Hologic to Remove Adiana Permanent Contraception System From the Market
2012 Financial Guidance Updated
MOUNTAIN VIEW, Calif., April 30, 2012 (GLOBE NEWSWIRE) -- Conceptus, Inc. (Nasdaq:CPTS), developer of the Essure® procedure, the leading non-surgical permanent birth control method, today announced that it has reached an agreement with Hologic, Inc. (Nasdaq:HOLX) to settle the ongoing patent infringement litigation related to Hologic's Adiana Permanent Contraception System. The settlement agreement resolves all outstanding litigation between Conceptus and Hologic.
Under the terms of the settlement agreement, Hologic has agreed to remove its Adiana system from the worldwide permanent birth control market by May 18, 2012. In addition, Conceptus has relieved Hologic of the $18.8 million payment for monetary damages awarded to Conceptus as part of the October 17, 2011 jury verdict. Both companies have agreed to withdraw their respective appeals. In February, Conceptus had filed an appeal to overturn the court's ruling denying its motion for permanent injunction against the sale of Hologic's Adiana system, and Hologic had filed an appeal of the jury's finding of patent validity and infringement. Hologic has also agreed to withdraw its False Patent Marking claims filed in 2009 in the United States District Court for Massachusetts. Furthermore, both parties will file with the United States District Court for Northern California appropriate motions seeking a consent judgment to the voluntary injunction of Hologic's sale of the Adiana product within the next 30 days. Lastly, Conceptus will receive non-exclusive licensing rights to the technology related to Hologic's Adiana system, limited to use in the field of permanent birth control. While Conceptus has been granted these rights, it does not intend to market the Adiana system.
"We are pleased to reach this settlement agreement with Hologic, which we believe is in the best interests of Conceptus, its employees and shareholders, as well as the market and its physicians and patients," said D. Keith Grossman, president and chief executive officer of Conceptus. "Essure is the leading hysteroscopic permanent birth control procedure, allowing women to achieve highly reliable permanent birth control without the risks and recovery time associated with surgical tubal ligation. We believe that the settlement with Hologic will allow us to expand our distribution and increase the overall availability and usage of Essure. This is an important and significant achievement for our company as we advance our vision of making Essure the standard of care in permanent birth control for women and position Conceptus for long-term growth."
Update on Financial Guidance
As a result of this agreement, Conceptus now expects 2012 net sales to be in the range of $140 million to $144 million, or an increase of $5 million compared to previously announced expectations of 2012 net sales of $135 million to $139 million. The Company expects 2012 adjusted EBITDA to be in the range of $26 million to $28 million, or an increase of $3 million compared to previously announced expectations of 2012 adjusted EBITDA of $23 million to $25 million.
"We will be reaching out immediately to service the needs of all of those customers who have been using or trialing the Adiana product. However, given the lack of transparency as to the utilization intentions of those customers, and their current Adiana inventory, we want to be cautious in setting sales expectations for this year," stated Mr. Grossman. "Once we get beyond the initial evaluation period, we will be in a better position to evaluate the impact upon our business, but we believe that this development will improve our growth rates extending into 2013."
Use of Non-GAAP Financial Measures
The Company has supplemented its GAAP net income/loss with a non-GAAP measure of adjusted EBITDA. Management believes that this non-GAAP financial measure provides useful supplemental information to management and investors regarding the performance of the Company, facilitates a more meaningful comparison of results for current periods with previous operating results, and assists management in analyzing future trends, making strategic and business decisions and establishing internal budgets and forecasts. A reconciliation of non-GAAP adjusted EBITDA to GAAP net income/loss in the most directly comparable GAAP measure is provided in the schedule below.
There are limitations in using this non-GAAP financial measure because it is not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. This non-GAAP financial measure should not be considered in isolation or as a substitute for GAAP financial measures. Investors and potential investors should consider non-GAAP financial measures only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP and the reconciliations of the non-GAAP financial measure provided in the schedule below.
