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EXHIBIT 21
[CELTRIX LETTERHEAD]
NEWS RELEASE
CONTACT: Donald D. Huffman
Vice President, Finance and Administration,
and Chief Financial Officer
(408) 988-2500
CELTRIX REPORTS FISCAL YEAR-END
FINANCIAL RESULTS
SIGNIFICANT MILESTONES IN PRODUCT DEVELOPMENT PROGRAMS
SANTA CLARA, CA - - May 14, 1998 - - For the fiscal year ended March 31,
1998, Celtrix Pharmaceuticals, Inc. (Nasdaq: CTRX) reported revenues of $661,000
and a net loss of $12,913,000, or $0.61 per share. In comparison, revenues for
the fiscal year ended March 31, 1997, were $658,000, and the net loss was
$12,696,000, or $0.83 per share. These results were in line with company
expectations.
Operating expenses increased 9 percent to $14,992,000 for the fiscal
year ended March 31, 1998, from $13,818,000 for the previous fiscal year, due
primarily to costs associated with human clinical studies and the manufacture of
SomatoKine(R), the company's novel IGF-BP3 therapeutic composition. This
increase was offset by a $737,000 gain on investment from the sale of Prograft
Medical, Inc. securities held by Celtrix since 1993. At March 31, 1998, Celtrix
had $7,913,000 in cash, cash equivalents and short-term investments.
IMPORTANT TRENDS IN CLINICAL STUDIES
"Fiscal 1998 was a year of significant progress in the development of
SomatoKine," said Andreas Sommer, Ph.D., Celtrix's president and chief executive
officer. "Phase II clinical feasibility studies are in progress for two
treatment indications - - hip fractures and severe burns - - and initial
findings are highly encouraging."
"Interim results from our feasibility study in hip fracture patients
show trends which are potentially important not only for recovery from hip
fracture surgery but also for the treatment of severe osteoporosis," Dr. Sommer
said. "We are seeing positive trends in hip bone mineral density, a strong
predictor of reduced refracture risk. We are also observing trends in increased
hand grip strength and reduced fat body mass, which may indicate improved health
and functionality. No adverse treatment-related side effects have been reported
to date."
"Initial data from our feasibility study for severe burns also show
potentially important trends with SomatoKine," Dr. Sommer said. "Severe burns
can cause significant imbalances in the immune system. However, data from the
treatment of 6 children ages 2 to 18 show that systemic administration of
SomatoKine appears to normalize immune functions that may protect patients from
infections. Such protection may be vital, since infections can interfere with
skin graft procedures and, in serious cases, trigger multi-system organ failure
and death."
-more-
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"Celtrix Reports Fiscal Year-End Financial Results"
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OTHER MAJOR COMPANY MILESTONES
Preclinical research is continuing for other treatment indications. As
reported recently, SomatoKine has been shown to effectively prevent the loss of
both muscle weight and muscle protein (the major component of muscle tissue) in
a laboratory model of muscular atrophy. The new findings provide further
evidence supporting the use of SomatoKine to treat protein wasting diseases
associated with cancer, AIDS and other life-threatening illnesses.
Also during the year, three new U.S. patents were issued to Celtrix. Key
among them is a patent providing important commercial protection for SomatoKine.
This patent covers methods for treating osteoporosis and other serious medical
conditions requiring the stimulation of bone and tissue growth.
In the fourth fiscal quarter, Celtrix granted Genzyme Corporation's
Tissue Repair Division expanded technology and territory rights to recombinant
TGF-beta-2, a therapeutic compound. Under new and amended agreements, Genzyme
Tissue Repair now has access to Celtrix's TGF-beta-2 antibody and receptor
technology. In addition, Celtrix granted Genzyme the right to develop and
commercialize TGF-beta-2 throughout the world, including Japan, China, Korea and
Taiwan.
ADDITIONAL INFORMATION
Celtrix is a biopharmaceutical company developing novel therapeutics for
seriously debilitating, degenerative conditions primarily associated with severe
trauma, chronic diseases or aging. The company's development focus is on
SomatoKine, a novel IGF-BP3 complex, for use in regenerating lost muscle, bone
and other tissues essential for the patient's health and quality of life.
Current product development programs target acute traumatic injury, such as hip
fracture surgery in the elderly and severe burns. Through strategic alliances
with Celtrix, Yoshitomi Pharmaceutical Industries Ltd. is developing SomatoKine
for the treatment of osteoporosis in Japan, and Genzyme Corporation is
developing TGF-beta-2 as part of a comprehensive approach to tissue repair and
the treatment of systemic disease.
This news release contains certain forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended.
Actual results may differ materially from the statements made, as a result of
various factors, including risks associated with the ability of the company to
enter into a collaboration with a corporate partner for the development of
SomatoKine to treat various indications, the ability to enroll enough patients,
as well as risks associated with future research, clinical study results, the
regulatory approval process, competitive products and other factors which are
listed from time to time in Celtrix's Securities and Exchange Commission (SEC)
filings. These forward-looking statements represent Celtrix's judgment as of the
date of this news release.
- FINANCIAL CHARTS FOLLOW -
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CELTRIX PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
March 31, March 31,
------------------------ ------------------------
1998 1997 1998 1997
-------- -------- -------- --------
(unaudited) (unaudited)
Revenues:
Product sales $ 2 $ 11 $ 51 $ 31
Other revenues 544 539 610 627
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546 550 661 658
Costs and expenses:
Cost of sales -- 1 1 5
Research and development 3,693 3,011 13,006 11,999
General and administrative 570 506 1,985 1,814
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4,263 3,518 14,992 13,818
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Operating loss (3,717) (2,968) (14,331) (13,160)
Interest income, net 117 65 681 464
Gain on sale of investment
in Prograft Medical, Inc. -- -- 737 --
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Net loss $ (3,600) $ (2,903) $(12,913) $(12,696)
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Basic and diluted net loss per share $ (0.17) $ (0.19) $ (0.61) $ (0.83)
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Shares used in basic and diluted per
share computation 21,061 15,263 21,004 15,238
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CELTRIX PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, March 31,
1998 1997
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ASSETS
Current assets:
Cash, cash equivalents and short-term investments $ 7,913 $ 5,788
Receivables and other current assets 219 197
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Total current assets 8,132 5,985
Property and equipment, net 7,062 8,423
Intangible and other assets, net 2,682 2,548
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$17,876 $16,956
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 2,234 $ 1,380
Short-term debt and lease obligations 8 328
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Total current liabilities 2,242 1,708
Deferred rent 890 1,038
Stockholders' equity 14,744 14,210
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$17,876 $16,956
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