SAN DIEGO, May 11 /PRNewswire-FirstCall/ -- Cardium Therapeutics
(NYSE Amex: CXM) today reported its financial results for its first
quarter ended March 31, 2009, and on recent developments and future
outlook. (Logo:
http://www.newscom.com/cgi-bin/prnh/20051018/CARDIUMLOGO) Cardium
made significant progress in the first quarter 2009 as the Company
continued to focus its efforts on the InnerCool Therapies and
Tissue Repair Company subsidiaries, both of which we believe are
advancing toward important asset value and monetization inflection
points within Cardium's biomedical opportunities portfolio. The
Tissue Repair Company made important progress on finalizing the
completion of patient recruitment for its Phase 2b MATRIX clinical
trial of Excellarate(TM) for the potential treatment of diabetic
ulcers. At the same time, InnerCool continued forward with the
successful development of the UroCool(TM) pelvic cooling catheter
system, which included the submission for FDA 510(k) clearance to
further enhance InnerCool's portfolio of best-in-class temperature
modulation therapy medical devices. As initially reported in
November 2008, Cardium instituted several important strategic
actions intended to focus and enhance its overall operating
structure and generate cost efficiencies. Based on these actions,
cost savings have begun to be reflected in the Company's operating
results. In particular, for the first quarter of 2009, Cardium's
Loss from Operations was reduced by almost 50% compared to the same
period a year ago. The first quarter 2009 financial results also
include substantial non-cash charges to adjust for the fair market
value of certain common stock warrants required beginning this
quarter as a result of the adoption of Emerging Issues Task Force
EITF 07-05 entitled "Determining Whether an Instrument (or Embedded
Feature) is indexed to an Entity's Own Stock" by the Financial
Accounting Standards Board. In accordance with this new rule, stock
warrants with certain terms that were previously accounted for as
equity are now required to be recorded as a derivative liability
with quarterly adjustments of their fair value recorded on the
income statement. These rule changes resulted in a $9.7 million
"Change in Fair Value of Derivative Liabilities" reflecting the
substantially higher values associated with outstanding warrants to
purchase the Company's stock, since the price of Cardium's common
stock increased by about 125% during the first quarter. Tissue
Repair Company On May 6, 2009, Cardium announced the completion of
recruitment for the Phase 2b MATRIX clinical trial to evaluate the
safety and efficacy of Excellarate for the treatment of non-healing
diabetic foot ulcers. The MATRIX Data and Safety Monitoring Board
has reviewed safety data collected from study participants as of
April 21, 2009 and reported that Excellarate appears to be both
safe and well tolerated, with no serious adverse events
attributable to the study product. Approximately 70% of the
patients recruited in the MATRIX study have already completed their
initial evaluation period with respect to key efficacy criteria,
particularly the percentage of patients achieving complete wound
closure, the rate of wound closure and the reduction of wound size
at various time points. With confirmation of one or more medically
meaningful responses, Cardium and TRC would expect to meet with the
U.S. Food and Drug Administration (FDA) to review the complete
safety and efficacy database from this Phase 2b clinical study and
their plans for initiating a larger-scale Phase 3 pivotal study.
Cardium announced on May 7, 2009, that in parallel with the Phase
2b study and in anticipation of a Phase 3 clinical study and future
commercialization, the Company's continuing process development
activities have led to an important breakthrough in product
formulation that not only significantly simplifies the use of
Excellarate, but opens the door to additional potential
applications of the Excellarate technology in a number of other
wound healing market opportunities. The product formulation that
was used in the Phase 2b study required storage in a -70 degrees
Celsius freezer and a two syringe mixing process prior to
treatment. The new product formulation is designed to be maintained
in a physician's office using a standard refrigerator (at a
temperature of about 4 degrees Celsius) and to have a shelf life of
12-18 months. It will also be formulated as an easy-to-use single
syringe that is pre-mixed and ready to be applied to patients'
wounds. The Company believes that with the completion of the Phase
2b MATRIX study, the Tissue Repair Company will have reached a key
valuation inflection point within Cardium's investment portfolio
and in concert with this, plans to consider potential development
and commercialization partnerships for Excellarate with large
pharmaceutical companies and companies focused on wound healing.
With continued clinical advancement, Excellarate offers the
potential to be commercially available in late 2011 or early 2012.
