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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported):
May 10, 2006
Aastrom Biosciences, Inc.
(Exact name of registrant as specified in its charter)
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Michigan
(State or other jurisdiction of
incorporation)
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0-22025
(Commission File No.)
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94-3096597
(I.R.S. Employer
Identification No.) |
24 Frank Lloyd Wright Drive
P.O. Box 376
Ann Arbor, Michigan 48106
(Address of principal executive offices)
Registrants telephone number, including area code:
(734) 930-5555
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
TABLE OF CONTENTS
Item 2.02 Results of Operations and Financial Condition.
On May 10, 2006, we issued a press release announcing financial results and achievements for
our third fiscal quarter ended March 31, 2006. A copy of the press release is attached hereto as
Exhibit 99.1.
Pursuant to General Instruction B.2 of Form 8-K, this report and the exhibit are not deemed to
be filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall this report
and the exhibit be incorporated by reference into our filings under the Securities Act of 1933 or
the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such
future filing.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
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Exhibit No. |
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Description |
99.1
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Press Release dated May 10, 2006 |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: May 10, 2006
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AASTROM BIOSCIENCES, INC.
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By: |
/s/ Gerald D. Brennan, Jr.
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Gerald D. Brennan, Jr. |
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Vice President, Administrative and
Financial Operations, CFO |
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exv99w1
Exhibit 99.1
FOR IMMEDIATE RELEASE
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CONTACTS:
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Kris M. Maly
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Cameron Associates |
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Investor Relations Department
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Kevin McGrath |
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Aastrom Biosciences, Inc.
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Phone: (212) 245-4577 |
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Phone: (734) 930-5777 |
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AASTROM BIOSCIENCES, INC. REPORTS THIRD QUARTER
FISCAL YEAR 2006 FINANCIAL RESULTS
Ann Arbor, Michigan, May 10, 2006 Aastrom Biosciences, Inc. (Nasdaq: ASTM) today reported
financial results for the third fiscal quarter ended March 31, 2006. The Company also reported
several clinical and operational achievements during the quarter, including:
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Tissue Repair Cells (TRCs) Aastroms proprietary mixture containing large numbers of
stem, stromal and progenitor cells derived from a small sample of the patients own bone
marrow received an Orphan Drug Designation from the U.S. Food and Drug Administration
(FDA) for the use in the treatment of osteonecrosis at the hip, and the clinical trial
protocol for this indication is currently being prepared. The tissues destroyed in the
osteonecrosis disease process include bone, bone marrow and vascular (blood vessels); TRCs
have been used in clinical trials to regenerate all three of these tissues. TRCs may offer
a novel means to restore healthy tissue at osteonecrotic sites. |
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Positive patient treatment results were presented at the combined Orthopaedic Research
Society and American Academy of Orthopaedic Surgeons annual meetings. Matthew L. Jimenez,
M.D., Principal Investigator of Aastroms U.S. Phase I/II multi-center clinical trial
evaluating the use of TRCs in the treatment of severe fractures that have failed prior
treatment interventions, presented results from his early clinical experience with the
first seven patients treated for recalcitrant long bone non-union fractures. Bone
regeneration, evidenced by callus formation or bone bridging, was observed in radiographs
for all seven patients by 6 months, and early healing was seen in four of the patients by 3
months, after the TRC treatment. A copy of Dr. Jimenez presentation may be accessed on
Aastroms website using the following link:
http://www.aastrom.com/pdf/MLJ-Presentation-032206.pdf. |
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A collaboration agreement was announced for the development of products for the
orthopedics market using Orthovitas synthetic ceramic matrices and ceramic-collagen
matrices (VITOSS) and Aastroms proprietary TRCs. The companies believe that a broad range
of orthopedic indications may benefit from the combination of VITOSS and TRCs to regenerate
tissue. |
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Two senior pharmaceutical executives were added to the Board of Directors.
