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LIFECELL CORPORATION REPORTS INCREASED PRODUCT SALES FOR THIRD QUARTER.

THE WOODLANDS, Texas--(BUSINESS WIRE)--Nov. 22, 1996--

New Funding to Accelerate AlloDerm(R) Tissue Marketing Programs

LifeCell Corporation (Nasdaq:LIFC) today reported increased product sales for the third quarter and nine months ended September 30, 1996. The Company also recently announced that the proceeds from a private offering of preferred stock earlier this month will allow it to accelerate marketing programs for its AlloDerm(R) preserved human dermis.

"LifeCell's product sales increased in the third quarter primarily due to the increased demand for AlloDerm tissue products by periodontal and plastic surgeons," stated Paul M. Frison, president and chief executive officer of LifeCell. "We signed our first plastic surgery distributor agreement in March 1996 and now have a network of 12 independent specialty distributors with over 60 representatives servicing the plastic surgery market.

"We launched our periodontal program for AlloDerm tissue in the third quarter with DENTSPLY (Nasdaq: XRAY) as our exclusive distributor. During the third quarter, training programs were conducted for DENTSPLY's sales force, our product was displayed by DENTSPLY for the first time at the American Academy of Periodontology, and their advertising program was launched."

Third quarter revenues increased to $816,126 compared with revenues of $514,037 for the same period in 1995. Product sales increased to $560,672 in the third quarter of 1996 compared with $251,392 in the same quarter in 1995, as a result of an increase in sales of AlloDerm preserved dermis products. In the third quarter of 1996, corporate alliance revenue decreased to $121,213 compared with $202,500 in the same quarter of 1995, from the Company's heart valve development program with Medtronic, Inc. (NYSE: MDT). The decrease in corporate alliance revenue was directly related to the maturity of the project and the planned decrease in activities performed by LifeCell in the third quarter of 1996. Revenue from research and development grants increased to $134,241 compared with $60,145 in the third quarter of 1995 due to increased funding provided through a $613,000 contract awarded to LifeCell in April 1996 from the U.S. Navy for the further development and preclinical toxicity studies of ThromboSol, LifeCell's proprietary platelet storage solution, and through a National Science Foundation grant awarded in August 1996 for LifeCell's Composite AlloDerm program.

Selling and marketing expenses increased to $597,214 in the third quarter of 1996 compared with $393,394 in the third quarter of 1995. The increase in selling and marketing expenses was related to the increased promotion of AlloDerm tissue to the periodontal and burn markets and for certain plastic and reconstructive surgery procedures.

The Company reported a net loss of $1,012,503, or $0.33 per share, for the third quarter of 1996 compared with a loss of $867,182, or $0.25 per share, for the third quarter of 1995. The losses in 1996 and 1995 include $0.11 and $0.05 per share, respectively, resulting from the accounting treatment of the Company's Series A Preferred Stock issued in November 1994 and the inducement of certain warrants.

For the first nine months of 1996, LifeCell's revenues increased to $2,069,758 compared with $1,342,998 in the same period in 1995. The Company reported a net loss of $2,880,258, or $0.82 per share, for the first nine months of 1996. This compared with a net loss of $2,841,459, or $0.81 per share, for the same period in 1995. The losses in 1996 and 1995 include $0.18 and $0.15 per share, respectively, resulting from the accounting treatment of the Company's Series A Preferred Stock and the inducement of certain warrants.

"After the close of the quarter, we completed a private placement of preferred stock which resulted in gross proceeds of approximately $12.4 million. Lead investors were Vector Fund Management, L.P.; and C.I.B.C. Wood Gundy Capital. Gruntal & Co., Incorporated served as the Company's placement agent for the financing. These funds will provide LifeCell the resources to expand our marketing programs for AlloDerm tissue," concluded Mr. Frison.

LifeCell Corporation develops and commercializes universal tissue grafts and blood cell preservation products. LifeCell's first commercial product, AlloDerm dermal tissue graft, is used in the treatment of third-degree burns, in periodontal surgery and in plastic and reconstructive surgery. In addition to AlloDerm grafts, the Company's current universal tissue graft development programs include XenoDerm(TM) porcine dermal graft, the LifeCell(R) heart valve and universal vascular conduits. LifeCell's product development programs also include ThromboSol, a formulation for extending the shelf-life of transfusable platelets.

Certain of the statements contained in this news release are forward-looking statements. While these statements reflect the Company's current beliefs, they are subject to uncertainties and risks that could cause actual results to differ materially. These factors include, but are not limited to, the demand for the Company's products and services, economic and competitive conditions, access to borrowed or equity capital on favorable terms, and other risks detailed in the Company's Quarterly Report on Form 10-Q for the period ended September 30, 1996, and Annual Report on Form 10-K for the year ended December 31, 1995. -0-

 LIFECELL CORPORATION
 Financial Highlights

 September 30, December 31,
 1996 1995
 (Unaudited)
Cash and cash equivalents $ 1,139,564 $ 3,015,332
Working capital 704,802 2,888,048
Total assets 3,482,477 4,376,039
Total stockholders' equity 295,159 2,093,906

 Three Months Ended Nine Months Ended
 September 30, September 30,

 1996 1995 1996 1995
 (Unaudited) (Unaudited)
Revenues:
 Product sales $ 560,672 $ 251,392 $1,410,373 $ 479,343
 Corporate alliance 121,213 202,500 409,598 624,539
 Research and
 development contracts
 and grants 134,241 60,145 249,787 239,116
 816,126 514,037 2,069,758 1,342,998
Costs and expenses:
 Costs of goods sold 355,647 258,052 899,805 542,852
 Contract research and
 development 255,454 262,645 659,385 863,655
 Proprietary research
 and development 209,014 232,195 550,354 830,155
 General and
 administrative
 expense 423,288 303,612 1,196,104 1,111,052
 Selling and marketing 597,214 393,394 1,699,739 1,075,905
 Total costs and
 expenses 1,840,617 1,449,898 5,005,387 4,423,619
Interest income 11,988 68,679 55,371 239,162
Net loss $(1,012,503) $(867,182) $(2,880,258) $(2,841,459)

Loss per share before
 preferred dividends
 and accretion of
 stock $ (0.22) $ (0.20) $ (0.65) $ (0.66)
Effect of preferred
 dividends, accretion
 of preferred stock
 and inducement of
 warrant exercise (0.11) (0.05) (0.18) (0.15)
Loss per share $ (0.33) $ (0.25) $ (0.82) $ (0.81)

Weighted average
 shares outstanding 4,548,547 4,298,538 4,452,307 4,297,911




CONTACT: LifeCell Corp., The Woodlands

Paul M. Frison, 713/367-5368

or

Jane Lea Hicks, 713/367-5368
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Date:Nov 22, 1996
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