Orthologic (MM) (NASDAQ:OLGC)
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- Company Sharpens Focus on Lead Development Programs With Top-line Phase 3 Results Expected by April 30, 2006 -
TEMPE, Ariz., Jan. 31 /PRNewswire-FirstCall/ -- OrthoLogic Corp. (NASDAQ:OLGC) today announced financial results for the fourth quarter and full-year ended December 31, 2005.
OrthoLogic reported a net loss of $7.5 million, or $0.20 per share, for the fourth quarter of 2005, compared to a net loss of $5.0 million, or $0.13 per share in the fourth quarter of 2004. For the year ended December 31, 2005, the Company reported a net loss of $27.2 million, or $0.72 per share, compared to a net loss of $41.8 million, or $1.16 per share in 2004. Fourth quarter operating expenses totaled $8.5 million, compared to operating expenses of $5.8 million in the fourth quarter of 2004. For the year, operating expenses decreased to $30.1 million, from $45.9 million in 2004. Fiscal year 2004 expenses from continuing operations included $25.8 million of in-process research and development costs related to the asset acquisition of Chrysalis Biotechnology, Inc. (CBI) on August 5, 2004. Additionally, the activities related to the CBI operations have been included in the operating results of the Company subsequent to the acquisition date.
At December 31, 2005, OrthoLogic had cash, cash equivalents, and investments of $83.6 million.
"2005 was a transforming year for OrthoLogic, as we made significant clinical progress and sharpened our clinical focus on our fracture repair and diabetic foot ulcer programs," stated James M. Pusey, M.D., president and chief executive officer of OrthoLogic. "In 2006 we look forward to directing our efforts to advancing Chrysalin in these indications, starting with data collection and announcement of top-line results for the Phase 3 wrist fracture repair study. We also plan to explore collaborative opportunities to expand our resources and our product portfolio."
2006 Guidance and Financial Expectations
OrthoLogic expects net loss of $37 million and cash burn of $35 million during 2006.
The Company is accelerating the timing for the announcement of top-line Phase 3 results of Chrysalin in distal radius fracture repair, now expected to occur by April 30, 2006, revised from earlier guidance of the first half of the year. The Company also plans to announce the following:
* Completion of enrollment in the Phase 2b study of Chrysalin in distal
radius fracture repair by the end of 2006;
* Initiation of a Phase 2b study of Chrysalin in diabetic foot ulcers in
the second half of 2006.
Recent Highlights
Clinical & Development Update: Enrollment is complete in the Company's Phase 3 trial in patients with unstable and/or displaced distal radius fractures with data collection ongoing and top-line results expected by April 30, 2006. Enrollment is continuing in the Company's Phase 2b dosing trial in the same indication. The Company's diabetic ulcer healing program is progressing toward Phase 2b with engineering studies for gel formulation manufacturing underway. During the fourth quarter, the Company closed its formulation and R&D facility in Galveston, Texas. Chemistry Manufacturing and Controls (CMC) has been relocated to the Company's headquarters in Tempe, Arizona.
Business Update: Earlier this month, OrthoLogic announced the appointment of Les Taeger as Chief Financial Officer. He joined OrthoLogic from CardioTech International, and its predecessor Gish Biomedical, where he was Chief Financial Officer for the last five years. Mr. Taeger has over fifteen years of experience as Chief Financial Officer and has a wide range of financial experience, including in mergers and acquisitions, financing, SEC reporting and compliance and Sarbanes-Oxley Act provisions. Prior to that position, he served in roles that included substantial audit and general financial management responsibilities. He has been a CPA for over twenty-two years.
In the fourth quarter, OrthoLogic appointed Dana B. Shinbaum to the position of Vice President of Business Development. In his new position, Mr. Shinbaum is responsible for identifying, evaluating and negotiating potential in-licensing opportunities, marketing and development partners and other possible collaborations for the company.
"In the last few months, OrthoLogic focused on expanding the capabilities of its management, which included the hiring of two key members of the management team," stated Dr. Pusey. "We believe that these two appointments are integral to our transition into a leading development-stage biopharmaceutical company."
Conference Call Information
As previously announced, management will host a conference call and webcast today at 4:30 p.m. EST (2:30 p.m. MST). To access the call, participants may dial 800-967-7135 (domestic) or 719-457-2626 (international) and provide the access code 4996641.
A replay of the call will be available beginning January 31, 2006, at 7:30 p.m. EST until March 2, 2006, at 12:59 a.m. EST. To access the replay, please dial 888-203-1112 (domestic) or 719-457-0820 (international) and provide the access code 4996641.
Additionally, the conference call will be webcast on the Investor Relations section of the company's website, http://www.orthologic.com/.
About Chrysalin(R)
Chrysalin (TP508) is a synthetic 23-amino acid peptide that represents the receptor-binding domain of the human thrombin molecule, the naturally occurring agent responsible for blood clotting and initiating the natural healing cascade of cellular events responsible for tissue repair -- both soft tissue and bone.
Thrombin acts as a signaling molecule to initiate the early stages of tissue repair. Since all cells contain high-affinity thrombin receptors, it is widely accepted that thrombin plays a larger role in the natural healing cascade than just forming blood clots. Scientists began developing Chrysalin in 1985, when a class of synthetic peptides was developed representing a specific receptor-binding domain of thrombin that activates specific tissue repair signals. Today, OrthoLogic is exclusively developing several drug candidates based on the Chrysalin peptide, which mimic part of the thrombin response without stimulating blood clotting, and therefore have the potential to accelerate the natural healing cascade.
