Cardium Therapeutics, a health sciences and regenerative medicine company, today presented financial results for the third quarter, ended September 30, 2012. The company also reported on recent developments, including the acquisition of To Go Brands nutraceutical brand platform, and various developments with Cardium's Excellagen collagen-based topical gel for the treatment of wounds.
Cardium reported a net loss of $1.9 million for the three months ended September 30, 2012, compared to a net loss of $1.6 million for the three months ended September 30, 2011. The increase in loss was due primarily to an increase in costs, resulting from expenses related to the commercial development of Excellagen and the company's Generx ASPIRE clinical study.
Selling, general and administrative expenses for the three-month period ended September 30, 2012, were $1.4 million, compared to $1.2 million for the three months ended September 30, 2011. For the nine months ended September 30, 2012, selling, general and administrative expenses were $4.4 million, compared to $3.6 million for the nine months ended September 30, 2011. The increase in selling, general and administrative expenses for the nine-month period was primarily due to expenses related to the costs associated with the market introduction of Excellagen and preparations to support and facilitate strategic partnering activities, and for Cardium's nutraceutical initiative, which served as the catalyst for Cardium's recent acquisition of the business assets of To Go Brands, Inc., which includes a portfolio of more than 25 products sold through mass, food and drug channels at retailers including Whole Foods®, CVS®, Kroger®, GNC®, Jewel-Osco®, Ralph's Supermarkets®, Meijr® and the Vitamin Shoppe®, in addition to the company's web-based store.
Cardium's Quarterly Report on Form 10-Q filed with the SEC today presents in footnote unaudited pro forma consolidated financial information which includes To Go Brands for the period ended September 30, 2012 and 2011. The pro forma financial information includes net sales of To Go Brands for the nine months ended September 30, 2012, totaling $2.1 million, with a net loss of $0.4 million.
Excluding revenue from the To Go Brands business, revenue for the nine months ended September 30, 2012 totaled $39,000, including $5,600 for the third quarter ended September 30, 2012. Since the introduction of Excellagen, the company's marketing efforts have been focused on product sampling to key opinion leaders to support physician-based post-marketing case studies, to "seed" the use of Excellagen in the wound care market, and to further support and enhance strategic partnering activities.
As of September 30, 2012, the company had a total of $4.5 million in cash compared to $4.7 million in cash at the end of December 31, 2011. Working capital at September 30, 2012, was $4.8 million. As of September 30, 2012, 129.2 million shares of Cardium's common stock were outstanding.
In third quarter 2012, Cardium announced the formation of the Excellagen Medical Advisory Board, which is comprised of leading practitioners, clinicians and researchers with diversified expertise in the field of advanced wound care, and the selection of Excellagen as one of the top ten podiatry innovations in 2012 by Podiatry Today publication. Excellagen is a syringe-based, professional-use, pharmaceutically-formulated 2.6% fibrillar Type I bovine collagen gel that functions as an acellular biological modulator designed to accelerate the growth of granulation tissue and to activate the wound healing process. Excellagen is FDA-cleared for the treatment of neuropathic and diabetic foot ulcers, pressure ulcers, venous ulcers, surgical wounds, and other dermal wounds, and 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.
Recently, the company announced the publication of an Excellagen Profiles in Excellence 2012 article in Podiatry Management and two poster presentations at the Desert Foot 2012 High Risk Diabetic Foot Conference in Phoenix, AZ. Arthur J. Tallis, DPM, President and Medical Director of Associated Foot & Ankle Specialists in Phoenix, AZ, presented the results of three Excellagen case studies including a venous leg ulcer, neuropathic diabetic foot ulcer and dehisced surgical wound. In addition, Howard M. Kimmel, DPM, MBA, FACFAS, Senior Clinical Instructor, Case Western Reserve University School of Medicine, in Cleveland, OH, presented the results of two Excellagen diabetic foot ulcer case studies.
There have also been important, positive findings reported by physicians now using Excellagen as part of the company's initial physician sampling, patient outreach and market "seeding" programs. As case studies are being conducted, a number of physicians have reported observing a rapid onset of the growth of granulation tissue in a wide array of wounds, including classic non-healing diabetic foot ulcers (consistent with the results of Cardium's Matrix clinical study), as well as pressure ulcers, venous ulcers and Mohs surgical wounds. In certain cases, rapid granulation tissue growth and wound closure have been reported using Excellagen's wound care management therapy following unsuccessful treatment with other advanced wound care approaches. From a dermatology perspective, a previously unexplored vertical market, remarkable biological healing responses have been observed following cancer-related Mohs surgery for patients diagnosed with squamous and basal cell carcinomas, including deep surgical wounds extending to the periosteum (a membrane that lines the outer surface of bones). Additionally, because of the easy-use and platelet activating capacity, physicians have been employing Excellagen in severe non-healing wounds at near-amputation status, in combination with autologous platelet-rich plasma therapy and collagen sheet products. These case studies and physician feedback provide additional information regarding the potential uses of Excellagen and support its medical utility as an important new tool to help promote the wound healing process.
