Medgenics second quarter net loss increases to $2.32 million

Aug 12 2011

Medgenics, Inc. (NYSE Amex: MDGN and AIM: MEDU, MEDG) (the "Company"), the developer of a novel technology for the sustained production and delivery of therapeutic proteins in patients using their own tissue, today reported financial results for the three and six months ended June 30, 2011 and the filing with the U.S. Securities and Exchange Commission of the Company's Quarterly Report on Form 10-Q. The Form 10-Q includes unaudited interim consolidated financial statements containing the information highlighted below, as well as additional information regarding the Company. The Form 10-Q is available at www.sec.gov or www.medgenics.com.

Second Quarter Financial Results

The Company's net research and development expense for the second quarter of 2011 was $1.04 million, compared with $0.40 million for the second quarter of 2010. This increase is due to costs associated with the ongoing Phase I/II clinical trial with EPODURE, preparation of INFRADURE for a Phase I/II clinical trial, further development of HEMODURE to produce Factor VIII and decreases in participations in R&D costs by third parties, partially offset by increases to participations in R&D costs from the Israeli Office of the Chief Scientist.

General and administrative expense for the second quarter of 2011 increased to $1.05 million from $0.44 million for second quarter of 2010, due primarily to higher professional fees.

The net loss for the second quarter of 2011 was $2.32 million or $0.26 per share, compared with a net loss of $1.95 million or $0.47 per share for the second quarter of 2010.

Six Month Financial Results

For the six months ended June 30, 2011 net research and development expense increased to $2.22 million from $0.70 million for the comparable prior-year period due to ongoing clinical development of the Biopump™ platform, partially offset by increases to participations in R&D costs from the Israeli Office of the Chief Scientist. General and administrative expense for the first six months of 2011 was $1.83 million compared with $1.11 million for the first six months of 2010, with the increase due primarily to higher professional fees. The Company's net loss for the first six months of 2011 was $2.66 million or $0.37 per share, compared with a net income of $0.35 million or $0.09 per share for the same period of 2010.

Medgenics ended the second quarter of 2011 with $10.12 million in cash and cash equivalents, compared with $2.86 million as of December 31, 2010. In April 2011, the Company raised $13.2 million of gross proceeds (approximately $10.4 million net) in its U.S. initial public offering ("IPO").

Commenting on the second quarter, Andrew L. Pearlman, Ph.D., President and Chief Executive Officer of Medgenics, said, "We were heartened by the positive investment community response as we successfully completed our IPO in the U.S., raising approximately $10.4 million (net) in equity capital. These funds will support the ongoing development of our proprietary Biopump technology platform for the sustained manufacture and delivery of therapeutic proteins in patients using their own dermis tissue."

Source Medgenics