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BioSphere Medical Reports First Quarter 2006 Financial Results; Revenues Increase 19% to a Record $5.3 Million

Posted on: Thursday, 27 April 2006, 09:01 CDT

BioSphere Medical, Inc. (Nasdaq: BSMD), a medical device company that pioneered the use of bioengineered microspheres to treat uterine fibroids, hypervascularized tumors and vascular malformations, today reported that total revenues for the first quarter of 2006 were a record $5.27 million, compared with total revenues of $4.43 million for the first quarter of 2005, an increase of 19%. In the first quarter of 2006, revenues in the United States were $3.63 million, compared to revenues of $2.92 million in the first quarter of 2005, an increase of 24%. Revenues outside of the United States were $1.64 million for the first quarter of 2006, compared to revenues of $1.51 million in the first quarter of 2005. Global sales of Embosphere(R) Microspheres were $4.43 million in the first quarter of 2006, compared to $3.52 million in the first quarter of 2005, an increase of 26%.

Gross margin was $3.58 million, or 68% of revenues, for the first quarter of 2006, compared to a gross margin of $2.89 million, or 65% of revenues, for the first quarter of 2005.

Selling, general and administrative expenses were $4.03 million for the first quarter of 2006, compared to $3.22 million for the first quarter of 2005. Research and development expenses were $0.45 million for the first quarter of 2006, compared to $0.64 million in the first quarter of 2005.

The net loss applicable to common stockholders for the first quarter of 2006 was $0.90 million, or $0.06 per basic and diluted share. This compares with a net loss of $1.35 million, or $0.09 per basic and diluted share, for the first quarter of 2005. In the first quarter of 2006, $0.18 million, or $0.01 per basic and diluted share, was attributable to a compensation charge related to the adoption of SFAS 123(R) in connection with BioSphere's employee stock incentive plan.

At March 31, 2006, the Company had cash and cash equivalents of $20.7 million.

Richard Faleschini, BioSphere Medical's president and chief executive officer, said, "During the quarter we achieved record revenues, continued to invest in and execute our local marketing efforts, and increased the number of U.S. sales territories. Our recently completed financing is allowing us to focus on developing the market for UFE by communicating the new and, we believe, persuasive clinical data now available to patients and to the medical community. At the 2006 31st Society of Interventional Radiology ("SIR") Annual Scientific Meeting in Toronto, Ontario, Canada, we featured four new products that we are expecting to launch in the coming quarters. "

Significant activities and developments in the first quarter of 2006 and subsequent weeks include:

-- Record revenue growth to $5.27 million, an increase of 19%

compared to the same period last year.

-- At the recent SIR meeting, Dr. James Spies presented his

findings on the long-term durability of UFE procedures done

with BioSphere's Embosphere Microspheres. For the patients

followed for the 3-year term of the study, 83% reported that

their symptoms of pelvic pain and discomfort were greatly

improved, and 69% reported improvement in urinary problems.

84% of patients were moderately or very satisfied with their

outcome. Only 8.3% of patients subsequently required surgery

(seven hysterectomies and one myomectomy). These favorable

results are consistent with previously published outcomes on

UFE.

-- Publication in the January 2006 issue of Fertility and

Sterility - Uterine artery embolization versus myomectomy: a

multicenter comparative study; Goodwin S. et al. This study

included 149 uterine artery embolization (UAE) patients and 60

myomectomy patients with observations at 6 months for both

myoemectomy and UAE patients and 1-year follow up solely for

the UAE patients. Both groups of patients had statistically

significant improvements in uterine fibroids quality of life

scores, menstrual bleeding, uterine volume, and overall

quality of life. Also, the patients had a mean hospital stay -

UAE = 1 day, myomectomy = 2.5 days with a return to normal

activities - UAE = 15 days, myomectomy = 44 days and a return

to work - UAE = 10 days, myomectomy = 37 days.

-- BioSphere's product showcase at SIR which featured its

products under development, including QuadraSphere(TM) (an

absorbing, conforming and expanding embolic which is currently

the subject of a pending 510(k) submission), Sequitor

(TM)(which BioSphere expects will be its next generation

steerable guidewire), the EmboCath(R) Plus Infusion

Microcatheter delivery systems and MR-Embospheres (a

microsphere visible under magnetic resonance imaging). The

Company's MR-Embospheres product candidate was the topic of a

"featured abstract" at the recent SIR meeting and as such

merited not only a presentation but an additional commentary

presentation by one of the physician panelists.

-- At the SIR meeting, the Society issued a position statement,

previously published in the February 2006 issue of the Journal

of Vascular and Interventional Radiology, or JVIR, supporting

the use of chemoembolization, which refers to the use of

embolics that have been injected with chemotherapeutic agents,

for the treatment of liver malignancies. The Society indicates

in the position statement that chemoembolization is accepted

as "a safe, proven, and effective" treatment for patients with

unresectable hepatocellular carcinoma (inoperable primary

liver cancer) and adequate preservation of liver function, it

"has a palliative role for patients with colon carcinoma," and

"it may be useful for patients with hepatic-dominant

metastatic disease from other primary malignancies."

-- In February 2006, the Company completed a placement of

2,075,000 shares of common stock to selected accredited

investors at a price of $7.00 per share, which resulted in net

proceeds of approximately $13.4 million.

-- In March 2006, the Company achieved ISO 13485:2003

certification at its Roissy, France, facility.

