SAN DIEGO, Nov. 19, 2013 /PRNewswire/ -- Cardium Therapeutics (NYSE MKT: CXM) today presented its financial results for the third quarter ended September 30, 2013, and reported on recent highlights and other business developments including:
Sale of To Go Brands® business to Cell-nique Corporation and Healthy Brands Collective® in an asset purchase for approximately $2.5 million through the exchange of a preferred equity position in Healthy Brands. Healthy Brands is a private operating company that has acquired eight brand platforms in the health and nutraceutical space and has previously reported plans to move forward as a public company as its businesses advance through internal growth and by further acquisition.
Market introduction of LifeAgain's BlueMetric Select term life insurance program for men with active localized prostate cancer issued by Symetra Life Insurance Company. The BlueMetric Select program is based on LifeAgain's Advanced Medical Data Analytics Platform Technology (ADAPT™), which was internally developed by researchers at Cardium.
Publication of "Serial Sharp Debridement and Formulated Collagen Gel to Treat Pressure Ulcers in Elderly Long-term Care Patients: A Case Study", in the November 2013 issue of Ostomy Wound Management, highlighting Excellagen's capability of promoting rapid granulation and healing in chronic pressure ulcers in elderly long-term care facility residents.
Distribution agreements with (1) AvKARE Inc. for the sale and distribution of Excellagen into government medical facilities throughout the United States. AvKARE services a diverse customer base that includes government (federal, state and municipal) and commercial sectors, and (2) international distribution agreement with Kasiak Holdings AG for the marketing and sale of Excellagen in Germany and Switzerland.
New FDA 510(k) submission for Cardium's current FDA-cleared Excellagen to reflect additional and specific structural and functional properties based on the Company's supplemental research and development activities.
Research collaborations with (1) Orbsen Therapeutics Ltd and the National University of Ireland, Galway, to utilize Excellagen in pre-clinical studies as a delivery agent for Orbsen's proprietary stromal cell therapy for the potential treatment of diabetic foot ulcers, and (2) researchers at Boston Children's Hospital, to assess the medical utility of Excellagen as a scaffold to seed autologous mesenchymal fetal stem cells for ex-vivo engineering of tissue grafts for transplantation into infants to potentially repair prenatally diagnosed birth defects.
Completion of a 1:20 reverse stock split of the Company's common stock and closing of the second tranche of the securities purchase agreement with one of its institutional investors consisting of 1,656 shares of Series A convertible preferred stock for gross proceeds of approximately $1.7 million, both of which were approved at the 2013 annual meeting of stockholders.
Instituted a series of cost reduction actions that include relocation of the corporate offices to a smaller and lower cost facility, reduced employee headcount and across the board salary reductions. The impact of these measures will be reflected in the fourth quarter.
During the third quarter, LifeAgain Insurance Solutions, Inc., Cardium's newly-formed advanced medical data analytics business focused on the development, marketing and sale of "survivable risk" term life insurance programs, and AgencyONE, its commercialization partner, entered into agreements to market and sell term life insurance issued by Symetra Life Insurance Company under LifeAgain's BlueMetric Select term life insurance program for men with active localized prostate cancer. The BlueMetric Select program was developed based on LifeAgain's Advanced Medical Data Analytics Platform Technology (ADAPT™) and was specifically designed to provide eligible men with term life insurance coverage following a prostate cancer diagnosis or upon the completion of a prostate cancer surgery, without the traditional multi-year waiting periods and additional medical re-qualifications generally required by most life insurance companies.
The BlueMetric Select program has been designed for men aged 45-65, who are in otherwise good health and who have low- to medium-risk active localized prostate cancer, which has been confirmed by a recent biopsy, and for men who have recently completed prostate cancer surgery. This program seeks to provide term life insurance coverage and may include an automatic renewal option (following the initial ten-year term), the right to convert into universal life insurance, and an accelerated benefit in the event of a terminal illness. The BlueMetric Select Program is designed to offer substantial coverage levels, ranging from $100,000 to $1,000,000, without waiting periods, so an individual can begin the application process on the day of his prostate cancer diagnosis, or immediately following completion of prostate cancer surgery. Additional information is at www.lifeagain.com.
