RIVER EDGE, N.J., Aug. 14 /PRNewswire-FirstCall/ -- Nephros, Inc. announced today financial results for the three month period ended June 30, 2009.
Recent Highlights
“2009 has continued to be a productive year for Nephros,” said Ernest A. Elgin, President and CEO of Nephros. “The Company received 510(k) approval for our DSU technology in the U.S. and is still awaiting a final response from the FDA on the pending applications for our OLpur(TM) H2H(TM) module and OLpur(TM) MD 220 filter. More recently, our July financing solidified our financial condition to allow us to expand our commercialization efforts for these products.”
Financial Performance for the Second Quarter Ended June 30, 2009.
For the quarter ended June 30, 2009, Nephros reported revenues of approximately $527,000 compared to approximately $253,000 for the three months ended June 30, 2008. Total revenues increased approximately $274,000 during the three months ended June 30, 2009 over the same period in 2008. The increase of approximately 108% was due to increased revenue of approximately $201,000, related to our contract with the U.S. Office of Naval Research (“ONR”) and $67,000 in sales of our DSU for the three months ended June 30, 2009 whereas we had no DSU revenue in the same period in 2008. Sales of our MD filters in our target European market were $6,000 higher in the three months ended June 30, 2009 compared to the same period in 2008. Unit sales in Europe were slightly lower in the three months ended June 30, 2009 compared to the same period in 2008 but were not the result of decreased customer orders, but rather due to production delays resulting in deferment of shipments.
Operating expenses for the three months ended June 30, 2009 were approximately $785,000 compared with $2,715,000 in the corresponding period of 2008. The decrease of approximately $1,930,000 or 71% is primarily related to: decreased research and development expenses of approximately $1,057,000 due to the fact that there was no clinical trial being conducted in the three months ended June 30, 2009 compared to the same period in 2008; decreased selling, general and administrative expenses of approximately $846,000 resulting from decreased legal, insurance, rent, personnel and other expenses and a reduction in depreciation expense of approximately $27,000.
The Company’s net loss was $413,000 or $.01 per basic and diluted common share for the second quarter of 2009 compared to a net loss of $2,444,000 or $.06 per basic and diluted common share in the second quarter of 2008.
As of June 30, 2009, Nephros had cash and cash equivalents in the amount of $890,000. This amount does not include cash provided by the $1,250,000 financing which was completed on July 24, 2009.
End-Stage Renal Disease (ESRD) Products
Nephros completed the patient treatment phase of the U.S. clinical trial evaluation of the OLpur(TM) H2H(TM) module and OLpur(TM) MD 220 filter during the second quarter of 2008. The Company submitted the clinical data to the U.S. Food and Drug Administration (“FDA”) with the 510(k) application for U.S. marketing approval of these products in November 2008. Following its review of the application, the FDA requested additional information from us. Nephros replied to the FDA inquiries on March 13, 2009. Nephros believes that, if approved, its technology would be the first FDA-approved on-line HDF therapy available in the U.S.
Water Ultrafiltration Products
On July 1, 2009, Nephros received 510(k) marketing approval from the U.S. FDA for the DSU to be used to filter biological contaminants from water and bicarbonate concentrate used in hemodialysis procedures. Within the U.S., there are approximately 4,500 clinics providing over 50 million dialysis treatments to 350,000 patients annually. The DSU filter can be used as the last step in the water purification process to ensure ultra pure water for dialysis procedures. Nephros is investigating a range of additional commercial, industrial and retail opportunities for its DSU technology.
Military Product Development
Nephros has contracted with the ONR to develop an advanced water purification system for military field use. Nephros’ proprietary dual stage cold sterilization ultrafilter will form the basis of the portable system. Nephros is continuing the development of its dual stage ultra reliable personal water filtration system under support from its U.S. Department of Defense (“DOD”) appropriation and has completed initial concept development. Assuming additional appropriation from the DOD, Nephros will expand the program and plans to conclude development and to conduct limited field testing in 2009. Nephros has introduced the DSU to various government agencies as a solution for providing potable water in certain emergency response situations.
Intellectual Property
During the second quarter, Nephros was granted four new patents. In the U.S., the company was issued patent #7,534,349 for a Dual Stage Ultrafilter with pump mechanism and/or shower feature. In Canada, the company was issued patent #2,430,575 for a valve mechanism used in Infusion Fluid systems which is a feature used on our H2H(TM) module and patent #2,396,852 for an Ionic Enhanced Dialysis/Diafiltration system which is related to mid-dilution HDF. In China, the company was issued patent #200510092067.3 for a Dual Stage Hemodiafiltration cartridge used in its OLpur(TM) MD HDF Filter.
About Nephros, Inc.
Nephros, Inc., headquartered in River Edge, New Jersey, is a medical device company developing and marketing filtration products for therapeutic applications, infection control, and water purification.
The Nephros hemodiafiltration (“HDF”) system is designed to improve the quality of life for the End-Stage Renal Disease (ESRD) patient while addressing the critical financial and clinical needs of the care provider. ESRD is a disease state characterized by the irreversible loss of kidney function. The Nephros HDF system removes a range of harmful substances more effectively, and with greater capacity, than existing ESRD treatment methods, particularly with respect to substances known collectively as “middle molecules.” These molecules have been found to contribute to such conditions as dialysis-related amyloidosis, carpal tunnel syndrome, degenerative bone disease and, ultimately, mortality in the ESRD patient. Nephros ESRD products are sold and distributed throughout Europe and are currently being used in over fifty clinics in Europe.
The Nephros Dual Stage Ultrafilter (DSU) is the basis for the Nephros line of water filtration products. The patented dual stage cold sterilization ultrafilter has the capability to filter out bacteria and, due to its exceptional filtration levels, filter out many viruses, parasites and biotoxins. Sale of the DSU has begun at several major U.S. medical centers for infection control and has been selected for further development by the U.S. Marine Corps for purification of drinking water by soldiers in the field.
For more information about Nephros, please visit our website at http://www.nephros.com/.
Forward-Looking Statements
Statements in this news release that are not historical facts constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). Such statements may be preceded by words such as “may,” “plans,” “expects,” “believes,” “hopes,” “potential” or similar words. For such statements, Nephros claims the protection of the PSLRA.
Forward-looking statements are not guarantees of future performance, are based on assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond Nephros’ control. Actual results may differ materially from the expectations contained in the forward-looking statements. Factors that may cause such differences include the risks that Nephros may not be able: (i) to obtain additional funding when needed or on favorable terms; (ii) to continue as a going concern; (iii) to obtain appropriate or necessary governmental approvals to achieve its business plan or effectively market its products; (iv) to have its technologies and products accepted in current or future target markets; (v) to demonstrate in pre-clinical or clinical trials the anticipated efficacy, safety or cost savings of products that appeared promising to Nephros in research or clinical trials; or (vi) to secure or enforce adequate legal protection, including patent protection, for its products. More detailed information about Nephros and the risk factors that may affect the realization of forward-looking statements is set forth in Nephros’ filings with the SEC, including Nephros’ Annual Report on Form 10-K for the fiscal year ended December 31, 2008. Investors and security holders are encouraged to read these documents on the SEC’s website at http://www.sec.gov/. Nephros does not undertake to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise except as required by law.
SOURCE Nephros, Inc.
CONTACT: Eileen M. Sukumaran of Nephros, Inc., +1-201-343-5202,
Eileen@nephros.com
Web site: http://www.nephros.com/
