Cardium Reports on Second Quarter 2010 Financial Results and Recent Developments
For the second quarter ended June 30, 2010, the Company reported a net loss of $0.7 million, or $(0.01) per share, compared to a net loss of $11.1 million, or $(0.24) per share for the same period in 2009. For the six months ended June 30, 2010, net loss was $1.7 million, or $(0.03) per share, compared to a net loss of $25.9 million, or $(0.55) per share, for the same six month period in 2009. The decrease in net loss was primarily due to a reduction in costs as a result of the completion of the Phase 2b clinical study for Cardium's Excellarate product candidate. The second quarter 2010 financial results also include a $1.3 million favorable adjustment to income for the non-cash change in fair market value of certain common stock warrants we recorded as derivative liabilities upon the adoption of ASC 815 (formerly Emerging Issues Task Force EITF 07-05), recorded in "Change in Fair Value of Derivative Liabilities."
Research and development costs for the three months ended June 30, 2010 totaled $0.6 million and general and administrative expenses were $1.4 million, compared to $1.1 million and $1.2 million, respectively, for the same period last year.
As of June 30, 2010, the Company had $9.9 million in cash compared to $3.4 million for the same period last year. As of August 6, 2010, 77,852,154 shares of Cardium's common stock were outstanding.
Cardium is focused on the acquisition and strategic development of new and innovative bio-medical product opportunities and businesses that have the potential to address significant unmet medical needs and definable pathways to commercialization, partnering and other economic monetizations. Cardium's investment portfolio includes the Tissue Repair Company and Cardium Biologics, medical technology companies primarily focused on the development of innovative therapeutic products for wound healing, bone repair, and cardiovascular indications. In July 2009, Cardium completed the sale of its InnerCool Therapies medical device business to Royal Philips Electronics, the first asset monetization from the Company's biomedical investment portfolio. News from Cardium is located at www.cardiumthx.com.
Except for statements of historical fact, the matters discussed in this press release are forward looking and reflect numerous assumptions and involve a variety of risks and uncertainties, many of which are beyond our control and may cause actual results to differ materially from stated expectations. For example, there can be no assurance that results or trends observed in one clinical study or procedure will be reproduced in subsequent studies or procedures, or that clinical studies even if successful will lead to product advancement or partnering; that the U.S. Food and Drug Administration (the "FDA") will grant marketing clearance of the Excellagen product candidates or that we or a partner can successfully introduce these or additional products into advanced wound care markets; that Cardium can maintain its exchange listing compliance with NYSE Amex; that Excellagen, Excellarate or our other candidates will prove to be sufficiently safe and effective, or that results or trends observed in one clinical study or procedure will be reproduced in subsequent studies or procedures, or that clinical studies even if successful will lead to product advancement or partnering; that the Excellagen or Excellarate product candidates offer the potential for simpler or more cost-effective treatment for physicians and patients than other FDA-approved products that currently are or will be on the market; that improvements in the formulation or use of Generx will be commercially practicable, or that Generx could be successfully advanced as a therapeutic in developing markets or that the results of studies in such markets could be used to advance or broaden the commercialization of Generx in the U.S. or other markets; that our product candidates will not be unfavorably compared to competitive products that may be regarded as safer, more effective, easier to use or less expensive; that our clinical study programs can be conducted and completed in an efficient and successful manner; that we can develop a DNA-based orthobiologics product portfolio; that the FDA or other regulatory clearances or other certifications, or other commercialization efforts will be successful or will effectively enhance our businesses or their market value; that our products or product candidates will prove to be sufficiently safe and effective after introduction into a broader patient population; or that third parties on whom we depend will perform as anticipated.
Actual results may also differ substantially from those described in or contemplated by this press release due to risks and uncertainties that exist in our operations and business environment, including, without limitation, risks and uncertainties that are inherent in the development of complex biologics and in the conduct of human clinical trials, including the timing, costs and outcomes of such trials, our ability to obtain necessary funding, regulatory approvals and expected qualifications, our dependence upon proprietary technology, our history of operating losses and accumulated deficits, our reliance on collaborative relationships and critical personnel, and current and future competition, as well as other risks described from time to time in filings we make with the Securities and Exchange Commission. We undertake no obligation to release publicly the results of any revisions to these forward-looking statements to reflect events or circumstances arising after the date hereof.
