http://www.businesswire.com/news/home/20091104006399/en
* Third quarter 2009 sales increased 8% to $22.3 million; operating loss was
$1.0 million compared to an operating loss of $1.2 million in the third quarter
of 2008
* Controlled Cortoss launch in the U.S. generated $400,000 in Q3 2009 sales;
Cortoss launch expanded to entire sales force for fourth quarter of 2009
MALVERN, Pa.--(Business Wire)--
Orthovita, Inc. (NASDAQ: VITA), a leading orthobiologics and biosurgery company,
today reported its financial results for the quarter ended September 30, 2009.
Product sales for the third quarter of 2009 were $22.3 million, an 8% increase
over product sales of $20.6 million in the third quarter of 2008. The 2009 third
quarter results included $400,000 in U.S. sales of Cortoss, the Company`s new
and innovative synthetic biomaterial that was cleared by the FDA in June 2009
for the treatment of vertebral compression fractures. In July 2009, Orthovita
initiated a limited, controlled launch of Cortoss in the U.S. using a small
group of its highly trained direct sales representatives, and expanded the
launch to its entire sales force for the fourth quarter of 2009.
Gross profit during the third quarter of 2009 was $15.1 million, or 68% of
sales, compared to $13.9 million, or 68% of sales, in the third quarter of 2008.
Operating expenses in the third quarter of 2009 were $16.1 million, a 7%
increase over operating expenses of $15.1 million in the third quarter of 2008.
The operating loss for the third quarter of 2009 decreased to $1.0 million
compared to an operating loss of $1.2 million in the third quarter of 2008. The
net loss for the quarter ended September 30, 2009 was $1.7 million, or $0.02 per
common share, which was unchanged from the third quarter of 2008.
"The most significant news of the third quarter was our controlled launch of
Cortoss in the United States," said Antony Koblish, President and Chief
Executive Officer of Orthovita. "There are subtle but important differences in
the application of the Cortoss technology compared to standard
polymethylmethacrylate (PMMA) bone cement, and we wanted to ensure the best
possible clinical outcomes as we introduced this innovative new technology to
surgeons and patients. I am very pleased to report that surgeons adapted readily
to the use of Cortoss, and many were impressed with the product`s ease of use,
therapeutic fill and flow characteristics and strong clinical benefit. Several
surgeons have commented that these features allow them to complete cases in less
time than previously required. A number of surgeons are also using Cortoss in
their more difficult cases and achieving favorable outcomes for their patients."
"In September, following additional clinical training, all of our direct sales
representatives began targeting surgeons for potential Cortoss use. Cortoss is a
new technology, so our representatives need to spend quite a bit of time
addressing new technology committees in hospitals before the product is approved
and ordered. We are gratified to see that nearly two-thirds of the hospitals
that have ordered Cortoss have already placed reorders for the product."
"Total sales in the third quarter of 2009 increased over the corresponding 2008
quarter at a slower rate than in previous quarters," commented Nancy Broadbent,
Senior Vice President and Chief Financial Officer of Orthovita. "The third
quarter is typically affected by summer seasonality, but we believe this had
less of an impact in 2008 because of the rapid uptake of Vitoss Bioactive Foam
launched earlier in 2008. We believe that sales force productivity in the 2009
quarter was also adversely affected by the launch of Cortoss in the U.S. and the
time required educating physicians and hospital new technology committees about
Cortoss."
For the first nine months of 2009, product sales increased 22% to $68.5 million,
compared to $56.1 million for the first nine months of 2008. This increase was
due primarily to higher sales of Vitoss Bioactive Foam. Gross profit for the
nine months ended September 30, 2009 was $ 46.7 million, or 68% of product
sales, compared to $37.2 million, or 66% of product sales, in the nine months
ended September 30, 2008. This improvement in gross margin was largely due to a
more favorable product mix.
The operating loss in the first nine months of 2009 was $1.5 million compared to
an operating loss of $8.5 million in the first nine months of 2008. This
improvement resulted from higher sales and gross margins, which were partially
offset by higher (5.0%) operating expenses in the first nine months of 2009
compared to the first nine months of 2008. The net loss for the first nine
months of 2009 was $3.6 million, or $0.05 per common share, compared to a net
loss of $9.5 million, or $0.13 per common share, in the first nine months of
2008.
Cash, cash equivalents and short-term investments were $22.5 million at
September 30, 2009, compared to $32.3 million at December 31, 2008. For the nine
months ended September 30, 2009, the net cash and cash equivalents used in
operating activities was $5.9 million, compared to $11.7 million for the nine
months ended September 30, 2008. Net cash and cash equivalents used in operating
activities for the nine months ended September 30, 2009 decreased as compared
with the nine months ended September 30, 2008, primarily due to a decrease in
the operating loss.
