Ondine Biopharma Announces 2007 Year End Financial Results Tuesday, March 25, 2008 Website | News Archive Vancouver, BC, March 25, 2008--(T-Net)--Ondine Biopharma (TSX: OBP; AIM: OBP) a medical technology company developing photodisinfection based products, today announced its financial results for the year ended December 31, 2007. "2007 was a year in which we continued to make great strides forward on several fronts, including the validation of our Periowave(TM) Photodisinfection System for the treatment of periodontal diseases," said Carolyn Cross, President and CEO of Ondine. "To date, over 10,000 patients have been treated, with clinicians reporting excellent outcomes compared to the gold standard of scaling and root planing alone. We are also very pleased to be able to state that there have been no reported adverse events associated with the treatment. Looking beyond the current oral applications of Ondine's technology, our belief is that Photodisinfection may be able to address the growing need for non-antibiotic options for eradicating resistant 'superbugs' including methicillin/multiple-resistant Staphylococcus aureus (MRSA). Our Photodisinfection technology has been cleared to market in Canada and in Europe for eradication of potentially pathogenic microorganisms (including MRSA) in the nose - a primary source of MRSA in hospital-acquired infections. We expect to initiate further clinical programs in MRSA decolonization and disinfection in 2008. Finally, Ondine is actively pursuing strategic partnerships for current and future applications which will allow the Company to exploit the full potential of Photodisinfection while remaining focused on its core strength of technology development." 2007 Results and Recent Developments FINANCIAL RESULTS - For the year ended December 31, 2007 (the "Current Year") the Company recorded a loss of $13.16 million, or $0.24 per common share, compared with a loss of $11.96 million, or $0.25 per common share, for the year ended December 31, 2006 (the "Prior Year"). Product sales revenue for Periowave(TM) laser base stations and treatment kits, the Company's first commercially available photodisinfection ("PDD") product, for the Current Year was $1.61 million generating a gross margin of $0.82 million (51%) compared to product sales of $1.62 million and gross profit margin of $0.60 million (37%) for the Prior Year. REGULATORY AND PRODUCT DEVELOPMENTS MRSA Program - A Health Canada license was received for decolonization of pathogenic bacteria such as MRSA in the nose. This license represents the first application of the Company's PDD technology outside the oral cavity to receive regulatory clearance in Canada. The Company plans to initiate a clinical study for this indication for marketing and regulatory purposes during 2008; - A nanotechnology-based photosensitizer was developed, jointly with UCL Business PLC, which dramatically enhances antimicrobial lethality at very small unit doses. The Company owns exclusive rights to worldwide patent applications covering this nanotechnology-based photosensitizer technology, with potential widespread antimicrobial indications including eradication of MRSA from the nose and other areas, treatment of conditions such as periodontal diseases, otitis externa, nailbed fungus and the disinfection of burns and wounds; and - On March 6, 2008, the Company announced the results from two research studies from its MRSA program will be presented at the Society for General Microbiology's 162nd Meeting held March 31 - April 3, 2008 in Edinburgh, Scotland. The studies provide detailed results of Ondine's photodisinfection system in the eradication of Staphylococcus aureus, a bacterium which secretes potent cell wall-bound virulence factors that enhance host tissue destruction. Dental Program - A 510(k) submission to the United States Food and Drug Administration (FDA) seeking clearance to market the Periowave(TM) System in the United States was filed in October. The Company was subsequently advised by the Center for Devices and Radiological Health ("CDRH") branch of the FDA that the Company's device was classified as Class III (Premarket Approval), an automatic designation since no substantially equivalent system has been previously marketed. Final determination of the regulatory pathway is subject to continued evaluation by FDA of Ondine's submission as well as other information that may be required; - Health Canada licenses were received for endodontics (root canal); peri-implantitis, which includes peri-mucositis; and gingivitis applications of the Company's Periowave(TM) PDD system; - Regulatory clearance was received from the European Commission for the treatment of peri-implantitis and for endodontics using the Company's Periowave(TM) PDD system; - A meta-analysis (statistical review of pooled clinical trial data) was completed on the use of the Periowave(TM) PDD system for the treatment of gum disease. Among other data, the meta-analysis found that Periowave(TM) used in a re-treatment protocol (six weeks apart) produced 2.3 times more clinically relevant (greater than or equal to)2 mm) pocket depth reductions than the gold standard of and root planning (SRP) alone (p(less than)0.0001); and - Dr. Tim Rose was appointed chairman of Ondine's Clinical Advisory Board (CAB) and Dr. Angelo Mariotti was appointed a member of Ondine's CAB. CORPORATE DEVELOPMENTS - The Company moved its US-based R&D facilities to a new facility in Bothell, Washington. The expanded facility in Bothell, which includes a microbiology laboratory, provides the basis for accelerated product development in both the oral care and MRSA sectors; - The Company closed its office in York, Pennsylvania and transferred the marketing and sales functions to its head office in Vancouver, British Columbia and to the new facility in Bothell. York-based