Cohesion Technologies Reports Third Quarter Results; Expanded Clinical Study with CoSeal Surgical Sealant Underway.PALO ALTO Palo Alto, city, California Palo Alto (păl`ō ăl`tō), city (1990 pop. 55,900), Santa Clara co., W Calif.; inc. 1894. Although primarily residential, Palo Alto has aerospace, electronics, and advanced research industries. , Calif.--(BW HealthWire)--April 26, 1999-- Cohesion Technologies (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on NM: CSON CSON Connell School of Nursing (Boston College) ) today reported results for the third quarter of fiscal year 1999. Highlights for the three months ended March 31, 1999 and recent weeks include: -0-
-- Launching CoStasis(TM) Surgical Hemostat ("CoStasis") in Austria,
Germany and the United Kingdom
-- Engaging additional distributors in Denmark, Belgium, the
Netherlands, Switzerland and Italy
-- Receiving regulatory clearance for CoStasis in France
-- Completing a feasibility study in Europe with CoSeal(TM) Surgical
Sealant ("CoSeal"), a 100% synthetic product designed to seal
anastomotic sites in vascular and cardiovascular surgeries
-- Beginning an expanded clinical study with CoSeal in Europe
Near-term anticipated milestones for Cohesion include:
-- Filing a pre-market approval ("PMA") application with the U.S.
Food and Drug Administration ("FDA") for CoStasis
-- Continuing to introduce CoStasis broadly into Europe
-- Continuing enrollment in an expanded clinical study with CoSeal
in Europe
-- Completing and validating new manufacturing facilities for
CoStasis and CoSeal
-- Reducing the Company's burn rate by engaging financial partners
for the orthopedic business and the recombinant collagen and
thrombin programs
-0- "We are encouraged by the reception to CoStasis among surgeons in Europe. Many surgeons appreciate the benefit of using the patient's own fibrinogen Fibrinogen The major clot-forming substrate in the blood plasma of vertebrates. Though fibrinogen represents a small fraction of plasma proteins (normal human plasma has a fibrinogen content of 2–4 mg/ml of a total of 70 mg protein/ml), its conversion and platelets, as compared with human plasma from pooled sources, and we have received numerous favorable comments from nurses and physicians about CoStasis' relative ease of preparation and use. In the few weeks since the product was first made available, our distributors have sampled and sold over 250 kits of CoStasis for cardiovascular, liver and general surgery procedures, including some pediatric pediatric /pe·di·at·ric/ (pe?de-at´rik) pertaining to the health of children. pe·di·at·ric adj. Of or relating to pediatrics. cases," stated David Foster  This article or section resembles a .Please help [ improve this article] by removing excessive trivia, irrelevant praise and criticism, lists and collections of links that are of . , chief executive officer. "During the fiscal 1999 fourth quarter, we look forward to expanding the distribution of CoStasis in Europe, filing our PMA PMA (papillary-marginal-attached), n a system of epidemiologic scoring of periodontal disease devised by Schour and Massler in which the symbols denote the areas involved in gingival inflammation. PMA Progressive muscular atrophy for CoStasis in the U.S., and continuing enrollment in our expanded clinical study with CoSeal in Europe." For the fiscal 1999 third quarter, Cohesion Technologies reported net income of $4.4 million or $0.52 per share (basic and diluted) on 8.4 million average shares outstanding, compared with a net loss of $32,000 in the prior-year quarter. Historical net income (loss) per share is not presented for the comparable prior-year quarter as no common shares were outstanding until June 25, 1998. Revenues for the fiscal 1999 third quarter were up 80% to $428,000, primarily from product sales of Collagraft(R) bone graft bone graft Orthopedic surgery Sterilized bony tissue, often of cadaveric origin, used to fill and/or 'sculpt' bone defects Indications Spinal fusion, revision of failed articular prostheses, filling traumatic or malignant bone defects, or periodontal defects. matrix and strip, which are marketed by the Zimmer, Inc. subsidiary of the Bristol-Myers Squibb Bristol-Myers Squibb (NYSE: BMY), colloquially referred to as BMS, is a pharmaceutical corporation, formed by a 1989 merger between pharmaceutical companies Bristol-Myers Company, founded in 1887 by William McLaren Bristol and John Ripley Myers in Clinton, NY (both were Company. Revenues for the third quarter of fiscal 1998 were $238,000. Research and development expenses for the fiscal 1999 third quarter were approximately $3.7 million, down 5%, compared with $3.9 million in the prior-year quarter. Selling, general and administrative expenses of $1.7 million increased 39% over the prior year primarily due to a ramp-up of marketing costs associated with the launch of CoStasis in Europe. During the fiscal 1999 third quarter, the Company recorded compensation expense of $498,000 in connection with a cash-out of stock options for Cohesion Corporation, a majority-owned subsidiary majority-owned subsidiary A firm in which more than 50% of outstanding voting stock is owned by the parent company. of Cohesion Technologies. The Company expects to record up to an additional $2.9 million in cash compensation expense over the next three fiscal years in connection with the cash-out of options. Gain on sale of investments for the fiscal 1999 third quarter was $13.2 million primarily from the sale of 400,000 shares (post-split) of Boston Scientific The Boston Scientific Corporation (NYSE: BSX) (abbreviated BSC), is a worldwide developer, manufacturer and marketer of medical devices whose products are used in a range of interventional medical specialties, including interventional cardiology, peripheral interventions, (NYSE NYSE See: New York Stock Exchange : BSX BSX Bermuda Stock Exchange BSX Bandai Satellaview-X BSX Bicycle Super-X (Cross) ) common stock. The Company now holds approximately 1.3 million shares of BSX, 93% of which are hedged with equity collars Equity collar The simultaneous purchase of an equity floor and sale of an equity cap. ranging from $31 - $49 per share. The Company expects to continue selling shares of BSX stock on a quarterly