TIDMMEDG TIDMMEDU
RNS Number : 1141R
Medgenics Inc
14 November 2012
Press Release 14 November 2012
Medgenics, Inc.
("Medgenics" or "the Company")
Medgenics Reports Third Quarter 2012 Financial Results
Medgenics, Inc. (NYSE Amex: MDGN and AIM: MEDU, MEDG), the
developer of a novel technology for the sustained production and
delivery of therapeutic proteins in patients using their own
tissue, today reported financial results for three and nine months
ended September 30, 2012.
Business Highlights of the Third Quarter and Subsequent
Weeks
-- Received approval from Israel's Ministry of Health to
initiate two Phase I/II studies to assess the safety and efficacy
of INFRADURE(TM) to treat hepatitis C. These will be the first
clinical proof-of-concept studies for the INFRADURE Biopump.
-- Enrolled the first patients in a Phase IIa trial in Israel
with EPODURE(TM) to treat anemia in patients with end-stage renal
disease who are on dialysis, and presented preliminary data at the
American Society of Nephrology's Kidney Week 2012.
-- Expanded the executive management team with the addition of
Marvin Garovoy, M.D., as Chief Medical Officer. Dr. Garovoy is a
biotechnology and pharmaceutical industry executive with
considerable drug development experience at Genentech, XOMA,
Hyperion Therapeutics, and Arriva Pharmaceuticals.
-- Appointed Sol J. Barer, Ph.D. as Chairman of the Board. Dr.
Barer is the former Chairman and Chief Executive Officer of Celgene
Corporation.
Management Commentary
"We made important progress during the third quarter towards our
strategic and clinical goals," stated Andrew L. Pearlman, Ph.D.,
Chief Executive Officer of Medgenics.
"Specifically, we received approval from the Israel Ministry of
Health for our Phase I/II trials in hepatitis C, with an objective
of enrolling up to 16 untreated patients with hepatitis C genotype
3. This represents the first proof of concept study of INFRADURE in
man. We expect to use data from this study to advance our broader
INFRADURE hepatitis clinical development program, starting in the
U.S., where we have received Orphan Drug Designation for hepatitis
D from the U.S. Food and Drug Administration ("FDA"). Hepatitis D
is a rare and aggressive form of hepatitis whose standard treatment
today consists of weekly injections of interferon-alpha for a year
or more, where oral antiviral treatments have not been effective.
In addition, we are investigating the application of INFRADURE for
hepatitis B towards addressing the emerging need for a practical,
shorter treatment alternative to years of expensive oral
antivirals. Hepatitis B is the most prevalent form of hepatitis,
with an estimated 350 million people infected worldwide, according
to the World Health Organization.
"We have also initiated a Phase IIa EPODURE study in Israel to
treat anemia in dialysis patients with end-stage renal disease
("ESRD"), and have recently presented early data from that study in
a poster at the 2012 Kidney Week of the American Society of
Nephrology. We continue preparations to initiate a Phase II
clinical trial in the U.S. in early 2013 with EPODURE in ESRD
patients on dialysis, as cleared by the FDA in May under an
Investigational New Drug ("IND") application. Our objective with
this EPODURE study is to achieve recommended hemoglobin targets for
months, while avoiding the risks of supraphysiologic EPO
concentrations associated with injections of erythropoietin
stimulating agents. It also has the potential to improve the
logistics of anemia management in a range of settings, whether in
the clinic, home or elsewhere, to the benefit of both patients and
payors.
"We are in the process of performing a comprehensive pipeline
review to assess clinical applications we believe could benefit
from our versatile Biopump platform and to update our list of
targeted indications that will maximize our business development
prospects," added Dr. Pearlman.
"We are very pleased to have strengthened Medgenics leadership
with the addition of Dr. Sol Barer as Chairman of the Board, and to
have bolstered our clinical team with the appointment of Dr. Marvin
Garovoy as Chief Medical Officer," concluded Dr. Pearlman.
Third Quarter Financial Results
Gross research and development ("R&D") expense for the third
quarter of 2012 increased to $1.89 million from $1.79 million for
same period in 2011 due to an increase in R&D personnel. Net
R&D expense for the 2012 third quarter was $1.61 million
compared with net R&D expense of $1.35 million for the prior
year's third quarter.
General and administrative expense for the third quarter of 2012
was $1.47 million compared with $1.88 million for the third quarter
of 2011, primarily due to a decrease in compensation for
professional services.
Financial expense for the third quarter of 2012 decreased to nil
from $0.27 million for the same period in 2011, mainly as a result
of changes in valuation of the warrant liability.
For the quarter ended September 30, 2012, the Company reported a
net loss of $3.03 million or $0.25 per share, compared with a net
loss of $3.42 million or $0.35 per share in the comparable 2011
period.
