- Company Sharpens Focus on Lead Development Programs With Top-line
Phase 3 Results Expected by April 30, 2006 - TEMPE, Ariz., Jan. 31
/PRNewswire-FirstCall/ -- OrthoLogic Corp. (NASDAQ:OLGC) today
announced financial results for the fourth quarter and full-year
ended December 31, 2005. OrthoLogic reported a net loss of $7.5
million, or $0.20 per share, for the fourth quarter of 2005,
compared to a net loss of $5.0 million, or $0.13 per share in the
fourth quarter of 2004. For the year ended December 31, 2005, the
Company reported a net loss of $27.2 million, or $0.72 per share,
compared to a net loss of $41.8 million, or $1.16 per share in
2004. Fourth quarter operating expenses totaled $8.5 million,
compared to operating expenses of $5.8 million in the fourth
quarter of 2004. For the year, operating expenses decreased to
$30.1 million, from $45.9 million in 2004. Fiscal year 2004
expenses from continuing operations included $25.8 million of
in-process research and development costs related to the asset
acquisition of Chrysalis Biotechnology, Inc. (CBI) on August 5,
2004. Additionally, the activities related to the CBI operations
have been included in the operating results of the Company
subsequent to the acquisition date. At December 31, 2005,
OrthoLogic had cash, cash equivalents, and investments of $83.6
million. "2005 was a transforming year for OrthoLogic, as we made
significant clinical progress and sharpened our clinical focus on
our fracture repair and diabetic foot ulcer programs," stated James
M. Pusey, M.D., president and chief executive officer of
OrthoLogic. "In 2006 we look forward to directing our efforts to
advancing Chrysalin in these indications, starting with data
collection and announcement of top-line results for the Phase 3
wrist fracture repair study. We also plan to explore collaborative
opportunities to expand our resources and our product portfolio."
2006 Guidance and Financial Expectations OrthoLogic expects net
loss of $37 million and cash burn of $35 million during 2006. The
Company is accelerating the timing for the announcement of top-line
Phase 3 results of Chrysalin in distal radius fracture repair, now
expected to occur by April 30, 2006, revised from earlier guidance
of the first half of the year. The Company also plans to announce
the following: * Completion of enrollment in the Phase 2b study of
Chrysalin in distal radius fracture repair by the end of 2006; *
Initiation of a Phase 2b study of Chrysalin in diabetic foot ulcers
in the second half of 2006. Recent Highlights Clinical &
Development Update: Enrollment is complete in the Company's Phase 3
trial in patients with unstable and/or displaced distal radius
fractures with data collection ongoing and top-line results
expected by April 30, 2006. Enrollment is continuing in the
Company's Phase 2b dosing trial in the same indication. The
Company's diabetic ulcer healing program is progressing toward
Phase 2b with engineering studies for gel formulation manufacturing
underway. During the fourth quarter, the Company closed its
formulation and R&D facility in Galveston, Texas. Chemistry
Manufacturing and Controls (CMC) has been relocated to the
Company's headquarters in Tempe, Arizona. Business Update: Earlier
this month, OrthoLogic announced the appointment of Les Taeger as
Chief Financial Officer. He joined OrthoLogic from CardioTech
International, and its predecessor Gish Biomedical, where he was
Chief Financial Officer for the last five years. Mr. Taeger has
over fifteen years of experience as Chief Financial Officer and has
a wide range of financial experience, including in mergers and
acquisitions, financing, SEC reporting and compliance and
Sarbanes-Oxley Act provisions. Prior to that position, he served in
roles that included substantial audit and general financial
management responsibilities. He has been a CPA for over twenty-two
years. In the fourth quarter, OrthoLogic appointed Dana B. Shinbaum
to the position of Vice President of Business Development. In his
new position, Mr. Shinbaum is responsible for identifying,
evaluating and negotiating potential in-licensing opportunities,
marketing and development partners and other possible
collaborations for the company. "In the last few months, OrthoLogic
focused on expanding the capabilities of its management, which
included the hiring of two key members of the management team,"
stated Dr. Pusey. "We believe that these two appointments are
integral to our transition into a leading development-stage
biopharmaceutical company." Conference Call Information As
previously announced, management will host a conference call and
webcast today at 4:30 p.m. EST (2:30 p.m. MST). To access the call,
participants may dial 800-967-7135 (domestic) or 719-457-2626
(international) and provide the access code 4996641. A replay of
the call will be available beginning January 31, 2006, at 7:30 p.m.
