WAYNE, Pa. and MISGAV, Israel, July 16, 2014 (GLOBE NEWSWIRE) -- Medgenics, Inc. (NYSE MKT:MDGN) (the Company), 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 and six months ended June 30, 2014 and the filing with the U.S. Securities and Exchange Commission (SEC) of the Company's Quarterly Report on Form 10-Q. The Form 10-Q includes unaudited interim consolidated financial statements containing the information presented below, as well as additional information regarding the Company. The Form 10-Q is available at www.sec.gov and at www.medgenics.com.
Highlights of the second quarter include:
- The successful enrollment of the first patient in the company's Phase 1/2 clinical trial of MDGN-201 (EPODURETM). The aim of the trial is to validate the potential of the Company's BioPump™ platform using a second generation vector, which was developed to enhance durability of the proposed therapeutic effect. The study will evaluate the potential of the updated platform to offer sustained production and delivery of erythropoietin (EPO) to treat anemia in dialysis patients with end-stage renal disease (ESRD) or chronic kidney disease (CKD).
- The initiation of multiple preclinical programs in rare and orphan diseases. The company anticipates having preclinical proof-of-concept data for several of the programs in the second half of 2014.
- Garry Neil, M.D., Global Head, Research and Development, being awarded the Food and Drug Administration (FDA) Commissioner's Special Citation. The Citation was established as an expression of the Commissioner's personal appreciation, recognizing outstanding and significant service in the public interest related to activities of the FDA. Dr. Neil has been extensively involved with many aspects of FDA policy work, including his work with the Reagan-Udall Foundation for the FDA.
Management Commentary
"We are pleased with the tremendous progress our research and development group has made on several fronts," stated Michael Cola, President and Chief Executive Officer of Medgenics. "The initiation of the EPODURE trial is an important step toward validating the capability of the BioPump platform to deliver sustained, physiologically relevant levels of protein production. Achieving this milestone while simultaneously progressing several programs in rare and orphan diseases represents a significant achievement. We look forward to providing data from the MDGN-201 study, as well as our ongoing preclinical programs, later this year."
Second Quarter Financial Results
Gross research and development (R&D) expenses for the three months ended June 30, 2014 decreased to $1.96 million from $2.07 million for same period in 2013. This decrease was due mainly to deferred expenses. Net R&D expenses for the three months ended June 30, 2014 decreased to $0.77 million from $0.86 million for the same period in 2013. The decrease in net R&D expenses was due to the decrease in gross R&D expenses offset in part by the participation by the Israel Office of the Chief Scientist (OCS) of $1.18 million in the three months ended June 30, 2014, compared with $1.22 million in the same period in 2013.
General and administrative expenses for the three months ended June 30, 2014 were $2.86 million, up from $1.59 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 and consulting services.
Financial expenses for the quarter ended June 30, 2014 increased to $0.22 million from $0.03 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 June 30, 2014 was $0.02 million, decreasing from $0.37 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 June 30, 2014, the Company reported a net loss of $3.84 million or $0.21 per share, compared with a net loss of $2.10 million or $0.11 per share for the same period in 2013.
Six Months Financial Results
Gross R&D expenses for the six months ended June 30, 2014 were $4.10 million, similar to the comparative period in 2013. Net R&D expenses for the six months ended June 30, 2014 increased to $2.92 million from $2.89 million for the same period in 2013 due to a decrease of $0.04 million in the participation by the OCS.
General and administrative expenses for the six months ended June 30, 2014 were $5.96 million, up from $4.13 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 expenses for the six months ended June 30, 2014 increased to $0.34 million from $0.04 million for the same period in 2013, mainly due to the change in valuation of the warrant liability.
Financial income for the six months ended June 30, 2014 was $0.02, decreasing from $1.29 million for the same period in 2013. The decrease was primarily due to the change in valuation of the warrant liability.
For the second quarter of 2014 the Company reported a net loss of $9.20 million or $0.49 per share, compared with a net loss of $5.78 million or $0.34 per share for the second quarter of 2013.
