Portfolio Press Release
BioMimetic Therapeutics Reports 2009 First Quarter Earnings Results
BioMimetic Therapeutics, Inc. Press Release
7 May 2009
BioMimetic Therapeutics, Inc. (NASDAQ: BMTI) today reported its financial results as of and for the three months ended March 31, 2009. For the three months ended March 31, 2009, the Company reported a net loss of $8.0 million, or $(0.43) per diluted share. This compares to a net income of $31.3 million, or $1.62 per diluted share, for the same period in 2008, which included a gain of $39.3 million resulting from the January 2008 sale of the Company's orofacial therapeutics business. The Company ended the quarter with $88.8 million of cash and cash equivalents and investments, including $48.1 million in auction rate securities with a loan balance of $39.1 million against the auction-rate securities.
First Quarter Clinical and Corporate Updates
During the first part of 2009, BioMimetic made significant advancements in its product development programs and other critical business areas:
Augment™ Bone Graft
The Company completed enrollment in its Augment Bone Graft 436 patient North American pivotal clinical trial in foot and ankle fusions in December 2008 and is on track with patient follow up. The primary endpoint is based on the fusion rate at six months as assessed on CT scans. The Company expects to release top line data from the trial in the second half of this year.
The Company is on track to file the pre-clinical and manufacturing/quality modules of its modular pre-market approval (PMA) application for Augment in the second quarter of 2009 and the final module containing the clinical data in the fourth quarter of 2009.
The Company responded to a letter from Health Canada regarding what is believed to be the remaining open issues concerning its Device License Application (DLA), for commercialization of Augment Bone Graft in Canada. The Company anticipates a decision on the DLA around the middle of 2009.
The Company highlighted pre-clinical and clinical activities at the Orthopedic Research Society (ORS) and American Academy of Orthopedic Surgeons (AAOS) meetings in Las Vegas in February. Several posters and a podium presentation were presented by the Company's scientists and its investigators. In conjunction with the meetings, the Company hosted its 2nd Annual Analyst and Investor Meeting, which focused on the growing foot and ankle surgery market and how Augment Bone Graft will address clinical needs in this area.
Augment™ Injectable Bone Graft
The Company has decided to pursue a pivotal clinical trial comparing Augment Injectable Bone Graft to autograft in foot and ankle fusions using many of the same investigators and a similar protocol as the Augment Bone Graft pivotal study. This approach has the potential to reduce time-to-market for this product candidate by as much as two years. Augment Injectable demonstrated promising results in foot and ankle fusions in a pilot study reported in the third quarter of 2008. If authorized by the appropriate regulatory bodies, the Company plans to initiate this pivotal trial later this year.
Corporate Highlights
On April 3, 2009, an affiliate of InterWest Partners, one of BioMimetic's stockholders, entered into an agreement to purchase 941,177shares of the Company's common stock at $8.50 per share, for an aggregate purchase price of approximately $8.0 million. The closing price of the Company's common stock on April 3, 2009 was $7.45 per share. The transaction was completed on April 7, 2009.
The Company's Board of Directors has approved a rights offering of up to $17 million to be made, on a pro rata basis, to the Company's existing stockholders of record as of April 21, 2009, at a price of $8.50 per share. Under the terms of the rights offering, the Company will distribute, at no charge, to holders of its common stock as of the record date, non-transferable rights to purchase up to 2,000,000 shares of its common stock. The rights offering will be conducted via a registration statement, which has been filed but not yet declared effective by the Securities and Exchange Commission.
In connection with the rights offering, the Company entered into a standby purchase agreement on April 4, 2009, with Novo A/S, an existing stockholder and affiliate of the Company, pursuant to which Novo A/S has agreed to backstop the rights offering by agreeing to purchase up to $15 million of common stock in the offering, if this stock is not purchased by other current shareholders. Novo A/S's participation in the rights offering as a standby purchaser requires the approval of 662/3% of the Company's outstanding shares of common stock excluding any shares owned by Novo, its affiliates and associates. The Company intends to solicit such approval at its upcoming annual meeting of stockholders on June 18, 2009.
BioMimetic achieved partial liquidity on its holdings of auction-rate securities (ARS), which were valued at $48.1 million at the end of the first quarter. In April 2009, the Company sold certain of its ARS investments and certain of the ARS investments were redeemed by the issuer for total proceeds of $10.9 million with a total par value of $11.9 million. Additionally, the Company has filed an arbitration claim with the Financial Industry Regulatory Authority, Inc. (FINRA) against Deutsche Bank Securities, Inc. asserting various claims relating to their purchases of auction rate securities on BioMimetic's behalf.
"So far in 2009 we have focused on completing two of the three modules of the Augment PMA required for FDA approval. They are now nearly complete and should be filed very shortly. We also strengthened our balance sheet by completing an $8 million private placement with Interwest Partners and by the initiation of a rights offering to our other shareholders of record. We could receive up to $25 million in total gross proceeds between these transactions, which will be used to ramp up product development of our second product candidate, Augment Injectable, as well as help to fund our anticipated launch activities for Augment in Canada," said Dr. Samuel E. Lynch, president and CEO of BioMimetic Therapeutics. "With one recombinant protein therapeutic product successfully developed and FDA approved for bone and periodontal regeneration, a second nearing completion of pivotal clinical trials for orthopedic applications and a third ready to go into a pivotal clinical study, BioMimetic has established itself as a premier orthobiologics product development franchise."
