Conceptus Reports First Quarter Results; Strengthens Executive Team in Preparation for Commencement of Pivotal Trial and International Marketing.Business Editors & Health/Medical Writers SAN CARLOS San Carlos (săn kär`lōs), residential city (1990 pop. 26,167), San Mateo co., W Calif.; inc. 1925. The chief manufactures are plastic products, hardware, and machine parts. , Calif.--(BUSINESS WIRE)--May 15, 2000 Conceptus conceptus /con·cep·tus/ (-tus) the product of the union of oocyte and spermatozoon at any stage of development from fertilization until birth, including extraembryonic membranes as well as the embryo or fetus. , Inc. (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: CPTS CPTS Certified Penetration Testing Specialist (network security) CPTS Comptroller Squadron CPTS Computer Program Test Specifications CPTS Catastrophe Personnel Tracking System CPTS Claims Procedure Training Specialist ), developer of the STOP(TM) (Selective Tubal Tubal (t  `bəl), in the Bible, son of Japheth. Occlusion occlusion /oc·clu·sion/ (o-kloo´zhun)1. obstruction. 2. the trapping of a liquid or gas within cavities in a solid or on its surface. 3. Procedure) non-surgical permanent contraception device for women, today announced financial results for the three months ended March 31, 2000. For the first quarter of 2000, the Company reported a net loss of $1.8 million, or $0.18 per share, compared with a net loss of $1.1 million, or $0.11 per share, for the first quarter of 1999. Research and development costs, which includes product development, regulatory, clinical and pilot manufacturing, increased 112% to $1.6 million as Conceptus continued to develop the STOP device, began to scale-up pilot manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. and increased clinical activities in preparation for the commencement of an international pivotal clinical study of STOP. SG&A expenses increased 49% to $822,000 as Conceptus began to invest in marketing capabilities in order to commence marketing efforts in certain international markets by the end of 2000, combined with growth in administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. to support higher activity levels throughout the Company. Cash and investments at March 31, 2000 were $9.1 million, which is consistent with burn rate expectations. "The first quarter was a period of significant accomplishments as we continue our STOP development efforts," said Steve Bacich, President and Chief Executive Officer. "Enrollment in our pivotal clinical study is scheduled to begin in the second quarter of 2000, and we are pleased by the initial response to the study among potential investigators and patients, and by our near-term international marketing opportunities." Mr. Bacich added that he will be making a company presentation at the ING Barings Emerging Medical Technology Conference on May 31, 2000, in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. . As announced in late March, Conceptus received Food and Drug Administration ("FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. ") approval to commence a pivotal clinical study of STOP. The Company will study 400 women who have had bilateral placement of STOP devices at 10-20 clinical sites in the U.S., Europe and Australia. Women in the pivotal study will begin to rely on STOP for contraception three months after the placement procedure, and the FDA requires 12 months of effectiveness testing prior to submission of the Pre-Market Approval. The primary clinical endpoints In a research trial, a clinical endpoint refers to a disease, symptom, or sign that constitutes one of the target outcomes of the trial. The results of a clinical trial generally indicate the number of people enrolled who reached the pre-determined clinical endpoint during the of the study include pregnancy prevention, safety, and comfort during and after the STOP procedure. During the quarter, Conceptus made two significant management changes. In preparation for commencement of marketing efforts in certain international markets, the Company named Mr. Stan Van Gent as Vice President, Marketing. "Mr. Van Gent has 16 years of experience in the medical device industry in both sales and marketing. Most recently he has managed $60 million of international revenues for Valley Lab. Additionally, he comes to us with a wealth of international and U.S. reimbursement experience, which is key to our plan for rapid market acceptance of the STOP technology," commented Mr. Bacich. The Company also announced the promotion of Mr. Ashish Khera to Vice President, Research & Development. "Mr. Khera has been the founding project manager of the STOP program since 1994, and has been instrumental in the technological advancements that have allowed Conceptus to collect our impressive Phase II and histology histology (hĭstŏl`əjē), study of the groups of specialized cells called tissues that are found in most multicellular plants and animals. data. With these two management changes, Conceptus is well positioned to commence marketing efforts in certain international markets by the end of 2000 and to complete our pivotal trial," added Mr. Bacich. About STOP Surgical tubal ligation ligation /li·ga·tion/ (li-ga´shun) the application of a ligature. tubal ligation sterilization of the female by constricting, severing, or crushing the uterine tubes. has become the most common form of contraception worldwide, despite the fact that it is invasive and costly. About 93% of the procedures in the U.S. are performed in a hospital