Nelson M. Sims joined Aastroms Board with over 30 years of pharmaceutical industry
experience at companies such as Novavax, Inc. and Eli Lilly and Company. Robert L. Zerbe.,
M.D. brings over three decades of experience to Aastrom from companies such as QUATRx
Pharmaceutical, Inc., Eli Lilly and Company, and Pfizer (formerly Parke-Davis). |
Aastroms continued progress was illustrated by several significant clinical and operational
events that were reported during the quarter, said R. Douglas Armstrong, Ph.D., Chief Executive
Officer and Chairman of Aastrom. An important highlight of these milestones is that each one
provides third party validation of Aastroms progress in the development of our TRC products for
tissue regeneration. This increased level of support is evidenced by the addition of highly
accomplished industry executives to our board of directors, an agreement for a new strategic
collaboration, the increasing positive clinical treatment data from physicians using Aastrom TRC
products, and the
-more-
Aastrom- 3rd Q FY2006 Fin Results
May 10, 2006
Page 2
receipt of an Orphan Drug Designation from the FDA for our TRC product as a new treatment option
for patients suffering from the debilitating disease of osteonecrosis.
Dr. Armstrong continued, We were pleased to complete an equity financing that provided net
proceeds of approximately $24 million in early April. This transaction strengthened our financial
position for the planned expansion of our clinical trial activity. In addition, a number of
leading healthcare funds took new positions in Aastrom through this round of financing. We are
proud of our accomplishments since January, and look forward to building upon these achievements in
the coming quarters.
Fiscal Year 2006 Third Quarter Ended March 31, 2006 Results
Total revenues for the quarter ended March 31, 2006, consisting of product sales and grant funding,
were $238,000 compared to $252,000 for the same period in fiscal year 2005. Total revenues for the
nine months ended March 31, 2006 were $535,000 compared to $813,000 for the same period in fiscal
year 2005.
As previously disclosed, the AastromReplicell® System is now almost exclusively used to
manufacture our proprietary TRC cell products for treatments in tissue regeneration, rather than
being marketed as a stand-alone product. Therefore, product sales decreased to $85,000 and
$142,000 for the quarter and nine months ended March 31, 2006, respectively, from $150,000 and
$377,000 for the same periods in fiscal year 2005.
Grant revenues increased for the quarter ended March 31, 2006 to $153,000 from $102,000 for the
same period in fiscal year 2005, and decreased for the nine months ended March 31, 2006 to $393,000
from $436,000 for the same period in fiscal year 2005. Grant revenues accounted for 73% of total
revenues for the nine months ended March 31, 2006, compared to 54% for the same period in fiscal
year 2005 and are recorded on a cost-reimbursement basis. As we continue to pursue grant funding,
grant revenues may vary in any period based on timing of grant awards, grant-funded activities,
level of grant funding and number of grant awards received.
Total costs and expenses for the quarter and nine months ended March 31, 2006 increased to
$5,037,000 and $13,467,000, respectively, from $3,805,000 and $9,625,000 for the same periods in
fiscal year 2005.
The cost of product sales decreased for the quarter and nine months ended March 31, 2006, from
$2,000 and $11,000, respectively, from $77,000 and $131,000 for the same periods in fiscal year
2005.
As a result of the continued expansion of our research activities, including additional staffing
requirements, to support future regulatory submissions, on-going and planned bone and vascular
tissue regeneration clinical trials in the U.S. and EU, product development activities, and
development of centralized facilities for product manufacturing and distribution processes,
research and development expenses for the quarter and nine months ended March 31, 2006 increased to
$2,597,000 and $6,745,000, respectively, from $2,095,000 and $5,258,000 for the same periods in
fiscal year 2005. Research and development expenses for the quarter and nine months ended March
31, 2006, also include a non-cash charge of $90,000 and $289,000, respectively, pursuant to SFAS
123R, which requires us to measure the fair value of all employee share-based payments and
recognize that value as an operating expense.
