TEMPE, Ariz., Oct. 25 /PRNewswire-FirstCall/ -- OrthoLogic Corp. today announced financial results for the third quarter ended September 30, 2005.
OrthoLogic reported a net loss of $7.6 million, or $(0.20) per share, for the third quarter of 2005, compared to a net loss of $29.4 million, or $(0.80) per share in the third quarter of 2004. Third quarter operating expenses totaled $8.3 million, compared to operating expenses of $31.8 million in the third quarter of 2004. Third quarter expenses for continuing operations for the prior year included $25.8 million of In-Process Research and Development costs related to the asset acquisition of Chrysalis Biotechnology, Inc. (CBI).
At September 30, 2005, OrthoLogic had cash, cash equivalents, and investments of $83.5 million.
“We continue to make progress in our late stage programs for Chrysalin(R) in the accelerated fracture repair and diabetic foot ulcer indications, both of which represent significant, underserved markets,” stated James M. Pusey, M.D., president and chief executive officer of OrthoLogic. “We are looking forward to advancing our pipeline with the finalization of a gel formulation of Chrysalin for use in diabetic foot ulcers, as well as advancing our preclinical compound addressing cartilage defect repair.”
Company Highlights
Fracture Repair: Enrollment is ongoing in the company’s Phase 2b dosing trial in patients with unstable and/or displaced distal radius fractures. This study is intended to establish the lower dose range of Chrysalin versus a placebo control and will include 500 patients in 60 U.S. and Canadian centers. OrthoLogic expects the patient enrollment for this trial to be faster than the Phase 3 study. Enrollment is complete in the company’s Phase 3 trial indication with data collection ongoing and efficacy results expected in the first half of 2006.
Diabetic Ulcer Healing: OrthoLogic submitted final study results from the Phase 1/2 trial of Chrysalin in diabetic ulcer healing to a peer-reviewed journal during the third quarter. These results showed significant efficacy and a dose response curve in the foot ulcer sub-population of 35 patients and will be the basis for further studies of Chrysalin in diabetic foot ulcer patients.
Supportive Preclinical Data: During the third quarter, OrthoLogic announced findings from a study in the online version of the Journal of Cellular Physiology, showing that Chrysalin enhances neovascularization, or the growth of new blood vessels that have already sprouted, which can be an advantage for bone and tissue repair. These results further support the Chrysalin clinical development program currently underway in fracture repair and diabetic foot ulcer healing.
Business Development: Yesterday, OrthoLogic announced the hiring of Dana B. Shinbaum to the position of Vice President of Business Development. He joins OrthoLogic from Savient Pharmaceuticals, Inc. where he held positions of increasing responsibility in marketing, strategic planning and new product development, with responsibilities including creating and developing new business opportunities, leading global project teams and managing product launches. Dana holds a BA in economics and business from Lafayette College, and an MBA in finance and accounting from Drexel University. In his new position at OrthoLogic, Dana Shinbaum will be responsible for identifying, evaluating and negotiating potential in-licensing opportunities, marketing and development partners and other possible collaborations for the company.
“With the addition of Dana Shinbaum and continued positive news on Chrysalin in our two major indications of fracture repair and diabetic foot ulcers, we are strengthening the infrastructure necessary to become a fully integrated and rapidly growing biotechnology drug development company,” concluded Dr. Pusey.
Conference Call Information
As previously announced, management will host a conference call and webcast today at 4:30 p.m. EDT (1:30 p.m. PDT). To access the call, participants may dial 800-946-0706 (domestic) or 719-457-2638 (international) and provide the access code 6958949.
A replay of the call will be available beginning October 25, 2005, at 7:30 p.m. EDT until November 23, 2005, at 12:59 a.m. EST. To access the replay, please dial 888-203-1112 (domestic) or 719-457-0820 (international) and provide the access code 6958949.
Additionally, the conference call will be webcast on the Investor Relations section of the company’s website, www.orthologic.com.
About Chrysalin(R)
Chrysalin (TP508) is a synthetic 23-amino acid peptide that represents the receptor-binding domain of the human thrombin molecule, the naturally occurring agent responsible for blood clotting and initiating the natural healing cascade of cellular events responsible for tissue repair -- both soft tissue and bone.
Thrombin acts as a signaling molecule to initiate the early stages of tissue repair. Since all cells contain high-affinity thrombin receptors, it is widely accepted that thrombin plays a larger role in the natural healing cascade than just forming blood clots. Scientists began developing Chrysalin in 1985, when a class of synthetic peptides was developed representing a specific receptor-binding domain of thrombin that activates specific tissue repair signals. Today, OrthoLogic is exclusively developing several drug candidates based on the Chrysalin peptide, which mimic part of the thrombin response without stimulating blood clotting, and therefore have the potential to accelerate the natural healing cascade.
