MedPro Safety Products second quarter net loss decreases to $2.9 million

Aug 23 2011

MedPro Safety Products, Inc. (OTCBB:MPSP), a leading developer of transformational technologies that enable safer medication delivery and blood collection, today reported on several key financial highlights for the second quarter ended June 30, 2011, as well as significant corporate developments.

“We continue to believe that our strategy to work with partners in bringing innovative safety technologies and design for blood collection and infusion devices to market is the best approach to driving awareness and sales of the products”

In the second quarter of 2011, the Company received $631,000 in product royalty income generated under a six-year agreement signed in July 2010 granting manufacturing and distribution rights for three MedPro blood collection and infusion products to a strategic medical products distribution partner. Royalty payments, based on minimum volume commitments, commenced on October 1, 2010 with the first payment received in January 2011. Year to date, product royalty income totaled $781,000. The royalties received from the sale of MedPro's blood collection and infusion products are committed to pay principal and interest to holders of a $30 million Senior Secured Note Offering completed in September 2010.

Operating expenses declined 39% in the second quarter of 2011 compared with the second quarter of 2010. The decrease was driven by a significant reduction in employee salary and compensation expense, the result of lower amortization charges on share-based compensation related to stock options granted to employees and directors in 2008. The net loss of the quarter was $2.9 million, or $0.22 per share, compared with a net loss of $3.4 million, or $0.26 per share, for the second quarter of 2010.

Cash, cash equivalents and restricted cash increased 7% from the end of December 2010 to $13.0 million at June 30, 2011. The increase was largely the result of receipt of a reserve associated with the FDA clearance on the wing device, which totaled $7.9 million, partially offset by a decline in restricted cash reflecting interest payments made to the holders of the senior notes.

"The second quarter product royalty payments represent a good start to our efforts to build sales. We are excited about the future of the product and technology in the marketplace," said W. Craig Turner, Chairman and CEO of MedPro Safety Products. "We anticipate product royalty payments will continue to grow as healthcare professionals become increasingly aware of the benefits of the blood collection product in providing superior safety through a truly passive needlestick prevention feature."

"We continue to believe that our strategy to work with partners in bringing innovative safety technologies and design for blood collection and infusion devices to market is the best approach to driving awareness and sales of the products," continued Mr. Turner. "To that end, we have made substantial progress in recent months in introducing new products and receiving a key regulatory approval, significant milestones in our efforts to attract new partners."

Operational highlights during the second quarter of 2011 include:

• Receipt of CE Mark approval for the sale of the blood collection devices throughout the European Union. This, along with the FDA approval received in 2010, positions the Company well in its efforts to expand the products globally.
• Introduction of the passive hypodermic safety syringe, which incorporates a proprietary safety shield that is automatically released during the administration of medicine, covering the needle as it is removed, and thereby enhancing patient and operator safety.
• Introduction of the pre-filled safety syringe, that contains a precise dose of pharmaceutical stored within a syringe system equipped with MedPro's fully passive safety mechanism, nearly eliminating the risk of needlestick injury.
• Participation in the APIC Annual Educational Conference, where the Company met with many of its target users to learn about their specific safety needs with respect to needlesticks and syringes and to educate them on the benefits of MedPro products.
• Presented the MedPro investment story in Atlanta, South Florida and Denver.

"We are optimistic about the outlook for MedPro, based on the reception that our products have received. We believe our patent-protected technologies are unique. We have a full product pipeline. At $3 billion, the market opportunity is large and we are excited by the interest shown by potential strategic partners. We remain focused on expanding our presence and driving enhanced valuation for our shareholders and we look forward to our continued progress," Mr. Turner concluded.