LifeAgain's proprietary Advanced Medical Data Analytics Platform Technology enables a scalable, actuarial-based risk assessment based on a diagnostic histological biopsy or a prostate cancer surgery. Together with an applicant's overall health, these factors may be used to support favorable underwriting decisions and to establish appropriate premium pricing based on the level of prostate cancer progression of each applicant. LifeAgain is developing additional new and innovative insurance solutions for other medical conditions currently considered uninsurable by traditional underwriters.
In third quarter 2013, Cardium filed a 510(k) submission for its current FDA-cleared Excellagen advanced wound care product to reflect additional and specific structural and functional properties based on the Company's supplemental research and development activities. The new 510(k) submission is designed to provide further mechanistic insight into the significantly accelerated and activated healing response seen with Excellagen. In addition, the Company plans to modify Excellagen's packaging to include individually pouched applicator syringes and a large volume syringe applicator to allow for easier use in larger-sized wounds such as those found in limb salvage, orthopedic surgery and other surgical applications.
The Company entered into a distribution agreement with AvKARE Inc., its new sales and distribution partner for Excellagen in Veterans Hospitals and other governmental medical facilities throughout the United States. The new agreement and commercialization arrangement with AvKARE effectively replaces an earlier arrangement with Academy Medical, LLC. Cardium elected to transfer the Excellagen distribution responsibilities to AvKARE, which provides five direct wound care experts and allows Cardium's distributor representatives access to all government accounts. AvKARE services a diverse customer base that includes government (federal, state and municipal) and commercial sectors.
In addition, during third quarter Cardium entered into a distribution agreement with Kasiak Holdings AG for the marketing and sale of Excellagen in Germany and Switzerland, with the potential for expansion into additional European markets. Kasiak Holdings is focused on developing stem cell-based therapeutics for the treatment of diabetic foot ulcers. Kasiak Holdings is affiliated with Kasiak Research, which is an operating unit of India-based Bharat Serums and Vaccines, that develops and manufactures specialized biological, pharmaceutical and biotechnology products.
The Company also announced research collaborations with (1) Orbsen Therapeutics Ltd and the National University of Ireland, Galway, to utilize Excellagen in pre-clinical studies as a delivery agent for Orbsen's proprietary stromal cell therapy for the potential treatment of diabetic foot ulcers, and (2) researchers at Boston Children's Hospital, to assess the medical utility of Excellagen as a scaffold to seed autologous mesenchymal fetal stem cells for ex-vivo engineering of tissue grafts for transplantation into infants to potentially repair prenatally diagnosed birth defects.
Regarding Excellagen's CE mark submission, Cardium has reported that based on the current status, all information requests have been provided to the notified body, BSI and that the Company believes this process should lead to CE mark certification for its FDA-cleared advanced wound care product.
Report on To Go Brands and Health Sciences Businesses
On November 18, 2013, the Company announced that Cell-nique Corporation, which owns a variety of innovative businesses that are part of the Healthy Brands Collective®, has acquired To Go Brands® in an asset purchase for approximately $2.5 million through an exchange of a preferred equity position in Healthy Brands.
Consistent with Cardium's business model of developing businesses that can be partnered or monetized with larger enterprises, Healthy Brands has been making significant acquisitions and has previously reported plans to move forward as a public company as its businesses advance through internal growth and by further acquisition.
Through recent acquisitions and the purchase of Cardium's To Go Brands business, Healthy Brands' portfolio now includes nine independent brand product platforms including Cell-nique®, Cherrybrook Kitchen®, Yumnuts®, Living Harvest/Tempt®, Bites of Bliss®, Funky Monkey®, High Country Kombucha® drinks and Organics European Gourmet Bakery™ (Dr. Oetker) natural and organic baking mixes.
