1st Quarter Results (5145G)

TIDMMEDG TIDMMEDU

RNS Number : 5145G

Medgenics Inc

12 May 2011

Medgenics Announces First Quarter Financial Results

MISGAV, Israel and VIENNA, Va. (May 12, 2011) - Medgenics, Inc. (NYSE Amex: MDGN and MDGN.W and London Stock Exchange-AIM: MEDG and MEDU) (the "Company"), the developer of a novel technology for the sustained production and delivery of therapeutic proteins in patients using their own tissue, today announces financial results for the three months ended March 31, 2011 and the filing with the U.S. Securities and Exchange Commission of its Quarterly Report on Form 10-Q for the three months ended March 31, 2011. The Form 10-Q contains 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 the Securities and Exchange Commission's website at http://www.sec.gov/ and on the Company's website at www.medgenics.com.

Financial Summary (unaudited)

-- R&D expense, net for the first quarter of 2011 increased to $1.17 million from $0.30 million for the first quarter of 2010, due to an increase in the use of sub-contractors in connection with the ongoing Phase I/II clinical trial of EPODURE, increased expenses in developing the HEMODURE Biopump to produce Factor VIII, preparation for the trial of the INFRADURE Biopump and decreases in participations in R&D costs.

-- General and administrative expense was $0.78 million for the first quarter of 2011 compared with $0.67 million for first quarter of 2010, with the increase due primarily to management consulting fees.

-- The net loss for the first quarter of 2011 was $0.34 million or $0.06 per share, compared with net income of $2.31 million or $0.28 per diluted share for the first quarter of 2010, primarily a result of non-cash financial income of $2.7 million that resulted from a decrease in the fair value of warrants and convertible debentures, presented as liabilities.

-- Cash, cash equivalents and short-term investments as of March 31, 2011 were $1.35 million, compared with $2.86 million as of December 31, 2010.

-- In April and May 2011, the Company completed its U.S. initial public offering and partial underwriter overallotments, and raised gross proceeds of $13.21 million, or approximately $10.64 million in net proceeds after deducting $2.57 million of underwriting discounts, commissions and other offering costs.

Andrew Pearlman, Ph.D., President and Chief Executive Officer of Medgenics, commented "During the first quarter of 2011, Medgenics worked diligently to complete its initial public offering in the United States, which was successfully consummated on April 13, 2011, while continuing our ongoing Phase I/II clinical trial of our lead product candidate, the EPODURE Biopump producing erythropoietin to treat anemia. We are excited about the coming months as we work to complete the EPODURE trial, prepare for a Phase I/II clinical trial of the INFRADURE Biopump producing interferon-a to treat hepatitis C and engage in further research and development of the HEMODURE Biopump to produce Factor VIII to treat hemophilia."

About Medgenics

Medgenics is developing and commercializing Biopump, a proprietary tissue-based platform technology for the sustained production and delivery of therapeutic proteins. Biopumps are processed autologous tissue for the treatment of a range of chronic diseases including anemia, hepatitis C and hemophilia. Medgenics believes this approach has multiple benefits compared with current treatments, which include regular and costly injections of therapeutic proteins.

Medgenics has three products in development based on this technology: EPODURE (in a Phase I/II dose-ranging trial) is a long-acting protein therapy intended to produce and deliver erythropoietin from a single administration in a steady manner for up to six months and more in patients with anemia; INFRADURE (to commence a Phase I/II trial in Israel in 2011) is a long-acting protein therapy designed to produce a sustained therapeutic dose of interferon-alpha to treat hepatitis C; and HEMODURE is being developed as a sustained Factor VIII therapy for the prophylactic treatment of hemophilia.

Medgenics intends to develop its innovative products and bring them to market via strategic partnerships with major pharmaceutical and/or medical device companies. In addition to treatments for anemia, hepatitis C and hemophilia, Medgenics plans to develop and/or out-license a pipeline of future Biopump products targeting the large and rapidly growing global protein therapy market, which is forecast to reach $132 billion in 2013. Other potential applications for Biopumps include multiple sclerosis, arthritis, pediatric growth hormone deficiency, obesity and diabetes.

Forward-looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and as that term is defined in the Private Securities Litigation Reform Act of 1995, which include all statements other than statements of historical fact, including (without limitation) those regarding the Company's financial position, its development and business strategy, its product candidates and the plans and objectives of management for future operations. The Company intends that such forward-looking statements be subject to the safe harbors created by such laws. Forward-looking statements are sometimes identified by their use of the terms and phrases such as "estimate," "project," "intend," "forecast," "anticipate," "plan," "planning, "expect," "believe," "will, " "will likely," "should," "could," "would," "may" or the negative of such terms and other comparable terminology. All such forward-looking statements are based on current expectations and are subject to risks and uncertainties. Should any of these risks or uncertainties materialize, or should any of the Company's assumptions prove incorrect, actual results may differ materially from those included within these forward-looking statements. Accordingly, no undue reliance should be placed on these forward-looking statements, which speak only as of the date made. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. As a result of these factors, the events described in the forward-looking statements contained in this release may not occur.

For further information, contact:

 
      Medgenics, Inc.                        Phone: [phone] 
       Dr. Andrew L. Pearlman                 Phone: [phone] 
       Lippert/Heilshorn & Associates, 
       Inc. 
       Anne Marie Fields 
       [e-mail] 
      De Facto Communications                Phone: [phone] 
       Mike Wort 
       Anna Dunphy 
      Religare Capital Markets (Nomad)       Phone: [phone] 
       James Pinner 
       Derek Crowhurst 
      SVS Securities plc (Joint Broker)      Phone: [phone] 
       Alex Mattey 
       Ian Callaway 
      Nomura Code Securities (Joint Broker)  Phone: [phone] 
       Jonathan Senior 
 

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