Selling, general and administrative expenses increased for the quarter and nine months ended March
31, 2006 to $2,438,000 and $6,711,000, respectively, from $1,624,000 and $4,227,000 for the same
periods in fiscal year 2005. This increase reflects additional staffing requirements, bonuses paid
to certain employees, and accruals for future performance bonuses and under the CEOs revised
employment agreement. This increase also reflects additional consulting and marketing activities,
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Aastrom- 3rd Q FY2006 Fin Results
May 10, 2006
Page 3
increased legal costs associated with patent protection and increased costs required for financial internal controls compliance and certification. In addition, selling,
general and administrative expenses for the quarter and nine months ended March 31, 2006, included
a non-cash charge of $200,000 and $503,000, respectively, pursuant to SFAS 123R.
Net loss for the quarter ended March 31, 2006 was $4,549,000, or $.04 per share, compared to a net
loss of $3,349,000, or $.03 per share for the same period in fiscal year 2005. Net loss for the
nine months ended March 31, 2006, was $12,179,000, or $.12 per share, compared to $8,451,000 or
$.09 per share for the same period in fiscal year 2005. The increase in net loss is primarily the
result of increased costs and expenses offset on a per share basis by an increase in the weighted
average number of common shares outstanding resulting from sale of our common shares to investors
in fiscal year 2005.
At March 31, 2006, the Company had $22.3 million in cash, cash equivalents and short-term
investments as compared to $32.4 million in cash and cash equivalents at June 30, 2005. On April
11, 2006, Aastrom closed the sale of approximately 15.9 million shares of the Companys common
stock in a registered direct placement to a select group of institutional investors at a price of
$1.60 per share for net proceeds of approximately $24 million. Aastroms proforma balance for
cash, cash equivalents and short-term investments (as if the financing had occurred before the
third fiscal quarter ended on March 31, 2006) would have been approximately $46.3 million.
Aastrom Conference Call Information
R. Douglas Armstrong, Ph.D., Chief Executive Officer and Chairman and Gerald D. Brennan, Jr., Vice
President Administrative & Financial Operations and Chief Financial Officer of Aastrom Biosciences,
Inc., will host a conference call to review and discuss the third quarter fiscal year 2006
financial results and the Companys recent progress and future goals today, May 10, 2006, at 11:00
a.m. (EDT). Interested parties should call toll-free (877) 407-9205, or from outside the U.S.
(201) 689-8054, fifteen minutes before the start of the call to register and identify themselves as
registrants of the Aastrom Conference Call. Any registered caller on the toll-free line may ask
to be placed in the queue for the Question & Answer session. The call will be simulcast on the web
at http://www.vcall.com/IC/CEPage.asp?ID=104209. A podcast of the call may be downloaded from the
web at the internet address above. If you are unable to participate during the live call, the
webcast will be available for replay at http://www.investorcalendar.com/ for 60 days. Through May
20, 2006, an audio replay of the call will be available by dialing toll-free (877) 660-6853, or
from outside the U.S. (201) 612-7415; when prompted on the phone line, the Account # is: 286 and
the Conference ID# is: 201274.
About Aastrom Biosciences, Inc.
Aastrom Biosciences, Inc. (Nasdaq: ASTM) is developing products for the repair or regeneration of
multiple human tissues, based on its proprietary Tissue Repair Cell (TRC) adult stem cell
technology. Aastroms TRC products contain large numbers of stromal, stem and progenitor cells
that are produced from a small amount of bone marrow cells originating from the patient. The
AastromReplicell® System, an industry-unique automated cell product manufacturing
platform, was developed for the production of standardized, patient-specific TRC products. TRC
products have been used safely in humans as a substitute for bone marrow stem cells, and are
currently in clinical trials for bone grafting (long bone fractures and spine fusion) and blood
vessel regeneration (diabetic limb ischemia) applications. The Company has reported positive
interim clinical trial results for its TRCs demonstrating both the clinical safety and ability of
TRCs to induce healthy new tissue growth (long bone fractures and jaw bone reconstruction). Most
recently, the Companys proprietary TRCs received an Orphan Drug Designation from the U.S. Food and
Drug Administration (FDA) for use in the treatment of osteonecrosis at the hip.
