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
months ended March 31, 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 First Quarter and recent weeks:
- Raised gross proceeds of approximately
$32 million in a public offering of common stock and warrants
- Appointed Joseph J. Grano, Jr., former
Chairman and CEO of UBS Financial Services, to the Company’s Board
of Directors
- Received a Notice of Allowance from the
U.S. Patent Office for claims that expand the patent protection for
the Company’s Biopump™ platform technology for additional
therapeutic proteins
- Reported interim results from the
Company’s ongoing Phase IIa study of EPODURE™ to treat anemia in
dialysis patients
Management Commentary
“During the first quarter we achieved important milestones that
strengthened our position in key areas and advanced our strategic
and clinical goals,” stated Andrew L. Pearlman, Ph.D., President
and Chief Executive Officer of Medgenics. “We raised gross proceeds
of approximately $32 million to strengthen our financial
foundation, reported interim clinical results from our Phase IIa
anemia trial in patients with end-stage renal disease, fortified
our intellectual property and enhanced our Board of Directors with
the appointment of Joseph J. Grano, Jr.
“We look forward to advancing our clinical studies in both
Israel and the U.S. and to achieving a number of value-creating
milestones throughout the remainder of 2013,” concluded Dr.
Pearlman.
First Quarter Financial Results
Gross research and development (“R&D”) expense for the first
quarter of 2013 increased to $2.03 million from $1.59 million for
same period in 2012 due to an increase in R&D personnel. Net
R&D expense for the 2013 first quarter was $2.03 million
compared with net R&D expense of $0.57 million for the prior
year’s first quarter, when grants of $1.02 million were received
from the Israel Office of the Chief Scientist.
General and administrative expense for the first quarter of 2013
was $2.55 million compared with $1.36 million for the first quarter
of 2012, primarily due to increased stock-based compensation
granted to directors and consultants.
Financial income for the first quarter of 2013 increased to
$0.92 million from $0.02 million for the same period in 2012,
mainly as a result of changes in valuation of the warrant
liability.
For the quarter ended March 31, 2013, the Company reported a net
loss of $3.68 million or $0.29 diluted loss per share, compared
with a net loss of $2.71 million or $0.28 per share in the
comparable 2012 period.
As of March 31, 2013, Medgenics had cash and cash equivalents of
$32.46 million, compared with $6.43 million as of December 31,
2012. For the three months ended March 31, 2013, the Company used
$2.80 million in net cash to fund operating activities, compared
with $2.36 million for the three months ended March 31, 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 and hemophilia, among others.
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
March 31, December 31, 2013 2012
Unaudited ASSETS CURRENT ASSETS: Cash and cash
equivalents $ 32,463 $ 6,431 Accounts receivable and prepaid
expenses 572 539 Total current assets
33,035 6,970 LONG-TERM ASSETS: Restricted
lease deposits 45 62 Severance pay fund 229 283
Total long-term assets 274 345
PROPERTY AND EQUIPMENT, NET 350 352 DEFERRED
ISSUANCE EXPENSES - 40 Total assets $ 33,659 $
7,707
MEDGENICS, INC. AND ITS
SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
March 31,
December 31,
2013 2012 Unaudited LIABILITIES AND
STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Trade
payables $ 951 $ 877 Other accounts payable and accrued expenses
1,718 1,473 Total current
liabilities 2,669 2,350
LONG-TERM LIABILITIES: Accrued severance pay 1,429 1,492
Liability in respect of warrants 1,017 1,931
Total long-term liabilities 2,446
3,423 Total liabilities 5,115
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 March 31, 2013 and
December 31, 2012, respectively
2 1 Additional paid-in capital 96,797 66,509 Deficit accumulated
during the development stage (68,255 ) (64,576 )
Total stockholders' equity 28,544 1,934
Total liabilities and stockholders' equity $ 33,659
$ 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)
Three months ended
March 31,
2013 2012 Research and
development expenses $ 2,031 $ 1,592 Less - Participation by
the Office of the Chief Scientist - (1,022 )
Research and development expenses, net 2,031 570
General and administrative expenses 2,546
1,359 Operating loss (4,577 ) (1,929 )
Financial expenses (14 ) (801 ) Financial income 915
18 Loss before taxes on income (3,676 ) (2,712
) Taxes on income 3 -
Loss $ (3,679 ) $ (2,712 ) Basic loss per share $ (0.24 ) $
(0.28 ) $ (0.28 ) Diluted loss per share $ (0.29 )
15,222,268 9,753,725 Weighted average number
of Common stock used in computing basic loss per share Weighted
average number of Common stock used in computing diluted loss per
share 15,634,768 9,753,725
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