InnerCool Therapies Cardium continues to build and enhance its
InnerCool Therapies operating unit with a specific focus on the
development of a new class of targeted organ-specific cooling
applications, including its UroCool(TM) pelvic cooling catheter
system, which is designed to induce localized cooling during
surgery for prostate cancer. An application for FDA 510(k)
clearance of the UroCool(TM) system was submitted in the first
quarter of 2009. Cardium believes that InnerCool has reached a
significant valuation inflection point within Cardium's investment
portfolio, and with the appropriate strategic positioning,
best-in-class products and a pipeline of innovative product
opportunities, Cardium intends to advance InnerCool's therapeutic
cooling and warming products into corresponding markets through the
strategic sale of the business to a large and diversified medical
device company or through various vertical partnering opportunities
with established companies having existing sales and marketing
organizations but with a continuing need for innovative, high-value
content products. The Company believes this strategy is more
cost-effective than building InnerCool into a fully integrated
manufacturing, sales and marketing organization. Financial Report
For the first quarter ended March 31, 2009, the Company reported a
loss from operations of $3.5 million, representing a 47% reduction
from year ago levels, as a result of various strategic actions
initiated in the fourth quarter 2008. The first quarter 2009
financial results also include substantial non-cash charges to
adjust for the fair market value of certain common stock warrants
required beginning this quarter as a result of the adoption of
Emerging Issues Task Force EITF 07-05, as noted above. Since the
price of Cardium's common stock increased by about 125% during the
first quarter, this resulted in a $9.7 million "Change in Fair
Value of Derivative Liabilities," and resulted in a reported net
loss for the current period of $14.7 million, or $0.31 per share,
compared to a net loss of $6.7 million, or $0.16 per share for
first quarter 2008. Product revenue for the first quarter 2009 was
$350,000, compared to $534,000 in the same period in 2008 as
InnerCool's direct sales force was reduced consistent with the
Company's new business strategy which is focused on the marketing
and sale of InnerCool products through corporate accounts and
web-based initiatives, and ultimately vertical partnering with
larger organizations having already established marketing and sales
organizations. Grant revenue for the first quarter 2009 was $18,000
compared to $112,000 for the same quarter last year. Research and
development costs for the three months ended March 31, 2009 totaled
$1.4 million and selling, general and administrative expenses were
$2.0 million, compared to $3.4 million and $3.4 million
respectively for the same period last year. Cash and cash
equivalents as of March 31, 2009 were $1.4 million, compared to
cash and cash equivalents of $6.3 million as of March 31, 2008.
Interest expense for the three months ended March 31, 2009 was $1.6
million and includes $1.3 million representing the amortization of
debt costs and warrant value issued with the debt. During the first
quarter 2009, the Company completed a secured debt financing
resulting in gross proceeds of approximately $3.5 million, before
placement agent fees and offering expenses and excluding any future
proceeds from the exercise of the warrants issued in the financing.
The Company continues to provide information in accordance with
GAAP. However, with the adoption of EITF 07-05 and its very
substantial impact on our overall reported net losses, varying
substantially based on changes in the underlying market value of
Cardium's common stock, the Company believes it is also helpful for
investors to receive additional information relating more
specifically to the Company's operating results. Accordingly, the
Company additionally provides a pro forma income statement and pro
forma balance sheet which excludes the non-cash effects of EITF
07-05 on its financial results. The Company presents this
information to investors as an additional tool for evaluating the
Company's financial results in a manner that reflects ongoing
operations and facilitates comparisons with operating results from
prior periods. The presentation of this additional non-GAAP
information is intended to provide investors with additional
incremental tools for their review of the Company's results and is
not meant to be considered in isolation or as a substitute for net
income information prepared and provided in accordance with GAAP.
