Medgenics, Inc. (NYSE MKT: MDGN and AIM: MEDU, MEDG) (the
“Company” or “Medgenics”), the developer of a novel platform
technology for the sustained production and delivery of therapeutic
proteins in patients using their own tissue, today announced
financial results for the fiscal year ended December 31, 2012 and
the filing with the U.S. Securities and Exchange Commission (“SEC”)
of the Company’s Annual Report on Form 10-K. The Form 10-K includes
audited annual consolidated financial statements containing the
information presented below, as well as additional information
regarding the Company. The Form 10-K is available at www.sec.gov
and at www.medgenics.com. It will be mailed to shareholders on or
about April 2, 2013.
2012 and Recent Highlights
- Welcomed financial industry veteran and
former Chairman of UBS Financial Services Inc. Joseph J. Grano, Jr.
to the Board of Directors
- Appointed Sol J. Barer, Ph.D. as
Chairman of the Board. Dr. Barer is the former Chairman and CEO of
Celgene Corporation
- Raised gross proceeds of $29.4 million
in a public offering of common stock and warrants
- Commenced a first-in-man Phase I
clinical trial in Israel of INFRADURE™, sustained interferon alpha
therapy, for the treatment of hepatitis C
- Fortified the Company’s intellectual
property portfolio with the addition of key patents in the U.S. and
Japan covering EPODURE™, sustained erythropoietin (“EPO”) therapy,
and INFRADURE, respectively
- Convened a roundtable of 15 top liver
experts and regulatory advisors from the U.S., Europe, Israel and
Australia to discuss INFRADURE for the treatment of hepatitis,
specifically for its potential applications in the treatment of
hepatitis B and hepatitis D
Management Discussion
“During 2012 we achieved a number of milestones under our
strategic plan,” stated Andrew L. Pearlman, Ph.D., Chief Executive
Officer of Medgenics. “We remain focused on advancing our
proprietary Biopump technology for the sustained production and
delivery of therapeutic proteins from a patient’s own tissue in our
lead indications of anemia and hepatitis.
“Our objective with EPODURE is to achieve recommended hemoglobin
targets in patients for months, while avoiding the risks of
supraphysiologic EPO concentrations associated with injections of
erythropoietin stimulating agents (“ESA”). U.S. Food and Drug
Administration (“FDA”) black box warnings and the recent product
recall of a commercial ESA drug underscore the need for safer, more
effective therapies in anemia management. EPODURE also has the
potential to improve the safety, efficacy and 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 believe, and key opinion leaders in hepatitis recently
concurred, that the foremost opportunity for INFRADURE is in
orphan-designated hepatitis D, where oral drugs are ineffective,
and in hepatitis B, where oral drugs do not clear the disease but
only contain it. Also, in hepatitis B these oral drugs must be
taken on a lifelong basis, with mounting costs and health risks
over time. Only sustained interferon therapy of a year or longer
has been shown to clear the hepatitis B virus. As such, INFRADURE
Biopumps may be able to provide a far more compliant alternative to
weekly interferon injections. Our strategy in hepatitis is to
develop proof-of-concept and safety data for INFRADURE in hepatitis
C, which represents a large and accessible patient population, and
then use the results to help develop and calibrate INFRADURE dosing
and method of use for these other strains of hepatitis.
“Our goals for the balance of 2013 will be to continue to
advance the clinical development of EPODURE and INFRADURE in Israel
and the U.S., to expand our leadership with experienced industry
executives, to optimize our manufacturing process, to pursue
potential partnership and licensing opportunities and to explore
potential new indications for our Biopump autologous tissue
technology,” concluded Dr. Pearlman.
2012 Financial Results
Gross research and development (“R&D”) expense for 2012
increased to $7.19 million from $5.99 million in 2011 due to an
increase in the use of materials and sub-contractors in connection
with the Company’s ongoing Phase II EPODURE clinical trial in
Israel, the preparations for the INFRADURE trial in Israel and the
phase II EPODURE clinical trials in the U.S; ongoing method
development, and an increase in R&D personnel.
