Ondine Biopharma Announces 2006 Second Quarter Financial Results
August 14, 2006
VANCOUVER, Aug. 14 /CNW/ - Ondine Biopharma Corporation ("the Company", TSX: OBP; AIM: OBP) announced today its financial results for the second quarter ended June 30, 2006.
"During the second quarter, placement of Periowave(TM) laser consoles and treatment kits generated Ondine's first product sales revenue," said Carolyn Cross, President and CEO of Ondine. "This achievement is of historical significance for Ondine, evidence of our ability to successfully commercialize products based on our core Photodynamic Disinfection technology."
Cy Elborne, President of Henry Schein Ash Arcona (HSAA), the Company's distributor in Canada, stated "Periowave(TM) is certainly one of the most successful new product launches in the history of HSAA, rewarding our collaborative efforts. Initial sales of Periowave(TM) have exceeded expectations and bode well for continued success in the coming quarters."
Second Quarter 2006 Highlights:
- Initiated sales of Periowave(TM) laser consoles and treatment kits, generating the first product sales revenue in Ondine's corporate history.
- Signed a multi-year research and development agreement with UCL Biomedica Plc for the research and development of potential applications to prevent and treat infectious diseases caused by methicillin-resistant Staphylococcus aureus (MRSA) using Photodynamic Disinfection (PDD) technology.
Financial Review
For the quarter ended June 30, 2006 (the "Current Quarter") the Company recorded a net loss of $2.9 million or $0.06 per common share compared with a loss of $2.3 million or $0.06 per common share during the same period in the prior year (the "Prior Quarter"). For the six-month period ended June 30, 2006 (the "Current Period") the Company recorded a net loss of $5.7 million, or $0.12 per common share, compared with a loss of $4.1 million, or $0.11 per common share, for the same period in the prior year (the "Prior Period"). During the Current Quarter, product sales of Periowave(TM) laser consoles and treatment kits generated $0.42 million and a gross profit margin of $0.18 million.
The increase in loss during the Current Quarter and the Current Period, when compared to the Prior Quarter and Prior Period, is primarily due to the increase in costs incurred in research and development (R&D) and in marketing and sales activities, together with an increase in the Company's administrative infrastructure required to support those activities. These expenses have increased significantly when compared to the same period in the prior year and are expected to continue to increase during the remainder of 2006 as the Company continues to execute its marketing and sales strategy for the introduction of Periowave(TM) to the Canadian market and initiates plans to introduce Periowave(TM) later this year in certain countries in Europe.
Research & Development (R&D) expenses for the Current Quarter were $1.4 million compared to $1.3 million during the Prior Quarter and for the Current Period were $2.8 million compared to $2.3 million during the Prior Quarter. During the first quarter of 2006 development of the Company's PDD technology progressed with completion of demonstration and testing units of the Company's Periowave(TM) product. During the second quarter of 2006, in addition to an ongoing clinical study in China, a number of clinical studies using Periowave(TM) commenced in Canada and an additional study commenced at University College London Hospital in the United Kingdom. The results from these studies are expected to be used as part of a submission to the United States Food and Drug Administration (FDA). FDA approval of Periowave(TM) is required in order for Ondine to be able to sell Periowave(TM) in the United States. In addition, the Company has undertaken additional research programs at University College London on potential new applications of PDD, principally for the non-antibiotic treatment of methicillin-resistant Staphylococcus aureus (MRSA) and other topical infections.
Marketing and sales expenses for the Current Quarter were $0.75 million compared to $0.19 million during the Prior Quarter and for the Current Period were $1.41 million compared to $0.28 million in the Prior Period, as the Company hired its Canadian sales force and commenced marketing and selling
Periowave(TM) in Canada.
General and administrative costs for the Current Quarter were $0.97 million compared to $0.88 million during the Prior Quarter and for the Current Period were $1.81 million compared to $1.60 million in the Prior Period, as additional administrative staff were added to support the increase in the Company's activities. The costs for the Prior Period included a credit in connection with the forfeiture of stock options and a severance payment to the Company's former CEO which were not duplicated in the Current Quarter.
