Business Update
NMT achieved several milestones during the first quarter, including expanding its reach into new markets and territories with BioSTAR(R) and further streamlining the Company’s cost structure, said president and chief executive officer Frank Martin. More recently, NMT received Pre-Market Approval (PMA) from the U.S. Food and Drug Administration (FDA) for the commercial sale of its STARFlex(R) cardiac septal repair implant for patients with ventricular septal defects (VSD). Additionally, we announced plans for the timing of data analysis for our landmark patent foramen ovale (PFO) and transient ischemic attack (TIA) clinical trial, CLOSURE I.
During the first quarter, NMT experienced lower-than-anticipated product sales, which we believe was primarily a result of the challenging global economy, Martin said. In an effort to more tightly manage their cash flow, hospitals are reducing their inventories. As a result, while our implants continue to be used in procedures, hospitals are taking longer to re-order product in the near-term, thus slowing our sales cycle.
Our direct sales force continues to make progress and have increased our market share with sales of BioSTAR(R), said Martin. In addition, we expanded into new geographic areas by adding distributors in previously untargeted countries in Europe and Latin America and the early response in these new territories has been encouraging.
In April, we announced that the Company would maintain the original data analysis timing for CLOSURE I, said Martin. NMT and the CLOSURE I Executive Committee agreed that it was best at this time to conduct the review of the data in the fall of 2010 in order to ensure that the study demonstrated maximum statistical power and the highest level of quality and integrity. We then expect to submit a PMA application to the FDA for the STARFlex(R) device for the stroke and TIA indication shortly thereafter. As we have indicated in the past, we are eager to uncover the connection between PFO, stroke and TIA but at this time have decided not to accelerate the data analysis schedule.
Chief operating officer Richard E. Davis said, The current economic conditions require us to preserve our capital resources. As previously announced, we took action to further reduce our expenses by more than $1 million on an annualized basis. We remain confident that we have sufficient capital resources to complete the CLOSURE I trial and fund operations at least until we receive a decision with respect to a PMA with a PFO/stroke and TIA indication in the U.S. We ended the first quarter of 2009 with $16.3 million in cash, cash equivalents and marketable securities compared with $17.6 million at December 31, 2008. As previously announced, we are in discussions with a potential lender to establish a line of credit that would provide NMT with additional financial flexibility, if necessary.
Business Outlook
Looking ahead, our near-term emphasis will be on advancing our sales and marketing efforts by further expanding our international presence with BioSTAR(R), said Martin. In addition to entering new markets in Europe during the first quarter, more recently we also entered the Brazilian market. We have already begun identifying other markets where we expect to roll out our products in the months ahead.
At the same time, we remain focused on achieving additional regulatory approval for our technologies, said Martin. For example, we recently received PMA approval from the FDA for STARFlex(R) for patients with VSD and the implant is now available for commercial use for that indication in the U.S. STARFlex(R) is implanted using a catheter during a minimally invasive procedure. The alternative treatment for VSD is open-heart surgery, which is considered a high-risk, invasive procedure. STARFlex(R), which replaces our previous device, CardioSEAL(R), is a technologically advanced implant that features a unique self-centering mechanism.
Overall, we remain well-positioned in our marketplace, Martin said. We are confident about the prospects for our pivotal CLOSURE I trial, which has the potential to define the PFO closure landscape. Despite the current economic environment, BioSTAR(R) has been well-received by the market and its bioabsorbable collagen matrix gives us a competitive advantage. We believe that we remain the technology leader in cardiac septal repair and have several promising programs underway.
Davis said, For the second quarter of 2009, we are expecting total revenues of approximately $3.8 to $4.3 million. For full year 2009, we currently anticipate total revenues of approximately $16 to $18 million. With a far leaner cost structure and CLOSURE I enrollment complete, we expect a lower cash burn in the quarters ahead. As a result, we expect cash, cash equivalents and marketable securities at December 31, 2009 to remain in the range of $6 to $8 million.