Since receiving FDA clearance for Excellagen, Cardium has established cGMP out-sourced manufacturing and supply with UK-based Angel Biotechnology, developed cold chain logistics and distribution with Smith Medial Partners, initiated a pathway toward securing private payer and government product reimbursement, and assembled an internal strategic and tactical sales and marketing team. Already-established standard CPT® procedure reimbursement codes may apply when Excellagen is administered with surgical debridement procedures. The company is currently engaged in physician relationship building with key opinion leaders, product sampling, practice integration and building a portfolio of physician case studies. Excellagen is a key asset in Cardium's medical opportunities portfolio and represents the first product from the company's regenerative medicine platform. Excellagen has been engineered to serve as a delivery platform enabling multiple device and therapeutic product extensions (via 510(k) and IDE pathways) to include Excellagen-based antimicrobials, small molecule drugs, peptides, conditioned cell media, stem cells and DNA-based biologic products.
Consistent with its long-term business strategy, and similar to the business strategy for the company's InnerCool operating unit, which was successfully developed and sold to Philips Electronics, Cardium does not plan to establish an internal sales force for Excellagen. The company is currently in discussions with strategic partners to establish representation, marketing and sales, or co-promotional arrangements into four U.S. vertical wound healing market channels: (1) podiatry, (2) wound care centers, hospitals and long-term care facilities, (3) government agency providers (such as the U.S. Department of Veterans Affairs and Bureau of Indian Affairs), and (4) dermatology.
The company does not plan to increase marketing and selling expenses for Excellagen beyond current levels in expectation of completing strategic partnering transactions that would cover the marketing and sale of Excellagen into these vertical markets. This commercialization strategy is similar to other companies in the advanced wound care space. For example, GraftJacket® products developed by Wright Medical are now being marketed and sold by Kinetic Concepts Inc.; TEI Biosciences' products are being sold by Boston Scientific, Medtronic and Stryker; and Cook Medical's Oasis® products are currently being marketed and sold by Healthpoint Biotherapeutics.
Internationally, Cardium plans to obtain a CE Mark for the potential marketing and sale of Excellagen in the European Union, which consists of 27 member countries. The company expects to be in a position to obtain a CE Mark for Excellagen in early 2013. Cardium also has a marketing and distribution agreement with BL&H Co. for the marketing and sale of Excellagen in South Korea, which is currently advancing through the regulatory and reimbursement pricing process. In addition, Advanced Biosciences Research, an affiliate of bioRASI, is assisting Cardium for the planned commercialization of Excellagen in Russia and the eight additional member countries comprising the Commonwealth of Independent States (NYSE:CIS).
On September 28, 2012, Cardium acquired the business assets and product portfolio of To Go Brands® to support the expansion of Cardium's health sciences nutraceutical platform and to provide a revenue platform for the potential growth of the business. With a portfolio of over 25 products, To Go Brands' nutraceutical powder mixes, supplements and chews are being sold through mass, food and drug channel retailers and To Go Brands' web-based store. To Go Brands' experienced management team has key contacts and a track record of developing and placing new and innovative health and nutraceutical products into retail channels. To Go Brands has now assumed operational responsibility for Cardium's nutraceutical initiative, which includes the company's strategic investment in SourceOne Global Partners, a leading supplier of science-based ingredients and proprietary formulas, and the MedPodium Nutra-Apps® product line. The acquisition of To Go Brands is part of Cardium's long-term business strategy and opportunistic diversification strategy.
Cardium recently announced the publication of preclinical findings demonstrating that cardiac ischemia plays an important role in adenovector gene delivery (transfection) in mammalian hearts. The new findings were published in the peer-reviewed journal Human Gene Therapy Methods in an article entitled "Ischemia-Reperfusion Increases Transfection Efficiency of Intracoronary Adenovirus type 5 in Pig Heart in Situ," which is available online at http://online.liebertpub.com/doi/full/10.1089/hgtb.2012.048. The published findings demonstrate that Cardium's innovative technique employing transient cardiac ischemia can be used to dramatically enhance gene delivery and transfection efficiency after one-time intracoronary administration of adenovector in mammalian hearts. The international ASPIRE Phase 3/registration study is currently enrolling patients with chronic myocardial ischemia and advanced angina pectoris at leading cardiovascular centers in Russia.
For additional information, visit www.CardiumTHX.com
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