Net R&D expense for 2012 was $5.43 million compared with
$5.05 million in 2011. The increase was due to higher gross R&D
expenses as detailed above, which were partially offset by
participation by the Israeli Office of the Chief Scientist of $1.76
million in 2012 and $0.86 million in 2011.
General and administrative expense for 2012 increased to $7.20
million from $4.92 million in 2011, primarily due to stock-based
compensation expense related to equity granted to the Chairman of
the Board upon his appointment and increased legal fees and
professional services.
Financial expense for 2012 was $2.43 million, up from $0.21
million in 2011, mainly due to the change in valuation of the
warrant liability. Financial income for 2012 was de minimis,
compared with $2.10 million for 2011, which was primarily due to
the change in valuation of the warrant liability.
The Company reported a net loss for 2012 of $15.07 million or
$1.37 per share, compared with a net loss of $8.10 million or $0.96
per share for 2011.
As of December 31, 2012, Medgenics had $6.43 million in cash and
cash equivalents, compared with $5.00 million as of December 31,
2011. Net cash used in operating activities during the year was
$8.61 million compared with $8.02 million used in 2011. During 2012
the Company received proceeds of $8.41 million from a private
placement of common stock and warrants and $1.71 million from the
exercise of options and warrants. In February 2013 Medgenics raised
gross proceeds of $29.4 million in a public offering of common
stock and warrants.
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 and hemophilia, among others. For more
information, visit the Company’s website at 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.
Tables to Follow
Medgenics, Inc. and its
Subsidiary
Consolidated Balance Sheetin
thousands of US Dollars (except share and per share data)
31-Dec-11 31-Dec-12
ASSETS CURRENT ASSETS: Cash and cash equivalents $
4,995 $ 6,431 Accounts receivable and prepaid expenses 1,122
539 Total current assets 6,117 6,970
LONG-TERM ASSETS: Restricted lease deposit and prepaid
expenses 52 62 Severance pay fund 259 283 311
345 PROPERTY AND EQUIPMENT, NET 434 352
DEFERRED ISSUANCE EXPENSES - 40 Total assets $
6,862 $ 7,707
LIABILITIES AND STOCKHOLDERS'
DEFICIT CURRENT LIABILITIES: Trade payables
903 877 Other accounts payable and accrued expenses 1,156
1,473 Total current liabilities 2,059 2,350
LONG-TERM LIABILITIES: Accrued severance pay 1,328
1,492 Liability in respect of warrants 478 1,931
Total long-term liabilities 1,806 3,423 Total
liabilities 3,865 5,773 STOCKHOLDERS'
EQUITY: Common shares 1 1 Additional paid-in capital 52,501
66,509 Accumulated Deficit (49,505) -64,576 Total
stockholders' deficit 2,997 1,934 Total
liabilities and stockholders' deficit $ 6,862 $ 7,707
Medgenics, Inc. and its
Subsidiary
Consolidated Statements of
Operations
US Dollars in thousands (except share
and per share data)
31-Dec-11
31-Dec-12
Research and development expenses $ 5,987 $ 7,187 Less -
Participation by the Office of the Chief Scientist (860 ) (1,756 )
U.S. Government Grant 0 Participation by third party (75 )
Research and development expenses, net 5,052 5,431 General
and administrative expenses 4,924 7,197 Other income:
Excess amount of participation in research
anddevelopment from third party
-
- Operating loss (9,976 ) (12,628 ) Financial
expenses (214 ) (2,429 ) Financial income 2,097
5 Loss before taxes on income (8,093 ) (15,052 )
Taxes on income 3 19 Loss $ (8,096 ) $
(15,071 ) Basic and diluted loss per share $ (0.960 )
$ (1.37 )
Weighted average number of shares of
Common stock usedin computing basic and diluted loss per share
8,447,908 11,023,881
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