As at June 30, 2006 the Company had cash, cash equivalents and short term investments totaling $11.2 million compared with $15.5 million as at December 31, 2005. During the Current Period the Company used cash of $5.5 million for its operating activities and received cash of $1.6 million from the exercise of warrants.
As at June 30, 2006 the Company had 47,804,992 common shares outstanding.
Strategy Update
Ondine's immediate priority is to utilize its Canadian sales and marketing experience to help ensure a successful launch in larger markets in Europe and, pending FDA clearance, in the United States.
Upcoming areas of focus:
- The expansion of preparations for entering selected European countries during the next two quarters, ahead of the start of sales efforts planned for early 2007.
- Continuing patient enrollment for clinical studies on Periowave(TM) currently underway in Canada and the United Kingdom. The results of these studies, which will involve more than 200 patients, are expected to assist future sales and marketing efforts as well as support a planned submission to the FDA during the second quarter of 2007.
- The continuation of several research and development projects to determine and advance new applications for PDD technology through the Company's product pipeline to commercialization.
About Periowave(TM) and Photodynamic Disinfection
Periowave(TM) is a Photodynamic Disinfection system developed by Ondine that utilizes low-intensity lasers and wavelength-specific, light-activated compounds to specifically target and destroy microbial pathogens and reduce the symptoms of disease. The compounds are generally topically applied and one or more lasers are used to activate the compounds and complete the disinfection. The Photodynamic Disinfection technologies were developed by Professor Michael Wilson and colleagues at the Eastman Dental Institute, University College London, and licensed to Ondine by UCL Biomedica PLC, University College London. Additional information about Periowave(TM) is available at www.periowave.com.
About Periodontal Disease
Periodontitis (gum disease) is a common human affliction, affecting one third of all adults, and over half of the population over the age of 50. Periodontitis results in gum tissue detachment, bleeding gums, oral malodour, bone and tooth loss as well as other complications. The standard of care for treating periodontal disease is Scaling and Root Planing (SRP), or gum surgery, or both. SRP is the sub-gingival removal of plaque biofilm adhering to the root surfaces. Periodontitis is associated with a host of other serious conditions including heart disease, stroke, premature births and diabetes.
About Ondine Biopharma Corporation
Ondine is developing non-antibiotic therapies for the treatment of a broad spectrum of bacterial, fungal and viral infections. The Company is focused on creating and commercializing leading-edge products utilizing its patented light-activated technology. Photodynamic Disinfection (PDD) provides broad-spectrum antimicrobial efficacy without encouraging the formation and spread of antibiotic resistance. Ondine has developed Periowave(TM) for the treatment of chronic periodontitis in adults, and is extending its platform technology into other applications both within and outside the oral cavity. The Company is headquartered in Vancouver, British Columbia, Canada, with a research laboratory in Redmond, Washington, USA and an international office in St. Michael, Barbados. For additional information, please visit the Company's website at: www.ondinebiopharma.com.
Forward-Looking Statements:
Certain statements contained in this release containing words like "believe", "intend", "may", "expect" and other similar expressions, are forward-looking statements that involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from those projected in the Company's forward-looking statements include the following: market acceptance of our technologies and products; our ability to obtain financing; our financial and technical resources relative to those of our competitors; our ability to keep up with rapid technological change; government regulation of our technologies; our ability to enforce our intellectual property rights and protect our proprietary technologies; the ability to obtain and develop partnership opportunities; the timing of commercial product launches; the ability to achieve key technical milestones in key products and other risk factors identified from time to time in the Company's filings.
For further information:
Carolyn Cross"
President and Chief Executive Officer
Ondine Biopharma Corporation
(604) 669-0555
ccross@ondinebiopharma.com
Christina Bessant
Investor Relations
The Equicom Group Inc.
(416) 815-0700 ext. 269
cbessant@equicomgroup.com
