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[CELTRIX LETTERHEAD]
NEWS RELEASE
CONTACT: Donald D. Huffman
Vice President, Finance and Administration
Chief Financial Officer
(408) 988-2500
CELTRIX REPORTS THIRD QUARTER RESULTS
SAN JOSE, CA -- March 18, 1999 -- For the third quarter ended December
31, 1998, Celtrix Pharmaceuticals, Inc. (Nasdaq: CTRX) reported revenues of
$21,000 and a net loss of $1,076,000, or $0.04 per share, compared with revenues
of $36,000 and a net loss of $3,532,000, or $0.17 per share, for the same period
in 1997. Operating expenses decreased to $1,111,000 for the third quarter, from
$3,716,000 for the same period last year. These decreases reflect the reduction
in spending resulting from the action taken in September to focus on the
clinical development of SomatoKine(R), discontinue manufacturing and
substantially reduce the cash burn rate.
For the first nine months ended December 31, 1998, revenues were $79,000
and the net loss was $13,135,000, or $0.59 per share. This includes a
non-recurring charge of $5.2 million, of which $4.5 million was a non-cash
charge, taken in September to restructure operations. For the same period last
year, revenues were $115,000 and the net loss was $9,313,000, or $0.44 per
share. The net loss in 1997 was reduced by a $737,000 gain on investment from
the sale of securities held by the company in Prograft Medical, Inc.
At December 31, 1998, Celtrix had $1,780,000 in cash, cash equivalents
and short-term investments. Management expects that current cash and short-term
investments, together with a payment of $600,000 arising from a settlement
agreement with a former licensee, will be sufficient to fund Celtrix's
operations into the third calendar quarter of 1999.
"We are pleased by the performance of SomatoKine in our clinical trials.
During the quarter, we presented final results from Phase II feasibility trials
in severe osteoporosis (recovery from hip fracture surgery) and traumatic
burns," said Andreas Sommer, Ph.D., president and chief executive officer. "Very
promising results from a Phase II feasibility study in diabetes were announced
recently."
"Our efforts remain concentrated on establishing corporate partnerships
and other opportunities that will enable the continued development of SomatoKine
beyond the recently completed trials," said Dr. Sommer.
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 focus is on SomatoKine, a novel
IGF-BP3 complex, for treatment of a broad range of metabolic disorders.
SomatoKine has completed Phase II clinical testing for the treatment of severe
osteoporosis (recovery from hip fracture), traumatic burns and diabetes. Other
potential indications include protein wasting diseases associated with cancer,
AIDS, advanced kidney failure and other life-threatening conditions. Celtrix has
also licensed rights for development of another molecule, TGF-beta-2, to Genzyme
Corporation for incorporation into its comprehensive program for tissue repair.
Genzyme is currently in Phase II clinical testing using TGF-beta-2 for the
treatment of dermal ulcers.
-more-
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"Celtrix Reports Third Quarter Results"
Page 2
This news release contains certain forward-looking statements within the
meaning of Section 21 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 to enter into
collaboration(s) with corporate partners, obtaining additional funding for
further research, continuation of the same observations in future clinical
trials involving SomatoKine, as well as risks associated with future 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 BALANCE SHEETS
(In thousands)
December 31, March 31,
1998 1998
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(unaudited)
ASSETS
Current assets:
Cash, cash equivalents and short-term investments $ 1,780 $ 7,913
Receivables and other current assets 148 219
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Total current assets 1,928 8,132
Property and equipment, net 836 7,062
Intangible and other assets, net 2,548 2,682
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$ 5,312 $17,876
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 1,613 $ 2,234
Accrued restructuring costs 131 --
Current portion of capital lease obligations -- 8
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Total current liabilities 1,744 2,242
Deferred rent -- 890
Stockholders' equity 3,568 14,744
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$ 5,312 $17,876
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CELTRIX PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
---------------------- ----------------------
1998 1997 1998 1997
-------- -------- -------- --------
Revenues:
Product sales $ -- $ 16 $ 10 $ 49
Related party revenue -- -- -- --
Other revenues 21 20 69 66
-------- -------- -------- --------
21 36 79 115
Costs and expenses:
Cost of sales -- -- -- 1
Research and development 615 3,248 6,432 9,313
General and administrative 496 468 1,725 1,415
Restructuring costs -- -- 5,178 --
-------- -------- -------- --------
1,111 3,716 13,335 10,729
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Operating loss (1,090) (3,680) (13,256) (10,614)
Interest income, net 14 148 121 564
Gain on sale of investment
in Prograft Medical, Inc. -- -- -- 737
-------- -------- -------- --------
Net loss $( 1,076) $( 3,532) $(13,135) $( 9,313)
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Basic and diluted net loss per share $( 0.04) $( 0.17) $( 0.59) $( 0.44)
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Shares used in basic and diluted
per share computation 24,583 20,986 22,235 20,986
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