Cell-nique is not yet a public reporting company, but annualized revenue is currently estimated to exceed $13.0 million, without giving effect to its recently-completed acquisitions of the Funky Monkey and To Go Brands businesses. Cardium's preferred stock position in Cell-nique is convertible into common stock currently representing approximately 4% of the fully-diluted common stock, it accrues an 8% annual dividend, and it comes with certain rights and preferences described in Cell-nique's articles of incorporation. For more information on Cell-nique and the Healthy Brands Collective, visit www.healthybrandsco.com.
Cardium, through its health sciences unit, will retain the trademarks and technology relating to the MedPodium® Nutra-apps® and nutraceutical product line, and will retain its investment interest in SourceOne, a nutraceutical and health sciences ingredient supplier.
The sale of the To Go Brands unit is Cardium's second development and monetization of a portfolio business. Its InnerCool subsidiary was advanced and sold to a U.S. affiliate of Philips for approximately $12.5 million.
Product sales for the three months ended September 30, 2013 totaled $472,000, compared to $5,600 for the same period in 2012. Product sales for the nine months ended September 30, 2013 were $1.7 million, compared to $39,000 for the nine months ended September 30, 2012. The increase in product sales was comprised of sales from the Company's To Go Brands health sciences business, which Cardium acquired in late September 2012.
Cardium's research and development costs for the third quarter ended September 30, 2013 totaled $0.3 million, and selling, general and administrative expenses were $1.6 million, compared to $0.5 million and $1.4 million, respectively, for third quarter ended September 30, 2012. For the nine months ended September 30, 2013, research and development costs were $1.6 million, and selling, general and administrative expenses were $5.3 million, compared to $2.1 million and $4.4 million, respectively, for the nine months ended September 30, 2012. Research and development expenses for the nine months ended September 30, 2013 included milestone payments and out-of-pocket costs for the ASPIRE study and product and testing costs for validating production volume and cost efficiency improvements for Excellagen.
For the three months ended September 30, 2013, the Company reported a net loss of $1.9 million, or $(0.28) per share, when compared to a net loss of $1.9 million, or $(0.32) per share for the three months ended September 30, 2012. For the nine months ended September 30, 2013, the Company reported a net loss of $6.6 million, or $(0.99) per share, compared to a net loss for the nine months ended September 30, 2012 of $6.4 million, or $(1.10) per share. As of September 30, 2013, the Company had $585,000 in cash and cash equivalents, compared to $2.3 million in cash and cash equivalents on December 31, 2012. On September 30, 2013, 7,747,228 million shares of Cardium's common stock were outstanding.
The sale of To Go Brands is intended to monetize that business by positioning it with a diversified, fast growing platform. Cardium's preferred stock position in Cell-nique is convertible into common stock currently representing approximately 4% of the fully-diluted common stock, it accrues an 8% annual dividend, and it comes with certain rights and preferences described in Cell-nique's articles of incorporation. Cardium could also elect to sell or otherwise monetize its preferred stock position in Cell-nique in one or more transactions.
The To Go Brands transaction also included the transfer of certain operating expenses and liabilities to Healthy Brands Collective, which will further reduce the Company's operating expenses. In addition, during third quarter, Cardium implemented certain cost reductions that include relocating the Company to a smaller corporate office, as well as headcount and salary reductions.
The Company intends to consider additional corporate development transactions designed to place its product candidates or businesses into larger organizations or with partners having existing commercialization, sales and marketing resources, and a need for innovative products. Such transactions could involve the sale, partnering or other monetization of particular product opportunities or businesses. In parallel, as the Company's businesses are advanced and corresponding valuations established, it plans to pursue new product opportunities and acquisitions with strong value enhancement potential.
Cardium has also been approached by a strategic investor interested in potentially acquiring a stake in the company at a premium to market, although we have not entered into definitive agreements for such a transaction.
