| Artes Medical Reports Second Quarter 2007 Financial Results |
SAN DIEGO--(BUSINESS WIRE)--Aug. 9, 2007--Artes
Medical, Inc. (Nasdaq:ARTE), a medical technology company focused on developing,
manufacturing and commercializing a new category of aesthetic injectable products for men
and women, today reported recent company highlights and financial results for the second
quarter ended June 30, 2007.
Recent Company Highlights "We are pleased with our physician training efforts, and we now have over 600 physicians on our 'Find a Doctor' website locator. We are now accelerating our marketing efforts to increase both consumer and physician awareness of ArteFill's differentiated formulation that provides a safe and long-lasting solution for wrinkle correction of smile lines," said Diane S. Goostree, President and Chief Executive Officer. Financial Results The Company reported total revenues of $2.8 million for the three months ended June 30, 2007, which included ArteFill product sales of $2.1 million and technology license revenues of $732,000. The Company reported a net loss of $6.7 million for the three months ended June 30, 2007, an increase of $0.5 million compared to three months ended June 30, 2006 of $6.2 million. Gross profit for the three months ended June 30, 2007 was $628,000, which included an obsolete inventory reserve provision of $475,000 related to expired product produced in 2006 in anticipation of an earlier FDA approval and product launch. Total operating expenses for the three months ended June 30, 2007 were $7.5 million, an increase of $1.1 million, over the three months ended June 30, 2006 operating expenses of $6.4 million. The increase in second quarter 2007 operating expenses compared to second quarter 2006 is primarily attributable to the transition of the Company from a development stage organization to a commercial operation required in order to manufacture and distribute our FDA-approved product ArteFill. Cash, cash equivalents and short-term investments were $31.0 million as of June 30, 2007. Conference Call and Webcast Information Artes Medical will host a webcast and conference call today, August 9, 2007 at 5:00 a.m. Pacific Time (8:00 a.m. Eastern Time) to discuss the financial results. The dial-in numbers are (866) 543-6408 for domestic callers, and (617) 213-8899 for international callers. The passcode for both domestic and international callers is 39932848. A live webcast of the conference call will be available online from the investor relations page of the Company's corporate website at www.artesmedical.com. Participating in the call will be Diane S. Goostree, President and Chief Executive Officer, and Peter C. Wulff, Executive Vice President and Chief Financial Officer. After the live webcast, the call will remain available on Artes Medical's web site for at least 30 days following the presentation. In addition, a telephonic replay of the call will be available for 7 days. The replay dial-in numbers are (888) 286-8010 for domestic callers, and (617) 801-6888 for international callers. The passcode for both domestic and international callers is 17317938. About ArteFill(R) ArteFill is the first and only FDA-approved non-resorbable injectable dermal filler for the correction of wrinkles known as smile lines or nasolabial folds. The unique microspheres in ArteFill are not absorbed by the body and therefore provide the first-of-its-kind permanent support for long-lasting wrinkle correction in one to two treatments. ArteFill was approved by the FDA in October 2006 based on data from the Company's 12-month controlled, randomized, double-masked, multi-center U.S. clinical trial, which compared outcomes for patients treated with ArteFill with those of patients treated with the leading bovine collagen-based filler. At the 6-month evaluation, which was the primary efficacy evaluation period for the clinical trial, the wrinkle correction in patients treated with ArteFill persisted and showed statistically significant improvement compared to the wrinkle correction in the patients treated with the collagen control, who returned to their pretreatment status. The ArteFill patients were also evaluated one year after treatment, demonstrating continued safety and wrinkle correction. In February 2007, the Company announced it completed a 5-year follow-up study of 145 patients who were treated with ArteFill in the Company's U.S. clinical trial. In addition to demonstrating the safety profile of ArteFill, the study showed statistically significant (p less than 0.001) improvement in patient wrinkle correction five years after the patient's last ArteFill treatment, and a statistically significant (p=0.002) improvement in wrinkle correction at the 5-year point compared to the 6-month evaluation period. As part of the study, physician investigators and patients were asked to provide their assessment of ArteFill treatment. Over 90% of the physician assessments were either "completely successful" or "very successful;" and over 90% of the patient assessments were either "very satisfied" or "satisfied." In March 2007, the Company submitted the data from the study to the FDA for review in order to enhance the product labeling for ArteFill. An ArteFill Skin Test is required before initial treatment. The most common adverse events associated with ArteFill treatment, similar to those observed with other dermal fillers, are lumpiness, persistent swelling or redness and increased sensitivity at the injection site. ArteFill is a proprietary formulation comprised of polymethylmethacrylate, or PMMA, microspheres and