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Wednesday July 28, 6:30 am Eastern Time
Company Press Release
SOURCE: Gliatech Inc.
Gliatech Announces Second Quarter 1999 Financial
Results
Company Reports Record ADCON(R) Sales and Continued Profitability Company Also
Announces Stock Repurchase Plan
CLEVELAND, July 28 /PRNewswire/ -- Gliatech Inc. (Nasdaq: GLIA - news) today announced financial results and
earnings for the second quarter ended June 30, 1999. The Company's product sales increased more than six-fold to a record
$7.9 million in the second quarter of 1999 from $1.2 million in the second quarter of 1998. This increase resulted primarily
from sales of ADCON®-L in the U.S. Total revenues, which also include revenues from a research contract and government
grants, increased four-fold to $8.3 million in the second quarter of 1999 from $2.1 million in the second quarter of 1998.
Gliatech reported net income of $950,000 in the second quarter of 1999, compared to a net loss of $2.2 million in the
second quarter of 1998. The net income per diluted share was $.09 in the second quarter of 1999, compared to a net loss of
$.28 per diluted share in the second quarter of 1998.
''We are extremely pleased to report our third consecutive profitable quarter for Gliatech. The continued sales growth of
ADCON®-L in the United States was instrumental in achieving such positive financial results,'' said Thomas O. Oesterling,
Ph.D., Chairman and Chief Executive Officer of Gliatech Inc. ''The demand for ADCON®-L remains strong and is reflected
in the increasing number of hospitals who are using the product. Currently, we have penetrated approximately 80% of the
2000 hospitals performing the majority of spine surgeries. In addition, we have received positive feedback regarding the
effectiveness of ADCON®-L observed in reoperations of patients who have had ADCON®-L administered in prior
surgery. In these cases, this experience has generally resulted in increased use of the product by these surgeons.''
Also during the quarter, Gliatech filed applications with the FDA to initiate pilot clinical trials of ADCON®-A, which is
designed to inhibit scarring and adhesions following abdominal and colorectal surgeries, and to initiate pilot clinical trials for
the use of ADCON®-L in breast augmentation surgeries, respectively. The Company also completed a Phase I
multiple-dose rising study of its lead compound Perceptin® in connection with its Cognition Modulation Program.
Perceptin® has potential uses in Alzheimer's Disease, Attention Deficit Hyperactivity Disorder (ADHD), and sleep disorders,
including narcolepsy.
Gliatech also announced that its Board of Directors has authorized the purchase, from time to time, of up to 250,000 shares
of its common stock. These purchases may be made in the open market pursuant to Rule 10b-18 of the Securities Exchange
Act of 1934 through block trades or otherwise. These purchases will be made based on market conditions and other factors
and may be made or suspended at any time. ''Our Board of Directors believes this repurchase program reflects the
Company's opinion that at the current market price, Gliatech common stock represents a good investment,'' said Dr.
Oesterling.
Gliatech was formed in 1988 to discover, develop and commercialize therapeutic products based on understanding the
properties of glial cells, a major component of the nervous system. The Company applies its core glial research to developing
innovative products for major unmet human health care needs.
Certain statements in this press release constitute ''forward-looking statements'' that are subject to risks and uncertainties
which may cause the actual results of the Company to be different from expectations expressed or implied by such
forward-looking statements. Such factors include, but are not limited to, uncertainty of market acceptance of the Company's
products, the uncertainty of expenses associated with clinical trials and research efforts which may affect the continued
profitability of the Company, uncertainty of regulatory approvals including the timing and content of decisions by the FDA,
the Company's ability to execute purchases of its stock, the uncertainty of market conditions and other risk factors detailed in
the Company's SEC filings.
GLIATECH INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
June 30 June 30
1999 1998 1999 1998
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues
Product sales $7,929,085 $1,150,870 $ 15,685,355 $1,662,370
Research contracts
and licensing fees 171,398 738,500 514,194 1,477,000
Government grants 245,168 259,923 430,851 410,257
Total revenues 8,345,651 2,149,293 16,630,400 3,549,627
Operating costs
and expenses
Cost of products
sold 1,147,525 297,832 2,294,655 464,666
Research and
development 3,360,182 2,451,013 7,300,551 4,767,179
Selling, general
and administrative 3,194,393 1,777,213 6,170,669 3,033,782
Total operating
costs and
expenses 7,702,100 4,526,058 15,765,875 8,265,627
Operating income
(loss) 643,551 (2,376,765) 864,525 (4,716,000)
Interest income, net 306,818 133,001 560,086 279,809
Net income (loss) $950,369 $(2,243,764) $1,424,611 $(4,436,191)
Earnings (loss) per share
Basic $0.10 $(0.28) $0.15 $(0.57)
Diluted $0.09 $(0.28) $0.14 $(0.57)
Average shares outstanding
Basic 9,498,917 8,044,761 9,463,663 7,768,980
Diluted 10,104,888 8,044,761 10,128,941 7,768,980
Balance Sheet Data: June 30, December 31,
1999 1998
(unaudited)
Cash, cash equivalents and
short-term investments $26,430,406 $26,398,878
Other current assets 6,405,158 5,188,863
Total current assets 32,835,564 31,587,741
Property and equipment, net 2,574,459 1,556,815
Other assets, net 758,381 817,630
Total assets $36,168,404 $33,962,186
A/P and other accrued expenses $4,536,054 $4,377,388
Other current liabilities 2,547,732 2,432,226
Total current liabilities 7,083,786 6,809,614
Stockholders' equity 29,084,618 27,152,572
Total liabilities &
stockholders' equity $36,168,404 $33,962,186
SOURCE: Gliatech Inc. |
