BioMimetic Therapeutics, Inc. (BioMimetic), an orthopedic and dental devices company, reported revenues of $3.1 million for the full year of 2008, compared with the total revenues of $7 million in the previous year-end. It posted a net loss of $8.0 million, or $0.43 per share, for the full year of 2008, compared with the net loss of $24.6 million, or $1.37 per share, in the previous year-end.
Enrollment in US foot and ankle pivotal trial completed with 436 patients enrolled
Enrollment in EU foot and ankle clinical trial completed with 108 patients enrolled
Favorable clinical results in the Canadian foot and ankle pilot clinical trial for Augment Injectable Bone Graft
Favorable clinical results in the Augment Injectable Swedish distal radius fracture pilot study
US Patent Office issued patent number 7,473,678 that will protect the company’s Augment product line, as well as certain other PDGF product formulations, until at least June 2025
Additional Financial Results
For the three months ended December 31, 2008, the company reported revenues of $1.8 million, which includes $1.6 million of royalty income and $0.2 million of sublicense fee income. This compares to revenues of $4.5 million for the three months ended December 31, 2007, which included $3.6 million of product sales of GEM 21S to Luitpold, $0.7 million of royalty income and $0.2 million of sublicense fee income.
For the twelve months ended December 31, 2008, total revenues were $3.1 million, which includes $2.1 million of royalty income and $1.0 million of sublicense fee income. This compares to revenues of $7.0 million for the twelve months ended December 31, 2007, which included $5.0 million of product sales of GEM 21S to Luitpold, $1.2 million of royalty income and $0.7 million of sublicense fee income.
Research and development expenses totaled $5.9 million for the three months ended December 31, 2008, compared to $6.0 million for the three months ended December 31, 2007. For the twelve months ended December 31, 2008, research and development expenses were $24.6 million, compared to $19.2 million for the twelve months ended December 31, 2007. The increase in 2008 research and development expenses was primarily due to clinical trials of the company’s orthopedic product Augment in the US, Canada and the European Union, as well as continuing expenses associated with new and ongoing pre-clinical studies and regulatory filings.
General and administrative expenses were $4.2 million for the three months ended December 31, 2008, compared to $2.8 million for the three months ended December 31, 2007. For the twelve months ended December 31, 2008, general and administrative expenses totaled $11.3 million, compared to $8.8 million for the twelve months ended December 31, 2007. The increase in 2008 general and administrative expenses was partially attributable to a $0.9 million increase in royalty expense, which was due to minimum contractual requirements. In addition, general and administrative expenses increased by another $1.6 million due to higher stock compensation expense, professional fees, and the facilities expansion to accommodate the company’s growth.
2009 Financial Guidance
As of December 31, 2008, the company’s consolidated balance sheet includes approximately $17.6 million of cash and cash equivalents, $33.2 million of short-term investments and $46.6 million of long-term investments in auction rate securities, which includes an impairment charge of $13.4 million on the company’s investments in auction-rate securities.
Based on current operating plans, forecasted timing and costs of clinical trials and other product development programs, the company anticipates its 2009 year-end balance of cash, cash equivalents and investments to range from $71 to $78 million, and anticipates that its net cash use will be between $19 and $26 million. This includes $10 million in time-based cash payments related to the sale of its orofacial therapeutic business to Luitpold Pharmaceuticals, Inc., which are due in 2009. Loss before income taxes for the year ending December 31, 2009 is forecasted to be in the range of $32 to $39 million.
Corporate Highlights Announced
The US Patent Office issued patent number 7,473,678 entitled “Platelet-Derived Growth Factor Compositions and Methods of Use Thereof”. This patent will provide the company protection for its Augment product line, as well as certain other PDGF product formulations, until at least June 2025.
The US Patent Office also approved of a 2.7 year patent term extension on a key patent that protects GEM 21S, a product approved by the FDA for the treatment of bone loss associated with advanced periodontal disease. As a result of this extension, the patent’s term will extend to March 8, 2012.
An agreement with Deutsche Bank AG provides a loan facility enabling the company to borrow up to 70% of the par value on certain FFELP-guaranteed student loan backed auction-rate securities the company purchased, which will serve as collateral for the credit facility. Through this credit facility, the company was able to borrow $39M. BioMimetic is working diligently to achieve full liquidity on these securities, and to that end, has filed an arbitration claim with the Financial Industry Regulatory Authority (FINRA) against Deutsche Bank AG asserting various claims relating to their purchases of auction rate securities on BioMimetic’s behalf.
The Marketing Authorization Application (MAA) for GEM 21S Growth-factor Enhanced Matrix was validated and accepted for review by the European Medicines Agency (EMEA) in March 2008. The company recently received a preliminary report from the EMEA which raised a number of issues that the company must address before the MAA will be approved. Approval of the MAA submission is required for commercialization and distribution of GEM 21S as a medicinal product in the EU. The company estimates that it will receive the final report on the MAA submission by the middle of 2009. As previously announced, BioMimetic will receive a $10 Million milestone payment from Luitpold Pharmaceuticals, Inc. upon approval of GEM 21S in the EU. Based on the issues raised in the EMEA’s preliminary report, the timing of the receipt of the $10.0 million milestone payment is uncertain, and therefore, the company’s financial guidance for 2009 excludes this payment.
The company entered into a distribution agreement in April 2008 with Joint Solutions Alliance Corporation, a sales and distribution company for orthopedic products headquartered in Burlington, Ontario, Canada. As part of this agreement, Joint Solutions will act as the exclusive distributor of BioMimetic’s Augment and Augment Injectable products in Canada.
“The past year has been filled with challenges as we completed enrollment in both our U.S. pivotal trial and EU clinical study with Augment, released promising results in two pilot trials with our second orthopedic product candidate, Augment Injectable, and dealt with issues surrounding auction rate securities,” said Dr. Samuel E. Lynch, president and chief executive officer of BioMimetic Therapeutics. “We finished 2008 strong and are now well positioned to file the pre-clinical and manufacturing/quality PMA modules for Augment very soon, followed by the clinical data package once our six month patient follow up is completed later this year. Further, the allowance of our patent last fall is a major step in building our intellectual property position and will enable us to exclude potential competitors from marketing similar or generic versions of Augment, Augment Injectable, GEM 21S and potentially other products the company has in development until at least June 2025.