About Medgenics
Medgenics is developing and commercializing BioPump™, a proprietary platform for the sustained production and delivery of therapeutic proteins and peptides 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.
| MEDGENICS, INC. AND ITS SUBSIDIARY | ||||
| CONSOLIDATED BALANCE SHEETS | ||||
| U.S dollars in thousands (except share and per share data) | ||||
| June 30, | December 31, | |||
| 2014 | 2013 | |||
| Unaudited | ||||
| ASSETS | ||||
| CURRENT ASSETS: | ||||
| Cash and cash equivalents | $ 16,429 | $ 22,390 | ||
| Accounts receivable and prepaid expenses | 997 | 202 | ||
| Total current assets | 17,426 | 22,592 | ||
| LONG-TERM ASSETS: | ||||
| Restricted lease deposits | 31 | 42 | ||
| Severance pay fund | 102 | 96 | ||
| Property and equipment, net | 492 | 357 | ||
| 625 | 495 | |||
| Total assets | $ 18,051 | $ 23,087 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
| CURRENT LIABILITIES: | ||||
| Trade payables | $ 988 | $ 1,062 | ||
| Other accounts payable and accrued expenses | 1,380 | 1,952 | ||
| Total current liabilities | 2,368 | 3,014 | ||
| LONG-TERM LIABILITIES: | ||||
| Accrued severance pay | 467 | 439 | ||
| Liability in respect of warrants | 1,517 | 1,211 | ||
| Total long-term liabilities | 1,984 | 1,650 | ||
| Total liabilities | 4,352 | 4,664 | ||
| STOCKHOLDERS' EQUITY: | ||||
| Common stock--$0.0001 par value; 100,000,000 shares authorized; 18,808,765 shares issued and 18,805,265 shares outstanding at June 30, 2014; 18,497,307 shares issued and outstanding at December 31, 2013 | 2 | 2 | ||
| Additional paid-in capital | 104,599 | 100,126 | ||
| Accumulated Deficit | (90,902) | (81,705) | ||
| Total stockholders' equity | 13,699 | 18,423 | ||
| Total liabilities and stockholders' equity | $ 18,051 | $ 23,087 | ||
| MEDGENICS, INC. AND ITS SUBSIDIARY | |||||||
| CONSOLIDATED STATEMENTS OF LOSS | |||||||
| US Dollars in thousands (except share and per share data) | |||||||
|
Six months ended, June 30, |
Three months ended, June 30, |
||||||
| 2014 | 2013 | 2014 | 2013 | ||||
| Unaudited | |||||||
| Research and development expenses | $ 4,097 | $ 4,104 | $ 1,955 | $ 2,073 | |||
| Less: | |||||||
| Participation by the Office of the Chief Scientist | (1,182) | (1,218) | (1,182) | (1,218) | |||
| Research and development expenses, net | 2,915 | 2,886 | 773 | 855 | |||
| General and administrative expenses | 5,957 | 4,134 | 2,864 | 1,588 | |||
| Operating loss | (8,872) | (7,020) | (3,637) | (2,443) | |||
| Financial expenses | (337) | (39) | (217) | (25) | |||
| Financial income | 18 | 1,286 | 15 | 371 | |||
| Loss before taxes on income | (9,191) | (5,773) | (3,839) | (2,097) | |||
| Taxes on income | 6 | 5 | 1 | 2 | |||
| Loss | $ (9,197) | $ (5,778) | $ (3,840) | $ (2,099) | |||
| Basic loss per share | $ (0.49) | $ (0.34) | $ (0.21) | $ (0.11) | |||
| Diluted loss per share | $ (0.49) | $ (0.42) | $ (0.21) | $ (0.11) | |||
| Weighted average number of Common stock used in computing basic loss per share | 18,664,544 | 16,850,657 | 18,715,541 | 18,410,951 | |||
| Weighted average number of Common stock used in computing diluted loss per share | 18,664,544 | 16,895,741 | 18,715,541 | 18,410,951 | |||