About OrthoLogic
OrthoLogic is a biotechnology company focused on the development and commercialization of the novel synthetic peptide Chrysalin(R) (TP508) in two lead indications, both of which represent areas of significant unmet medical need -- fracture repair and diabetic foot ulcer healing. Based on the Company's pioneering scientific research of the natural healing cascade, OrthoLogic has become the leading company focused on tissue and bone repair. OrthoLogic is committed to developing a pipeline of novel peptides and other molecules aimed at helping patients with equally under-served conditions. The Company maintains exclusive worldwide rights for Chrysalin. OrthoLogic's corporate headquarters are in Tempe, Arizona. For more information, please visit the Company's website: http://www.orthologic.com/.
Forward-Looking Statements
Statements in this press release or otherwise attributable to OrthoLogic regarding our business that are not historical facts are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which include the timing and acceptability of FDA filings and the efficacy and marketability of potential products, involve risks and uncertainties that could cause actual results to differ materially from predicted results. These risks include: delays in obtaining or inability to obtain FDA; institutional review board or other regulatory approvals of preclinical or clinical testing; unfavorable outcomes in our preclinical and clinical testing; the development by others of competing technologies and therapeutics that may have greater efficacy or lower cost; delays in obtaining or inability to obtain FDA or other necessary regulatory approval of our products; our inability to successfully and cost effectively develop or outsource manufacturing and marketing of any products we are able to bring to market; changes in FDA or other regulations that affect our ability to obtain regulatory approval of our products, increase our manufacturing costs or limit our ability to market our products; our inability to raise additional capital in the future needed to fund the continued development of our Chrysalin Product Platform; and other factors discussed in our Form 10-K for the fiscal year ended December 31, 2004, our Form 10-Q for the quarter ended September 30, 2005, and other documents we file with the Securities and Exchange Commission.
ORTHOLOGIC CORP.
(A Development Stage Company)
Statements of Operations
(in thousands, except per share data)
(Unaudited)
Three months Twelve months As a
ending ending Development
December 31, December 31, Stage Company
8/5/2004 -
Expenses 2005 2004 2005 2004 12/31/2005
Operating Expenses
General and
administrative $1,700 $908 $4,910 $3,306 $6,788
Research and
development 6,784 4,953 25,444 17,116 33,524
CPM divestiture
and related gains -- (75) (250) (347) (375)
CBI in process
research and
development -- -- -- 25,840 25,840
Total operating
expenses 8,484 5,786 30,104 45,915 65,777
Interest income,
net 734 514 2,640 1,464 3,391
Loss from
continuing
operations (7,750) (5,272) (27,464) (44,451) (62,386)
Income tax
Benefit (96) (300) (108) (642) (750)
Net loss from
continuing
operations (7,654) (4,972) (27,356) (43,809) (61,636)
Discontinued
Operations
Net gain on
the sale of
the bone device
business, net
of taxes of
$96, $0, $96,
($363), ($267)
respectively 154 -- 154 2,048 2,202
Net income from
discontinued
operations 154 -- 154 2,048 2,202
Net loss ($7,500) ($4,972) ($27,202) ($41,761) ($59,434)
Per Share
Information:
Net Loss from
continuing
operations
Basic ($0.20) ($0.13) ($0.72) ($1.22)
Diluted ($0.20) ($0.13) ($0.72) ($1.22)
Net Income from
discontinued
operations
Basic $0.00 $0.00 $0.00 $0.06
Diluted $0.00 $0.00 $0.00 $0.06
Net Loss
Basic ($0.20) ($0.13) ($0.72) ($1.16)
Diluted ($0.20) ($0.13) ($0.72) ($1.16)
Basic and
diluted shares
outstanding 38,073 38,000 38,032 35,899
ORTHOLOGIC CORP.
(A Development Stage Company)
BALANCE SHEETS
(in thousands)
(Unaudited)
ASSETS December 31, December 31,
2005 2004
Current assets
Cash and cash equivalents $35,111 $38,377
Short-term investments 46,437 53,642
Prepaids and other current assets 857 1,053
Total current assets 82,405 93,072
Furniture and equipment, net 525 478
Escrow receivable, net -- 6,828
Long-term investments 2,084 11,558
Deferred income taxes - non-current 1,106 1,106
Trademarks and Patents 2,223 2,142
Total assets $88,343 $115,184
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $1,036 $833
Accrued compensation 711 648
Accrued property taxes 119 114
Excess space reserve 87 559
Accrued clinical 544 1,236
Accrued severance and other restructuring costs 602 --
Other accrued liabilities 883 727
Total current liabilities 3,982 4,117
Deferred rent and capital lease obligation 65 137
Non current portion of excess space reserve 81 --
Other non-current liabilities 37 --
Total liabilities 4,165 4,254
Stockholders' Equity
Common Stock $.0005 par value; 19 19
100,000,000 and 50,000,000 shares authorized;
38,124,742 and 38,011,642 shares issued and
outstanding
Additional paid-in capital 171,355 170,905
Accumulated deficit (87,196) (59,994)
Total stockholders' equity 84,178 110,930
Total liabilities and stockholders' equity $88,343 $115,184
DATASOURCE: OrthoLogic Corp.
CONTACT: Les Taeger, Chief Financial Officer of OrthoLogic Corp.,
+1-602-286-5414; or Melanie Friedman of Stern Investor Relations, Inc.,
+1-212-362-1200, for OrthoLogic Corp.
Web site: http://www.orthologic.com/