Additional Financial Results
For the three months ended March 31, 2009, the Company reported total revenues of $0.4 million, consisting of sublicense fee income and royalty income. This compares to total revenues of $0.5 million for the three months ended March 31, 2008, excluding a gain of $39.3 million resulting from the January 2008 sale of the Company's orofacial therapeutics business.
Research and development expenses totaled $5.2 million for the three months ended March 31, 2009, compared to $6.1 million for the three months ended March 31, 2008. Research and development expenses result primarily from clinical trials of the Company's orthopedic product Augment in the United States, Canada and the European Union, as well as continuing expenses associated with new and ongoing pre-clinical studies and regulatory filings. The decrease in 2009 research and development expenses was partially due to decreased professional services expenses for clinical costs, which have decreased $0.3 million in 2009 after initial start-up costs of clinical trials in 2008. In addition, contract manufacturing costs, outside consultants and milestone expenses decreased by $0.6 million.
General and administrative expenses totaled $2.4 million for the three months ended March 31, 2009, compared to $2.3 million for the three months ended March 31, 2008. These expenses consist of salaries, wages and related benefits, professional services, rent and utility costs for our facilities and minimum royalty payments per our patent licensing agreements.
2009 Financial Guidance
As of March 31, 2009, the Company's condensed consolidated balance sheet includes approximately $9.1 million of cash and cash equivalents and $79.7 million of short-term and long-term investments, which includes $48.1 million of investments in auction rate securities. In April 2009, the Company sold certain of its auction rate securities, and certain of its auction rate securities were redeemed by the issuer, for total proceeds to the Company of $10.9 million. Concurrently, the Company repaid $8.3 million against its note payable to Deutsche Bank, which is secured by certain of its investments in auction rate securities as collateral, resulting in a remaining balance of the note payable of $30.8 million.
Based on current operating plans, forecasted timing and costs of clinical trials and other product development programs, the Company anticipates its 2009 year-end balance of cash, cash equivalents and investments to range from $71 to $78 million, and anticipates that its net cash use will be between $19 and $26 million. This includes the $8 million recently received in the private placement and $10 million in time-based cash payments related to the sale of its orofacial therapeutic business to Luitpold Pharmaceuticals, Inc., which are due in 2009. Loss before income taxes for the year ending December 31, 2009 is forecasted to be in the range of $31 to $38 million.
Conference Call and Webcast
As previously announced, BioMimetic will be hosting a conference call and webcast on Thursday, May 7, 2009 at 4:30 p.m. EDT to discuss the first quarter 2009 financial results. A live webcast of the conference call will be available on the Investor Relations section of BioMimetic's website at www.biomimetics.com . The webcast will be archived on the website for at least 30 days.
The conference call may be accessed on May 7, 2009 by dialing 888.680.0892 (passcode: 77087017). The international dial in number is 617.213.4858, and the same passcode applies. Participants should dial in 10 minutes prior to the call if they have not pre-registered.
About BioMimetic Therapeutics
BioMimetic Therapeutics, Inc. is developing and commercializing regenerative protein-device combination products for the healing of musculoskeletal injuries and disease, including orthopedic, spine and sports injury applications. BioMimetic received marketing approval from the FDA for its first product, GEM 21SÆ, as a grafting material for bone and periodontal regeneration following completion of human clinical trials, which demonstrated the safety and efficacy of the rhPDGF-BB platform technology. Additionally, the Company has both completed and ongoing clinical trials with its product candidates Augment and Augment Injectablein multiple orthopedic bone healing indications including the treatment of foot and ankle fusions and the stimulation of healing of fractures of the wrist. The Company's previously approved product and lead product candidates all combine recombinant protein therapeutics (rhPDGF-BB) with tissue specific scaffolds to actively stimulate tissue healing and regeneration.
GEM 21S is the registered trademark of Luitpold Pharmaceuticals, Inc., who now owns and markets that product.
For further information, visit www.biomimetics.com or contact Kearstin Patterson, corporate communications, at 615-236-4419.
Forward-looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the current intent and expectations of the management of BioMimetic. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. There are many important factors that could cause actual results to differ materially from those indicated in the forward-looking statements. BioMimetic's actual results and the timing and outcome of events may differ materially from those expressed in or implied by the forward-looking statements because of risks associated with the marketing of BioMimetic's product and product candidates, unproven preclinical and clinical development activities, regulatory oversight, and other risks detailed in BioMimetic's filings with the Securities and Exchange Commission. Except as required by law, BioMimetic undertakes no responsibility for updating the information contained in this press release beyond the published date, whether as a result of new information, future events or otherwise, or for changes made to this document by wire services or Internet services.
CONTACT: BioMimetic Therapeutics, Inc.
Kearstin Patterson, 615-236-4419
Director, Corporate Communications
Mobile: 615-517-6112
kpatterson@biomimetics.com
