Business Update Conference Call Scheduled for
Tomorrow at 8:30 a.m. Eastern time
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 nine months ended September 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.
Highlights of the third quarter and recent weeks
include:
- Appointed a new leadership team
including President and CEO Michael Cola, formerly with Shire and
Safeguard Scientifics; CFO John Leaman, formerly with Shire and
McKinsey; and Global Head of R&D Garry Neil, formerly with
Johnson & Johnson; also announced the retirement of founder and
former CEO Andrew L. Pearlman, Ph.D.
- Appointed biopharmaceutical industry
veteran Wilbur H. (Bill) Gantz to the Company’s Board of
Directors
- Reported new, positive data on the
Company’s second-generation viral vectors in a poster presentation
at the European Society of Gene and Cell Therapy Congress
Management Commentary
“It was with great pleasure that the new executive team joined
Medgenics in mid-September. We are excited to be building upon the
Company’s strong scientific and technological foundation, and are
refining new strategic initiatives to advance the clinical
development program in carefully selected specialty and orphan
indications,” stated Michael Cola, President and Chief Executive
Officer of Medgenics. “Our Board of Directors, enhanced by the
recent addition of Bill Gantz, is comprised of an impressive team
of industry leaders. We are delighted to be working together to
implement our shared vision for the future of Medgenics.”
“The Company achieved a significant milestone with the recent
presentation of new, positive data on our second-generation viral
vectors that optimize the Biopump platform through a number of
enhancements to our protein expression technology and processing
methods, as well as improvements in patient administration. In
vitro and in vivo models of the second-generation viral vectors
showed potential to substantially increase the duration and levels
of the protein secretion of the Biopump along with enhanced
surgical techniques. These advances can be clinically meaningful,
particularly for patients on chronic protein therapy. Based on
these results, we believe that all clinical programs,
including the proposed EPODURE trial in the U.S., could
benefit from the potentially improved performance from a
second-generation vector. Our plan is to use Biopumps utilizing
these vectors in clinical trials expected to commence in the first
half of 2014,” commented Garry Neil, M.D., Global Head of R&D
for Medgenics.
Third Quarter Financial Results
Gross research and development (R&D) expense for the third
quarter of 2013 increased to $2.45 million from $1.89 million for
same period in 2012. Net R&D expense for the third quarter of
2013 was $2.34 million compared with net R&D expense of $1.61
million for the prior-year third quarter. The increase in net
R&D expense was due mainly to higher headcount and an increase
in clinical activities.
General and administrative expense for the three months ended
September 30, 2013 was $2.56 million, up from $1.47 million for the
same period in 2012 primarily due to increases in general and
administrative personnel, directors’ equity compensation and
professional fees.
Financial expense for the quarter ended September 30, 2013
increased to $1.26 million from nil for the same period in 2012,
mainly due to the change in valuation of the warrant liability.
Financial income for the quarter ended September 30, 2013
declined to $0.02 million from $0.06 million for the same period in
2012, primarily due to the change in valuation of the warrant
liability.
For the third quarter of 2013 the Company reported a net loss of
$6.14 million or $0.33 per share, compared with a net loss of $3.03
million or $0.25 per share for the third quarter of 2012.
Nine Month Financial Results
Gross R&D expense for the first nine months of 2013
increased to $6.56 million from $5.13 million for same period in
2012 due to an increase in R&D personnel and clinical
activities. Net R&D expense for the first nine months of 2013
was $5.23 million compared with net R&D expense of $3.36
million for the first nine months of 2012. The increase in net
R&D expense was due to a reduction in participation by the OCS,
$1.33 million in the 2013 period versus $1.77 million in the 2012
period, and the increase in the gross R&D expense as explained
above.
General and administrative expense for the nine months ended
September 30, 2013 of $6.70 million increased from $5.60 million in
the prior-year period primarily due to increases in general and
administrative personnel, directors’ equity compensation and
professional fees.
Financial expense for the nine months ended September 30, 2013
of $0.02 million decreased from $3.72 million for the same period
in 2012, primarily due to the change in valuation of the warrant
liability.
Financial income for the nine months ended September 30, 2013
increased by an insignificant amount compared to the same period in
2012.
For the nine months ended September 30, 2013, the Company
reported a net loss of $11.92 million or $0.68 per share, compared
with a net loss of $12.69 million or $1.20 per share in the
comparable 2012 period.