Depending on the extent and timing of such product advancements, business monetizations and strategic or other investments, and based on recently-issued amendments to Rule 506 and Rule 144A under the Securities Act of 1933 that were implemented under Section 201(a) of the Jumpstart Our Business Startups Act (the "JOBS Act"), we may also consider financings through the sale of private equity interests to qualified investors or strategic partners based on the JOBS Act amendments, and/or through other private placements or a public offering of securities, which could potentially be made in the parent company or independently in one or more of our subsidiary business units.
In third quarter 2013, Cardium completed a 1:20 reverse split of the Company's common stock and announced the completion of the second tranche of a registered direct offering with one of its institutional investors consisting of 1,656 shares of Series A convertible preferred stock for gross proceeds of approximately $1.7 million. During third quarter 2013 and as of the date of this report, the Company has not sold any common stock under its "at-the-market" facility.
As previously reported, a communication from the staff of the Company's current listing exchange, NYSE MKT, indicated that the Company was considered to be noncompliant with certain listing requirements based on its quarterly report for the period ended September 30, 2012, and provided that the company should submit a plan to staff of the exchange that would reestablish compliance with the NYSE MKT listing requirement by March 31, 2013. On December 6, 2012, the company reported that it had submitted a plan designed to reestablish compliance with the exchange's requirement in advance of the March 31, 2013 time frame, and on January 6, 2013, announced that the plan had been accepted by the listing exchange. On April 5, 2013, the Company reported that the NYSE MKT had granted an additional quarterly extension of the listing exchange compliance plan from March 31 to June 30, 2013. On July 2, 2013, the Company reported that its exchange had granted an additional quarterly extension of the listing exchange compliance plan from June 30, 2013 to September 30, 2013. On October 7, 2013, the Company reported that the NYSE MKT had granted an additional quarterly extension of the listing exchange compliance plan from September 30, 2013 to December 31, 2013. If Cardium does not achieve and maintain compliance in accordance with its plans, it could be subjected to delisting proceedings. However, as part of the Company's overall cost reduction efforts, Cardium has also considered relisting its common stock on the OTC Market, on which its stock regularly traded prior to its listing on the American Stock Exchange.
Excellagen is a sterile, syringe-based, professional-use, physiologically formulated homogenate of purified bovine dermal collagen (Type I) in its native, 3-dimensional fibrillar configuration, providing a structural scaffold for cellular infiltration and wound granulation. Excellagen activates platelets, triggering release of essential growth factors and functions as an acellular biological modulator to activate the wound healing process and significantly accelerate the growth of granulation tissue. Excellagen's FDA clearance provides for very broad labeling including partial and full-thickness wounds, pressure ulcers, venous ulcers, diabetic ulcers, chronic vascular ulcers, tunneled/undermined wounds, surgical wounds (donor sites/graft, post-Mohs surgery, post-laser surgery, podiatric, wound dehiscence), trauma wounds (abrasions, lacerations, second-degree burns and skin tears) and draining wounds. Excellagen is intended for professional use following standard debridement procedures in the presence of blood cells and platelets, which are involved with the release of endogenous growth factors. Excellagen's unique fibrillar Type I bovine collagen homogenate formulation is topically applied through easy-to-control, pre-filled, sterile, single-use syringes and is designed for application at only one-week intervals. For more information about Excellagen, visit www.excellagen.com.
Generx [Ad5FGF-4] alferminogene tadenovec is a disease-modifying regenerative medicine biologic that is being developed to offer a one-time, non-surgical therapy for the treatment of cardiac microvascular insufficiency due to myocardial ischemia in patients with stable angina due to advancing coronary artery disease. Similar to surgical and mechanical revascularization approaches, the goal of Cardium's Generx product candidate is to improve blood flow to the heart muscle, following a single, non-surgical administration using a standard balloon angioplasty catheter. The ASPIRE Phase 3 registration study is currently being conducted at leading cardiology centers in the Russian Federation to evaluate the continued safety and therapeutic effects of Generx. For more information about Generx and the ASPIRE clinical study, visit www.cardiumthx.com/generx.html.