Jacqueline Walker, formerly Chief Operating Officer, and Tom Leonardi, formerly Vice President of Sales and Marketing of Ondine Biopharma (U.S.A.) Inc., left to pursue opportunities outside of the Company; - A non-brokered private placement financing was completed in December 2007 raising aggregate net proceeds of $6.96 million; and - In February of 2008 the Company cancelled its exclusive distribution agreement with Henry Schein Canada, Inc. (formerly Henry Schein Ash Arcona Inc.) for the Canadian market and intends to work with them on a non-exclusive basis. For the quarter ended December 31, 2007 (the "Current Quarter") the Company recorded a loss of $2.73 million or $0.05 per common share compared with a loss of $3.46 million or $0.07 per common share during the quarter ended December 31, 2006 (the "Prior Quarter"). Product sales of our laser consoles and treatment kits during the Current Quarter amounted to $0.12 million with a gross margin of $0.05 million (41%) compared to product sales of $0.66 million and a gross margin of $0.24 million (36%) during the Prior Quarter. There were no sales during the three months ended March 31, 2006 in the Prior Year as the Company commenced sales of its first product, Periowave(TM), in April of 2006. The improvement in gross margin during the Current Year, as compared to the Prior Year, is primarily due to higher treatment kit sales during the Current Year. Sales during the Current Year include a $0.27 million sale of Periowave(TM) laser base stations and treatment kits to a distributor in Germany as an initial order and a $0.22 million sale of Periowave(TM) laser base stations to the Radcliffe Foundation who donated them to certain universities and colleges across Canada. The balance of product sales revenue for the Current Year consisted primarily of laser base stations and treatment kit sales to the Company's distributor in Canada. Sales revenue for the Prior Year included sales of laser base stations to the Canadian distributor as the distributor built up its inventory to meet expected demand. Sales in the Prior Quarter included sales of laser base stations to the Company's Canadian distributor, which did not occur in the Current Quarter as the Canadian distributor's level of laser base station inventory during the Current Quarter was sufficient to meet demand. The Company is seeing additional market acceptance for its products in Canada. Information obtained from the Company's Canadian distributor shows an increase of 259% in the average number of treatment kits sold per month during 2007, when compared to that average during 2006. Although the Company is seeing increasing market acceptance for Periowave(TM), its sales to date have been limited and there is not sufficient sales history to reasonably predict future demand, including the full impact of seasonality on its sales. The Company expects that the summer months will generally be a slower sales period and this may have a negative impact on third quarter sales. In addition, substantially all of the Company's sales in Canada are to one distributor. Sales by the Company to its distributor are not necessarily reflective of the distributor's sales to dental offices. Until the Company has adequate sales history to accurately forecast demand on an ongoing basis, the fluctuations in the distributor's inventory levels could significantly impact sales in future quarters. The increase in loss during the Current Year, when compared to the Prior Year, was primarily due to increases in operating costs which were partially offset by the increase in gross margin as described above. The increases in operating costs occurred in general and administration (G&A) and in marketing and sales (M&S). Research and Development (R&D) expenses for the Current Year were $5.71 million compared to $5.71 million during the Prior Year. During the Current Year the Company continued to invested in research and development programs on potential new applications of the Company's PDD technology, incurred costs in connection with a number of ongoing clinical studies in Canada and at University College London Hospital in the United Kingdom on the use of Periowave(TM) for the treatment of periodontitis, and incurred costs in connection with the preparation and filing of its submission to the FDA for Periowave(TM). In addition, the Company currently has underway research programs at University College London on potential new applications of PDD, principally for the non-antibiotic treatment of MRSA and other topical infections. During the Current Year, the Company was successful in expanding the scope of its license in Canada for the use of its Periowave(TM) PDD system to include the treatment of other indications in the oral cavity and for the decolonization of pathogenic bacteria, such as MRSA, in the nose. G&A expenses for the Current Year were $4.24 million compared to $3.93 million during the Prior Year as additional administrative staff and administrative facilities were added at the beginning of 2007 to support the increase in the Company's activities. During the Current Year, as compared to the Prior Year, the Company incurred an increase in consulting fees in connection with general corporate matters, an increase in investor relations costs, and costs associated with an office in York, PA, which has now been closed. These increases were partially offset by a decrease in stock-based compensation costs due to the forfeiture of unvested stock options and a reduction in travel costs. M&S expenses for the Current Year were $3.71 million compared to $3.03 million during the Prior Year. M&S expenses during the Current Year, as compared to the Prior Year, increased primarily due to the Current Year including costs incurred in connection with market research studies and plans for the United States market and for the