Conference Call
Antony Koblish, President and Chief Executive Officer, and Nancy C. Broadbent,
Senior Vice President and Chief Financial Officer of Orthovita, will host a
conference call at 8:30 a.m. Eastern Time on Thursday, November 5, 2009 to
review and discuss the third quarter 2009 financial results. The phone number to
join the conference call from within the U.S. is (888) 815-2919, and from
outside the U.S. is (706) 643-3675; the conference identification number is
35689143. Listeners are advised to dial in ten minutes prior to the scheduled
start time for the conference call. A replay of the conference call will be
available for two weeks beginning November 5, 2009 at 11:30 a.m. Eastern Time,
and ending November 19, 2009, at 11:59 p.m. Eastern Time. You may listen to the
replay by dialing within the U.S. (800) 642-1687 or by dialing from outside the
U.S. (706) 645-9291. The replay identification number is 35689143.
About the Company
Orthovita is an orthobiologics and biosurgery company that develops and markets
novel medical devices. Our orthobiologics platform offers products for the
fusion, regeneration, and fixation of human bone. Our biosurgery platform offers
products for controlling intra-operative bleeding, also known as hemostasis. Our
current fusion and regeneration products are based on our proprietary VITOSSTM
Bone Graft Substitute technology and address the non-structural bone graft
market with synthetic, bioactive alternatives to patient- and cadaver-derived
bone tissue. CORTOSSTM Bone Augmentation Material, an injectable, polymer
composite that mimics the structural characteristics of human bone, provides the
basis for our fixation portfolio. CORTOSS received clearance in June 2009 for
vertebral augmentation. Our hemostasis portfolio includes VITAGELTM Surgical
Hemostat, a unique, collagen-based matrix that controls bleeding and facilitates
healing, and VITASURE Absorbable Hemostat, a plant-based product that can be
deployed quickly throughout surgery.
Disclosure Notice
This press release may contain forward-looking statements regarding Orthovita`s
current expectations of future events that involve risks and uncertainties,
including, without limitation, the demand and market acceptance of our products,
including CORTOSS, our ability to successfully launch Cortoss, our ability to
achieve our sales and net loss forecast for 2009, and other aspects of our
business. Such statements are based on management`s current expectations and are
subject to a number of substantial risks and uncertainties that could cause
actual results or timeliness to differ materially from those addressed in the
forward-looking statements.Factors that may cause such a difference are listed
from time to time in reports filed by the Company with the U.S. Securities and
Exchange Commission (SEC), including but not limited to risks described in our
most recently filed Form 10-K under the caption "Risk Factors."Further
information about these and other relevant risks and uncertainties may be found
in Orthovita`s filings with the SEC, all of which are available from the SEC as
well as other sources. Orthovita undertakes no obligation to publicly update any
forward-looking statements.
ORTHOVITA, INC. AND SUBSIDIARIES
Summary Financial Information (Unaudited)
Statements of Operations Data: Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
PRODUCT SALES $ 22,295,070 100 % $ 20,563,081 100 % $ 68,476,675 100 % $ 56,068,078 100 %
COST OF SALES 7,149,818 32 % 6,682,197 32 % 21,826,529 32 % 18,850,313 34 %
GROSS PROFIT 15,145,252 68 % 13,880,884 68 % 46,650,146 68 % 37,217,765 66 %
OPERATING EXPENSES:
General & administrative expenses 3,443,940 15 % 2,671,559 13 % 9,148,039 13 % 8,202,293 15 %
Selling & marketing expenses 10,819,777 49 % 10,957,284 53 % 33,433,176 49 % 32,236,273 57 %
Research & development expenses 1,885,648 8 % 1,456,380 7 % 5,542,759 8 % 5,292,670 9 %
Total operating expenses 16,149,365 72 % 15,085,223 73 % 48,123,974 70 % 45,731,236 81 %
OPERATING LOSS (1,004,113 ) (4 %) (1,204,339 ) (6 %) (1,473,828 ) (2 %) (8,513,471 ) (15 %)
INTEREST EXPENSE (756,081 ) (3 %) (814,013 ) (4 %) (2,342,272 ) (3 %) (1,976,195 ) (4 %)
INTEREST INCOME 28,572 <1% 264,517 1 % 238,569 <1% 1,075,520 2 %
GAIN/(LOSS) ON SALE OR DISPOSAL OF ASSETS 4,995 <1% 74,074 (<1%) 4,995 <1% (71,909 (3,502 ) (852 ) (8,618 ) (2,747 )
Acquisition activity - (93 ) - (505 )
Proceeds from sale of assets - 20 - 20
Acquired technology rights - (234 ) (21 ) (1,216 )
Net cash provided by (used in) investing activities 6,419 (28,333 ) (2,230 ) (34,554 )
Cash flows from financing activities:
Proceeds from debt - - 454 -
Payments on debt - - (440 ) (134 )
Proceeds from secondary offering, net of offering costs - (104 ) - 74,675
Proceeds from issuance of common stock 77 3,668 362 6,438
Net cash provided by financing activities 77 3,564 376 80,979
Effect of foreign currency exchange rate on cash (246 ) 25 (376 ) 49
Change in cash and cash equivalents 12,589 (21,061 ) (2,879 ) 54,385
Cash and cash equivalents, beginning of period 66,151 102,679 81,619 27,233
Cash and cash equivalents, end of period $ 78,740 $ 81,618 $ 78,740 $ 81,618
Orthovita, Inc.
Nancy C. Broadbent
Senior Vice President and Chief Financial Officer
610-640-1775 or 800-676-8482
Copyright Business Wire 2009
