BioMimetic Therapeutics reports net loss of $4.6 million for third quarter 2012

Nov 6 2012

BioMimetic Therapeutics, Inc. (NASDAQ: BMTI) today reported its corporate highlights and financial results as of and for the three and nine months ended September 30, 2012. For the three months ended September 30, 2012, the Company reported a net loss of $4.6 million, or $0.16 per diluted share, compared to a net loss of $7.1 million, or $0.25 per diluted share, for the same period in 2011. For the nine months ended September 30, 2012, the Company reported a net loss of $17.1 million, or $0.61 per diluted share, compared to a net loss of $23.3 million, or $0.83 per diluted share, for the same period in 2011. The Company ended the quarter with $44.3 million of cash, cash equivalents and investments.

Corporate Development Highlights

The following are some of the recent key Company highlights:

• The Company continues to focus on advancing its Augment^® Bone Graft Pre-Market Approval (PMA) application through the FDA review process. In September 2012, the Company amended its PMA to include the results of a study conducted on becaplermin (Regranex^®) to evaluate cancer mortality. The results of the study, presented at the Second Annual Meeting of The American College of Wound & Tissue Repair, indicated no difference in either cancer incidence or cancer mortality in 12,858 matched patients (Regranex vs. no Regranex) who were recorded in the Veterans Affairs and Medicare patient records and followed for up to 11 years to identify new malignancies and cancer-related deaths. Regranex contains the same synthetic protein that is found in Augment, but is topically administered onto open skin sores daily for weeks to months compared to the one-time implantation of Augment during foot and ankle fusion surgery. Given that the same protein therapeutic is used in both Regranex and Augment, the Company believes these data strengthen the case for approval of Augment.
• In June 2012, the Company submitted to the FDA an amendment to its PMA application for Augment Bone Graft for its use as an alternative to autograft in hindfoot and ankle fusion procedures. The amendment provided supplemental information requested by the FDA in a post-panel response letter announced by the Company earlier this year. The FDA is actively reviewing the amendment and has 180 days from the date of the filing to respond, although there can be no assurance that this timeline will not be extended. The Company reiterates guidance for a complete response letter from FDA around year-end and a final approvability decision between April 2013 and January 2014.
• Augment Bone Graft was recently listed on the Australian Private Health Insurance Prostheses List, enabling a full launch into this market in September.
• Following the June release of top-line data from the Canadian registration study comparing Augment^® Injectable Bone Graft to autograft in foot and ankle fusion surgery, the Company recently filed a Device License Application (DLA) with Health Canada for approval to market the product candidate in Canada. The Company also intends to file for approval of Augment Injectable in other countries in the coming months. Additionally, all 105 patients enrolled in the North American randomized controlled clinical trial have completed six months follow-up, the time of the primary endpoint for the study. The patients will continue to be followed to assess safety. If the Company determines it won't re-initiate enrollment, it expects results of the trial will be unblinded and available in the first half of next year.
• The Company has elected to proceed with its Augment^® Chronic Tendinopathy 100 patient dose ranging Phase II clinical trial. A contract research organization has been retained to assist in managing the trial. Patient enrollment is expected to begin in the first half of next year.

"We remain focused on gaining U.S. FDA marketing approval of Augment and accordingly amended our PMA to include compelling findings supporting the safety of rhPDGF-BB which we believe further strengthen the benefit: risk profile of Augment and offer another supporting factor for approval. The FDA is reviewing our submission, and we continue to anticipate additional feedback from the Agency in the coming weeks and a formal letter around year-end," said Dr. Samuel Lynch, president and CEO of BioMimetic Therapeutics. "While we await the FDA's complete response, we believe we are in a position to continue to advance regulatory approvals and subsequent commercialization of Augment in other parts of the world, the commercialization of Augmatrix in the U.S. and our other product development programs such as Augment Injectable Bone Graft and Augment Chronic Tendinopathy in the sports medicine area. If approved by the appropriate regulatory authorities, we believe our deep product pipeline will provide new, effective and less invasive treatment options for the repair of bone, tendons and ligaments, thus helping patients recover from their injuries and improving their quality of life."

