Vasogen Announces First Quarter 2003 Results
21:22 EDT Monday, April 28, 2003
MISSISSAUGA, ON, April 28 /PRNewswire-FirstCall/ - Vasogen (TSX:VAS; AMEX:VSV),
a leader in the development of immune modulation therapies for the treatment
of cardiovascular disease and other chronic inflammatory disorders, today
reported the results of operations for the first quarter of 2003. All
amounts referenced herein are in Canadian dollars, unless otherwise stated.
The loss for the first quarter of 2003 was $5.4 million, or $0.10 per share,
compared with a loss of $5.0 million, or $0.11 per share, in 2002. The
increased loss resulted primarily from higher costs associated with clinical
research and the corporate costs associated with supporting this activity.
Research and development expenditures totalled $3.5 million in the first
quarter of 2003, compared with $3.2 million in 2002. General and administration
expenditures totalled $2.3 million for the first quarter of 2003, compared
with $2.0 million in 2002. For the first quarter of 2003, investment income
increased to $0.3 million, compared with $0.2 million in 2002.
Cash, cash equivalents, and marketable securities held to maturity totalled
$36.9 million, versus $42.7 million at year-end 2002. The total number of
common shares outstanding at the end of the first quarter of 2003 was 51.9
million, unchanged from year-end.
An expanded Management's Discussion and Analysis for the quarter is
accessible on Vasogen's Web site at www.vasogen.com.
Highlights
- Vasogen is advancing two pivotal phase III programs targeting chronic
inflammation in major cardiovascular diseases - the ACCLAIM trial in
advanced chronic heart failure (HF) and the SIMPADICO trial in
peripheral arterial disease (PAD).
- The phase III ACCLAIM trial has received U.S. and Canadian regulatory
approvals and is currently recruiting clinical sites to enroll up to
2,000 patients at cardiac centers throughout North America. The primary
outcome measure of the trial is the composite endpoint of all-cause
mortality or hospitalization for cardiovascular causes (time to first
event). The Global Principal Investigator and Chairman of the Steering
Committee for Vasogen's ACCLAIM trial is James B. Young, MD, Medical
Director of the Kaufman Center for Heart Failure and Head of the
Section of Heart Failure and Cardiac Transplant Medicine at The
Cleveland Clinic Foundation.
- The phase III SIMPADICO trial, currently enrolling patients at cardiac
centers throughout North America, is evaluating the impact of Vasogen's
immune modulation therapy on maximal treadmill walking distance, the
efficacy endpoint recognized by the FDA and other regulatory
authorities for approving new PAD therapies. The Principal Investigator
and Chairman of the Steering Committee for Vasogen's 500-patient
SIMPADICO trial is Jeffrey W. Olin, DO, FACP, FACC, Director of the
Vascular Medicine Program at The Zena and Michael A. Wiener
Cardiovascular Institute, Mount Sinai School of Medicine in New York.
- Milton Packer, MD, Director of the Heart Failure Center at the
Columbia-Presbyterian Medical Center, and Valentin Fuster, MD, PhD,
Director of The Zena and Michael A. Wiener Cardiovascular Institute and
The Marie-Josee and Henry R. Kravis Cardiovascular Health Center at the
Mount Sinai School of Medicine, joined Vasogen's Scientific Advisory
Board.
- Dr. Packer, who is also the Dickinson W. Richards, Jr., Professor of
Medicine, Professor of Pharmacology, and Chief of the Division of
Circulatory Physiology at the Columbia University College of Physicians
and Surgeons in New York, is one of the leading experts in the
pathophysiology and treatment of heart failure. Dr. Packer has made
significant contributions to heart failure research and has been
instrumental in the introduction of a number of new treatments. The
author of more than 200 papers, he has won numerous honors for teaching
and has lectured around the world, including a number of prestigious
named lectureships, on the treatment of heart failure. He has served,
or currently serves, on the editorial boards of many major medical
journals, including Circulation and Journal of the American College of
Cardiology. He has also been elected to a number of societies,
including the American Society for Clinical Investigation. He is
currently on the executive committees of both the American Heart
Association and the American College of Cardiology and is past-
President of the Heart Failure Society of America. Dr. Packer is a
primary consultant to the National Institutes of Health and the Food
and Drug Administration on the management of heart failure and on
matters related to cardiovascular research and drug development and
health care policy.
- Dr. Fuster, who is also the Richard Gorlin, MD/Heart Research
Foundation Professor of Cardiology in New York, is recognized as a
leading expert in coronary disease, atherosclerosis, and thrombosis
research. He is past-President of the American Heart Association,
former member of the National Heart, Lung, and Blood Institute Advisory
Council, and Chairman of the Fellowship Training Directors Program of
the American College of Cardiology. He has published over 400 articles
on coronary disease, atherosclerosis, and thrombosis, and is the Lead
Editor of "The Heart," a major textbook on cardiology. Dr. Fuster has
received the Andreas Gruntzig Scientific Award of the European Society
of Cardiology, as well as many awards from both the American College of
Cardiology and the American Heart Association. He is the recipient of
nine honorary degrees from distinguished universities throughout the
world, and received the Principe de Asturias Award of Science and
Technology, the highest award to Spanish-speaking scientists from the
son of the King and Queen of Spain. Recently, Dr. Fuster was elected as
a member of the Institute of Medicine of the National Academy of
Sciences, and was appointed President-Elect of the World Heart
Federation. Dr. Fuster recently received the "Gold Heart Award," the
American Heart Association's highest award.