About OrthoLogic
OrthoLogic is a biotechnology company focused on the development and commercialization of the novel synthetic peptide Chrysalin(R) (TP508) in three lead indications, all of which represent areas of significant unmet medical need -- fracture repair, diabetic foot ulcer healing and cartilage defect repair. Based on the Company’s pioneering scientific research of the natural healing cascade, OrthoLogic has become the leading company focused on tissue and bone repair. OrthoLogic is committed to developing a pipeline of novel peptides and other molecules aimed at helping patients with equally under-served conditions. The Company maintains exclusive worldwide rights for Chrysalin. OrthoLogic’s corporate headquarters are in Tempe, Arizona. For more information, please visit the company’s website: www.orthologic.com.
Forward-Looking Statements
Statements in this press release or otherwise attributable to OrthoLogic regarding our business that are not historical facts are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which include the timing and acceptability of FDA filings and the efficacy and marketability of potential products, involve risks and uncertainties that could cause actual results to differ materially from predicted results. These risks include: delays in obtaining or inability to obtain FDA, institutional review board or other regulatory approvals of preclinical or clinical testing; unfavorable outcomes in our preclinical and clinical testing; the development by others of competing technologies and therapeutics that may have greater efficacy or lower cost; delays in obtaining or inability to obtain FDA or other necessary regulatory approval of our products; our inability to successfully and cost effectively develop or outsource manufacturing and marketing of any products we are able to bring to market; changes in FDA or other regulations that affect our ability to obtain regulatory approval of our products, increase our manufacturing costs or limit our ability to market our products; our inability to raise additional capital in the future needed to fund the continued development of our Chrysalin Product Platform; and other factors discussed in our Form 10-K for the fiscal year ended December 31, 2004, our Form 10-Q for the quarter ended June 30, 2005, and other documents we file with the Securities and Exchange Commission.
OrthoLogic Corp. (A Development Stage Company) Statements of Operations (in thousands, except per share data) (Unaudited) Three months Nine months As a Development ending ending Stage Company September 30, September 30, 8/5/2004 - 2005 2004 2005 2004 9/30/2005 OPERATING EXPENSES General and administrative $1,027 $1,226 $3,210 $2,397 $5,088 Research and development 7,266 4,803 18,660 12,163 26,740 CPM divestiture and related gains 0 (79) (250) (272) (375) CBI in process research and development 0 25,840 0 25,840 25,840 Total operating expenses 8,293 31,790 21,620 40,128 57,293 Other income, net 700 344 1,906 950 2,657 Loss from continuing operations (7,593) (31,446) (19,714) (39,178) (54,636) Income tax benefit 0 (411) (12) (705) (654) Net loss from continuing operations (7,593) (31,035) (19,702) (38,473) (53,982) Discontinued operations Net gain on the sale of the bone device business, net of taxes of $0, $0, $0, $0, ($363), respectively 0 1,685 0 1,685 2,048 Net income from discontinued operations 0 1,685 0 1,685 2,048 NET LOSS $(7,593) $(29,350) $(19,702) $(36,788) $(51,934) Per Share Information: Net loss from continuing operations Basic ($0.20) ($0.85) ($0.52) ($1.09) Diluted ($0.20) ($0.85) ($0.52) ($1.09) Net income from discontinued operations Basic $0.00 $0.05 $0.00 $0.05 Diluted $0.00 $0.05 $0.00 $0.05 Net loss Basic ($0.20) ($0.80) ($0.52) ($1.04) Diluted ($0.20) ($0.80) ($0.52) ($1.04) Basic and diluted shares outstanding 38,025 36,726 38,019 35,281 See notes to the financial statements ORTHOLOGIC CORP. (A Development Stage Company) BALANCE SHEETS (in thousands) (Unaudited) September 30, December 31, 2005 2004 ASSETS Current assets: Cash and cash equivalents $29,744 $38,377 Short-term investments 51,175 53,642 Prepaids and other current assets 1,068 1,053 Escrow receivable, net 6,942 -- Total current assets 88,929 93,072 Furniture and equipment, net 551 478 Escrow receivable, net -- 6,828 Long-term investments 2,623 11,558 Deferred income taxes - non-current 1,106 1,106 Trademarks and patents 2,288 2,142 Total assets $95,497 $115,184 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $1,315 $833 Accrued compensation 659 648 Accrued property taxes 174 114 Excess space reserve 99 559 Accrued clinical 765 1,236 Other accrued liabilities 982 727 Total current liabilities 3,994 4,117 Deferred rent and capital lease obligation 83 137 Non-current portion of excess space reserve 111 0 Other non-current liabilities 37 0 Total liabilities 4,225 4,254 Stockholders’ Equity Common stock, $.0005 par value; 100,000,000 and 50,000,000 shares authorized; 38,024,742 and 38,011,642 shares issued and outstanding 19 19 Additional paid-in capital 170,949 170,905 Accumulated deficit (79,696) (59,994) Total stockholders’ equity 91,272 110,930 Total liabilities and stockholders’ equity $95,497 $115,184 See notes to the financial statements
OrthoLogic Corp.
CONTACT: Sherry A. Sturman, Chief Financial Officer of OrthoLogic Corp.,+1-602-286-5436; or Melanie Friedman of Stern Investor Relations, Inc.,+1-212-362-1200, for OrthoLogic Corp.
Web site: http://www.orthologic.com/