bovine collagen, and is the only PMMA-based injectable product that has been approved by the FDA for the treatment of facial wrinkles. Artes Medical is the sole manufacturer of ArteFill, which is only available in the United States through our Company, and we have not entered into distribution or licensing arrangements with any third party for the distribution or sale of ArteFill outside the United States. About Artes Medical, Inc. Artes Medical is a medical technology company focused on developing, manufacturing and commercializing a new category of aesthetic injectable products for the dermatology and plastic surgery markets. There were approximately two million dermal filler procedures in the U.S. in 2006, an increase of 25% over the prior year, according to the American Society of Aesthetic Plastic Surgeons, or ASAPS. The Company's initial product, ArteFill, is being marketed to men and women as a treatment option for the correction of nasolabial folds. Additional information about Artes Medical and ArteFill is available at www.artesmedical.com and www.artefill.com. Forward-Looking Statements This news release may contain forward-looking statements that are based on the Company's current beliefs and assumptions and on information currently available to its management. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. As a result of these risks, uncertainties and other factors, which include the Company's history of net losses, its reliance on its sole FDA-approved product, ArteFill, its limited experience in commercializing ArteFill, and its future receipt of FDA approval to enhance the product label for ArteFill to extend the efficacy period of ArteFill beyond six months, readers are cautioned not to place undue reliance on any forward-looking statements included in this press release. A more extensive set of risks and uncertainties is set forth in the Company's SEC filings available at www.sec.gov. These forward-looking statements represent beliefs and assumptions only as of the date of this news release, and the Company assumes no obligation to update these forward-looking statements publicly, even if new information becomes available in the future. Artes Medical(R) and ArteFill(R) are registered trademarks of Artes Medical, Inc. ARTES MEDICAL, INC.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------------------------------
2007 2006 2007 2006
------------ ----------- ------------ ------------
Product sales $ 2,055 $ - $ 3,497 $ -
License revenue 732 390 732 390
----------- ---------- ----------- -----------
Total revenues 2,787 390 4,229 390
Cost of product
sales 2,159 3,879
----------- ---------- ----------- -----------
Gross profit 628 390 350 390
Operating expenses:
Research and
development 1,136 1,530 2,168 4,479
Selling, general
and
administrative 6,327 4,868 11,897 8,062
----------- ---------- ----------- -----------
Total operating
expenses 7,463 6,398 14,065 12,541
----------- ---------- ----------- -----------
Loss from
operations (6,835) (6,008) (13,715) (12,151)
Interest income 394 233 871 302
Interest expense (263) (457) (531) (2,387)
Other income
(expense), net (3) (12) 10 (31)
------------ ----------- ------------ ------------
Loss before benefit
for income taxes (6,707) (6,244) (13,365) (14,267)
Benefit for income
taxes 51 58 100 100
------------ ----------- ------------ ------------
Net loss $ (6,656) $ (6,186) $ (13,265) $ (14,167)
============ =========== ============ ============
Historical net loss
per common share:
Net loss per common
share - basic and
diluted $ (0.40) $ (4.59) $ (0.81) $ (10.71)
============ =========== ============ ============
Weighted average
shares - basic and
diluted 16,459,103 1,347,993 16,411,789 1,322,884
============ =========== ============ ============
(1) On December 26, 2006, the Company closed its initial public
offering. Immediately prior to the closing of the Company's initial
public offering, all outstanding shares of the Company's preferred
stock were converted into shares of common stock and warrants to
purchase shares of common stock were exercised. The impact of the
Company's initial public offering on its common stock outstanding is
as follows at December 31, 2006:
Capitalization summary upon closing of initial public offering:
Common stock issued and outstanding pre
initial public offering 1,427,400
Initial public offering sale of common
stock 5,290,000
Conversion of preferred stock upon initial
public offering into common stock 9,367,512
Cash exercise of warrants to purchase
common stock upon initial public offering 276,334
-----------
16,361,246
===========
ARTES MEDICAL, INC.
Condensed Consolidated Balance Sheet
(in thousands)
June 30, Dec. 31,
2007 2006
----------- ----------
(unaudited)
Assets:
Cash, cash equivalents, and marketable
securities $ 30,964 $ 46,258
Accounts receivable 642 -
Inventory 6,419 4,761
Other current assets 877 406
----------- ----------
Total current assets 38,902 51,425
Property and equipment, net 5,113 5,271
Intellectual property, net 2,981 3,578
Deposits and other assets 346 339
----------- ----------
Total assets $ 47,342 $ 60,613
=========== ==========
Liabilities and stockholders' equity:
Current liabilities $ 10,572 $ 12,019
Long-term obligations 3,363 4,040
Deferred tax liability 1,273 1,368
----------- ----------
Total liabilities 15,208 17,427
Total stockholders' equity 32,134 43,186
----------- ----------
Total liabilities and stockholders' equity $ 47,342 $ 60,613
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CONTACT: Artes Medical, Inc. (Investor Relations) SOURCE: Artes Medical, Inc. |