In late December 2008, Cardium received notification from the staff
of its current listing exchange indicating that the Company was
considered to be noncompliant with certain listing requirements of
the NYSE Amex. On January 23, 2009, the Company submitted a
proposed plan outlining how it could establish compliance with the
requirements of section 1003(a)(iv) by March 23, 2009, and
establish compliance with all sections, including section
1003(a)(i), by June 23, 2010. Cardium received notification in late
February that its plan had been accepted by the exchange, but
remains subject to continuing review by the exchange with respect
to the carrying out of its plan and the achievement and maintenance
of overall compliance. On April 9, 2009, the exchange notified
Cardium that it had extended the time for compliance with the
requirements of section 1003(a)(iv) from March 23, 2009 to June 27,
2009; and that the Company would also need to regain compliance
with section 1003(a)(ii) of the exchange's company guide regarding
maintenance of stockholder's equity of at least $4 million, which
it would need to do by June 23, 2010. About Cardium Cardium
Therapeutics, Inc. and its subsidiaries, InnerCool Therapies, Inc.
and the Tissue Repair Company, are medical technology companies
primarily focused on the development, manufacture and sale of
innovative therapeutic products and devices for cardiovascular,
ischemic and related indications. Cardium's InnerCool Therapies
subsidiary is a San Diego-based medical technology company in the
emerging field of temperature modulation therapy to rapidly and
controllably cool the body in order to reduce cell death and damage
following acute ischemic events such as cardiac arrest or stroke,
and to potentially lessen or prevent associated injuries such as
adverse neurological outcomes. For more information about Cardium's
InnerCool subsidiary and patient temperature modulation, including
InnerCool's new RapidBlue(TM) System, which just received FDA
clearance, and its CoolBlue(TM) System, please visit
http://www.innercool.com/. Cardium also has two biologic candidates
in clinical development. Cardium's Tissue Repair Company subsidiary
(TRC) is focused on the development of growth factor therapeutics
for the treatment of severe chronic diabetic wounds. TRC's lead
product candidate, Excellarate(TM), is a DNA-activated collagen gel
for topical treatment formulated with an adenovector delivery
carrier encoding human platelet-derived growth factor-BB (PDGF-BB).
Excellarate(TM) is initially being developed to be administered
once or twice for the potential treatment of non-healing diabetic
foot ulcers. Other potential applications for TRC's Gene Activated
Matrix(TM) (GAM) technology include therapeutic angiogenesis
(cardiovascular ischemia, peripheral arterial disease) and
orthopedic products, including hard tissue (bone) and soft tissue
(ligament, tendon, cartilage) repair. For more information about
Cardium's Tissue Repair Company subsidiary, please visit
http://www.t-r-co.com/. Cardium's Generx product candidate
(alferminogene tadenovec, Ad5FGF-4) is a DNA-based growth factor
therapeutic designed for use by interventional cardiologists as a
potential one-time treatment to promote and stimulate the growth of
collateral circulation in the hearts of patients with ischemic
conditions such as recurrent angina. For more information about
Cardium Therapeutics and its businesses, products and therapeutic
candidates, please visit http://www.cardiumthx.com/ or view its
most recent annual report on Form 10-K and other reports as filed
with the Securities and Exchange Commission and available on the
company's website. Forward-Looking Statements Except for statements
of historical fact, the matters discussed in this press release are
forward looking and reflect numerous assumptions and involve a
variety of risks and uncertainties, many of which are beyond our
control and may cause actual results to differ materially from
stated expectations. For example, there can be no assurance that
results or trends observed in pre-clinical studies will be
reproduced in subsequent studies, that human clinical trials can be
conducted and completed in an efficient and successful manner, that
partnering, asset monetization or other strategic development
opportunities can be successfully achieved and that such
opportunities will effectively and efficiently advance
commercialization of our products, that we can raise sufficient
capital from partnering, monetization or other fundraising
transactions to maintain our stock exchange listing or adequately
fund ongoing operations, that product modifications or launches
will be successful or that the resulting products will be favorably
received in the marketplace, that results or trends observed in one
clinical study will be reproduced in subsequent studies, that our
products or product candidates will prove to be sufficiently safe
and effective, that necessary regulatory approvals will be
obtained, or that our products or product candidates will not be
unfavorably compared to competitive products that may be regarded
as safer, more effective, easier to use or less expensive. Actual
results may also differ substantially from those described in or
contemplated by this press release due to risks and uncertainties
that exist in our operations and business environment, including,
without limitation, risks and uncertainties that are inherent in
the development of complex biologics and therapeutic hypothermia
devices and in the conduct of human clinical trials, including the
timing, costs and outcomes of such trials, our ability to obtain
necessary funding, regulatory approvals and expected
qualifications, our dependence upon proprietary technology, our
history of operating losses and accumulated deficits, our reliance
on collaborative relationships and critical personnel, and current
and future competition, as well as other risks described from time
to time in filings we make with the Securities and Exchange
Commission. We undertake no obligation to release publicly the
results of any revisions to these forward-looking statements to
reflect events or circumstances arising after the date hereof.
