Medgenics, Inc. (NYSE MKT: MDGN and AIM: MEDU, MEDG) (the
“Company”), 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 the three
and six months ended June 30, 2013 and the filing with the U.S.
Securities and Exchange Commission (SEC) of the Company’s Quarterly
Report on Form 10-Q. The Form 10-Q includes unaudited interim
consolidated financial statements containing the information
presented below, as well as additional information regarding the
Company. The Form 10-Q is available at www.sec.gov and at
www.medgenics.com.
Management Commentary
“The first half of 2013 was an active and productive period
during which we made progress in a number of significant areas and
positioned the Company to address important near term milestones,”
stated Andrew L. Pearlman, Ph.D., President and Chief Executive
Officer of Medgenics. “We advanced our clinical programs, fortified
our patent portfolio, were awarded a grant of approximately $2
million from the Israeli Office of the Chief Scientist (OCS) and
raised substantial capital in a public offering to support the
forward momentum of our programs.
“In April 2013 we reported interim data from our Israeli Phase
IIa clinical study of EPODURE to treat anemia in patients with
end-stage renal disease who are on dialysis, which showed sustained
hemoglobin levels in patients for months without the need for
injections of erythropoietin. We completed a number of key
preparations and continue to be on target to initiate our U.S.
Phase II study of EPODURE in similar patients. This will be our
first U.S. clinical study for the Biopump technology. We reported
the launch and enrollment of the first patient in our Phase I/II
proof-of-concept clinical study of INFRADURE in the treatment of
hepatitis C in Israel, and look forward to reporting interim data
from this study before year-end. We expect to use data from this
trial to support the clinical development and regulatory strategy
for INFRADURE to treat hepatitis D, an indication for which we have
U.S. orphan drug designation. We are exploring its role in treating
hepatitis B as well.
“In addition, we continue to make advances in optimizing our
Biopump platform through a number of developments that include
enhancements to the protein expression technology and Biopump
processing methods, as well as to improvements in patient
administration. These developments have the potential to further
increase production and delivery of protein and to extend the
duration of clinical effect,” added Dr. Pearlman.
Second Quarter Financial Results
Gross research and development (R&D) expense for the second
quarter of 2013 increased to $2.07 million from $1.64 million for
same period in 2012. Net R&D expense for the 2013 second
quarter was $0.86 million compared with net R&D expense of
$1.18 million for the prior year’s second quarter. The decrease in
net R&D expense was due to the participation by the OCS of
$1.22 million in the three months ended June 30, 2013, compared
with $0.46 million in the same period in 2012, somewhat offset by
the increase in the gross R&D expense.
General and administrative expense for the second quarter of
2013 decreased to $1.59 million compared with $2.77 million for the
comparative quarter in 2012, due primarily to lower stock-based
compensation expense related to options and restricted shares
granted to directors and consultants.
Financial expenses for the quarter ended June 30, 2013 were
$0.03 million, compared with $2.97 million for the same period in
2012. This decrease was mainly due to the change in valuation of
the warrant liability.
Financial income for the quarter ended June 30, 2013 was $0.37
million, increasing from $0.02 million for the same period in 2012.
This increase was primarily due to the change in valuation of the
warrant liability.
For the second quarter of 2013 the Company reported a net loss
of $2.10 million or $0.11 per share, compared with a net loss of
$6.91 million or $0.69 per share for the second quarter of
2012.
Six Month Financial Results
Gross R&D expense for the first half of 2013 increased to
$4.10 million from $3.23 million for same period in 2012 due to an
increase in R&D personnel. Net R&D expense for the first
half of 2013 was $2.89 million compared with net R&D expense of
$1.75 million for the first half of 2012. The increase in net
R&D expense was due to the participation by the OCS of $1.22
million in the six months ended June 30, 2013 compared with $1.49
million in the same period in 2012, and by the increase in the
gross R&D expense as explained above.
General and administrative expense for the six months ended June
30, 2013 of $4.13 million was consistent with the prior-year
period.
Financial income for the six months ended June 30, 2013 of $1.29
million was primarily due to the change in valuation of the warrant
liability.
For the six months ended June 30, 2013, the Company reported a
net loss of $5.78 million or $0.42 diluted loss per share, compared
with a net loss of $9.66 million or $0.98 per share in the
comparable 2012 period.