Additional Financial Results

As of September 30, 2012, the Company had approximately $15.5 million in cash and cash equivalents and $28.8 million in short-term investments.

For the three and nine months ended September 30, 2012, the Company reported total revenues of $0.7 million and $1.6 million, respectively, consisting of product sales, sublicense fee income and royalty income. This compares to total revenues of $0.4 million and $1.3 million, respectively, recorded for the same periods in 2011.

Research and development expenses totaled $1.9 million for the three months ended September 30, 2012, compared to $3.6 million for the same period in 2011. For the nine months ended September 30, 2012, research and development expenses totaled $7.5 million, compared to $11.5 million for the same period in 2011. Research and development expenses include outside professional services expenses, as well as salaries, wages, benefits, payroll taxes and stock-based compensation expense for internal research and development personnel, and relate to clinical trials of our product candidates in the United States, Canada and the European Union, as well as continuing expenses associated with pre-clinical studies and regulatory filings. The 2012 expenses for manufacturing costs and outside professional services associated with clinical trials, which decreased by a combined $0.6 million and $1.1 million for the three and nine months ended September 30, 2012, respectively, were lower as certain clinical trials and pre-clinical studies have been delayed to allow the Company to conserve resources and focus attention on addressing the Augment PMA. For example, clinical trial expenditures for Augment Injectable have decreased since the Company voluntarily suspended additional screening and enrollment of patients. Salaries, benefits, payroll taxes and stock-based compensation expense in the research and development function decreased by a combined $0.9 million and $2.3 million for the three and nine months ended September 30, 2012, respectively, due to a reduction in staffing. In addition, expenses for general business activities in the research and development function, such as travel, recruiting and relocation and lab supplies, decreased by a combined $0.2 million and $0.6 million for the three and nine months ended September 30, 2012, respectively.

Selling, general and administrative expenses totaled $3.0 million for the three months ended September 30, 2012, compared to $3.6 million for the same period in 2011. For the nine months ended September 30, 2012, selling, general and administrative expenses totaled $10.2 million, compared to $12.3 million for the same period in 2011. The 2012 expenses for selling, general and administrative activities decreased primarily from the Company's efforts to carefully manage expenses and conserve resources given the uncertainty surrounding the FDA review process of its Augment PMA application, offset partially by the Company's sales, marketing and customer service efforts, particularly in connection with the commercial activities for Augment and Augmatrix. The $0.6 million decrease for the three months ended September 30, 2012 resulted from a $0.3 million decrease in salaries, benefits, payroll taxes and stock-based compensation expense due to a reduction in staffing, and a $0.4 million decrease in general business activities in the selling, general and administrative function, such as outside professional services, rent and utilities, dues and subscriptions, recruiting and relocation, repairs and maintenance, and taxes and licenses. These decreases are partially offset by an increase of $0.1 million in sales commissions and milestone expenses during the quarter. The $2.1 million decrease for the nine months ended September 30, 2012 resulted from a $0.5 million decrease in royalty expense, a $0.7 million decrease in outside professional fees, a $0.7 million decrease in salaries, benefits, payroll taxes and stock-based compensation expense due to a reduction in staffing, and a $0.4 million decrease in general business activities in the selling, general and administrative function, such as travel, conferences and seminars, charitable contributions, office supplies, and rent and utilities. These decreases are partially offset by an increase of $0.2 million in sales commissions and milestone expenses during the year.

2012 Financial Guidance

Based on current operating plans, forecasted timing and costs of clinical trials and other product development programs, the Company anticipates its 2012 year-end balance of cash, cash equivalents and investments to range from $32 to $39 million, and anticipates its net cash use for the year will be between $22 and $29 million. Net loss for the year ending December 31, 2012 is forecasted to be in the range of $23 to $30 million.