
7 |
Net loss |
(1,319) |
(1,935) |
(8,064) |
(15,849) |
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Net loss per share – basic and
diluted |
$ (0.04) |
$ (0.06) |
$ (0.25) |
$ (0.58) |
Weighted-average common shares outstanding
used in computing per share amounts – basic and diluted |
34,453,180 |
27,927,553 |
32,703,220 |
27,212,837 |
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(1) Included in operating
expenses for the three months ended December 31, 2014 were non-cash
charges of $213,000, including $182,000 of stock-based compensation
expense and $31,000 of depreciation and amortization expenses,
compared with non-cash charges for the same period in 2013 of
$358,000, including $247,000 of stock-based compensation expense
and $34,000 of depreciation and amortization expenses. |
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Included in operating expenses
for the full year ended December 31, 2014 were non-cash charges of
$802,000, including $671,000 of stock-based compensation expense
and $131,000 of depreciation and amortization expenses, compared
with non-cash charges for the same period in 2013 of $1.8 million,
including $1.2 million of stock-based compensation expense,
$105,000 of impairment of intangible asset, $329,000 consideration
associated with stock purchase agreement and $165,000 of
depreciation and amortization expenses. |
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BG Medicine, Inc. and
Subsidiary Condensed Consolidated Balance
Sheets |
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As of
December 31, |
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2014 |
2013 |
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(in thousands) |
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(unaudited) |
Assets |
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Current assets |
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Cash |
$ 4,123 |
$ 7,751 |
Accounts receivable |
174 |
319 |
Inventory |
400 |
459 |
Prepaid expenses and other current
assets |
154 |
306 |
Total current assets |
4,851 |
8,835 |
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Property and equipment, net |
117 |
192 |
Intangible assets, net |
135 |
192 |
Deposits and other assets |
126 |
134 |
Total assets |
$ 5,229 |
$ 9,353 |
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Liabilities and Stockholders'
(Deficit) Equity |
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Current liabilities |
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Term loan, current portion |
2,960 |
4,353 |
Accounts payable |
695 |
965 |
Accrued expenses |
906 |
1,993 |
Other current liabilities |
18 |
39 |
Total current liabilities |
4,579 |
7,350 |
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Term loan, net of current portion |
-- |
2,961 |
Other liabilities |
93 |
111 |
Total liabilities |
4,672 |
10,422 |
Stockholders' (deficit) equity |
557 |
(1,069) |
Total liabilities and stockholders'
(deficit) equity |
$ 5,229 |
$ 9,353 |
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BG Medicine, Inc. and
Subsidiary Condensed Consolidated Statements of
Cash Flows |
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Full Year Ended
December 31, |
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2014 |
2013 |
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(in thousands) |
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(unaudited) |
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Net cash flows from operating activities |
(8,167 ) |
(15,288 ) |
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Net cash flows from investing activities |
-- |
(32 ) |
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Net cash flows from financing activities
(1) |
4,539 |
10,285 |
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Net (decrease) increase in cash and cash
equivalents |
(3,628 ) |
(5,035) |
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Cash and cash equivalents, beginning of
year |
7,751 |
12,786 |
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Cash and cash equivalents, end of year |
$ 4,123 |
$ 7,751 |
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(1) For the full year ended
December 31, 2014, cash flows provided by financing activities
include proceeds from the $9.2 million public offering. For
the full year ended December 31, 2013, cash flows provided by
financing activities include proceeds from the $13.1 million term
loan. |
CONTACT: Stephen Hall, EVP & Chief Financial Officer
(781) 890-1199
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