The Company ended the second quarter with cash and cash
equivalents of $28.98 million, compared with $6.43 million as of
December 31, 2012. Medgenics raised gross proceeds of approximately
$32 million in a public offering of common stock and warrants
during the first quarter of 2013. The Company used $6.18 million in
net cash to fund operating activities during the first half of
2013, compared with $4.34 million for the first half of 2012.
About Medgenics
Medgenics is developing and commercializing Biopump™, 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, among others. For more information,
please visit www.medgenics.com.
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.
Medgenics, Inc. and its Subsidiary
Balance Sheet in thousands of US
Dollars
30-Jun-13
30-Jun-12
31-Dec-12
ASSETS CURRENT ASSETS: Cash and cash
equivalents $ 28,979 $ 9,040 $ 6,431 Accounts receivable and
prepaid expenses 1,818 1,702 539 Total current
assets 30,797 10,742 6,970
LONG-TERM ASSETS: Restricted lease deposit and
prepaid expenses 43 57 62 Severance pay fund 243 264 283 Property
and equipment, net 410 407 352
Total long-term assets 696 728
697 DEFERRED ISSUANCE EXPENSES -
- 40 Total assets $ 31,493 $
11,470 $ 7,707
LIABILITIES AND
STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Trade
payables $ 901 $ 917 $ 877 Other accounts payable and accrued
expenses 1,425 1,249 1,473
Total current liabilities 2,326 2,166
2,350 LONG-TERM LIABILITIES:
Accrued severance pay 1,446 1,387 1,492 Liability in respect of
warrants 654 4,107 1,931
Total long-term liabilities 2,100 5,494
3,423 Total liabilities 4,426
7,660 5,773 STOCKHOLDERS'
EQUITY:
Common stock-$0.0001 par value;
100,000,000 shares
authorized; 18,481,308, 11,746,251 and
12,307,808
shares issued and outstanding at June 30,
2013, June
30, 2012 and December 31, 2012,
respectively
2 1 1 Additional paid-in capital 97,419 62,972 66,509 Deficit
accumulated during the development stage (70,354 )
(59,163 ) (64,576 ) Total stockholders' equity 27,067
3,810 1,934 Total
liabilities and stockholders' equity $ 31,493 $ 11,470
$ 7,707
Medgenics, Inc. and its Subsidiary
Consolidated Statements of Operations US Dollars in
thousands ( except share and per share data)
Period
from Six months ended June 30, Three months ended
June 30, inception through 2013
2012 2013
2012 June 30, 2013 Research and
development expenses $ 4,104 $ 3,231 $ 2,073 $ 1,639 $ 41,733 Less
- Participation by the Office of the Chief Scientist (1,218 )
(1,486 ) (1218 ) (464 ) (8,267 ) U.S. Government Grant - - - - (244
) Participation by third party - -
- - (1,067 ) Research and
development expenses, net 2,886 1,745 855 $ 1,175 32,155 General
and administrative expenses 4,134 4,133 1,588 2,774 37,729 Other
income:
Excess amount of participation in research
and
development from third party
- - - -
(2,904 ) Operating loss (7,020 ) (5,878 ) (2,443 ) (3,949 )
(66,980 ) Financial expenses (39 ) (3773 ) (25 ) (2972 ) (4,072 )
Financial income 1,286 1 371
17 369 Loss before taxes on
income (5,773 ) (9,650 ) (2,097 ) (6,904 ) (70,683 ) Taxes on
income 5 8 2 8
100 Loss $ 5,778 $ 9,658 $ 2,099
$ 6,912 $ 70,783 Basic loss per share $ (0.34
) $ (0.98 ) $ (0.11 ) $ (0.69 ) Diluted loss per share $ (0.42 ) $
(0.98 ) $ (0.11 ) $ (0.69 )
Weighted average number of Common stock
used in
computing basic loss per share
16,850,657 9,893,072 18,410,951
10,032,760
Weighted average number of Common stock
used in
computing diluted loss per share
16,895,741 9,893,072 18,410,951
10,032,760
Medgenics, Inc.Dr. Andrew L. Pearlman, +972 4 902
8900andrew.pearlman@medgenics.comorLHAAnne Marie Fields,
212-838-3777afields@lhai.com@LHA_IR_PRorAbchurch CommunicationsAdam
Michael/Joanne Shears/Jamie Hooper+44 207 398
7719jamie.hooper@abchurch-group.comorNomura Code Securities (NOMAD
& Joint Broker)Jonathan Senior/Giles Balleny+44 207 776
1200orSVS Securities plc (Joint Broker)Alex Brearley+44 207
638-5600
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