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 CAMBRIDGE, Mass., Oct. 28 /PRNewswire/ -- BioSurface Technology, Inc. (NASDAQ: BSRF) reported financial results today for the third quarter and nine months ended Sept. 30, 1993. Net sales for the quarter were $1,535,071 compared to $2,287,061 in the third quarter of 1992. Research and development expense for the third quarter of 1993 was $1,658,930, a 36 percent increase over the same period last year. For the third quarter of 1993 there was a net loss of $1,664,982 or 19 cents per share. For the third quarter of 1992 there was a net loss of $693,296 or 11 cents per share as adjusted to include all outstanding shares of preferred stock that were converted into common stock at the time of the Company's initial public offering.
 For the nine months ended Sept. 30, 1993, net sales were $4,636,978 compared to $5,712,416 in the first nine months of 1992. Net loss for the first nine months of 1993 was $5,015,314 compared to $2,658,875 for the same period last year. At Sept. 30, 1993, BioSurface had $27 million in cash and marketable securities.
 The third quarter results were due primarily to the acceleration of the Company's research and development activities, a decline in sales of Epicel-CEA epidermal grafts for permanent skin replacement, and an NIH grant which is nearing the end of its term. The decline in sales in the United States was partially offset by an increase in European sales. Epicel sales have been subject to significant fluctuation due to the small number of patients with severe burns and the unpredictable nature of burn accidents. For example, net sales in the third quarter increased 37 percent over the second quarter of 1993.
 "The increase in research and development expense reflects our expanding program in Chondrograft, our cartilage replacement product; and our on-going Acticel development program," explains David Castaldi, president and CEO of BioSurface. "In our Chondrograft program we are conducting in vivo preclinical studies with BioSurface grown cartilage cells. The research at BioSurface, along with our collaborative studies in Europe, will provide the basis for initial human studies in the United States." Castaldi explained that BioSurface continues to accrue patients in its Acticel clinical study for deep partial thickness burns, and that it plans to begin a venous leg ulcer trial in early 1994.
 Based in Cambridge, Mass., BioSurface Technology is a leader in the development of living human tissue biodevices grown from normal human cells using tissue engineering techniques. BioSurface was the first company in the world to sell these tissues for therapeutic use. The Company manufactures and sells EPICEL-CEA epidermal skin drafts; is clinically testing Acticel wound dressings; and is developing Chondrograft, a cartilage repair product.
 BioSurface Technology, Inc.
 Statement of Operation Data
 Three Months Ended Nine Months Ended
 Sept. 30, Sept. 30, Sept. 30, Sept. 30,
 1993 1992 1993 1992
 Net sales $1,535,071 $2,287,061 $4,636,978 $5,712,416
 Cost of sales 560,895 757,772 1,607,592 2,012,755
 Gross profit 974,176 1,529,289 3,029,386 3,699,661
 Research and devel. 1,658,930 1,216,958 5,003,990 3,494,401
 Selling and Mktg 638,004 620,993 2,089,653 1,825,912
 General and admin. 558,852 398,863 1,542,715 1,102,299
 Total 2,855,786 2,236,814 8,636,358 6,422,612
 Loss from operations (1,881,610) (707,525) (5,606,972) (2,722,951)
 Other inc.,net 216,628 14,229 591,658 64,076
 Net loss $(1,664,982) $(693,296)$(5,015,314) $(2,658,875)
 Net loss per share 19 cents 51 cents 64 cents $(1.82)
 Weighted avg. shares
 outstng. 8,654,997 2,206,900 7,979,029 2,138,572
 Supplemental net loss
 per share(1) (19 cents) (11 cents) (60 cents) (43 cents)
 Supplemental weighted
 avg. shares
 outstng.(1) 8,654,997 6,440,407 8,397,728 6,248,717
 Balance Sheet Data
 Sept. 30, 1993 Dec. 31, 1992
 Cash and marketable
 securities $26,961,341 $4,818,105
 Total assets 31,186,642 9,686,501
 Total stockholders equity 28,071,371 5,981,240(1)
 (1) Includes all outstanding shares of preferred stock that were converted into common stock in conjunction with the initial public offering which became effective on Jan. 27, 1993.
 -0- 10/28/93
 /CONTRACT: Gus Lawlor, chief financial officer of BioSurface Technology, 617-494-8484; or Robert Gottlieb, senior vice president of Feinstein Partners, 617-577-8110, for BioSurface/

CO: BioSurface Technology, Inc. ST: Massachusetts IN: MTC SU: ERN

CM-JL -- NE001 -- 7705 10/28/93 08:14 EDT
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Publication:PR Newswire
Date:Oct 28, 1993

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