development of marketing materials and telemarketing activities in the Canadian market, higher advertising and promotional costs, primarily in connection with activities in Europe, and an increase in staff costs due principally to an increase in sales staff. The Company incurred a foreign exchange loss of $0.28 million during the Current Year, compared to a loss of $0.04 million during the Prior Year, primarily due to the decrease in the value of its cash and cash equivalents denominated in United States dollars as a result of a decrease during the last nine months of 2007 in the value of the United States dollar in relation to the value of the Canadian dollar. The Company's R&D activities are conducted primarily in the United States and accordingly a substantial portion of its expenses are incurred in United States dollars. The decrease in loss during the Current Quarter, when compared to the Prior Quarter, was primarily due to decreases in operating costs which were partially offset by the decrease in gross margin as described above. The decreases in operating costs occurred in R&D, G&A, and M&S. R&D expenses for the Current Quarter were $1.10 million compared to $1.63 million during the Prior Quarter. During the Current Quarter the Company continued to invest in research and development programs on potential new applications of the Company's PDD technology and incurred costs in connection with the preparation of its submission to the FDA. The decrease in R&D expenses during the Current Quarter, as compared to the Prior Quarter, was primarily due to a reduction in clinical trial costs, as substantially all patient visits had been completed by the beginning of the quarter, and lower salaries and benefits costs due to a reduction in staff. G&A expenses for the Current Quarter were $0.92 million compared to $1.07 million during the Prior Quarter. The decrease in G&A expenses during the Current Quarter, as compared to the Prior Quarter, was primarily due to lower salaries and benefits due to a reduction in staff and a reduction in travel costs. These decreases were partially offset by an increase in general corporate consulting and professional fees. M&S expenses for the Current Quarter were $0.71 million compared to $1.03 million during the Prior Quarter. M&S expenses during the Current Quarter, as compared to the Prior Quarter, decreased primarily due to a reduction in advertising and promotions activities. As at December 31, 2007 the Company had cash, cash equivalents and short term investments totaling $10.15 million compared with $15.50 million as at December 31, 2006. During the Current Year the Company used cash of approximately $11.9 million for its operating activities, $4.93 million was provided by its investing activities, and $6.99 million was provided by the issuance of common shares and warrants, including $6.96 million, being the net proceeds raised in a non-brokered private placement that closed in December 2007. As at December 31, 2007 the Company had 61,027,675 common shares outstanding. About Periowave(TM) Periowave(TM) is a photodisinfection system commercialized by Ondine that utilizes low-intensity lasers and microbiological stains to target and destroy microbial pathogens and reduce the symptoms of disease. The photodisinfection technology was developed by Professor Michael Wilson and colleagues at the Eastman Dental Institute, University College London, and licensed to Ondine by UCL Business plc, University College London. Periowave(TM) is currently approved in Canada and the European Union for several oral indications. Additional information about Periowave(TM) is available at www.periowave.com About Ondine Biopharma Corporation Ondine is developing non-antibiotic therapies for the treatment of a broad spectrum of bacterial, fungal and viral infections. The Company is focused on creating and commercializing leading edge products utilizing its patented light-activated technology. Photodisinfection provides broad-spectrum antimicrobial efficacy without encouraging the formation and spread of antibiotic resistance. The Company is headquartered in Vancouver, British Columbia, Canada, with a research laboratory in Bothell, Washington, USA, and an international office in St. Michael, Barbados. For additional information, please visit the Company's website at: www.ondinebiopharma.com. Forward-Looking Statements: Certain statements contained in this release containing words like "believe", "intend", "may", "expect" and other similar expressions, are forward-looking statements that involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from those projected in the Company's forward-looking statements include the following: market acceptance of our technologies and products; our ability to obtain financing; our financial and technical resources relative to those of our competitors; our ability to keep up with rapid technological change; government regulation of our technologies; our ability to enforce our intellectual property rights and protect our proprietary technologies; the ability to obtain and develop partnership opportunities; the timing of commercial product launches; the ability to achieve key technical milestones in key products and other risk factors identified from time to time in the Company's filings. For further information Carolyn Cross, President and Chief Executive Officer, Ondine Biopharma Corporation, (604) 669-0555, ccross@ondinebiopharma.com Christina Bessant, Investor Relations, The Equicom Group Inc., (416) 815-0700 ext. 269, cbessant@equicomgroup.com Irma Gomez-Dib, Media & Investors Relations, FD International, (212) 850-5761, Irma.gomez-dib@fd.com Canaccord Adams Ltd, Nominated Adviser & Broker, Neil Johnson, Ryan Gaffney, +4420 7050 6500   See All News Releases From This Company View Company Website Email To A Friend Printer-Friendly Format