Gliatech Announces First Quarter 2001 Results

Apr 25, 2001, 01:00 ET from Gliatech Inc.

    CLEVELAND, April 25 /PRNewswire/ -- Gliatech Inc. (Nasdaq:   GLIA) today
 announced financial results for the first quarter ended March 31, 2001.  Due
 to the Company's voluntary recall of ADCON(R)-L and ADCON(R)-T/N in January
 2001, there were no net product sales in the first quarter of 2001 compared to
 $6.8 million in the first quarter of 2000.  Cost of products sold increased to
 $1.4 million in the first quarter of 2001 compared to $1.2 million in the
 first quarter of 2000.  Cost of products sold in 2001 includes $1.1 million of
 operating and revalidation costs incurred at the Company's manufacturing
 facility in Solon, Ohio and its third party contract manufacturer, European
 Medical Contract Manufacturing, as well as $0.3 million of product recall
 costs.  Selling, general and administrative expenses decreased to $2.3 million
 in the first quarter of 2001 compared to $3.5 million in the first quarter of
 2000 primarily due to reduced commission expense.  The Company recorded a net
 loss in the first quarter of 2001 of $5.9 million, or $(0.61) per share,
 compared to net income of $0.1 million, or $0.01 per share in the first
 quarter of 2000.
     As of March 31, 2001, Gliatech had approximately $9.2 million of cash,
 cash equivalents and short-term investments. The Company is currently in
 active discussions regarding potential funding sources such as equity and debt
 financing and is engaged in discussions with strategic partners for its
 pharmaceutical programs.  While the Company anticipates that it will secure
 additional financing, there can be no assurance that the Company will be able
 to secure such funding or consummate any strategic alternatives on terms
 satisfactory to the Company, or at all.
 
     Q2 International Relaunch
 
     Gliatech announced on April 18, 2001 that it has successfully completed an
 International Standards Organization (ISO) 9001 audit that was conducted by
 KEMA Registered Quality B.V. (KEMA), a European Notified Body.  In addition,
 the Company has completed process development work relating to a raw material
 used in the manufacture of ADCON(R)-L and initiated manufacturing validation
 runs. The Company anticipates relaunch of ADCON(R)-L outside the U.S. in June
 2001.
 
     About Gliatech Inc.
 
     Gliatech Inc. is engaged in the discovery and development of biosurgery
 and pharmaceutical products.  The biosurgery products include ADCON(R) gel and
 ADCON(R) solution, which are proprietary, resorbable, carbohydrate polymer
 medical devices designed to inhibit scarring and adhesions following surgery.
 Gliatech's pharmaceutical product candidates include small molecule drugs to
 modulate the cognitive state of the nervous system and proprietary monoclonal
 antibodies designed to treat inflammatory disorders.
     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 express 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 profitability of the Company, the ability of the Company
 to consummate any strategic alternatives on satisfactory terms, or at all, the
 ability of the Company to obtain an adequate supply of the materials used in
 the manufacture of its ADCON(R) products, uncertainty of regulatory approvals,
 the status of the Company with respect to AIP, the timing and content of
 decisions including review of data by the FDA, including the decisions with
 respect to sale of ADCON(R)-L, product recalls and the inspectional
 observations by the FDA, the uncertainty of market conditions and other risk
 factors detailed in Gliatech's SEC filings.
     There will be a conference call at 10:00 a.m. EDT today to discuss
 Gliatech's first quarter financial results. This call will be broadcast live
 over the Internet at http://www.videonewswire.com/GLIATECH/042501/ and will be
 archived at Gliatech's website located at http://www.gliatech.com . A replay
 of the call will be available until April 29, 2001. The replay telephone
 number is 1-800-876-8729.
 