The Company will host its quarterly conference call today at 11 AM ET. The number to dial into the call is 1-888-603-7990 or 1-706-679-7298 and the conference ID is 8087781. Please call in approximately ten minutes before the call is scheduled to begin. A live web cast of the conference call will also be available on the BioSphere Medical web site. A replay of this conference call will be available from 2:00 PM ET today through 2:00 PM on May 10, 2006. The replay can be accessed by dialing 1-800-642-1687 or 1-706-645-9291 access code 8087781, or you can visit the "Investor" section of our company web site at www.biospheremed.com.

About BioSphere Medical, Inc.

BioSphere Medical, Inc., a medical device company based in Rockland, Massachusetts, has pioneered and is commercializing minimally invasive diagnostic and therapeutic products based on its proprietary bioengineered microsphere technology. The Company's core technologies, patented bioengineered polymers and manufacturing methods, are used to produce microscopic spherical materials with unique beneficial properties for a variety of medical applications. BioSphere's principal focus is the treatment of symptomatic uterine fibroids using a procedure called uterine fibroid embolization, or UFE. The Company's products continue to gain acceptance in this emerging procedure as well as in a number of other new and established medical treatments.

BioSphere Medical has received clearance in many countries, including the United States, Canada, Australia, the European Community, and Latin America, which allows the Company to sell its products for use in general embolization procedures, including uterine fibroid embolization. The terms uterine fibroid embolization (UFE) and uterine artery embolization (UAE) are generally used interchangeably in the literature. The most common side effect of uterine fibroid embolization (UFE) is "post-embolization syndrome," a collection of symptoms including abdominal pain, discomfort, low-grade fever and nausea. UFE is currently contraindicated for women who are, or who intend to become, pregnant, because the effects of UFE on the ability of a woman to conceive, and to carry a fetus to term, have not been determined.

Cautionary Statement Regarding Forward-Looking Statements - This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding the expectation that market acceptance of UFE and of the Company's products for UFE will increase through the dissemination of clinical and patient data about UFE procedures and the Company's expectations and plans relating to the introduction of new products. The Company uses words such as "plans,""seeks,""projects,""believes,""may,""anticipates,""estimates,""should,""intend," and similar expressions to identify these forward-looking statements. These statements are subject to risks and uncertainties and are based upon the Company's beliefs and assumptions. There are a number of important factors that may affect the Company's actual performance and results and the accuracy of its forward-looking statements, many of which are beyond the Company's control and are difficult to predict. These important factors include, without limitation, risks relating to:

-- the failure of the Company to achieve or maintain necessary

regulatory approvals, either in the United States or

internationally, with respect to the manufacture and sale of

its products and product candidates;

-- the failure of the Company to successfully develop,

commercialize and achieve widespread market acceptance of its

products, including, without limitation, widespread market

acceptance of its lead product, Embosphere(R) Microspheres for

the treatment of UFE;

-- the Company's ability to obtain and maintain patent and other

proprietary protection for its products and product

candidates;

-- the absence of, or delays and cancellations of, product

orders;

-- delays, difficulties or unanticipated costs in the

introduction of new products; competitive pressures;

-- the inability of the Company to raise additional funds in the

near term to finance the development, marketing, and sales of

its products;

-- general economic and market conditions; and

-- the risk factors described in the section titled " Risk

Factors" in the Company's Annual Report on Form 10-K for the

year ended December 31, 2005, as filed by the Company with the

Securities and Exchange Commission, and described in other

filings made by the Company from time to time with the

Securities and Exchange Commission.

In addition, the forward-looking statements included in this press release represent the Company's estimates as of the date of this release. The Company anticipates that subsequent events and developments may cause its forward-looking statements to change. The Company specifically disclaims any obligation or intention to update or revise these forward-looking statements as a result of changed events or circumstances after the date of this press release.

BioSphere Medical, Inc. ---------------------------------------------------------------------- SELECTED FINANCIAL INFORMATION CONSOLIDATED CONDENSED BALANCE SHEETS As of March 31, 2006 and December 31, 2005 (in thousands, unaudited) ---------------------------------------------------------------------- March 31, December 31, 2006 2005 ------------ ------------ ASSETS Cash and cash equivalents $ 20,720 $ 8,774 Accounts receivable, net 4,360 3,521 Inventories 2,393 2,435 Prepaid expenses and other current assets 621 407 Property and equipment, net 809 858 Goodwill 1,443 1,443 Other assets 58 57 ------------ ------------ Total assets $ 30,404 $ 17,495 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable and accrued expenses $ 3,665 $ 4,180 Capital lease obligations 193 228 Stockholders' equity 26,546 13,087 ------------ ------------ Total liabilities and stockholders' equity $ 30,404 $ 17,495 ============ ============ BioSphere Medical, Inc. --------------------------------------------------------------------- CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS For the three months ended March 31, 2006 and 2005 (in thousands, except per share amounts, unaudited) ---------------------------------------------------------------------- Three Months Ended March 31, ------------------- 2006 2005 --------- --------- Revenues $ 5,269 $ 4,429 Costs and expenses: Cost of revenues 1,691 1,541 Research and development 452 643 Sales 1,944 1,503 Marketing 712 617 General, administrative and patent costs 1,374 1,102 --------- --------- Total costs and expenses 6,173 5,406 --------- --------- Loss from operations (904) (977) Other income and expenses, net 131 (248) --------- --------- Net loss (773) (1,225) Preferred stock dividends (128) (121) --------- --------- Net loss applicable to common stockholders $ (901) $ (1,346) ========= ========= Net loss per common share Basic and diluted $ (0.06) $ (0.09) ========= ========= Weighted average common shares outstanding Basic and diluted 15,955 14,391 ========= =========

Source: Business Wire

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