For more information, visit Aastroms website at www.aastrom.com.
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Aastrom- 3rd Q FY2006 Fin Results
May 10, 2006
Page 4
This document contains forward-looking statements, including without limitation, statements
concerning clinical trial plans and expectations, intended product development and
commercialization objectives, expected milestones, plans for the current fiscal year and potential
product applications, which involve certain risks and uncertainties. The forward-looking
statements are also identified through use of the words may, planned, believe, and other
words of similar meaning. Actual results may differ significantly from the expectations contained
in the forward-looking statements. Among the factors that may result in differences are the
inherent uncertainties associated with clinical trial and product development activities,
regulatory approval requirements, the availability of resources and the allocation of resources
among different potential uses. These and other significant factors are discussed in greater
detail in Aastroms Annual Report on Form10-K and other filings with the Securities and Exchange
Commission.
Financial Table Follows
AASTROM BIOSCIENCES, INC.
(Unaudited)
CONSOLIDATED STATEMENTS OF OPERATIONS DATA:
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Quarter ended March 31, |
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Nine months ended March 31, |
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2005 |
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2006 |
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2005 |
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2006 |
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REVENUES: |
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Product sales |
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$ |
150,000 |
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$ |
85,000 |
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$ |
377,000 |
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$ |
142,000 |
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Grants |
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102,000 |
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153,000 |
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436,000 |
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393,000 |
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Total revenues |
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252,000 |
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238,000 |
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813,000 |
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535,000 |
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COSTS AND EXPENSES: |
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Cost of product sales |
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77,000 |
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2,000 |
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131,000 |
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11,000 |
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Cost of product sales provision for obsolete and excess
inventory |
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9,000 |
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9,000 |
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Research and development |
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2,095,000 |
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2,597,000 |
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5,258,000 |
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6,745,000 |
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Selling, general and administrative |
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1,624,000 |
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2,438,000 |
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4,227,000 |
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6,711,000 |
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Total costs and expenses |
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3,805,000 |
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5,037,000 |
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9,625,000 |
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13,467,000 |
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OTHER INCOME |
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204,000 |
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250,000 |
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361,000 |
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753,000 |
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NET LOSS |
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$ |
(3,349,000 |
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$ |
(4,549,000 |
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$ |
(8,451,000 |
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$ |
(12,179,000 |
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NET LOSS PER COMMON SHARE
(Basic and Diluted) |
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$ |
(.03 |
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$ |
(.04 |
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$ |
(.09 |
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$ |
(.12 |
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Weighted average number of common shares
outstanding |
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100,140,000 |
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103,033,000 |
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90,719,000 |
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102,730,000 |
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CONSOLIDATED BALANCE SHEET DATA:
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June 30, |
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March 31, |
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2005 |
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2006 |
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ASSETS |
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Cash and cash equivalents |
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$ |
14,408,000 |
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$ |
12,838,000 |
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Short-term investments |
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18,006,000 |
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9,500,000 |
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Receivables, net |
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193,000 |
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192,000 |
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Inventories |
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116,000 |
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3,000 |
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Other current assets |
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421,000 |
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447,000 |
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Property, net |
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753,000 |
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1,101,000 |
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Total assets |
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$ |
33,897,000 |
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$ |
24,081,000 |
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LIABILITIES AND SHAREHOLDERS EQUITY |
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Current liabilities |
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$ |
869,000 |
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$ |
1,697,000 |
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Shareholders equity |
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33,028,000 |
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22,384,000 |
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Total liabilities and shareholders equity |
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$ |
33,897,000 |
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$ |
24,081,000 |
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