Exhibit 99.1
Osiris Therapeutics Reports Third Quarter 2010 Financial Results
COLUMBIA, Md. —November 5, 2010 - Osiris Therapeutics, Inc. (NASDAQ: OSIR), the leading stem cell company focused on developing and marketing products to treat medical conditions in the inflammatory, autoimmune, cardiovascular and orthopedic areas, announced today its results for the third quarter of fiscal 2010.
Highlights and Recent Developments
· Prochymal New Drug Submission (NDS) under Priority Review for full marketing approval by the Biologics and Genetic Therapies Directorate of Health Canada for graft vs. host disease (GvHD).
· Request for Pre-BLA (Biologics License Application) meeting submitted to the U.S. Food and Drug Administration to prepare for the upcoming Prochymal BLA submission for GvHD.
· Received Orphan Drug designation from Swissmedic, the Swiss Agency for Therapeutic Products, for Prochymal as a treatment for GvHD, making the drug eligible for expedited review.
· Recorded net income of $4.5 million for the quarter; $0.14 per diluted common share.
· Reported cash, short-term investments and receivables of $76.5 million as of September 30, 2010.
“In conjunction with our partners at Genzyme, we are making progress towards our goal of winning approval of the world’s first stem cell therapy,” said C. Randal Mills, Ph.D., President and Chief Executive Officer of Osiris Therapeutics. “We are pleased with the steady progress made through the quarter and look forward to working with regulatory agencies around the globe to make Prochymal available to patients in need.”
Third Quarter Financial Results
Net income for the third quarter of 2010 was $4.5 million compared to a loss from continuing operations of $6.8 million in the third quarter of 2009. Revenues were $10.8 million in the third quarter of 2010, consisting primarily of the amortization of license fees from our collaboration agreements. Revenues in the third quarter of 2009 were $10.6 million. As of September 30, 2010, Osiris had $76.5 million of cash, receivables and short-term investments.
Research and development expenses for the third quarter of 2010 were $5.5 million, compared to $16.2 million incurred in the third quarter of 2009. The $10.7 million decrease in R&D expenses reflects the completion of clinical work associated with our Phase 3 clinical trials. General and administrative expenses were $1.3 million for the third quarter of 2010 compared to $1.5 million for the same period of the prior year. Net cash used in continuing operations for the three months ended September 30, 2010 was $8.0 million.
Webcast and Conference Call
A webcast and conference call to discuss the financial results is scheduled for today, November 5, 2010 at 9:00 a.m. ET. To access the webcast, visit the Investor Relations section of the company’s website at http://investor.osiris.com/events.cfm. Alternatively, callers may participate in the conference call by dialing (877) 303-6133 (U.S. participants) or (970) 315-0493 (international participants).
A replay of the conference call will be available approximately two hours after the completion of the call through November 11, 2010. Callers can access the replay by dialing (800) 642-1687 (U.S. participants) or (706) 645-9291 (international participants). The audio replay confirmation code is 21023779. To access a replay of the webcast, visit the Investor Relations section of the company’s website at http://investor.osiris.com/events.cfm.
About Osiris Therapeutics
Osiris Therapeutics, Inc. is the leading stem cell company focused on developing products to treat serious medical conditions in the inflammatory, autoimmune, orthopedic and cardiovascular areas. The Company’s pipeline of internally developed biologic drug candidates under evaluation includes Prochymal for inflammatory, autoimmune and cardiovascular indications, as well as Chondrogen for arthritis in the knee. Osiris is a fully integrated company, with capabilities in research, development, manufacturing and distribution of stem cell products. Osiris has developed an extensive intellectual property portfolio to protect the company’s technology, including 49 U.S. patents each having one or more foreign counterparts. Osiris and Prochymal are registered trademarks of Osiris Therapeutics, Inc. More information can be found on the company’s website, www.Osiris.com. (OSIR-G)
Osiris and Genzyme formed a strategic alliance for the development and commercialization of Prochymal and Chondrogen. Under the terms of the agreement, Osiris retains commercialization rights to Prochymal and Chondrogen in the United States and Canada. Genzyme holds these rights in all other countries except Japan, where JCR Pharmaceuticals holds rights to Prochymal for the treatment of patients with hematological malignancies.