basis to fund its operations. However, the number of BSX shares sold is expected to fluctuate significantly from quarter to quarter due in part to the timing of the expiration dates Expiration Date The day on which an options or futures contract is no longer valid and, therefore, ceases to exist. Notes: The expiration date for all listed stock options in the U.S. of the equity collars and the price at which BSX stock is trading, among other factors. For the nine months ended March 31, 1999, the Company reported net income of $5.3 million, or $0.62 per share (basic and diluted) on 8.6 million average shares outstanding, compared with a net loss of $11.0 million in the first nine months of fiscal 1998. Revenues for the first nine months of fiscal 1999 were $1.7 million, compared with revenues of $1.5 million for the first nine months of fiscal 1998. Fiscal 1999 nine-month research and development costs of $11.2 million were slightly lower than the prior-year period, while selling, general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. were up 29% to $4.9 million, primarily due to a ramp-up of marketing costs associated with the anticipated launch of CoStasis in Europe. The gain on sale of investments for the first nine months of fiscal 1999 was $27.2 million, primarily from the sale of BSX common stock, compared with $13.7 million in the prior-year period. As of March 31,1999, Cohesion Technologies had cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has of approximately $67.7 million and approximately 529,000 shares authorized Shares authorized The maximum number of shares of stock of a company allowed in the articles of incorporation, which may be changed only by a shareholder vote. See: Issued and outstanding. shares authorized See authorized capital stock. for repurchase. Cohesion Technologies is developing products for the estimated $1.3 billion worldwide surgical hemostasis hemostasis /he·mo·sta·sis/ (he?mo-sta´sis) (he-mos´tah-sis) 1. the arrest of bleeding by the physiological properties of vasoconstriction and coagulation or by surgical means. 2. and sealant Sealant A thin plastic substance that is painted over teeth as an anti-cavity measure to seal out food particles and acids produced by bacteria. Mentioned in: Tooth Decay sealant see bone sealant. markets. For more information on Cohesion Technologies, please visit the Company's Web site at www.cohesiontech.com. Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , the accuracy of which is subject to risks and uncertainties including the timing of product introductions, the success of scaling up product production, the timing and terms of sales Terms of sale Conditions under which a firm proposes to sell its goods or services for cash or credit. arrangements with other companies, receipt of regulatory approvals, clinical efficacy of and market demand for products, results of clinical studies and potential unfavorable publicity regarding Cohesion Technologies or its products, among other matters discussed in this release. Actual results are subject to risks and uncertainties, and actual events and results may differ significantly from the discussion of such matters in the forward-looking statements. Such differences may be based upon factors within the Company's control, such as strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. decisions by management and reallocation Noun 1. reallocation - a share that has been allocated again allocation, allotment - a share set aside for a specific purpose 2. reallocation of internal resources, or on factors outside the Company's control, such as scientific advances by third parties, introduction of competitive products and delays by regulatory authorities. Please see the Company's filings with the Securities and Exchange Commission including, without limitation, the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and Form 10-Qs Form 10-Q See 10-Q. , which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements. -0-
COHESION TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
March 31, June 30,
1999 1998(a)
ASSETS
Current assets:
Cash and cash equivalents $ 5,135 $ 591
Short-term investments -- 1,016
Accounts receivable, net 388 473
Inventories 1,145 81
Other current assets 1,591 1,254
Total current assets 8,259 3,415
Property and equipment, net 6,342 2,072
Intangible assets, net 842 1,184
Investment in Boston Scientific Corporation 51,419 73,979
Other investments and assets, net 11,351 15,003
------- -------
$78,213 $95,653
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,521 $ 792
Other accrued liabilities 2,471 2,390
Accrued compensation 1,243 953
Income taxes payable 2,834 300
Payable to Collagen Aesthetics 863 880
Total current liabilities 8,932 5,315
Deferred income taxes 22,009 31,923
Commitments and contingencies
Stockholders' equity 47,272 58,415
------- -------
$78,213 $95,653
(a) NOTE: Amounts derived from audited financial statements at the
date indicated.
COHESION TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
March 31, March 31,
1999 1998 1999 1998
Product Sales $ 428 $ 238 $ 1,651 $ 1,472
Costs and expenses:
Cost of sales 398 124 993 816
Research and development 3,724 3,907 11,182 11,309
Selling, general and
administrative 1,712 1,229 4,931 3,820
Compensation expense
related to Cohesion
Corporation options 498 -- 2,945 --
Purchased in-process
research and development -- -- -- 10,530
------- ------- ------- -------
6,332 5,260 20,051 26,475
Loss from operations (5,904) (5,022) (18,400) (25,003)
Other income (expense):
Net gain on investments,
principally Boston
Scientific Corporation 13,220 4,964 27,191 13,739
Equity in losses of
affiliates, net -- -- -- (9)
Interest income
(expense), net (6) 26 61 262
Income (loss) before
income taxes 7,310 (32) 8,852 (11,011)
Provision for income taxes 2,925 -- 3,541 --
Net income (loss) $ 4,385 $ (32) $ 5,311 $(11,011)
Basic and diluted net
income (loss) per share $ 0.52 $ n/a $ 0.62 $ n/a
Shares used in calculating
basic and diluted per
share information 8,399 n/a 8,607 n/a
Basic and diluted pro forma
net income (loss) per share $ -- $ (1.13)
Shares used in calculating
basic and diluted pro forma
per share information 8,989 8,901
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