Vasogen will hold its Annual and Special Meeting of Shareholders on Wednesday,
May 7, 2003, at 4:30 p.m. (Eastern Time) at the TSX Conference Centre. This
meeting will be web cast live and will be accessible on the Vasogen Web site
at www.vasogen.com.
Vasogen is a leader in the research and commercial development of immune
modulation therapies for the treatment of cardiovascular disease and other
inflammatory disorders.
This press release contains forward-looking statements that involve risks
and uncertainties, which may cause actual results to differ materially
from the statements made. For this purpose, any statements that are contained
herein that are not statements of historical fact may be deemed to be
forward-looking statements made pursuant to the safe harbor provisions o
f the Private Securities Litigation Reform Act of 1995. Without limiting
the foregoing, the words "believes," "anticipates," "plans," "intends,"
"will," "should," "expects," "projects," and similar expressions are
intended to identify forward-looking statements. You are cautioned that
such statements are subject to a multitude of risks and uncertainties
that could cause actual results, future circumstances, or events to differ
materially from those projected in the forward-looking statements. These
risks include, but are not limited to, those associated with the success
of research and development programs, the regulatory approval process,
competition, securing and maintaining corporate alliances, market
acceptance of the Company's products, the availability of government
and insurance reimbursements for the Company's products, the strength
of intellectual property, financing capability, the potential dilutive
effects of any financing, reliance on subcontractors and key personnel
and other risks detailed from time-to-time in the Company's public
disclosure documents or other filings with the Canadian and U.S. securities
commissions or other securities regulatory bodies. The forward-looking
statements are made as of the date hereof, and the Company disclaims
any intention and has no obligation or responsibility, except as required
by law, to update or revise any forward-looking statements, whether as
a result of new information, future events, or otherwise.
Financial Tables Below
VASOGEN INC.
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Balance Sheets
(In thousands of Canadian dollars)
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February 28, November 30,
2003 2002
-------------------------------------------------------------------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 915 $ 2,024
Marketable securities 35,456 35,605
Clinical supplies 2,496 2,645
Tax credits recoverable 1,214 1,379
Prepaid expenses and other receivables 379 518
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40,460 42,171
Marketable securities 546 5,086
Capital assets 700 707
Less accumulated amortization 423 394
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277 313
Acquired technology 4,081 4,081
Less accumulated amortization 2,879 2,815
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1,202 1,266
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$ 42,485 $ 48,836
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 2,277 $ 3,330
Shareholders' equity:
Share capital (note 2) 126,803 126,673
Deficit accumulated during the
development stage (86,595) (81,167)
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40,208 45,506
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$ 42,485 $ 48,836
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See accompanying notes to interim consolidated financial statements.
Interim Consolidated Statement of Operations and Deficit
(Unaudited, in thousands of Canadian dollars, except per share amounts)
Three months ended February 28
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2003 2002
-------------------------------------------------------------------------
Expenses:
Research and development $ 3,469 $ 3,208
General and administration 2,277 1,993
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Loss before the undernoted (5,746) (5,201)
Investment income 318 173
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Loss for the period (5,428) (5,028)
Deficit, beginning of period (81,167) (61,660)
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Deficit, end of period $ (86,595) $ (66,688)
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Basic and diluted loss per share (note 2(b)) $ (0.10) $ (0.11)
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See accompanying notes to interim consolidated financial statements.
VASOGEN INC.
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Statement of Cash Flows
(Unaudited, in thousands of Canadian dollars)
Three months ended February 28
-------------------------------------------------------------------------
2003 2002
-------------------------------------------------------------------------
Cash provided by (used in):
Operations:
Loss for the period $ (5,428) $ (5,028)
Items not involving cash:
Amortization of capital assets and
acquired technology 94 93
Loss on disposal of equipment 4 -
Foreign exchange loss (gain) 194 (81)
Stock compensation to non-employees 99 -
Change in non-cash operating working capital (568) (171)
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(5,605) (5,187)
Financing:
Warrants exercised for cash - 25
Options exercised for cash - 169
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- 194
Investments:
Increase in capital assets - (15)
Proceeds on disposition of equipment 2 -
Purchases of marketable securities (468) (159)
Maturities of marketable securities 4,968 6,409
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4,502 6,235
Foreign exchange gain (loss) on cash held
in foreign currency (6) 81
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Increase (decrease) in cash and cash equivalents (1,109) 1,323
Cash and cash equivalents, beginning of period 2,024 1,187
-------------------------------------------------------------------------
Cash and cash equivalents, end of period
$
915 $
2,510
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See accompanying notes to interim consolidated financial statements.
