Medgenics Inc MEDG Third Quarter Results

  Medgenics Inc (MEDG) - Third Quarter Results

RNS Number : 1141R
Medgenics Inc
14 November 2012








                                      



Press Release 14 November 2012



                               Medgenics, Inc.

                        ("Medgenics" or "the Company")



            Medgenics Reports Third Quarter 2012 Financial Results



Medgenics, Inc. (NYSE  Amex: MDGN  and AIM: MEDU,  MEDG), the  developer of  a 
novel technology  for the  sustained production  and delivery  of  therapeutic 
proteins in patients using their own tissue, today reported financial  results 
for three and nine months ended September 30, 2012.



Business Highlights of the Third Quarter and Subsequent Weeks



· Received approval from Israel's Ministry of Health to initiate two Phase
I/II studies  to  assess  the  safety and  efficacy  of  INFRADURE™  to  treat 
hepatitis C. These will be the first clinical proof-of-concept studies for the
INFRADURE Biopump.

· Enrolled the first patients in a Phase IIa trial in Israel with EPODURE™
to treat anemia in patients with end-stage renal disease who are on  dialysis, 
and presented preliminary data at the American Society of Nephrology's  Kidney 
Week 2012.

· Expanded  the executive  management  team with  the addition  of  Marvin 
Garovoy, M.D., as Chief Medical Officer.  Dr. Garovoy is a biotechnology  and 
pharmaceutical  industry   executive   with  considerable   drug   development 
experience   at   Genentech,   XOMA,   Hyperion   Therapeutics,   and   Arriva 
Pharmaceuticals.

· Appointed Sol J. Barer,  Ph.D. as Chairman of  the Board. Dr. Barer  is 
the former Chairman and Chief Executive Officer of Celgene Corporation.





Management Commentary



"We made important progress during the third quarter towards our strategic and
clinical goals," stated Andrew L. Pearlman, Ph.D., Chief Executive Officer  of 
Medgenics.



"Specifically, we received approval from the Israel Ministry of Health for our
Phase I/II trials  in hepatitis C,  with an  objective of enrolling  up to  16 
untreated patients with  hepatitis C  genotype 3. This  represents the  first 
proof of concept study of INFRADURE in  man. We expect to use data from  this 
study to advance our broader INFRADURE hepatitis clinical development program,
starting in  the U.S.,  where we  have received  Orphan Drug  Designation  for 
hepatitis D from the U.S. Food  and Drug Administration ("FDA"). Hepatitis  D 
is a rare  and aggressive  form of  hepatitis whose  standard treatment  today 
consists of weekly injections  of interferon-alpha for a  year or more,  where 
oral antiviral  treatments  have  not  been effective.  In  addition,  we  are 
investigating the application of INFRADURE for hepatitis B towards  addressing 
the emerging need for a practical,  shorter treatment alternative to years  of 
expensive  oral  antivirals.  Hepatitis  B  is  the  most  prevalent  form  of 
hepatitis, with an estimated 350 million people infected worldwide,  according 
to the World Health Organization.



"We have also initiated a Phase IIa EPODURE study in Israel to treat anemia in
dialysis patients with  end-stage renal  disease ("ESRD"),  and have  recently 
presented early data from that  study in a poster at  the 2012 Kidney Week  of 
the American Society of  Nephrology. We continue  preparations to initiate  a 
Phase II  clinical trial  in  the U.S.  in early  2013  with EPODURE  in  ESRD 
patients on dialysis, as  cleared by the FDA  in May under an  Investigational 
New Drug ("IND")  application. Our objective  with this EPODURE  study is  to 
achieve recommended hemoglobin targets for months, while avoiding the risks of
supraphysiologic   EPO   concentrations   associated   with   injections    of 
erythropoietin stimulating agents. It  also has the  potential to improve  the 
logistics of anemia management in a range of settings, whether in the  clinic, 
home or elsewhere, to the benefit of both patients and payors.