Forward-Looking Statements
This press release contains forward-looking statements. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Words or phrases such as “anticipate,” “believe,” “continue,” “ongoing,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. Examples of forward-looking statements include, but are not limited to, statements regarding the following: our product development efforts; our clinical trials and anticipated regulatory requirements and the ability to successfully navigate these requirements; the success of our product candidates in development; status of the regulatory process for our biologic drug candidates; implementation of our corporate strategy; our financial performance; our product research and development activities and projected expenditures, including our anticipated timeline and clinical strategy for Prochymal, Chondrogen and our other MSC and biologic drug candidates; our cash needs; patents and proprietary rights; the safety and ability of our potential products to treat disease and the results of our scientific research; our plans for sales and marketing; our plans regarding our facilities; types of regulatory
7015 Albert Einstein Drive · Columbia, Maryland 21046 · Ph 443.545.1800 · Fax 443.545.1701 · www.Osiris.com
frameworks we expect will be applicable to our potential products; and results of our scientific research. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements.�� Risks and uncertainties related to our Collaboration Agreement with Genzyme for the development and commercialization of Prochymal and Chondrogen include, among others: typical business transactional risks; risks related to product development and clinical trial design, performance and completion; uncertainty of the success of Prochymal and Chondrogen in clinical trials and their ability to treat disease; Genzyme’s early termination and opt-out rights; the ability of Osiris and Genzyme to successfully navigate regulatory requirements and to manufacture and commercialize products; and the uncertainty as to our ability to successfully perform under the collaborative arrangement and earn milestone and royalty payments thereunder. Our actual results could differ materially from those anticipated in forward-looking statements for many reasons, including the factors described in the section entitled “Risk Factors” in our Annual Report on Form 10-K and other Periodic Reports filed on Form 10-Q, with the United States Securities and Exchange Commission. Accordingly, you should not unduly rely on these forward-looking statements. We undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this press release or to reflect the occurrence of unanticipated events.
For additional information, please contact:
Erica Elchin
Osiris Therapeutics, Inc.
(443) 545-1834
OsirisPR@Osiris.com
Media Contacts:
Andrew Law/Rachel Gross
Schwartz Communications
(781) 684-0770
Osiris@schwartz-pr.com
OSIRIS THERAPEUTICS, INC.
Condensed Balance Sheets
Amounts in thousands
|
| September 30, 2010 |
| December 31, 2009 |
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| (unaudited) |
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Assets |
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Current assets: |
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Cash |
| $ | 1,088 |
| $ | 1,306 |
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Investments available for sale |
| 75,168 |
| 99,409 |
| ||
Accounts receivable |
| 262 |
| 1,138 |
| ||
Inventory |
| 321 |
| — |
| ||
Prepaid expenses and other current assets |
| 789 |
| 948 |
| ||
Total current assets |
| 77,628 |
| 102,801 |
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Property and equipment, net |
| 3,266 |
| 3,734 |
| ||
Restricted cash |
| 521 |
| 666 |
| ||
Other assets |
| 3,142 |
| 395 |
| ||
Total assets |
| $ | 84,557 |
| $ | 107,596 |
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable and accrued expenses |
| $ | 7,057 |
| $ | 9,013 |
|
Deferred revenue, current portion |
| 40,840 |
| 41,011 |
| ||
Capital lease obligations, current portion |
| — |
| 3 |
| ||
Current liabilities of discontinued operations |
| — |
| 412 |
| ||
Total current liabilities |
| 47,897 |
| 50,439 |
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|
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Deferred revenue, net of current portion |
| 13,543 |
| 44,173 |
| ||
Other long-term liabilities |
| 470 |
| 424 |
| ||
Total liabilities |
| 61,910 |
| 95,036 |
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Stockholders’ equity |
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Common stock, $.001 par value, 90,000 shares authorized, 32,790 shares outstanding - 2010, 32,773 outstanding - 2009 |
| 33 |
| 33 |
| ||
Additional paid-in-capital |
| 274,242 |
| 272,959 |
| ||
Accumulated other comprehensive income (loss) |
| 5 |
| (88 | ) | ||
Accumulated deficit |
| (251,633 | ) | (260,344 | ) | ||
Total stockholders’ equity |
| 22,647 |
| 12,560 |
| ||
Total liabilities and stockholders’ equity |
| $ | 84,557 |
| $ | 107,596 |
|
OSIRIS THERAPEUTICS, INC.