Nine Month Financial Results
Gross R&D expense for the nine months ended September 30,
2012 was $5.13 million, up from $4.50 million for the same period
in 2011 due to an increase in the use of materials and
sub-contractors in connection with preparations for the Company's
ongoing Phase II EPODURE clinical trial in Israel and planned Phase
II clinical trial in the U.S., preparations for the trials of
INFRADURE in Israel and an increase in R&D personnel. For the
nine months ended September 30, 2012, net R&D expense decreased
to $3.36 million from $3.57 million for the comparable prior-year
period due to the participation by the Israeli Office of the Chief
Scientist of $1.77 million in the 2012 period compared with $0.86
million for the 2011 period, which was partially offset by higher
gross R&D expenses as detailed above. General and
administrative expense for the first nine months of 2012 was $5.60
million compared with $3.71 million for the first nine months of
2011 primarily due to increased fees for legal and professional
services and stock-based compensation granted to consultants and
directors. The Company's net loss for the first nine months of 2012
was $12.69 million or $1.20 per share, compared with a net loss of
$6.09 million or $0.76 per share for the same period of 2011.
Balance Sheet Highlights
As of September 30, 2012, Medgenics had cash and cash
equivalents of $9.00 million, compared with $5.00 million as of
December 31, 2011. For the nine months ended September 30, 2012,
the Company used $5.87 million in net cash to fund operating
activities, compared with $5.46 million for the nine months ended
September 30, 2011.
Full results may be viewed in the Company's Quarterly Report on
Form 10-Qfiled with the U.S. Securities and Exchange Commission
("SEC"). The Form 10-Q includes unaudited consolidated financial
statements containing the information highlighted in this press
release, as well as additional information regarding the Company.
The Form 10-Q is available at www.sec.gov and at
www.medgenics.com.
About Medgenics
Medgenics is developing and commercializing Biopump(TM), a
proprietary tissue-based platform technology for the sustained
production and delivery of therapeutic proteins using the patient's
own tissue for the treatment of a range of chronic diseases
including anemia, hepatitis and hemophilia, among others. Medgenics
believes this approach has multiple benefits compared with current
treatments, which include regular and costly injections of
therapeutic proteins.
Medgenics has three long-acting protein therapy products in
development based on this technology:
-- EPODURE(TM) to produce and deliver erythropoietin from a
single administration, which has demonstrated elevation and
stabilization of hemoglobin levels in anemic patients for periods
of six months to more than 36 months in a Phase I/II dose-ranging
trial in Israel and is currently in a Phase IIa trial in dialysis
in Israel. An Investigational New Drug application has been cleared
by the FDA to initiate a Phase IIb study to evaluate the safety and
efficacy of EPODURE in the treatment of anemia in dialysis patients
in the U.S.
-- INFRADURE(TM) for sustained production and delivery of
interferon-alpha for use in the treatment of hepatitis, which has
received approval for two Phase I/II trials in hepatitis C from the
Israeli Ministry of Health with the first slated to commence in Q4
2012; and has received Orphan Drug Designation from the FDA for the
treatment of hepatitis D.
-- HEMODURE(TM) for sustained production and delivery of
clotting Factor VIII therapy for the sustained prophylactic
treatment of hemophilia, which is now in development.
Medgenics is focused on the development and manufacturing of its
innovative Biopumps, aiming to bring them to market via strategic
partnerships with major pharmaceutical and/or medical device
companies. In addition to treatments for anemia, hepatitis and
hemophilia, Medgenics plans to develop and/or out-license a
pipeline of future Biopump products targeting the large and rapidly
growing global protein therapy market, which is forecast to reach
$132 billion in 2013. Other potential applications for Biopumps
include multiple sclerosis, arthritis, pediatric growth hormone
deficiency, obesity and diabetes.
Forward-looking Statements
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, Section 21E
of the Securities Exchange Act of 1934 and as that term is defined
in the Private Securities Litigation Reform Act of 1995, which
include all statements other than statements of historical fact,
including (without limitation) those regarding the Company's
financial position, its development and business strategy, its
product candidates and the plans and objectives of management for
future operations. The Company intends that such forward-looking
statements be subject to the safe harbors created by such laws.
Forward-looking statements are sometimes identified by their use of
the terms and phrases such as "estimate," "project," "intend, "
"forecast," "anticipate," "plan," "planning, "expect," "believe,"
"will," "will likely," "should," "could," "would," "may" or the
negative of such terms and other comparable terminology. All such
forward-looking statements are based on current expectations and
are subject to risks and uncertainties. Should any of these risks
or uncertainties materialize, or should any of the Company's
assumptions prove incorrect, actual results may differ materially
from those included within these forward-looking statements.