About the Essure® Procedure
The Essure procedure, FDA approved since 2002, is the first permanent birth control method that can be performed in the comfort of a physician's office in less than 10 minutes (average hysteroscopic time) without hormones, cutting, burning or the risks associated with general anesthesia or tubal ligation. Soft, flexible inserts are placed in a woman's fallopian tubes through the cervix without incisions. Over the next three months, the body forms a natural barrier around and through the inserts to prevent sperm from reaching the egg. Three months after the Essure procedure, a doctor is able to perform an Essure Confirmation Test to confirm that the inserts are properly placed and that the fallopian tubes are fully blocked, allowing the patient to rely upon Essure for permanent birth control.
The Essure procedure is 99.83% effective based on five years of follow up with zero pregnancies reported in clinical trials, making it the most effective form of permanent birth control on the market. Essure's 10-year commercial data tracks closely with its five-year clinical results, and Essure has been proven and trusted by physicians since 2002. The Essure procedure is covered in the U.S. by most public and private insurance plans and more than 625,000 women worldwide have undergone the procedure.
About Conceptus®, Inc.
Conceptus, Inc. is a leader in the design, development and marketing of innovative solutions in women's healthcare. The Company manufactures and markets the Essure procedure. The Essure procedure is available in the United States, Europe, Australia, New Zealand, Canada, Mexico, Central and South America and the Middle East.
Please visit www.essure.com for more information on the Essure procedure. Patients may call the Essure Information Center at 1-877-ESSURE-1 with questions or to find a physician in their area.
The Conceptus, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7961
Forward Looking Statements
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, the accuracy of which is subject to known and unknown risks and uncertainties. These forward-looking statements include, without limitation, discussions regarding projected net sales and adjusted earnings before interest, taxes, depreciation, amortization and stock-based compensation ("adjusted EBITDA") for the full year 2012, and our ability to successfully expand the distribution and increase the overall availability of the Essure procedure as a result our settlement agreement with Hologic Inc. These discussions and other forward-looking statements included herein may differ significantly from actual results. Such differences may be based upon factors such as changes in strategic planning decisions by management, re-allocation of internal resources, changes in the impact of domestic and global macroeconomic pressures, reimbursement decisions by insurance companies and domestic and foreign governments, scientific advances by third parties, litigation risks, and attempts to amend or repeal all or part of the Patient Protection and Affordable Care Act of 2010 as amended, as well as those factors set forth in the Company's most recent Annual Report on Form 10-K and most recent Quarterly Report on Form 10-Q, and other filings with the Securities and Exchange Commission. These forward-looking statements speak only as to the date on which the statements were made. The Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.
| Conceptus, Inc. | ||
| Reconciliation of Forward-Looking Guidance For Non-GAAP Financial Measures | ||
| To Projected GAAP Net Income | ||
| (Unaudited) | ||
| Twelve Months Ending | ||
| December 31, 2012 | ||
| From | To | |
| Net Income Guidance | $ 3,032 | $ 4,125 |
| Adjustments to net income: | ||
| Interest and other income (expense), net (a) | 4,440 | 4,440 |
| Provision for income taxes | 2,469 | 3,376 |
| Amortization of intangibles (b) | 3,631 | 3,631 |
| Stock-based compensation (c) | 6,925 | 6,925 |
| Depreciation expense (d) | 5,503 | 5,503 |
| Adjustments to net income | 22,968 | 23,875 |
| Adjusted EBITDA | $ 26,000 | $ 28,000 |
| (a) Consists of interest from available-for-sale securities, interest expense associated with our | ||
| convertible debt and foreign exchange currency transactions | ||
| (b) Consists of amortization of intangible assets, primarily licenses and customer relationships | ||
| (c) Consists of stock-based compensation in accordance with ASC 718 | ||
| (d) Consists of depreciation, primarily on property, plant and equipment | ||
© 2012 Conceptus, Inc. – All rights reserved.