"We are in the process of performing a comprehensive pipeline review to assess
clinical applications  we believe  could benefit  from our  versatile  Biopump 
platform and to update our list of targeted indications that will maximize our
business development prospects," added Dr. Pearlman.



"We are  very  pleased to  have  strengthened Medgenics  leadership  with  the 
addition of Dr. Sol Barer as Chairman of the Board, and to have bolstered  our 
clinical team with  the appointment  of Dr.  Marvin Garovoy  as Chief  Medical 
Officer," concluded Dr. Pearlman.





Third Quarter Financial Results



Gross research and development ("R&D") expense  for the third quarter of  2012 
increased to $1.89 million from $1.79 million  for same period in 2011 due  to 
an increase in R&D personnel. Net R&D expense for the 2012 third quarter  was 
$1.61 million compared  with net R&D  expense of $1.35  million for the  prior 
year's third quarter.



General and administrative  expense for the  third quarter of  2012 was  $1.47 
million compared with $1.88 million for  the third quarter of 2011,  primarily 
due to a decrease in compensation for professional services.



Financial expense for the  third quarter of 2012  decreased to nil from  $0.27 
million for  the  same period  in  2011, mainly  as  a result  of  changes  in 
valuation of the warrant liability.



For the quarter ended September 30, 2012,  the Company reported a net loss  of 
$3.03 million or $0.25 per share, compared with a net loss of $3.42 million or
$0.35 per share in the comparable 2011 period.



Nine Month Financial Results



Gross R&D  expense for  the nine  months ended  September 30,  2012 was  $5.13 
million, up from $4.50 million for the same period in 2011 due to an  increase 
in the use of  materials and sub-contractors  in connection with  preparations 
for the  Company's ongoing  Phase  II EPODURE  clinical  trial in  Israel  and 
planned Phase II clinical  trial in the U.S.,  preparations for the trials  of 
INFRADURE in Israel  and an  increase in R&D  personnel. For  the nine  months 
ended September 30,  2012, net  R&D expense  decreased to  $3.36 million  from 
$3.57 million for the comparable prior-year period due to the participation by
the Israeli Office of the Chief Scientist of $1.77 million in the 2012  period 
compared with $0.86 million for the 2011 period, which was partially offset by
higher gross  R&D  expenses  as detailed  above.  General  and  administrative 
expense for the  first nine  months of 2012  was $5.60  million compared  with 
$3.71 million for  the first nine  months of 2011  primarily due to  increased 
fees for legal and professional services and stock-based compensation  granted 
to consultants and directors. The Company's net loss for the first nine months
of 2012 was $12.69  million or $1.20  per share, compared with  a net loss  of 
$6.09 million or $0.76 per share for the same period of 2011.



Balance Sheet Highlights



As of September  30, 2012, Medgenics  had cash and  cash equivalents of  $9.00 
million, compared with $5.00  million as of December  31, 2011. For the  nine 
months ended September 30, 2012, the Company used $5.87 million in net cash to
fund operating activities,  compared with  $5.46 million for  the nine  months 
ended September 30, 2011.



Full results may be viewed in the Company's Quarterly Report on Form 10-Qfiled
with the  U.S.  Securities and  Exchange  Commission ("SEC").  The  Form  10-Q 
includes  unaudited   consolidated   financial   statements   containing   the 
information  highlighted  in  this  press  release,  as  well  as   additional 
information  regarding   the  Company.   The  Form   10-Q  is   available   at 
www.sec.govand at www.medgenics.com.









About Medgenics

Medgenics  is   developing  and   commercializing  Biopump™,   a   proprietary 
tissue-based platform technology for the sustained production and delivery  of 
therapeutic proteins using  the patient's own  tissue for the  treatment of  a 
range of chronic  diseases including anemia,  hepatitis and hemophilia,  among 
others. Medgenics believes this approach  has multiple benefits compared  with 
current treatments, which include regular and costly injections of therapeutic
proteins.