EST until March 2, 2006, 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 4996641. Additionally, the conference
call will be webcast on the Investor Relations section of the
company's website, http://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 two lead indications,
both of which represent areas of significant unmet medical need --
fracture repair and diabetic foot ulcer healing. 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: http://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
September 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 Twelve months As a ending ending
Development December 31, December 31, Stage Company 8/5/2004 -
Expenses 2005 2004 2005 2004 12/31/2005 Operating Expenses General
and administrative $1,700 $908 $4,910 $3,306 $6,788 Research and
development 6,784 4,953 25,444 17,116 33,524 CPM divestiture and
related gains -- (75) (250) (347) (375) CBI in process research and
development -- -- -- 25,840 25,840 Total operating expenses 8,484
5,786 30,104 45,915 65,777 Interest income, net 734 514 2,640 1,464
3,391 Loss from continuing operations (7,750) (5,272) (27,464)
(44,451) (62,386) Income tax Benefit (96) (300) (108) (642) (750)
Net loss from continuing operations (7,654) (4,972) (27,356)
(43,809) (61,636) Discontinued Operations Net gain on the sale of
the bone device business, net of taxes of $96, $0, $96, ($363),
($267) respectively 154 -- 154 2,048 2,202 Net income from
discontinued operations 154 -- 154 2,048 2,202 Net loss ($7,500)
($4,972) ($27,202) ($41,761) ($59,434) Per Share Information: Net
Loss from continuing operations Basic ($0.20) ($0.13) ($0.72)
($1.22) Diluted ($0.20) ($0.13) ($0.72) ($1.22) Net Income from
discontinued operations Basic $0.00 $0.00 $0.00 $0.06 Diluted $0.00
$0.00 $0.00 $0.06 Net Loss Basic ($0.20) ($0.13) ($0.72) ($1.16)
Diluted ($0.20) ($0.13) ($0.72) ($1.16) Basic and diluted shares
outstanding 38,073 38,000 38,032 35,899 ORTHOLOGIC CORP. (A
Development Stage Company) BALANCE SHEETS (in thousands)
(Unaudited) ASSETS December 31, December 31, 2005 2004 Current
assets Cash and cash equivalents $35,111 $38,377 Short-term
investments 46,437 53,642 Prepaids and other current assets 857
1,053 Total current assets 82,405 93,072 Furniture and equipment,
net 525 478 Escrow receivable, net -- 6,828 Long-term investments
2,084 11,558 Deferred income taxes - non-current 1,106 1,106
Trademarks and Patents 2,223 2,142 Total assets $88,343 $115,184
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts
payable $1,036 $833 Accrued compensation 711 648 Accrued property
taxes 119 114 Excess space reserve 87 559 Accrued clinical 544
1,236 Accrued severance and other restructuring costs 602 -- Other
accrued liabilities 883 727 Total current liabilities 3,982 4,117
Deferred rent and capital lease obligation 65 137 Non current
portion of excess space reserve 81 -- Other non-current liabilities
37 -- Total liabilities 4,165 4,254 Stockholders' Equity Common
Stock $.0005 par value; 19 19 100,000,000 and 50,000,000 shares
authorized; 38,124,742 and 38,011,642 shares issued and outstanding
Additional paid-in capital 171,355 170,905 Accumulated deficit
(87,196) (59,994) Total stockholders' equity 84,178 110,930 Total
liabilities and stockholders' equity $88,343 $115,184 DATASOURCE:
OrthoLogic Corp. CONTACT: Les Taeger, Chief Financial Officer of
OrthoLogic Corp., +1-602-286-5414; or Melanie Friedman of Stern
Investor Relations, Inc., +1-212-362-1200, for OrthoLogic Corp. Web
site: http://www.orthologic.com/
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