or surgi-center under general anesthesia Anesthesia, General Definition General anesthesia is the induction of a state of unconsciousness with the absence of pain sensation over the entire body, through the administration of anesthetic drugs. , requiring 4-5 hours of hospital recovery time and resulting in 3-4 days off work. In contrast, because a STOP procedure does not require cutting or penetrating the abdomen, the procedure is performed with local sedation Sedation Definition Sedation is the act of calming by administration of a sedative. A sedative is a medication that commonly induces the nervous system to calm. Purpose The process of sedation has two primary intentions. , thus enabling the procedure to be performed in a less costly office setting with less reliance on back-up emergency facilities and personnel. Accordingly, a woman is expected to spend about 2-3 hours of her day for a STOP procedure and have a rapid return to normal activities. The STOP device is a unique and proprietary micro-coil that is deployed permanently into each fallopian tube fallopian tube (fəlō`pēən), either of a pair of tubes extending from the uterus to the paired ovaries in the human female, also called oviducts, technically known as the uterine tube. using the Company's minimally invasive transcervical tubal access catheter system. Once in place, clinical studies have shown that the STOP device induces an occlusive occlusive /oc·clu·sive/ (o-kloo´siv) pertaining to or causing occlusion. oc·clu·sive adj. 1. Occluding or tending to occlude. 2. tissue response. Phase II interim results with STOP include 136 women with proven fertility. There has been a low rate of adverse events, and in excess of 99% of patients rated their tolerance to wearing the STOP device as "good to excellent" at each follow-up visit conducted to date. As of March 31, 2000, and including an earlier STOP design, more than 700 woman-months of effectiveness data have been accumulated with no reported pregnancies. About Conceptus Conceptus, Inc. is developing STOP, an innovative medical device designed to provide a non-surgical alternative to tubal ligation, the leading form of contraception worldwide. Data from the United Nations show that worldwide, 30% of reproductive couples using contraception rely on surgical tubal ligation. Additionally, a survey performed by the Centers for Disease Control and Prevention Centers for Disease Control and Prevention (CDC), agency of the U.S. Public Health Service since 1973, with headquarters in Atlanta; it was established in 1946 as the Communicable Disease Center. indicates that surgical tubal ligation continues to be the most prevalent form of contraception in the U.S., and that 35% of women age 35-44 have had a surgical tubal sterilization sterilization Any surgical procedure intended to end fertility permanently (see contraception). Such operations remove or interrupt the anatomical pathways through which the cells involved in fertilization travel (see reproductive system). . An estimated 800,000 surgical tubal ligations are performed each year in the U.S., of which 93% are performed in a hospital or surgi-center and require general anesthesia. 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 necessarily subject to risks and uncertainties. The receipt of regulatory approvals, results of product development programs, and clinical efficacy of and market demand for products, among other matters discussed in this release, 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 re-allocation of internal resources, or on factors outside of the Company's control, such as delays by regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities , scientific advances by Conceptus or third parties and introduction of competitive products, as well as those factors set forth in the Company's Annual Report on 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. for the year ended December 31, 1999 and other filings with the Securities and Exchange Commission.
CONCEPTUS, INC.
STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
--------------------------------
March 31, March 31,
2000 1999
--------------- ----------------
Net sales - $30
Cost of sales - 40
--------------- ----------------
Gross profit (loss) - (10)
Operating expenses:
Research and development 1,568 738
Selling, general and administrative 822 552
--------------- ----------------
Total operating expenses 2,390 1,290
Operating loss (2,390) (1,300)
--------------- ----------------
Recovery of legal defense costs(a) 453 -
Interest and investment income, net 178 218
--------------- ----------------
Net loss $(1,759) $(1,082)
=============== ================
Basic and diluted net loss per share $(0.18) $(0.11)
=============== ================
Shares used in computing basic and
diluted net loss per share 9,680 9,620
=============== ================
(a) Amount represents recovery of legal defense costs in connection
with the sexual harassment lawsuit won by the Company in December
1999.
Condensed Balance Sheet Data
(In thousands)
March 31, December 31,
2000 1999
------------ -------------
(Unaudited) (b)
Cash and short-term investments $9,136 $10,769
Trade accounts receivable, net 23 18
Total current assets 9,333 10,881
PP&E, net 811 845
Total assets 10,326 11,903
Accounts payable and accruals 946 754
Total current liabilities 1,043 851
Accumulated deficit (54,454) (52,695)
Stockholders' equity 9,170 10,914
(b) Derived from audited financial statements.
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