Orthovita, Inc. (Orthovita), an orthopedic devices company, has reported product sales of $76.9 million for the full year of 2008, up 33%, compared with the product sales of $58 million in the previous year-end. It also reported a net loss of $10.8 million, or $0.14 per share, for the full year of 2008, compared with the net loss of $29.9 million, or $0.44 per share, in the previous year-end.
Fourth Quarter 2008 Sales of $20.8 Million Reflect 34% Growth Over Fourth Quarter 2007
Fourth Quarter 2008 Operating Loss of $0.7 Million, Compared to Fourth Quarter 2007 Operating Loss of $5.1 Million
2008 Operating Loss of $9.2 Million, a 32% Reduction versus Operating Loss of $13.6Million for 2007
Working Capital Position of $49.7 Million at December 31, 2008
Product sales for the quarter ended December 31, 2008 increased 34% to $20.8 million, as compared to $15.6 million for the same period in 2007.
Sales growth for the reported periods in 2008 was primarily attributable to increased sales of our VITOSS FOAM and VITAGEL product portfolios in the U.S. Approximately 66% and 63% of our product sales during the quarter and year ended December 31, 2008, respectively, were from products based upon our VITOSS FOAM platform co-developed with Kensey Nash Corporation, as compared to approximately 60% of product sales during each of the corresponding periods in 2007. Of the 66% of product sales contributed by VITOSS FOAM products during the fourth quarter of 2008, approximately 30% was from sales of the VITOSS Bioactive FOAM products that were launched in 2008. VITAGEL contributed approximately 23% and 24% of product sales for the quarter and year ended December 31, 2008, respectively, as compared to approximately 22% and 21% of product sales during the corresponding periods in 2007.
Sales growth for the reported periods in 2008 was primarily attributable to increased sales of our VITOSSFOAM and VITAGEL product portfolios in the U.S. Approximately 66% and 63% of our product sales during the quarter and year ended December 31, 2008, respectively, were from products based upon our VITOSS FOAM platform co-developed with Kensey Nash Corporation, as compared to approximately 60% of product sales during each of the corresponding periods in 2007. Of the 66% of product sales contributed by VITOSS FOAM products during the fourth quarter of 2008, approximately 30% was from sales of the VITOSS Bioactive FOAM products that were launched in 2008. VITAGEL contributed approximately 23% and 24% of product sales for the quarter and year ended December 31, 2008, respectively, as compared to approximately 22% and 21% of product sales during the corresponding periods in 2007.
Gross profit for the quarters ended December 31, 2008 and 2007 was $13.8 million and $9.7 million, respectively. As a percentage of sales, gross profit grew to 66% for the fourth quarter of 2008 from 62% for the fourth quarter of 2007. Gross profit for 2008 was $51.0 million, as compared to $37.5 million in 2007. As a percentage of sales, gross profit was 66% and 65% for the years ended December 31, 2008 and 2007, respectively. The increase in the gross profit margins for the quarter and year ended December 31, 2008, as compared to the corresponding periods in 2007, primarily reflects more favorable product mix and lower VITAGEL royalty expense as a percentage of product sales.
Operating expenses for the quarters ended December 31, 2008 and 2007 were $14.4 million and $14.7 million, respectively, representing a 2% decrease in operating expenses, as compared to a 34% increase in product sales and a 42% increase in gross profit for the quarter. The decrease in operating expenses in the fourth quarter of 2008 resulted from lower research and development expenses. For 2008 and 2007, operating expenses were $60.2 million and $51.1 million, respectively, representing an 18% increase in operating expenses, as compared to a 33% increase in product sales and a 36% increase in gross profit from 2007 to 2008. The increase in operating expenses for the year ended December 31, 2008 was primarily due to higher selling and marketing expense incurred in order to support the growth of U.S. product sales, as well as higher commissions paid in the U.S. as a result of increased product sales in 2008.
The operating loss for the quarter ended December 31, 2008 decreased to $0.7 million from $5.1 million for the quarter ended December 31, 2007. The operating loss for the twelve month periods ended December 31, 2008 and 2007 was $9.2 million and $13.6 million, respectively. The decrease in the operating loss in the 2008 periods primarily resulted from increased sales and gross profit, partly offset by increased selling & marketing expenses.
“The fourth quarter and full year 2008 were record sales periods with strong sales growth and a further demonstration of the company developing operating leverage ahead of a potential U.S. Cortoss product launch in the future. We continue to be pleased with the sales growth from our specialized orthobiologics and biosurgery sales team,” said Antony Koblish, President and chief executive officer of Orthovita. “We look forward to more detailed discussions during the 2008 financial results conference call.”
The net loss for the quarter ended December 31, 2008 decreased to $1.2 million from $4.9 million for the quarter ended December 31, 2007. The net loss per common share for the quarter ended December 31, 2008 and 2007 was $0.02 and $0.06, respectively, based upon 75.8 million and 75.1 million common shares outstanding, respectively. The decrease in the net loss for the quarter ended December 31, 2008 resulted from increased sales and gross profit.
Cash, cash equivalents and investments were $32.3 million at December 31, 2008, in comparison to cash, cash equivalents and investments of $48.4 million at December 31, 2007. For the years ended December 31, 2008 and 2007, the net cash and cash equivalents used in operating activities was $14.2 million.