Condensed Statements of Operations
(Unaudited)
Amounts in thousands, except per share data
|
| Three Months Ended |
| Nine Months Ended |
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|
| September 30, |
| September 30, |
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|
| 2010 |
| 2009 |
| 2010 |
| 2009 |
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Product sales |
| $ | 99 |
| $ | — |
| $ | 99 |
| $ | — |
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Cost of goods sold |
| 34 |
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| 34 |
| — |
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Gross profit |
| 65 |
| — |
| 65 |
| — |
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Revenue from collaborative research agreements, government contract and royalties |
| 10,659 |
| 10,584 |
| 32,340 |
| 33,779 |
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Operating expenses: |
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Research and development |
| 5,460 |
| 16,247 |
| 18,476 |
| 53,354 |
| ||||
General and administrative |
| 1,268 |
| 1,511 |
| 4,677 |
| 6,745 |
| ||||
|
| 6,728 |
| 17,758 |
| 23,153 |
| 60,099 |
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Income (loss) from operations |
| 3,996 |
| (7,174 | ) | 9,252 |
| (26,320 | ) | ||||
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Other income, net |
| 27 |
| 134 |
| 151 |
| 387 |
| ||||
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Income (loss) from continuing operations, before income taxes |
| 4,023 |
| (7,040 | ) | 9,403 |
| (25,933 | ) | ||||
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Income tax benefit (expense) |
| 525 |
| 238 |
| (692 | ) | 2,636 |
| ||||
Income (loss) from continuing operations |
| 4,548 |
| (6,802 | ) | 8,711 |
| (23,297 | ) | ||||
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Discontinued operations: |
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Income (loss) from operations of discontinued operations, net of income taxes |
| — |
| (28 | ) | — |
| 1,069 |
| ||||
Gain from sale of discontinued operations, net of income taxes |
| — |
| 636 |
| — |
| 21,112 |
| ||||
Income from discontinued operations |
| — |
| 608 |
| — |
| 22,181 |
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|
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Net income (loss) |
| $ | 4,548 |
| $ | (6,194 | ) | $ | 8,711 |
| $ | (1,116 | ) |
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Basic income (loss) per share |
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Income (loss) from continuing operations |
| $ | 0.14 |
| $ | (0.21 | ) | $ | 0.27 |
| $ | (0.71 | ) |
Income from discontinued operations |
| — |
| 0.02 |
| — |
| 0.68 |
| ||||
Basic earnings (loss) per share |
| $ | 0.14 |
| $ | (0.19 | ) | $ | 0.27 |
| $ | (0.03 | ) |
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Diluted income (loss) per share |
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Income (loss) from continuing operations |
| $ | 0.14 |
| $ | (0.21 | ) | $ | 0.26 |
| $ | (0.71 | ) |
Income from discontinued operations |
| — |
| 0.02 |
| — |
| 0.68 |
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Diluted earnings (loss) per share |
| $ | 0.14 |
| $ | (0.19 | ) | $ | 0.26 |
| $ | (0.03 | ) |
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Weighted Average Common Shares (basic) |
| 32,789 |
| 32,764 |
| 32,781 |
| 32,731 |
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Weighted Average Common Shares (diluted) |
| 33,100 |
| 32,764 |
| 33,095 |
| 32,731 |
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OSIRIS THERAPEUTICS, INC.
Condensed Statements of Cash Flows
(Unaudited)
Amounts in thousands
|
| Nine Months Ended |
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|
| September 30, |
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|
| 2010 |
| 2009 |
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Cash flows from operating activities: |
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Continuing operations |
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Income (loss) from continuing operations |
| $ | 8,711 |
| $ | (23,297 | ) |
Adjustments to reconcile income (loss) from continuing operations to net cash (used in) provided by operations: |
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Depreciation and amortization |
| 566 |
| 483 |
| ||
Non cash share-based payments |
| 1,281 |
| 1,852 |
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Changes in operating assets and liabilities: |
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Accounts receivable |
| 876 |
| 56,101 |
| ||
Prepaid expenses and other current assets |
| (162 | ) | (710 | ) | ||
Other assets |
| (2,747 | ) | 162 |
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Accounts payable and accrued expenses |
| (1,938 | ) | 4,670 |
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Deferred revenue |
| (30,801 | ) | (29,928 | ) | ||
Net cash (used in) provided by continuing operations |
| (24,214 | ) | 9,333 |
| ||
Discontinued operations |
|
|
|
|
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Income from discontinued operations |
| — |
| 22,181 |
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Adjustments to reconcile income from discontinued operations to net cash used in discontinued operations: |
|
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Non cash impact of the sale of discontinued operations |
| — |
| (26,595 | ) | ||
Depreciation and amortization |
| — |
| 210 |
| ||
Provision for bad debts |
| — |
| 45 |
| ||
Non cash share-based payments |
| — |
| 98 |
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Changes in operating assets and liabilities: |
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|
|
|
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Accounts receivable |
| — |
| 1,516 |
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Inventory and other current assets |
| — |
| 1,707 |
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Accounts payable and accrued expenses |
| (412 | ) | (3,108 | ) | ||
Net cash used in discontinued operations |
| (412 | ) | (3,946 | ) | ||
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Net cash used in operating activities |
| (24,626 | ) | 5,387 |
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Cash flows from investing activities: |
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Purchases of property and equipment |
| (98 | ) | (181 | ) | ||
Proceeds from the sale of property and equipment |
| — |
| 17 |
| ||
Proceeds from sale of discontinued operations, net |
| — |
| 9,797 |
| ||
Proceeds from sale of investments available for sale |
| 24,598 |
| 35,578 |
| ||
Purchases of investments available for sale |
| (236 | ) | (50,000 | ) | ||
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Net cash provided by (used in) investing activities |
| 24,264 |
| (4,789 | ) | ||
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Cash flows from financing activities: |
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Principal payments on capital lease obligations and notes payable |
| (3 | ) | (5 | ) | ||
Restricted cash |
| 145 |
| (536 | ) | ||
Proceeds from the exercise of stock options |
| 2 |
| 575 |
| ||
|
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|
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Net cash provided by financing activities |
| 144 |
| 34 |
| ||
|
|
|
|
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Net (decrease) increase in cash |
| (218 | ) | 632 |
| ||
Cash at beginning of period |
| 1,306 |
| 940 |
| ||
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Cash at end of period |
| $ | 1,088 |
| $ | 1,572 |
|