VASOGEN INC.
(A DEVELOPMENT STAGE COMPANY)
Notes to Interim Consolidated Financial Statements
(Tabular figures in thousands, except per share amounts)
Three months ended February 28, 2003
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Since its inception, the Company has been engaged in the research and
commercial development of its immune modulation therapies for the
treatment and prevention of disease and has not had any commercial
operations since inception. The operations of the Company are not subject
to any seasonality or cyclicality factors. All amounts are expressed in
Canadian dollars unless otherwise noted.
The accompanying unaudited interim consolidated financial statements are
prepared in accordance with Canadian generally accepted accounting
principles ("GAAP") for interim financial statements and do not conform
in all respects to the requirements for GAAP for annual financial
statements. These interim consolidated financial statements and notes
related thereto should be read in conjunction with the Company's most
recent annual consolidated financial statements, as at and for the year
ended November 30, 2002.
1. Significant accounting policies:
These interim consolidated financial statements follow the same
accounting policies and methods of their application as the most
recent annual consolidated financial statements, with the exception
of the Company's adoption of the following new Canadian accounting
standards:
(a) Stock-based compensation:
The Company adopted the new CICA Handbook Section 3870, Stock-
based Compensation and Other Stock-based Payments, effective for
the quarter ended February 28, 2003. The Company will
(i) maintain its current policy of accounting for employee stock-
based compensation using the settlement method, and (ii) change
its policy to record compensation costs for stock options issued
on or after December 1, 2002 to non-employees at fair value. The
fair value of the non-employee stock options granted after
December 1, 2002 has been estimated as the performance occurs and
the options are earned using the Black Scholes option pricing
model based on the assumptions set out in note 2(c). This change
in policy for the accounting of non-employee stock options has
been applied prospectively. In addition, the Company will be
disclosing the pro forma effect on operations as if the Company
has measured employment options using the fair value method.
(b) Intangibles:
The Company adopted the new Handbook Section 3062, Goodwill and
Intangibles, effective for the quarter ended February 28, 2003.
The Company's current policy is consistent with the new standard
and will have no material impact on the Company's financial
position or results of operations.
(c) Guarantees:
The Company adopted the CICA's Accounting Guideline 14,
Disclosure of Guarantees, effective for the quarter ended
February 28, 2003. Accounting Guideline 14 requires certain
disclosures to be made by the guarantor about its obligations
under guarantees. Management believes there are no material
guarantees for disclosure.
2. Share capital:
(a) Common shares, employment options and warrants:
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February 28, November 30,
2003 2002
-----------------------------------------------------------------
(Unaudited)
Common shares 51,935 51,935
Options 2,942 2,271
Warrants 875 875
-----------------------------------------------------------------
At February 28, 2003, 62,216 employment options and warrants are
available for grant.
(b) Basic and diluted loss per share:
-----------------------------------------------------------------
Three months ended February 28,
2003 2002
-----------------------------------------------------------------
(Unaudited)
Weighted average number of common
shares outstanding:
Basic 51,935 46,442
Effect of stock options - -
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51,935 46,442
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Loss per share:
Basic and diluted $ (0.10) $ (0.11)
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(c) Stock-based compensation:
The fair value of the employee and non-employee stock-based
compensation has been estimated at the grant date, for all grants
made after November 30, 2002, under the following assumptions:
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Dividend yield -
Weighted average risk-free
interest rate 4.26%
Volatility factor of the expected
market price of the Company's
common shares 81%
Weighted average expected life
of the employment options 4 years
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The resulting weighted average, grant date fair value of the
employee and non-employee stock-based compensation issued in 2003
was $2.33.
CICA Handbook Section 3870 does not require the recording of
compensation cost at fair value; it does require disclosure of
pro forma net loss and loss per share information as if the
Company had measured options issued to employees under the fair
value method and recognizes the fair value over the vesting
period. This information is as follows:
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Three months ended February 28, 2003
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Loss for the period $ (5,428)
Compensation expense - employees (561)
-----------------------------------------------------------------
Pro forma loss for the period $ (5,989)
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Loss per share:
Pro forma loss per share - basic and diluted $ (0.12)
-----------------------------------------------------------------
The above pro forma disclosure excludes the effect of stock
option awards granted before December 1, 2002.
The effect of applying CICA Handbook Section 3870 to calculate
employee compensation costs may not be representative of the
effects on pro forma net loss in future period.
3. Segmented information:
The Company operates in one business segment, being the development
of immune modulation therapies. The capital assets are primarily
located in Canada and the acquired technology is located in Ireland.
SOURCE Vasogen Inc.
CONTACT: Glenn Neumann, Investor Relations, 2155 Dunwin Drive, Mississauga,
ON, Canada L5L 4M1, tel: (905) 569-9065, fax: (905) 569-9231,
www.vasogen.com/investor@vasogen.com |
