Conceptus sets restructuring, eyes loss
SAN CARLOS, Calif., July 6 (Reuters) - Conceptus Inc. on Monday said it is restructuring its operations, reducing spending and cutting some 53 jobs worldwide as it moves to reduce spending.
In a statement, the maker of medical products said it expects to report second quarter revenues of $80,000, and in the second half of 1998 it expects to report a net loss that would be about one-quarter of the net loss reported in 1997's second half.
In the second quarter one year ago, Conceptus reported a net loss of about $2.8 million, or $0.30 a share, on revenue of $424,000, and in the second half of 1997 it reported a net loss of about $0.69 per share.
Analysts' consensus estimate for the second quarter of 1998 had called for earnings of $0.32 per share, according to investment research firm First Call.
"While there is increasing clinical acceptance of our products, especially the ERA Resectoscope Sleeve, our challenge has been to build a new channel of distribution in the emerging market for Interventional Gynecology," Kathryn Tunstall, chief executive officer, said in a statement.
Finally, the company said it had been in merger discussions with an undisclosed private company, but those talks have been discontinued.
Conceptus Announces Restructuring
SAN CARLOS, Calif.--(BW HealthWire)--July 6, 1998--Conceptus Inc. (NASDAQ:CPTS), a company focused on the emerging women's health market, announced today that it has effected a restructuring which will significantly reduce spending levels.
As a result of the elimination of 53 positions worldwide, including two executive officer positions, and reduced spending in several non-personnel areas, the company expects that its net loss for the second half of 1998 will be approximately one-quarter of the loss for the same period of 1997.
"While there is increasing clinical acceptance of our products, especially the ERA(TM) Resectoscope Sleeve, our challenge has been to build a new channel of distribution in the emerging market of Interventional Gynecology," stated Kathryn Tunstall, president and chief executive officer. Conceptus had been in merger discussions with a private company which employs a direct sales force in the U.S. and Europe to market its proprietary line of gynecology products. These merger discussions have been discontinued.
Due to the lack of distribution capability, revenues for the second quarter 1998 were approximately $80,000, which is less than analysts' projections. Cash and equivalents at the end of June, 1998 exceeded $20 million.
"With this restructuring, we will seek marketing partners to distribute our current products, the ERA(TM) and FUTURA(TM) Resectoscope Sleeves and the STARRT(TM) Falloposcopy system. Reduced expense levels going forward will facilitate continued investment in the R&D and clinical studies of our S/TOP (Selective Tubal Occlusion Procedure) device for non-surgical permanent contraception, a potential product designed to address one of the largest medical device markets worldwide," she added.
In February, the company announced that it had obtained the first histology results from its ongoing clinical trial of the S/TOP Permanent Contraception system in hysterectomy patients. This ongoing study is designed to evaluate the system's mechanism of action and the ability to place the S/TOP device system in an awake, sedated woman. The company has also initiated a Phase II clinical effectiveness study of the S/TOP system in Australia.
Conceptus also announced that Robert Thomas, vice president of operations, has resigned to pursue other opportunities. Susan Schneider, formerly Conceptus's Sr. director of quality assurance and quality control and a 20 year veteran of life science research, operations and QA, will assume Thomas' responsibilities in connection with her promotion to vice president, operations and quality assurance. James J. Messemer, vice president corporate development, has also resigned to pursue other opportunities. The company does not plan to replace Messemer at this time.
Conceptus Inc. designs, develops and markets innovative interventional medical devices for use in reproductive medicine. The company's initial focus is on the development of systems to improve the diagnosis and treatment of fallopian tube disorders, a primary cause of infertility and on technology designed to improve the safety and ease-of-use of therapeutic hysteroscopy, a growing, less-invasive alternative to hysterectomy. The Company is in Phase II clinical trials of a non-surgical approach to fallopian tube sterilization, the most commonly performed contraceptive procedure worldwide.
Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements, the accuracy of which is necessarily subject to risks and uncertainties. The receipt of regulatory approvals, results of product development programs, clinical efficacy of and market demand for products, among other matters discussed in this release, may differ significantly from the discussion of such matters in the forward-looking statement. Such differences may be based upon factors within Conceptus's control, such as strategic planning decisions by management and re-allocation of internal resources, or on factors outside of Conceptus's control, such as delays by regulatory authorities, scientific advances by Conceptus or third parties and introduction of competitive products, as well as those factors set forth in the Company's quarterly report on Form 10-Q for the quarter ended March 31, 1998 and its Annual Report on Form 10-K for the year ended December 31, 1997, and the Company's prospectus dated February 1, 1996, under the heading "Risk Factors" and the Company's other filings with the Securities and Exchange Commission.
CONTACT:
Conceptus Inc.
Kathryn Tunstall or Sanford Fitch, 650/802-7240
KEYWORD: CALIFORNIA
BW0148 JUL 06,1998
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