TEMPE, Ariz., March 5, 2008 (PRIME NEWSWIRE) -- OrthoLogic Corp. (Nasdaq:OLGC) today announced operating results for the year ended December 31, 2007. The Company also announced that its Board of Directors has approved a stock repurchase program for up to five percent of its currently outstanding common shares. The shares may be repurchased from time to time in open market transactions or privately negotiated transactions at the Company's discretion, subject to market conditions and other factors. At February 29, 2008, there were approximately 41.8 million shares of common stock outstanding.
OrthoLogic reported a net loss for the year ended December 31, 2007 of $10.1 million, or $0.24 per share, compared to a net loss of $31.9 million, or $0.78 per share, for the year ended December 31, 2006. The $21.8 million decrease in net loss in 2007 compared to the same period in 2006 resulted primarily from the following: $8.5 million purchased in-process research and development costs in 2006; a decrease of $2.0 million in non-cash stock compensation expense; reduced costs in 2007 reflecting management changes and staff reductions occurring in the first half of 2006; a $5.5 million decline in clinical costs related to the Company's fracture repair Phase 3 and Phase 2b clinical trials, which were substantially completed as of December 31, 2006; a Chrysalin product platform patent impairment loss of $2.1 million recorded in 2006, and the recognition in 2006 of income tax expense related to the recording of a valuation allowance of $1.1 million for a deferred tax asset related to an Alternative Minimum Tax credit carryover.
The Company began 2007 with $70.2 million in cash and investments and ended the year with $60.6 million in cash and investments, a net change of $9.6 million versus original guidance of $18.0 million to $19.0 million and revised guidance of $12.0 million. For 2008, the Company forecasts a cash burn of $16.0 million to $18.0 million.
Conference Call Information
Management will host a conference call and webcast on Wednesday, March 5, 2008 at 1:30 pm PST/2:30 pm MST/4:30 pm EST. The call may be accessed at 877-440-5784 (domestic), 719-325-4928 (international), or by logging onto the "Investors" section of the Company's website, www.orthologic.com. An accompanying slide set entitled "OLGC YE2007 Operating Results 05-Mar-2008.pdf" can be accessed via the "Corporate Presentation" tab in the "Investors" section of the website.
A replay will be available beginning March 5, 2008 at 7:30 PM EST until midnight March 7, 2008 and may be accessed at 888-203-1112 (domestic) or 719-457-0820 (international) with access code 4224965.
About OrthoLogic
OrthoLogic is a biotechnology company committed to developing a pipeline of novel therapeutic peptides aimed at helping patients with under-served medical conditions. The Company is focused on development and commercialization of two product platforms: AZX100 and Chrysalin(r) (TP508).
AZX100 is a novel synthetic clinical-stage 24-amino acid peptide, one of a new class of compounds in the field of smooth muscle relaxation and fibrosis. Based on its demonstrated effects in pre-clinical models, AZX100 is currently being evaluated for commercially significant medical applications such as the treatment of pulmonary disease, intimal hyperplasia and the prevention of hypertrophic and keloid scarring. OrthoLogic has an exclusive worldwide license to AZX100.
Chrysalin, the Company's novel synthetic 23-amino acid peptide, has been proven in multiple pre-clinical and clinical models to stimulate cellular events leading to angiogenesis, revascularization, and repair of dermal and musculoskeletal tissues. It is being studied in disorders that involve vascular endothelial dysfunction. The Company owns exclusive worldwide rights to Chrysalin.
OrthoLogic's corporate headquarters are in Tempe, Arizona. For more information, please visit the Company's website: www.orthologic.com.
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 pre-clinical or clinical testing; unfavorable outcomes in our pre-clinical 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 possible need for additional capital in the future to fund the continued development of our product candidates; and other factors discussed in our Form 10-K for the fiscal year ended December 31, 2007, and other documents we file with the Securities and Exchange Commission.
Editors' Note: This press release is also available under the Investors section of the Company's Web site at www.orthologic.com.
