ANN ARBOR, Mich., May 10 /PRNewswire-FirstCall/ -- Aastrom
Biosciences, Inc. (NASDAQ:ASTM) today reported financial results
for the third fiscal quarter ended March 31, 2006. The Company also
reported several clinical and operational achievements during the
quarter, including: * Tissue Repair Cells (TRCs) -- Aastrom's
proprietary mixture containing large numbers of stem, stromal and
progenitor cells derived from a small sample of the patient's own
bone marrow -- received an Orphan Drug Designation from the U.S.
Food and Drug Administration (FDA) for the use in the treatment of
osteonecrosis at the hip, and the clinical trial protocol for this
indication is currently being prepared. The tissues destroyed in
the osteonecrosis disease process include bone, bone marrow and
vascular (blood vessels); TRCs have been used in clinical trials to
regenerate all three of these tissues. TRCs may offer a novel means
to restore healthy tissue at osteonecrotic sites. * Positive
patient treatment results were presented at the combined
Orthopaedic Research Society and American Academy of Orthopaedic
Surgeons annual meetings. Matthew L. Jimenez, M.D., Principal
Investigator of Aastrom's U.S. Phase I/II multi-center clinical
trial evaluating the use of TRCs in the treatment of severe
fractures that have failed prior treatment interventions, presented
results from his early clinical experience with the first seven
patients treated for recalcitrant long bone non-union fractures.
Bone regeneration, evidenced by callus formation or bone bridging,
was observed in radiographs for all seven patients by 6 months, and
early healing was seen in four of the patients by 3 months, after
the TRC treatment. A copy of Dr. Jimenez' presentation may be
accessed on Aastrom's website using the following link:
http://www.aastrom.com/pdf/MLJ-Presentation-032206.pdf . * A
collaboration agreement was announced for the development of
products for the orthopedics market using Orthovita's synthetic
ceramic matrices and ceramic-collagen matrices (VITOSS) and
Aastrom's proprietary TRCs. The companies believe that a broad
range of orthopedic indications may benefit from the combination of
VITOSS and TRCs to regenerate tissue. * Two senior pharmaceutical
executives were added to the Board of Directors. Nelson M. Sims
joined Aastrom's Board with over 30 years of pharmaceutical
industry experience at companies such as Novavax, Inc. and Eli
Lilly and Company. Robert L. Zerbe, M.D. brings over three decades
of experience to Aastrom from companies such as QUATRx
Pharmaceutical, Inc., Eli Lilly and Company, and Pfizer (formerly
Parke-Davis). "Aastrom's continued progress was illustrated by
several significant clinical and operational events that were
reported during the quarter," said R. Douglas Armstrong, Ph.D.,
Chief Executive Officer and Chairman of Aastrom. "An important
highlight of these milestones is that each one provides third party
validation of Aastrom's progress in the development of our TRC
products for tissue regeneration. This increased level of support
is evidenced by the addition of highly accomplished industry
executives to our board of directors, an agreement for a new
strategic collaboration, the increasing positive clinical treatment
data from physicians using Aastrom TRC products, and the receipt of
an Orphan Drug Designation from the FDA for our TRC product as a
new treatment option for patients suffering from the debilitating
disease of osteonecrosis." Dr. Armstrong continued, "We were
pleased to complete an equity financing that provided net proceeds
of approximately $24 million in early April. This transaction
strengthened our financial position for the planned expansion of
our clinical trial activity. In addition, a number of leading
healthcare funds took new positions in Aastrom through this round
of financing. We are proud of our accomplishments since January,
and look forward to building upon these achievements in the coming
quarters." Fiscal Year 2006 Third Quarter Ended March 31, 2006
Results Total revenues for the quarter ended March 31, 2006,
consisting of product sales and grant funding, were $238,000
compared to $252,000 for the same period in fiscal year 2005. Total
revenues for the nine months ended March 31, 2006 were $535,000
compared to $813,000 for the same period in fiscal year 2005. As
previously disclosed, the AastromReplicell(R) System is now almost
exclusively used to manufacture our proprietary TRC cell products
for treatments in tissue regeneration, rather than being marketed
as a stand-alone product. Therefore, product sales decreased to
$85,000 and $142,000 for the quarter and nine months ended March
31, 2006, respectively, from $150,000 and $377,000 for the same
periods in fiscal year 2005. Grant revenues increased for the
quarter ended March 31, 2006 to $153,000 from $102,000 for the same
period in fiscal year 2005, and decreased for the nine months ended
March 31, 2006 to $393,000 from $436,000 for the same period in
fiscal year 2005. Grant revenues accounted for 73% of total
revenues for the nine months ended March 31, 2006, compared to 54%
for the same period in fiscal year 2005 and are recorded on a
cost-reimbursement basis. As we continue to pursue grant funding,
grant revenues may vary in any period based on timing of grant
awards, grant-funded activities, level of grant funding and number
of grant awards received. Total costs and expenses for the quarter
and nine months ended March 31, 2006 increased to $5,037,000 and
$13,467,000, respectively, from $3,805,000 and $9,625,000 for the
same periods in fiscal year 2005. The cost of product sales
decreased for the quarter and nine months ended March 31, 2006,
from $2,000 and $11,000, respectively, from $77,000 and $131,000
for the same periods in fiscal year 2005. As a result of the
continued expansion of our research activities, including
additional staffing requirements, to support future regulatory
submissions, on-going and planned bone and vascular tissue
regeneration clinical trials in the U.S. and EU, product
development activities, and development of centralized facilities
for product manufacturing and distribution processes, research and
development expenses for the quarter and nine months ended March
31, 2006 increased to $2,597,000 and $6,745,000, respectively, from
$2,095,000 and $5,258,000 for the same periods in fiscal year 2005.
