Osteotech, Inc. (Osteotech), an orthopedic devices company, has reported revenue of $23.93 million for the first quarter of 2009, up 4%, compared with the revenue of $27.63 million in the year-ago quarter. It has also reported a net income of $1.8 million, or $0.10 per share, for the first quarter of 2009, compared with the net income of $0.80 million, or $0.05 per share, in the year-ago quarter.
Looking forward, the Osteotech still expects net loss for fiscal 2009 to be in the range of $0.05 – $0.07 per share on revenues of $96 million – $100 million. The company also expects to exit 2009 with about $15 million in cash.
During the first quarter, we continued to make MEANINGFUL progress executing our corporate strategy to position Osteotech as the leading provider of procedure-specific biologics for the orthopedic industry, said Sam Owusu-Akyaw, President and Chief Executive Officer of Osteotech. Three years ago, we began to make long-term investments based upon the premise that biologics would become key components of effective bone healing and the restoration of normal body function. With those investments, we believed that Osteotech, with its proprietary technology platforms, would begin to introduce best-in-class therapeutic solutions. We have begun to see tangible and anecdotal evidence that our assumptions were correct. To capitalize on this growing interest and opportunity, we have several upcoming product launches and unveilings from our technology platforms and have introduced a variety of innovative sales tools and educational forums to drive sales growth. We remain encouraged by our progress and believe that we are well on our way to achieving our 2009 goals that should position us for profitable revenue growth in 2010.
Recent 2009 Corporate Developments
At the Annual Meeting of the American Academy of Orthopedic Surgeons in February 2009, Osteotech hosted a technology suite to disseminate the results of its clinical research supporting the versatility of Plexur P(R) and the biologic’s effectiveness in promoting patient healing. More than 200 surgeons attended the technology suite to learn about how Plexur P can be utilized in specific foot and ankle, trauma and joint revision procedures.
Osteotech has continued to recruit patients for a pivotal clinical trial for its DuraTech(TM) BioRegeneration Matrix. To date, 55 of the 60 patients needed have been enrolled in the trial. Based upon this, the company remains on track to file a 510(k) with the U.S. Food and Drug Administration to secure marketing clearance for DuraTech in the third quarter of this year. DuraTech is the first of several products under development based upon Osteotech’s proprietary human collagen technology platform.
During the first quarter, the company started the production of new procedure-specific instrumentation sets for spinal facet fusion and foot and ankle surgical procedures. The creation of these instrumentation sets supports the company’s strategy to introduce biologics that can meet the needs of specific procedures and lead to better clinical outcomes. Osteotech plans to introduce several instrumentation sets to support its upcoming product launches and unveilings as the year progresses.
Osteotech has continued to work closely with a French Regulatory Agency to resolve the perceived irregularities in the documentation associated with certain donated tissue from its Bulgarian subsidiary. While this review did not question the safety or performance of any of Osteotech’s products, the company temporarily suspended the distribution of products processed from tissue recovered in Bulgaria. In late April, the French Regulatory Agency completed its follow-up audit of Osteotech’s Bulgarian operations and did not have any audit findings in its final closing discussions. The company is currently waiting on a final decision from the French Regulatory Agency before lifting its temporary suspension.
Osteotech continued to strengthen its distribution network and during the first quarter the company introduced a variety of new sales tools and educational programs focused on procedure specific applications for Plexur P and Grafton(R) DBM.
Shortly after the end of the first quarter, the company completed its 6-month posterolateral fusion study of its proprietary MagniFuse(TM) Bone Graft in primates. The initial analysis of the data indicates that the quality and quantity of bone growth formed is superior to autograft and is competitive with the performance seen with growth factors (BMP) that were tested within the same challenging animal model. The study investigators will be submitting the results of this study for a podium talk and abstract to be presented in early 2010 and these results will be made available to support the market introduction of MagniFuse at the North American Spine Society (NASS) meeting in November 2009. This study supports the company’s strategy to introduce application-specific products with documented scientific and technical support.
Looking ahead, we are well positioned to launch or unveil MagniFuse, Plexur M, DuraTech and Facetlinx(TM) Facet Fusion Graft, our procedure-specific spine product, and we believe we are taking the steps necessary, particularly within our sales distribution network, to encourage demand, continued Owusu-Akyaw. Based upon the investments we have made in our business and the emerging trends in orthopedics, we believe we are well positioned to emerge as a leader in the industry. We believe our proprietary technology platforms and research and development capabilities provide us with a technology lead that will be difficult to penetrate. We remain focused on increasing shareholder value and believe that the potential for sustainable, profitable revenue growth will allow us to reach our goal of providing significant returns to all of our stakeholders.