ORTHOLOGIC CORP. (A Development Stage Company) BALANCE SHEETS (in thousands, except share and per share data) December 31, -------------------- 2007 2006 --------- --------- ASSETS Current assets Cash and cash equivalents $ 20,943 $ 18,047 Short-term investments 18,236 35,977 Prepaids and other current assets 906 1,950 --------- --------- Total current assets 40,085 55,974 Furniture and equipment, net 318 409 Long-term investments 21,459 16,206 --------- --------- Total assets $ 61,862 $ 72,589 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 702 $ 1,621 Accrued compensation 658 584 Accrued clinical 1 133 Accrued severance and other restructuring costs 166 366 Other accrued liabilities 874 737 --------- --------- Total current liabilities 2,401 3,441 Stockholders' Equity Common Stock $.0005 par value; 21 21 100,000,000 shares authorized; 41,758,065 and 41,564,291 shares issued and outstanding Additional paid-in capital 189,013 188,236 Accumulated deficit (129,573) (119,109) --------- --------- Total stockholders' equity 59,461 69,148 --------- --------- Total liabilities and stockholders' equity $ 61,862 $ 72,589 ========= ========= ORTHOLOGIC CORP. (A Development Stage Company) STATEMENTS OF OPERATIONS (in thousands, except per share data) As a Years Ended December 31, Development ------------------------- Stage Company August 5, 2004 - 2007 2006 2005 December 31, 2007 ------- ------- ------- ----------------- OPERATING EXPENSES General and administrative $ 3,738 $ 6,558 $ 4,910 $ 17,084 Research and development 9,641 19,661 25,444 62,826 Purchased in-process research and development 8,471 -- 34,311 Other gains (250) (375) ------- ------- ------- ----------------- Total operating expenses 13,379 34,690 30,104 113,846 Interest and other income, net (3,278) (3,883) (2,640) (10,552) ------- ------- ------- ----------------- Loss from continuing operations before taxes 10,101 30,807 27,464 103,294 Income tax expense (benefit) 1,106 (108) 356 ------- ------- ------- ----------------- Loss from continuing operations 10,101 31,913 27,356 103,650 Discontinued operations - net gain on the sale of the bone device business, net of taxes of $0, $0, $96, ($267) respectively -- -- (154) (2,202) ------- ------- ------- ----------------- NET LOSS $10,101 $31,913 $27,202 $ 101,448 ------- ------- ------- ----------------- Per Share Information: Net loss, basic and diluted $ 0.24 $ 0.78 $ 0.72 ======= ======= ======= Basic and diluted shares outstanding 41,644 40,764 38,032 ------- ------- ------- ORTHOLOGIC CORP. (A Development Stage Company) STATEMENTS OF CASH FLOWS (in thousands) As a Development Stage Company August 5, 2004 - Years Ended December 31, December 31, 2007 2006 2005 2007 ---------------------------------------------------------------------- OPERATING ACTIVITIES Net loss $(10,101) $(31,913) $(27,202) $ (101,448) Non Cash items: Deferred tax expense -- 1,106 -- 770 Depreciation and amortization 169 2,833 392 3,434 Non-cash stock compensation 777 2,781 162 3,720 Gain on sale of bone device business -- -- (250) (2,298) In-process research and development -- 8,471 -- 34,311 Change in other operating items: -- Prepaids and other current assets 1,044 (1,094) 424 803 Accounts payable (919) 334 203 (269) Accrued liabilities (384) (1,422) (294) (1,317) -------- -------- -------- ------------- Cash flows used in operating activities (9,414) (18,904) (26,565) (62,294) -------- -------- -------- ------------- INVESTING ACTIVITIES Expenditures for furniture and equipment, net (178) (196) (268) (693) Proceeds from sale of assets -- -- 7,000 7,000 Cash paid for assets of AzERx/CBI -- (390) -- (4,058) Cash paid for patent assignment rights -- (250) (400) (650) Purchases of investments (51,395) (56,509) (48,823) (197,289) Maturities of investments 63,883 52,847 65,502 215,532 -------- -------- -------- ------------- Cash flows provided by (used in) investing activities 12,310 (4,498) 23,011 19,842 -------- -------- -------- ------------- FINANCING ACTIVITIES Net proceeds from stock option exercises -- 2,962 288 4,612 Net proceeds from sale of stock -- 3,376 -- 3,376 -------- -------- -------- ------------- Cash flows provided by financing activities -- 6,338 288 7,988 -------- -------- -------- ------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,896 (17,064) (3,266) (34,464) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 18,047 35,111 38,377 55,407 -------- -------- -------- ------------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 20,943 $ 18,047 $ 35,111 $ 20,943 ======== ======== ======== ============= Supplemental Disclosure of Non-Cash Investing Activities AzERx / CBI Acquisitions Current assets acquired $ -- $ -- $ -- $ 29 Patents acquired -- -- -- 2,142 Liabilities acquired, and accrued acquisition costs -- (317) -- (457) Original investment reversal -- -- -- (750) In-process research and development acquired -- 8,471 -- 34,311 Common stock issued for acquisitions -- (7,764) -- (31,217) -------- -------- -------- ------------- Cash paid for acquisitions $ -- $ 390 $ -- $ 4,058 ======== ======== ======== =============