Research and development expenses for the quarter and nine months
ended March 31, 2006, also include a non-cash charge of $90,000 and
$289,000, respectively, pursuant to SFAS 123R, which requires us to
measure the fair value of all employee share-based payments and
recognize that value as an operating expense. Selling, general and
administrative expenses increased for the quarter and nine months
ended March 31, 2006 to $2,438,000 and $6,711,000, respectively,
from $1,624,000 and $4,227,000 for the same periods in fiscal year
2005. This increase reflects additional staffing requirements,
bonuses paid to certain employees, and accruals for future
performance bonuses and under the CEO's revised employment
agreement. This increase also reflects additional consulting and
marketing activities, increased legal costs associated with patent
protection and increased costs required for financial internal
controls compliance and certification. In addition, selling,
general and administrative expenses for the quarter and nine months
ended March 31, 2006, included a non-cash charge of $200,000 and
$503,000, respectively, pursuant to SFAS 123R. Net loss for the
quarter ended March 31, 2006 was $4,549,000, or $.04 per share,
compared to a net loss of $3,349,000, or $.03 per share for the
same period in fiscal year 2005. Net loss for the nine months ended
March 31, 2006, was $12,179,000, or $.12 per share, compared to
$8,451,000 or $.09 per share for the same period in fiscal year
2005. The increase in net loss is primarily the result of increased
costs and expenses offset on a per share basis by an increase in
the weighted average number of common shares outstanding resulting
from sale of our common shares to investors in fiscal year 2005. At
March 31, 2006, the Company had $22.3 million in cash, cash
equivalents and short-term investments as compared to $32.4 million
in cash and cash equivalents at June 30, 2005. On April 11, 2006,
Aastrom closed the sale of approximately 15.9 million shares of the
Company's common stock in a registered direct placement to a select
group of institutional investors at a price of $1.60 per share for
net proceeds of approximately $24 million. Aastrom's proforma
balance for cash, cash equivalents and short-term investments (as
if the financing had occurred before the third fiscal quarter ended
on March 31, 2006) would have been approximately $46.3 million.
Aastrom Conference Call Information R. Douglas Armstrong, Ph.D.,
Chief Executive Officer and Chairman and Gerald D. Brennan, Jr.,
Vice President Administrative & Financial Operations and Chief
Financial Officer of Aastrom Biosciences, Inc., will host a
conference call to review and discuss the third quarter fiscal year
2006 financial results and the Company's recent progress and future
goals today, May 10, 2006, at 11:00 a.m. (EDT). Interested parties
should call toll-free (877) 407-9205, or from outside the U.S.
(201) 689-8054, fifteen minutes before the start of the call to
register and identify themselves as registrants of the 'Aastrom
Conference Call.' Any registered caller on the toll-free line may
ask to be placed in the queue for the Question & Answer
session. The call will be simulcast on the web at
http://www.vcall.com/IC/CEPage.asp?ID=104209 . A podcast of the
call may be downloaded from the web at the Internet address above.