Medgenics has three long-acting protein therapy products in development  based 
on this technology:



·  EPODURE™  to  produce  and   deliver  erythropoietin  from  a   single 
administration,  which  has  demonstrated   elevation  and  stabilization   of 
hemoglobin levels in anemic patients for periods of six months to more than 36
months in a Phase I/II  dose-ranging trial in Israel  and is currently in  a 
Phase IIa trial in dialysis in Israel. An Investigational New Drug application
has been cleared  by the FDA  to initiate a  Phase IIb study  to evaluate  the 
safety and efficacy of EPODURE in the treatment of anemia in dialysis patients
in the U.S.

· INFRADURE™ for  sustained production and  delivery of  interferon-alpha 
for use in  the treatment of  hepatitis, which has  received approval for  two 
Phase I/II trials in hepatitis C from the Israeli Ministry of Health with  the 
first slated to commence in Q4 2012; and has received Orphan Drug  Designation 
from the FDA for the treatment of hepatitis D.

· HEMODURE™ for sustained production and delivery of clotting Factor VIII
therapy for the sustained prophylactic  treatment of hemophilia, which is  now 
in development.



Medgenics is focused on  the development and  manufacturing of its  innovative 
Biopumps, aiming to bring them to market via strategic partnerships with major
pharmaceutical and/or medical device companies. In addition to treatments  for 
anemia,  hepatitis  and   hemophilia,  Medgenics  plans   to  develop   and/or 
out-license a  pipeline of  future Biopump  products targeting  the large  and 
rapidly growing global protein therapy market, which is forecast to reach $132
billion in 2013.  Other potential applications  for Biopumps include  multiple 
sclerosis,  arthritis,  pediatric  growth  hormone  deficiency,  obesity   and 
diabetes.



Forward-looking Statements

This release contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, Section 21E of the Securities Exchange  Act 
of 1934  and as  that term  is defined  in the  Private Securities  Litigation 
Reform Act of  1995, which  include all  statements other  than statements  of 
historical fact, including (without limitation) those regarding the  Company's 
financial  position,  its  development  and  business  strategy,  its  product 
candidates and the plans and  objectives of management for future  operations. 
The Company intends  that such  forward-looking statements be  subject to  the 
safe harbors created  by such laws.  Forward-looking statements are  sometimes 
identified by  their  use  of  the  terms  and  phrases  such  as  "estimate," 
"project," "intend,"  "forecast," "anticipate,"  "plan," "planning,  "expect," 
"believe," "will," "will  likely," "should,"  "could," "would,"  "may" or  the 
negative  of  such   terms  and   other  comparable   terminology.  All   such 
forward-looking statements are based on  current expectations and are  subject 
to risks  and  uncertainties.  Should  any of  these  risks  or  uncertainties 
materialize, or  should  any of  the  Company's assumptions  prove  incorrect, 
actual  results  may  differ  materially  from  those  included  within  these 
forward-looking statements. Accordingly, no undue reliance should be placed on
these forward-looking statements, which  speak only as of  the date made.  The 
Company expressly disclaims any obligation  or undertaking to disseminate  any 
updates or revisions  to any  forward-looking statements  contained herein  to 
reflect any change in  the Company's expectations with  regard thereto or  any 
change in events, conditions or circumstances on which any such statements are
based.  As  a  result   of  these  factors,  the   events  described  in   the 
forward-looking statements contained in this release may not occur.





For further information, contact:



Medgenics, Inc.                               Phone: +972 4 902 8900

Dr. Andrew L. Pearlman                        

Andrew.pearlman@medgenics.com                 

LHA                                           

Anne Marie Fields                             Phone: 212-838-3777

afields@lhai.com                              

@LHA_IR_PR


Abchurch Communications                       Phone: +44 207 398 7719

Adam Michael

Joanne Shears

Jamie Hooper

jamie.hooper@abchurch-group.com


SVS Securities plc (Joint Broker)             Phone: +44 207 638 5600

Alex Mattey                                   

Ian Callaway


Nomura Code Securities (NOMAD & Joint Broker) Phone: +44 207 776 1200

Jonathan Senior/Giles Balleny                 

                                      