                         GLIATECH INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (unaudited)
 
                                                        Three Months Ended
     (In thousands, except share and per share data)          March 31,
                                                         2001          2000
     Revenues
     Net product sales                                     $-        $$6,831
     Government grants                                      -            243
       Total revenues                                       -          7,074
 
     Operating costs and expenses
     Cost of products sold (a)                          1,365          1,202
     Research and development                           2,362          2,573
     Selling, general and administrative                2,336          3,452
       Total operating costs and expenses               6,063          7,227
     Loss from operations                              (6,063)          (153)
     Interest income, net                                 199            270
     Net (loss) income                                $(5,864)          $117
 
     (Loss) earnings per share
       Basic                                          $ (0.61)         $0.01
       Diluted                                        $ (0.61)         $0.01
 
     Average shares outstanding
       Basic                                        9,682,637      9,489,341
       Diluted                                      9,682,637      9,698,465
 
     (a)  Cost of products sold in 2001 includes $1.1 million of operating and
          revalidation costs incurred at the Company's manufacturing facility
          in Solon, Ohio, and its third party contract manufacturer, European
          Medical Contract Manufacturing, as well as $0.3 million of product
          recall costs.  Cost of products sold in 2000 includes $0.4 million of
          operating costs incurred at the Company's Solon, Ohio manufacturing
          facility.
 
                           CONSOLIDATED BALANCE SHEET
                                  (unaudited)
 
 
     (In thousands)                                   March 31,    December 31,
                                                        2001           2000
     Balance Sheet Data:
 
     Cash, cash equivalents and short-term investments $9,176         $8,464
     Other current assets                               3,183          4,830
       Total current assets                            12,359         13,294
     Long term investments                                             3,642
     Property and equipment, net                        3,046          3,197
     Other assets, net                                  1,064          1,043
       Total assets                                   $16,469        $21,176
 
     A/P and other accrued expenses                    $6,112         $3,840
     Other current liabilities                            692          1,833
       Total current liabilities                        6,804          5,673
     Stockholders' equity                               9,665         15,503
       Total liabilities & stockholders' equity       $16,469        $21,176
 
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SOURCE Gliatech Inc.
    CLEVELAND, April 25 /PRNewswire/ -- Gliatech Inc. (Nasdaq:   GLIA) today
 announced financial results for the first quarter ended March 31, 2001.  Due
 to the Company's voluntary recall of ADCON(R)-L and ADCON(R)-T/N in January
 2001, there were no net product sales in the first quarter of 2001 compared to
 $6.8 million in the first quarter of 2000.  Cost of products sold increased to
 $1.4 million in the first quarter of 2001 compared to $1.2 million in the
 first quarter of 2000.  Cost of products sold in 2001 includes $1.1 million of
 operating and revalidation costs incurred at the Company's manufacturing
 facility in Solon, Ohio and its third party contract manufacturer, European
 Medical Contract Manufacturing, as well as $0.3 million of product recall
 costs.  Selling, general and administrative expenses decreased to $2.3 million
 in the first quarter of 2001 compared to $3.5 million in the first quarter of
 2000 primarily due to reduced commission expense.  The Company recorded a net
 loss in the first quarter of 2001 of $5.9 million, or $(0.61) per share,
 compared to net income of $0.1 million, or $0.01 per share in the first
 quarter of 2000.
     As of March 31, 2001, Gliatech had approximately $9.2 million of cash,
 cash equivalents and short-term investments. The Company is currently in
 active discussions regarding potential funding sources such as equity and debt
 financing and is engaged in discussions with strategic partners for its
 pharmaceutical programs.  While the Company anticipates that it will secure
 additional financing, there can be no assurance that the Company will be able
 to secure such funding or consummate any strategic alternatives on terms
 satisfactory to the Company, or at all.
 
     Q2 International Relaunch
 
     Gliatech announced on April 18, 2001 that it has successfully completed an
 International Standards Organization (ISO) 9001 audit that was conducted by
 KEMA Registered Quality B.V. (KEMA), a European Notified Body.  In addition,
 the Company has completed process development work relating to a raw material
 used in the manufacture of ADCON(R)-L and initiated manufacturing validation
 runs. The Company anticipates relaunch of ADCON(R)-L outside the U.S. in June
 2001.
 