The Company ended the third quarter of 2013 with cash and cash
equivalents of $26.79 million, compared with $6.43 million as of
December 31, 2012. The Company used $8.36 million in net cash to
fund operating activities during the first nine months of 2013,
compared with $5.87 million in the first nine months of 2012.
Conference Call
Medgenics management will host a Business Update conference call
to discuss the Company’s progress and to answer questions tomorrow,
Friday, November 8, 2013 beginning at 8:30 a.m. Eastern time.
Shareholders and other interested parties may participate in the
call by dialing 877-664-6134 (from within the U.S.) or 702-495-1913
(from outside the U.S.) or 1-809-457-877 (toll-free from Israel)
and entering passcode 94707205. The call will also be broadcast
live on the Company's website at www.medgenics.com.
A replay of the conference call will be accessible two hours
after its completion through November 14, 2013, by dialing
855-859-2056 (domestic) or 404-537-3406 (international) and
referencing conference ID number 94707205. The call will also be
archived for 90 days on the Company's website at
www.medgenics.com.
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
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
September 30, December 31, 2013 2012
ASSETS CURRENT ASSETS: Cash and cash equivalents $ 26,791 $
6,431 Accounts receivable and prepaid expenses 1,009
539 Total current assets 27,800
6,970 LONG-TERM ASSETS: Restricted lease deposit and
prepaid expenses 46 62 Severance pay fund 93 283 PROPERTY AND
EQUIPMENT, NET 381 352 520
697 DEFERRED ISSUANCE EXPENSES -
40 Total assets $ 28,320 $ 7,707
LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT
LIABILITIES: Trade payables $ 1,546 $ 877 Other accounts
payable and accrued expenses 2,042 1,473
Total current liabilities 3,588 2,350
LONG-TERM LIABILITIES: Accrued severance pay 873
1,492 Liability in respect of warrants 1,911 1,931 Convertible
debentures - - Total long-term
liabilities 2,784 3,423 Total
liabilities 6,372 5,773
STOCKHOLDERS' EQUITY:
Common stock-$0.0001 par value;
100,000,000 shares
authorized; 18,481,308 and 12,307,808
shares issued
and outstanding at September 30, 2013 and
December 31, 2012, respectively
2 1 Additional paid-in capital 98,443 66,509 Accumulated Deficit
(76,497 ) (64,576 ) Total stockholders' equity
21,948 1,934 Total liabilities and
stockholders' equity $ 28,320 $ 7,707
MEDGENICS, INC. AND ITS
SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF
OPERATIONS
U.S. dollars in thousands (except share
and per share data)
Period from
Nine months ended
Three months ended
inception through
September 30,
September 30,
September 30,
2013
2012
2013
2012
2013
Research and development expenses $ 6,556 $ 5,125 $ 2,452 $
1,894 $ 44,185 Less - Participation by the Office of the Chief
Scientist (1,327 ) (1,769 ) (109 ) (283 ) (8,376 ) U.S. Government
Grant - -
-
- (244 ) Participation by third party - -
-
- (1,067 ) Research and development
expenses, net 5,229 3,356 2,343 1,611 34,498 General and
administrative expenses 6,695 5,603 2,561 1,470 40,290 Other
income: Excess amount of participation in research and development
from third party - - -
- (2,904 ) Operating loss (11,924 ) (8,959 )
(4,904 ) (3,081 ) (71,884 ) Financial expenses (21 ) (3721 )
(1260
)
- (5,311 ) Financial income 29 4
21
55 369 Loss before taxes on income (11,916 )
(12,676 ) (6,143 ) (3,026 ) (76,826 ) Taxes on income 5
9.000
-
1 100 Loss $ (11,921 ) $ (12,685
) $ (6,143 ) $ (3,027 ) $ (76,926 ) Basic and diluted loss per
share $ (0.68 ) $ (1.20 ) $ (0.33 ) $ 0.25 Weighted average
number of Common stock used in computing basic loss per share
17,435,235 10,604,924 18,410,951
12,013,153 Weighted average number of Common
stock used in computing diluted loss per share 17,468,255
10,604,924 18,410,951
12,013,153
Medgenics, Inc.John Leaman,
CFOjohn.leaman@medgenics.comorLHAAnne Marie Fields,
212-838-3777afields@lhai.com@LHA_IR_PRorAbchurch
CommunicationsJoanne Shears/Jamie Hooper+44 207 398
7719jamie.hooper@abchurch-group.comorOriel Securities (NOMAD &
Joint Broker)Jonathan Senior/Giles Balleny+44 207710 7617orSVS
Securities plc (Joint Broker)Alex Brearley+44 207 638-5600
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