Copyright 2009 Cardium Therapeutics, Inc. All rights reserved. For
Terms of Use Privacy Policy, please visit
http://www.cardiumthx.com/. Cardium Therapeutics(TM) and Generx(R)
are trademarks of Cardium Therapeutics, Inc. Tissue Repair(TM),
Gene Activated Matrix(TM), GAM(TM), and Excellarate(TM) are
trademarks of Tissue Repair Company. InnerCool Therapies(R),
InnerCool(R), RapidBlue(TM) and CoolBlue(TM) are trademarks of
InnerCool Therapies, Inc. - Continued - Cardium Therapeutics, Inc.
Selected Condensed Consolidated Results of Operations Three Months
Ended March 31, (Unaudited) EITF 07-05 2009 Actual Effect* Pro
forma 2009* 2008 Revenues $368,413 - $368,413 $646,002 Cost of
goods sold (206,594) - (206,594) (370,696) Gross profit 161,819 -
161,819 275,306 Research and development 1,426,728 - 1,426,728
3,372,480 Selling, general and administrative 2,025,035 - 2,025,035
3,385,566 Amortization - Intangibles 197,414 - 197,414 197,414 Loss
from operations (3,487,358) - (3,487,358) (6,680,154) Interest
income (expense), net (1,592,890) - (1,592,890) (53,974) Change in
fair value of derivative liabilities (9,656,629) 9,656,629 - - Net
loss $(14,736,877) 9,656,629 $(5,080,248) $(6,734,128) Net loss per
common share - basic and diluted $(0.31) $(0.11) $(0.16) Weighted
average common shares outstanding - basic and diluted 46,930,439
46,930,439 40,709,247 Selected Condensed Consolidated Balance Sheet
Data March 31, Pro forma December 31, 2009 EITF 07-05 March 31,
2008 (Unaudited) Effect* 2009* (Audited) Cash and cash equivalents
$1,426,967 - $1,426,967 $1,102,894 Accounts receivable, net 278,879
- 278,879 296,116 Inventories, net 1,917,769 - 1,917,769 2,000,385
Prepaid expenses and other current assets 744,464 - 744,464 642,246
Property and equipment, net 1,525,297 - 1,525,297 1,706,065
Patented technology and intangibles, net 3,779,260 - 3,779,260
3,976,674 Other long-term assets 620,041 - 620,041 572,541 Total
assets $10,292,677 - $10,292,677 $10,296,921 Accounts payable and
accrued liabilities $6,574,030 - $6,574,030 $6,819,586 Short-term
debt 7,187,038 - 7,187,038 4,036,776 Derivative liabilities
14,860,984 (14,860,984) - - Long-term liabilities 197,789 - 197,789
195,315 Stockholder's deficiency (18,527,164) 14,860,984
(3,666,180) (754,756) Total liabilities and stockholder's
deficiency $10,292,677 - $10,292,677 $10,296,921 * Note: additional
pro forma information is included to reflect the effects of
non-cash charges associated with the treatment of the value of
certain derivative securities under newly-adopted EITF 07-05, which
effects can vary substantially each quarter along with changes to
the price of the underlying common stock during the quarter. The
Company presents this information to investors as an additional
tool for evaluating the Company's financial results in a manner
that reflects ongoing operations and facilitates comparisons with
operating results from prior periods. The presentation of this
additional non-GAAP information is intended to provide investors
with additional incremental tools for their review of the Company's
results and is not meant to be considered in isolation or as a
substitute for the actual net income information prepared and
provided in accordance with GAAP.
http://www.newscom.com/cgi-bin/prnh/20051018/CARDIUMLOGO
http://photoarchive.ap.org/ DATASOURCE: Cardium Therapeutics
CONTACT: Bonnie Ortega, Director, Investor/Public Relations of
Cardium Therapeutics, Inc., +1-858-436-1018, Web Site:
http://www.cardiumthx.com/
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