Financial Guidance for Fiscal 2009
Looking ahead for fiscal 2009, the company expects development revenue from corporate collaborations to be between $2 million and $3 million. Taking into account recent expense reduction initiatives, Cardica expects that fiscal 2009 research and development and sales, general and administrative expenses will total between $22 and $23 million, including non-cash stock-based compensation expense of about $2 million.
While we continued to make progress during our fiscal third quarter with physicians and hospitals with our PAS-Port(R) and C-Port(R) Anastomosis Systems, the unpredictable pace of market adoption and the difficult financing environment required that we further cut expenses through two reductions in force since January 1 in order to conserve our cash resources, said Bernard A. Hausen, president and chief executive officer of Cardica. We also took an important step to expand beyond the field of cardiac surgery and into additional surgical markets with the initiation of development of a true multi-fire endoscopic linear microcutter based on proprietary technology developed at Cardica.
We believe that Allen & Company has the appropriate experience and resources to assist us due to their deep understanding of Cardica’s business and industry and their excellent track record of bringing together the right technologies, teams and finances to assist companies in realizing their potential, said Dr. Hausen. Our evaluation of strategic alternatives is intended to both provide the maximum value to our stockholders and continue to make the potential benefits of our technology available to patients and surgeons.
Recent Highlights and Accomplishments
Announced the development of an endoscopic microcutter prototype based on proprietary technology developed at Cardica, which could potentially result in significant improvements in surgical techniques, time and cost savings and ultimately in improved patient outcomes.
Trained a total of 283 US surgeons on the PAS-Port(R) Distal Anastomosis System since US Food and Drug Administration (FDA) clearance, including 57 in the fiscal 2009 third quarter, and a total of 407 surgeons on the C-Port(R) Distal Anastomosis Systems since product introduction;
Increased cumulative worldwide shipments of PAS-Port systems to over 13,900 units, with about 2,440 units shipped in the fiscal 2009 third quarter; the number of PAS-Port units sold in the U.S. in the fiscal 2009 third quarter was similar to the number sold in the fiscal 2009 second quarter;
Increased cumulative worldwide shipments of C-Port systems to over 8,800 units, with about 825 units shipped in the fiscal 2009 third quarter; and
Hosted an innovative educational symposium for cardiothoracic surgeons in conjunction with the Annual Meeting of the Society of Thoracic Surgeons in January, 2009.
Fiscal 2009 Third Quarter and Nine Months Ended March 31, 2009 Financial Results
Total product sales were about $2.1 million for the fiscal 2009 third quarter against about $1 million for the same period of fiscal 2008. The increase in product sales for the fiscal 2009 third quarter reflected sales of the PAS-Port system in the US in the 2009 but not the 2008 period and an increase of sales to our distributor in Japan of the PAS-Port system due to the timing of orders placed during the period. Development revenue was $728,000 for the fiscal 2009 third quarter against $646,000 for the same period of fiscal 2008.
Cost of product sales was about $1.5 million for the fiscal 2009 third quarter, representing a 26% product gross margin, against $1.2 million for the fiscal 2008 third quarter.
Research and development expenses were about $1.9 million for the fiscal 2009 third quarter, a decrease from $2.5 million for the fiscal 2008 third quarter. Selling, general and administrative expenses for the fiscal 2009 third quarter were about $3.3 million, a decrease from $3.7 million for the fiscal 2008 third quarter.
Total revenue for the nine months ended March 31, 2009 was about $7.9 million, against about $4.8 million for the same period of fiscal 2008. Total operating expenses for the nine months ended March 31, 2009 were about $21.7 million, against about $18.8 million for the same period of fiscal 2008. The net loss for the first nine months of fiscal 2009 was about $13.8 million, or $0.87 per share, against a net loss of about $13.4 million, or $0.92 per share, for the same period of fiscal 2008.
Cash and investments at March 31, 2009 were about $8.4 million, against $23.3 million at June 30, 2008 and $13.1 million at December 31, 2008. As of March 31, 2009, Cardica had total long-term debt of $2.0 million.