Accordingly, no undue reliance should be placed on these
forward-looking statements, which speak only as of the date made.
The Company expressly disclaims any obligation or undertaking to
disseminate any updates or revisions to any forward-looking
statements contained herein to reflect any change in the Company's
expectations with regard thereto or any change in events,
conditions or circumstances on which any such statements are based.
As a result of these factors, the events described in the
forward-looking statements contained in this release may not
occur.
For further information, contact:
Medgenics, Inc. Phone: +972 4 902 8900
Dr. Andrew L. Pearlman
Andrew.pearlman@medgenics.com
LHA
Anne Marie Fields Phone: 212-838-3777
afields@lhai.com
@LHA_IR_PR
Abchurch Communications Phone: +44 207 398 7719
Adam Michael
Joanne Shears
Jamie Hooper
jamie.hooper@abchurch-group.com
SVS Securities plc (Joint Broker) Phone: +44 207 638 5600
Alex Mattey
Ian Callaway
Nomura Code Securities (NOMAD & Phone: +44 207 776 1200
Joint Broker)
Jonathan Senior/Giles Balleny
- Tables to Follow-
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December
September 30, 31,
-------------------
2012 2011 2011
--------- -------- ---------
(Unaudited)
-------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 8,999 $ 7,570 $ 4,995
Accounts receivable and prepaid
expenses 619 1,298 1,122
--------- -------- ---------
Total current assets 9,618 8,868 6,117
--------- -------- ---------
LONG-TERM ASSETS:
Restricted lease deposits 59 59 52
Severance pay fund 279 346 259
--------- -------- ---------
Total long-term assets 338 405 311
--------- -------- ---------
PROPERTY AND EQUIPMENT, NET 380 428 434
--------- -------- ---------
Total assets $ 10,336 $ 9,701 $ 6,862
========= ======== =========
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December
September 30, 31,
--------------------
2012 2011 2011
--------- --------- ---------
Unaudited
--------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 769 $ 928 $ 903
Other accounts payable and accrued
expenses 1,395 1,413 1,156
---------
Total current liabilities 2,164 2,341 2,059
--------- --------- ---------
LONG-TERM LIABILITIES:
Accrued severance pay 1,585 1,252 1,328
Liability in respect of warrants 3,373 1,429 478
--------- --------- ---------
Total long-term liabilities 4,958 2,681 1,806
--------- --------- ---------
Total liabilities 7,122 5,022 3,865
--------- --------- ---------
STOCKHOLDERS' EQUITY:
Common stock - $0.0001 par value;
100,000,000 shares authorized;
12,236,570, 9,690,117 and 9,722,725
shares issued and outstanding at
September 30, 2012, September 30,
2011 and December 31, 2011, respectively 1 1 1
Additional paid-in capital 65,403 52,172 52,501
Deficit accumulated during the
development stage (62,190) (47,494) (49,505)
--------- --------- ---------
Total stockholders' equity 3,214 4,679 2,997
--------- --------- ---------
Total liabilities and stockholders'
equity $ 0,336 $ 9,701 $ 6,862
========= ========= =========
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Period from
January 27,
2000
Nine months ended Three months ended (inception)
September 30, September 30, through
---------------------- ----------------------
September 30,
2012 2011 2012 2011 2012
---------- --------- ---------- --------- ---------------
Unaudited
---------------------------------------------------------------
Research and development expenses $ 5,125 $ 4,503 $ 1,894 $ 1 ,785 $ 35,567
Less - Participation by the Office of the Chief
Scientist (1,769) (860) (283) (357) (7,062)
U.S. Government grant - - - - (244)
Participation by third party - (75) - (75) (1,067)
---------- --------- ---------- --------- ---------------
Research and development expenses, net 3,356 3,568 1,611 1,353 27,194
General and administrative expenses 5,603 3,709 1,470 1,877 32,001
Other income:
Excess amount of participation in research and
development from third party - - - - (2,904)
---------- --------- ---------- --------- ---------------
Operating loss (8,959) (7,277) (3,081) (3,230) (56,291)
Financial expenses 3,721 203 - 267 (7,001)
Financial income (4) (1,398) (55) (74) 758
---------- --------- ---------- --------- ---------------
Loss before taxes on income (12,676) (6,082) (3,026) (3,423) (62,534)
Taxes on income 9 3 1 1 85
---------- --------- ---------- --------- ---------------
Loss $ (12,685) $ (6,085) $ (3,027) $ (3,424) $ (62,619)
Basic and diluted loss per share $ (1.20) $ (0.76) $ (0.25) $ (0.35)
========== ========= ========== =========
Weighted average number of shares of Common
stock
used in computing basic and diluted loss per
share 10,604,924 8,020,348 12,013,153 9,657,659
========== ========= ========== =========
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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