     About Gliatech Inc.
 
     Gliatech Inc. is engaged in the discovery and development of biosurgery
 and pharmaceutical products.  The biosurgery products include ADCON(R) gel and
 ADCON(R) solution, which are proprietary, resorbable, carbohydrate polymer
 medical devices designed to inhibit scarring and adhesions following surgery.
 Gliatech's pharmaceutical product candidates include small molecule drugs to
 modulate the cognitive state of the nervous system and proprietary monoclonal
 antibodies designed to treat inflammatory disorders.
     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 express 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 profitability of the Company, the ability of the Company
 to consummate any strategic alternatives on satisfactory terms, or at all, the
 ability of the Company to obtain an adequate supply of the materials used in
 the manufacture of its ADCON(R) products, uncertainty of regulatory approvals,
 the status of the Company with respect to AIP, the timing and content of
 decisions including review of data by the FDA, including the decisions with
 respect to sale of ADCON(R)-L, product recalls and the inspectional
 observations by the FDA, the uncertainty of market conditions and other risk
 factors detailed in Gliatech's SEC filings.
     There will be a conference call at 10:00 a.m. EDT today to discuss
 Gliatech's first quarter financial results. This call will be broadcast live
 over the Internet at http://www.videonewswire.com/GLIATECH/042501/ and will be
 archived at Gliatech's website located at http://www.gliatech.com . A replay
 of the call will be available until April 29, 2001. The replay telephone
 number is 1-800-876-8729.
 
                         GLIATECH INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (unaudited)
 
                                                        Three Months Ended
     (In thousands, except share and per share data)          March 31,
                                                         2001          2000
     Revenues
     Net product sales                                     $-        $$6,831
     Government grants                                      -            243
       Total revenues                                       -          7,074
 
     Operating costs and expenses
     Cost of products sold (a)                          1,365          1,202
     Research and development                           2,362          2,573
     Selling, general and administrative                2,336          3,452
       Total operating costs and expenses               6,063          7,227
     Loss from operations                              (6,063)          (153)
     Interest income, net                                 199            270
     Net (loss) income                                $(5,864)          $117
 
     (Loss) earnings per share
       Basic                                          $ (0.61)         $0.01
       Diluted                                        $ (0.61)         $0.01
 
     Average shares outstanding
       Basic                                        9,682,637      9,489,341
       Diluted                                      9,682,637      9,698,465
 
     (a)  Cost of products sold in 2001 includes $1.1 million of operating and
          revalidation costs incurred at the Company's manufacturing facility
          in Solon, Ohio, and its third party contract manufacturer, European
          Medical Contract Manufacturing, as well as $0.3 million of product
          recall costs.  Cost of products sold in 2000 includes $0.4 million of
          operating costs incurred at the Company's Solon, Ohio manufacturing
          facility.
 
                           CONSOLIDATED BALANCE SHEET
                                  (unaudited)
 
 
     (In thousands)                                   March 31,    December 31,
                                                        2001           2000
     Balance Sheet Data:
 
     Cash, cash equivalents and short-term investments $9,176         $8,464
     Other current assets                               3,183          4,830
       Total current assets                            12,359         13,294
     Long term investments                                             3,642
     Property and equipment, net                        3,046          3,197
     Other assets, net                                  1,064          1,043
       Total assets                                   $16,469        $21,176
 
     A/P and other accrued expenses                    $6,112         $3,840
     Other current liabilities                            692          1,833
       Total current liabilities                        6,804          5,673
     Stockholders' equity                               9,665         15,503
       Total liabilities & stockholders' equity       $16,469        $21,176
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X17286277
 
 SOURCE  Gliatech Inc.