Non-GAAP Financial Measure
To supplement our condensed consolidated financial statements, which statements are prepared and presented in accordance with accounting principles generally accepted in the United States of America (GAAP), we use a non-GAAP financial measure called non-GAAP earnings or loss per share. We define non-GAAP earnings or loss per share as net income or loss not including the impact of:
It should be noted that basic and diluted weighted average shares are determined on a GAAP basis and the resulting share count is used for computing both GAAP and non-GAAP basic and diluted earnings per share.
With the adoption of ASC 815 and its very substantial impact on our total liabilities including certain non-cash derivative liabilities and corresponding reported net gains and losses arising from changes in the underlying market value of our common stock, we believe that non-GAAP earnings or loss per share provides meaningful supplemental information regarding our performance by excluding certain expenses that may not be indicative of the core business operating results and may help in comparing current-period results with those of prior periods as well as with our peers. We present this information to investors as an additional tool for evaluating our financial results in a manner that reflects ongoing operations and facilitates comparisons with operating results from prior periods. The presentation of this additional non-GAAP information is intended to provide investors with additional incremental tools for their review of our results and is not meant to be considered in isolation or as a substitute for financial information presented in accordance with GAAP.
-- Agreement with Devro Medical Limited for the supply of highly-refined fibrillar bovine Type I collagen, an important component of Cardium's Excellagen product candidate, which is pending 510(k) clearance with the U.S. Food and Drug Administration (FDA). In addition, Cardium is initiating activities associated with the commercial launch, including packaging and other final product requirements, and are in discussions with potential commercialization partners for the sale of Excellagen in the U.S. and internationally. Excellagen has been developed for patients with dermal wounds, which can include diabetic ulcers, pressure ulcers, venous ulcers, tunneled/undermined wounds, surgical and trauma wounds, second degree burns, and other types of wounds; -- Report on the final analysis of data from the Matrix Phase 2b study which indicated that the Excellagen product candidate appeared to be both safe and well tolerated, and showed a statistically significant acceleration of wound healing (as measured by a reduction in wound radius) during the first two weeks following a one-time application compared to patients receiving standard of care therapy; -- Agreement with bioRASI, an international contract research organization, to assist the Company in a planned late-stage clinical study and commercialization activities for Cardium's cardiovascular biologic candidate, Generx®, in Russia and affiliated jurisdictions, as well as in potentially other newly industrializing markets. Under the terms of the agreement, bioRASI will assist Cardium to conduct a late-stage clinical study to evaluate the efficacy and safety of Generx at up to three leading medical centers in Moscow and to assist the Company in commercialization activities in these international markets; -- Announcement that Dominique Dawes, an Olympic champion, has been named as the official web-based spokesperson for Cardium's MedPodium podiatry-focused advanced skin care line. The MedPodium product line has been designed to promote foot health and comfort and to support preventative care, self examination and early detection of foot ulcers, especially for diabetic patients with lower extremity neuropathy. MedPodium's initial products include advanced skin care products designed to provide a first line of defense for individuals at risk for foot ulcers and that will enhance and expand Cardium's podiatry- and wound care-focused product portfolio beyond the current Excellagen product candidate. Following the initial MedPodium product launch, Cardium plans to broaden and expand its MedPodium's product line to include aesthetic-based products and other fitness and wellness products; -- Resolution of matters relating to Cardium's exchange listing compliance with NYSE Amex. In the communication from NYSE Amex LLC, Cardium was informed that based upon a review of publicly available information, including the Company's Form 8-K filed on June 24, 2010, the Company has resolved the continued listing deficiencies referenced in the NYSE Amex LLC's letter dated December 28, 2009, as previously reported. In addition, the Exchange also indicated that as with the case for all listed issuers, the Company's continued listing eligibility will continue to be assessed on an ongoing basis and that the Company is subject to the provisions of Section 1009(h) of the NYSE Amex Company Guide; and -- Continued identification and evaluation of innovative and capital-efficient product opportunities and strategic partnership opportunities for the Company's current product candidates as they are advanced and corresponding valuations are established.
SOURCE Cardium Therapeutics, Inc.
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