LifeAgain Insurance Solutions is an advanced medical data analytics business and life insurance agency that is focused on the development, marketing and sale of "survivable risk" term life insurance programs for cancer survivors or others with medical conditions who are currently considered uninsurable based on traditional underwriting standards. Working in cooperation with large and established life insurance companies, LifeAgain uses new actuarial methods, and scientific and medical data-driven insights to design life insurance solutions for those who may otherwise not be able to obtain coverage. LifeAgain's initial focus is on the development, marketing and sale of survivable risk life insurance for men with active localized prostate cancer. LifeAgain plans to develop additional new and innovative life insurance solutions for men and women with other medical conditions. For more information about LifeAgain, visit www.lifeagain.com.
Cardium is a health sciences and biotechnology regenerative medicine company. Cardium has three business units: (1) Angionetic Therapeutics™, focused on the late-stage clinical development of Generx® , an angiogenic gene therapy product candidate for the treatment for cardiac microvascular insufficiency due to advancing coronary artery disease; (2) Activation Therapeutics™, a regenerative medicine wound healing technology and commercialization platform, that includes Excellagen®, an FDA-cleared advanced wound care product and (3) LifeAgain® Insurance Solutions, an advanced medical data analytics platform that supports the Company's BlueMetric Select term life insurance program, which is underwritten by Symetra Life Insurance for men with active localized prostate cancer. For more information about Cardium visit www.cardiumthx.com.
Except for statements of historical fact, the matters discussed in this press release are forward looking and reflect numerous assumptions and involve a variety of risks and uncertainties, many of which are beyond our control and may cause actual results to differ materially from expectations. For example, there can be no assurance that Cell-nique and Healthy Brands will be successful in their business development efforts, that their company will go public, or that Cardium's preferred stock position will result in an increase in value that can be realized by Cardium; that Cardium will be successful in advancing, capitalizing and partnering or monetizing its other businesses and technology platforms; that the Company can raise capital through the private or public sale of equity interests on a company-by-company basis or otherwise; that planned product development efforts and clinical studies can be performed in an efficient and effective manner; that results or trends observed in one clinical study or procedure will be reproduced in subsequent studies or in actual use; that new clinical studies will be successful or will lead to approvals or clearances from health regulatory authorities, or that approvals in one jurisdiction will help to support studies or approvals elsewhere; that the Company or its partners will be successful in developing and marketing survivable risk life insurance programs or that any intellectual property developed in the area will be effective for excluding potential competitors; that the Company will satisfy the requirements of its exchange listing compliance plan and will otherwise continue to satisfy the listing requirements of its exchange or that its shares can continue to be listed on a national exchange; that we can raise sufficient capital from partnering, monetization or other fundraising transactions to maintain our stock exchange listing or adequately fund ongoing operations; that the Company can attract suitable commercialization partners for our products or that we or partners can successfully commercialize them; that our product or product candidates will not be unfavorably compared to competitive products that may be regarded as safer, more effective, easier to use or less expensive or blocked by third party proprietary rights or other means; that our or our licensor's intellectual property can be successfully developed and enforced and that we will not be accused of infringing on intellectual property developed by third parties; that the products and product candidates referred to in this report or in our other reports will be successfully commercialized and their use reimbursed, or will enhance our market value; that new product opportunities or commercialization efforts will be successfully established; that third parties on whom we depend will perform as anticipated; or that the Company will not be adversely affected by risks and uncertainties that could impact our operations, business or other matters, as described in more detail in our filings with the Securities and Exchange Commission. We undertake no obligation to release publicly the results of any revisions to these forward-looking statements to reflect events or circumstances arising after the date hereof.
Cardium Therapeutics®, Generx®, Excellagen®, LifeAgain®, BlueMetric™, Decision Rule Adaption™, ADAPT™, Angionetic Therapeutics™, Activation Therapeutics™, MedPodium® and Nutra-Apps®are trademarks of Cardium Therapeutics, Inc. or Tissue Repair Company. Other trademarks belong to their respective owners.
Cardium Therapeutics, Inc.
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