If you are unable to participate during the live call, the webcast
will be available for replay at http://www.investorcalendar.com/
for 60 days. Through May 20, 2006, an audio replay of the call will
be available by dialing toll-free (877) 660-6853, or from outside
the U.S. (201) 612-7415; when prompted on the phone line, the
Account # is: 286 and the Conference ID# is: 201274. About Aastrom
Biosciences, Inc. Aastrom Biosciences, Inc. (NASDAQ:ASTM) is
developing products for the repair or regeneration of multiple
human tissues, based on its proprietary Tissue Repair Cell (TRC)
adult stem cell technology. Aastrom's TRC products contain large
numbers of stromal, stem and progenitor cells that are produced
from a small amount of bone marrow cells originating from the
patient. The AastromReplicell(R) System, an industry-unique
automated cell product manufacturing platform, was developed for
the production of standardized, patient-specific TRC products. TRC
products have been used safely in humans as a substitute for bone
marrow stem cells, and are currently in clinical trials for bone
grafting (long bone fractures and spine fusion) and blood vessel
regeneration (diabetic limb ischemia) applications. The Company has
reported positive interim clinical trial results for its TRCs
demonstrating both the clinical safety and ability of TRCs to
induce healthy new tissue growth (long bone fractures and jaw bone
reconstruction). Most recently, the Company's proprietary TRCs
received an Orphan Drug Designation from the U.S. Food and Drug
Administration (FDA) for use in the treatment of osteonecrosis at
the hip. For more information, visit Aastrom's website at
http://www.aastrom.com/ . This document contains forward-looking
statements, including without limitation, statements concerning
clinical trial plans and expectations, intended product development
and commercialization objectives, expected milestones, plans for
the current fiscal year and potential product applications, which
involve certain risks and uncertainties. The forward- looking
statements are also identified through use of the words "may,"
"planned," "believe," and other words of similar meaning. Actual
results may differ significantly from the expectations contained in
the forward-looking statements. Among the factors that may result
in differences are the inherent uncertainties associated with
clinical trial and product development activities, regulatory
approval requirements, the availability of resources and the
allocation of resources among different potential uses. These and
other significant factors are discussed in greater detail in
Aastrom's Annual Report on Form 10-K and other filings with the
Securities and Exchange Commission. -- Financial Table Follows --
AASTROM BIOSCIENCES, INC. (Unaudited) CONSOLIDATED STATEMENTS OF
OPERATIONS DATA: Quarter ended March 31, Nine months ended March
31, ---------------------- -------------------------- 2005 2006
2005 2006 ----- ----- ----- ----- REVENUES: Product sales $150,000
$85,000 $377,000 $142,000 Grants 102,000 153,000 436,000 393,000
-------- -------- -------- -------- Total revenues 252,000 238,000
813,000 535,000 -------- -------- -------- -------- COSTS AND
EXPENSES: Cost of product sales 77,000 2,000 131,000 11,000 Cost of
product sales - provision for obsolete and excess inventory 9,000 -
9,000 - Research and development 2,095,000 2,597,000 5,258,000
6,745,000 Selling, general and administrative 1,624,000 2,438,000
4,227,000 6,711,000 -------- -------- -------- -------- Total costs
and expenses 3,805,000 5,037,000 9,625,000 13,467,000 --------
-------- -------- -------- OTHER INCOME 204,000 250,000 361,000
753,000 -------- -------- -------- -------- NET LOSS $(3,349,000)
$(4,549,000) $(8,451,000) $(12,179,000) ======== ======== ========
======== NET LOSS PER COMMON SHARE (Basic and Diluted) $(.03)
$(.04) $(.09) $(.12) ======== ======== ======== ======== Weighted
average number of common shares outstanding 100,140,000 103,033,000
90,719,000 102,730,000 ======== ======== ======== ========
CONSOLIDATED BALANCE SHEET DATA: June 30, March 31, 2005 2006 -----
----- ASSETS Cash and cash equivalents $14,408,000 $12,838,000
Short-term investments 18,006,000 9,500,000 Receivables, net
193,000 192,000 Inventories 116,000 3,000 Other current assets
421,000 447,000 Property, net 753,000 1,101,000 --------- ---------
Total assets $33,897,000 $24,081,000 ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities $869,000
$1,697,000 Shareholders' equity 33,028,000 22,384,000 ---------
--------- Total liabilities and shareholders' equity $33,897,000
$24,081,000 ========= ========= (Logo:
http://www.newscom.com/cgi-bin/prnh/20060302/NETH028LOGO )
CONTACTS: Kris M. Maly Cameron Associates Investor Relations
Department Kevin McGrath Aastrom Biosciences, Inc. Phone: (212)
245-4577 Phone: (734) 930-5777
http://www.newscom.com/cgi-bin/prnh/20060302/NETH028LOGO
http://photoarchive.ap.org/ DATASOURCE: Aastrom Biosciences, Inc.
CONTACT: Kris M. Maly, Investor Relations Department of Aastrom
Biosciences, Inc., +1-734-930-5777; or Kevin McGrath of Cameron
Associates, +1-212-245-4577, for Aastrom Biosciences, Inc. Web
site: http://www.aastrom.com/
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