WAYNE, Pa. and MISGAV, Israel, May 8, 2014 (GLOBE NEWSWIRE) -- Medgenics, Inc. (NYSE MKT:MDGN), the developer of a novel platform technology for the sustained production and delivery of therapeutic proteins in patients using ex-vivo gene therapy and their own tissue for the treatment of rare and orphan diseases, today reported financial results for the three months ended March 31, 2014 and the filing with the U.S. Securities and Exchange Commission (SEC) of the Company's Quarterly Report on Form 10-Q.
First Quarter 2014 and Recent Highlights
- Medgenics's wholly owned subsidiary, Medgenics Medical Israel, Ltd., was awarded a $2.2 million grant from the Office of the Chief Scientist (OCS) at the Ministry of Industry, Trade and Labor of Israel for the continued development of the Company's BioPump™ platform technology for the treatment of rare and orphan diseases, and anemia.
- Medgenics' shareholders approved the cancellation of the Company's admission to the London Stock Exchange Alternative Investment Market (AIM) at the Annual Meeting of Stockholders held on April 8, 2014.
Management Commentary
"This first quarter of 2014 has been a productive one for us. With our new management team in place, we have focused our attention on our clinical development platform and have further evolved our pipeline strategy towards identifying and evaluating BioPump targets in the rare and orphan disease market," stated Michael Cola, President and Chief Executive Officer of Medgenics. "We are excited by the progress we have made so far in developing the BioPump platform and expect to initiate our EPODURE trial in the second quarter of 2014. We are likewise pleased with the advancement of the multiple preclinical programs that represent our ongoing strategic shift into the rare and orphan disease space."
First Quarter 2014 Financial Results
Gross and net research and development expense for the three months ended March 31, 2014 increased to $2.15 million from $2.03 million for same period in 2013. This increase was due mainly to increased stock-based compensation expenses related to options granted to research and development personnel.
General and administrative expense for the three months ended March 31, 2014 was $3.09 million, up from $2.55 million for the same period in 2013 primarily due to an increase in personnel and increased stock-based compensation expenses related to options granted to general and administrative personnel.
Financial expense for the three months ended March 31, 2014 increased to $0.12 million from $0.01 million for the same period in 2013, mainly due to the change in valuation of the warrant liability.
Financial income for the three months ended March 31, 2014 was de minimis, decreasing from $0.92 million for the same period in 2013. The decrease was primarily due to the change in valuation of the warrant liability.
For the three months ended March 31, 2014, the Company reported a net loss of $5.36 million or $0.28 per share, compared with a net loss of $3.68 million or $0.24 per share for the three months ended March 31, 2013.
About Medgenics
Medgenics is developing and commercializing BioPump™, a proprietary platform for the sustained production and delivery of therapeutic proteins using ex-vivo gene therapy and the patient's own tissue for the treatment of orphan and rare diseases. For more information, please visit www.medgenics.com.
Forward-looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and as that term is defined in the Private Securities Litigation Reform Act of 1995, which include all statements other than statements of historical fact, including (without limitation) those regarding the Company's financial position, its development and business strategy, its product candidates and the plans and objectives of management for future operations. The Company intends that such forward-looking statements be subject to the safe harbors created by such laws. Forward-looking statements are sometimes identified by their use of the terms and phrases such as "estimate," "project," "intend," "forecast," "anticipate," "plan," "planning, "expect," "believe," "will," "will likely," "should," "could," "would," "may" or the negative of such terms and other comparable terminology. All such forward-looking statements are based on current expectations and are subject to risks and uncertainties. Should any of these risks or uncertainties materialize, or should any of the Company's assumptions prove incorrect, actual results may differ materially from those included within these forward-looking statements. Accordingly, no undue reliance should be placed on these forward-looking statements, which speak only as of the date made. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. As a result of these factors, the events described in the forward-looking statements contained in this release may not occur.
Tables to Follow
| MEDGENICS, INC. AND ITS SUBSIDIARY | ||
| (A Development Stage Company) | ||
| CONSOLIDATED BALANCE SHEETS | ||
| U.S dollars in thousands (except share and per share data) | ||
|
March 31, 2014 |
December 31, 2013 |
|
| Unaudited | ||
| ASSETS | ||
| CURRENT ASSETS: | ||
| Cash and cash equivalents | $ 19,141 | $ 22,390 |
| Accounts receivable and prepaid expenses | 632 | 202 |
| Total current assets | 19,773 | 22,592 |
| LONG-TERM ASSETS: | ||
| Restricted lease deposit | 42 | 42 |
| Severance pay fund | 99 | 96 |
| Property and equipment, net | 337 | 357 |
| Total long-term assets | 478 | 495 |
| Total assets | $ 20,251 | $ 23,087 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| CURRENT LIABILITIES: | ||
| Trade payables | $ 879 | $ 1,062 |
| Other accounts payable and accrued expenses | 1,998 | 1,952 |
| Total current liabilities | 2,877 | 3,014 |
| LONG-TERM LIABILITIES: | ||
| Accrued severance pay | 459 | 439 |
| Liability in respect of warrants | 1,321 | 1,211 |
| Total long-term liabilities | 1,780 | 1,650 |
| Total liabilities | 4,657 | 4,664 |
| STOCKHOLDERS' EQUITY: | ||
| Common stock--$0.0001 par value; 100,000,000 shares authorized; 18,751,591 and 18,497,307 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively | 2 | 2 |
| Additional paid-in capital | 102,654 | 100,126 |
| Deficit accumulated during the development stage | (87,062) | (81,705) |
| Total stockholders' equity | 15,594 | 18,423 |
| Total liabilities and stockholders' equity | $ 20,251 | $ 23,087 |
| MEDGENICS, INC. AND ITS SUBSIDIARY | ||||
| (A Development Stage Company) | ||||
| CONSOLIDATED STATEMENTS OF LOSS | ||||
| US Dollars in thousands (except share and per share data) | ||||
|
Three months ended, March 31, |
Period from January 27, 2000 (inception) through March 31, |
|||
| 2014 | 2013 | 2014 | ||
| Unaudited | ||||
| Research and development expenses | $ 2,142 | $ 2,031 | $ 48,641 | |
| Less: | ||||
| Participation by the Office of the Chief Scientist | -- | -- | (8,622) | |
| U.S. Government Grant | -- | -- | (244) | |
| Participation by third party | -- | -- | (1,067) | |
| Research and development expenses, net | 2,142 | 2,031 | 38,708 | |
| General and administrative expenses | 3,093 | 2,546 | 47,209 | |
| Other income: | ||||
| Excess amount of participation in research and development from third party | -- | -- | (2,904) | |
| Operating loss | (5,235) | (4,577) | (83,013) | |
| Financial expenses | (120) | (14) | (4,728) | |
| Financial income | 3 | 915 | 367 | |
| Loss before taxes on income | (5,352) | (3,676) | (87,374) | |
| Taxes on income | 5 | 3 | 117 | |
| Loss | $ (5,357) | $ (3,679) | $ (87,491) | |
| Basic loss per share | $ (0.28) | $ (0.24) | ||
| Diluted loss per share | $ (0.28) | $ (0.29) | ||
| Weighted average number of shares of Common stock used in computing basic loss per share | 18,872,001 | 15,222,268 | ||
| Weighted average number of shares of Common stock used in computing diluted loss per share | 18,872,001 | 15,634,768 | ||