                                      

                             - Tables to Follow-



CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands



                                             September 30,      December 31, 
                                            2012       2011         2011     
                                              (Unaudited)                    
                                                                             
ASSETS                                                                      
                                                                             
CURRENT ASSETS:
                                                                             
Cash and cash equivalents                $ 8,999   $ 7,570      $ 4,995 
Accounts receivable and prepaid                                              
expenses                                       619      1,298         1,122
                                                                             
Total current assets                         9,618      8,868         6,117 
                                                                             
LONG-TERM ASSETS:                                                          
                                                                             
Restricted lease deposits                        59         59            52 
Severance pay fund                             279        346           259 
                                                                             
Total long-term assets                          338        405           311 
                                                                             
                                                                             
PROPERTY AND EQUIPMENT, NET                   380        428           434 
                                                                             
Total assets                             $ 10,336  $ 9,701     $ 6,862 
                                                                             
                                                                             



CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands



                                                September 30,     December 31,
                                                2012      2011        2011
                                                  Unaudited
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables                              $ 769    $ 928        $ 903
Other accounts payable and accrued expenses      1,395     1,413         1,156
Total current liabilities                      2,164     2,341         2,059
LONG-TERM LIABILITIES:
Accrued severance pay                     1,585     1,252         1,328
Liability in respect of warrants             3,373     1,429           478
Total long-term liabilities     4,958     2,681         1,806
Total liabilities                              7,122     5,022         3,865
STOCKHOLDERS' EQUITY:
Common stock - $0.0001 par value;

100,000,000 shares authorized; 12,236,570,
9,690,117 and 9,722,725 shares issued and
outstanding at September 30, 2012, September
30, 2011 and December 31, 2011, respectively         1         1             1
Additional paid-in capital                     65,403    52,172        52,501
Deficit accumulated during the development
stage                                         (62,190)  (47,494)      (49,505)
Total stockholders' equity                       3,214     4,679         2,997
Total liabilities and stockholders' equity    $ 0,336  $ 9,701      $ 6,862





                                      

CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands (except share and per share data)



                                                                   Period from
                                                                   January 27,
                     Nine months ended       Three months ended       2000
                                                                   (inception)
                       September 30,           September 30,         through
                                                                    September
                     2012           2011      2012        2011      30, 2012
                                           Unaudited
Research and
development        $ 5,125  $ 4,503    $ 1,894   $ 1 ,785   $ 35,567
expenses
Less -
Participation by
the Office of the
Chief Scientist       (1,769)       (860)       (283)       (357)   (7,062)
 U.S.
Government grant            -           -           -           -        (244)

Participation by
third party                 -        (75)           -        (75)      (1,067)
Research and
development
expenses, net           3,356       3,568  1,611            1,353       27,194
General and
administrative
expenses                5,603       3,709  1,470            1,877       32,001
Other income:
Excess amount of
participation in
research and
development from
third party                 -           -  -                    -      (2,904)
Operating loss        (8,959)     (7,277)     (3,081)     (3,230)     (56,291)
Financial
expenses                3,721         203  -                  267      (7,001)
Financial income          (4)     (1,398)  (55)              (74)          758
Loss before taxes
on income            (12,676)     (6,082)  (3,026)        (3,423)     (62,534)
Taxes on income             9           3           1           1           85
Loss              $ (12,685)  $ (6,085)  $ (3,027)  $ (3,424)  $ (62,619)
Basic and
diluted loss
per share          $ (1.20)   $ (0.76)   $ (0.25)   $ (0.35)
Weighted average
number of shares
of Common stock
used in computing
basic and
diluted loss per
share              10,604,924   8,020,348  12,013,153   9,657,659

                                      

                                   - Ends -

                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


QRTLLFIFLILSLIF -0- Nov/14/2012 14:30 GMT
 
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