Conor Medsystems Announces First Quarter 2006 Financial Results
May 01 2006 - 5:01PM
PR Newswire (US)
MENLO PARK, Calif., May 1 /PRNewswire-FirstCall/ -- Conor
Medsystems, Inc. (NASDAQ:CONR) today announced results of
operations for the quarter ended March 31, 2006. In the first
quarter of 2006, the net loss was $18.1 million, or $0.54 per
share, compared to a net loss of $11.7 million, or $0.37 per share,
in the first quarter of 2005. As of March 31, 2006, Conor had cash
and cash equivalents of $61.7 million. The first quarter of 2006
included product sales of $4.4 million as a result of the
commercial launch of Conor's cobalt chromium paclitaxel-eluting
stent system, CoStar(TM), in many countries in the European Union
through the company's distribution partner, Biotronik AG. Research
and development expenses increased to $14.2 million in the first
quarter of 2006 from $7.7 million for the first quarter of the
prior year, primarily due to higher payroll expenses associated
with an increased number of research and development personnel,
expenditures for Conor's clinical trials and non-cash stock-based
compensation expense. General and administrative expenses increased
to $5.4 million in the first quarter of 2006 from $4.6 million for
the first quarter of the prior year, primarily due to increased
expenses for professional services and higher payroll expenses.
Effective January 1, 2006, the Company adopted SFAS 123R,
"Share-Based Payment," and operating expenses for the quarter ended
March 31, 2006 include employee stock-based compensation expense
totaling $4.3 million. "In the first quarter, we achieved a major
milestone with the receipt of the CE Mark and the commercial launch
in Europe of our CoStar stent," commented Frank Litvack, M.D.,
Conor's Chairman and CEO. "We look forward to launching the CoStar
stent in other countries as well as continuing to advance the
development of the product candidates in our pipeline." Conference
Call and Webcast Information Frank Litvack, M.D., Chairman and
Chief Executive Officer, and Michael Boennighausen, Chief Financial
Officer, will host a conference call at 5:00 p.m. Eastern Time
today to discuss the company's operating and financial results and
provide updates on the company's commercialization efforts,
clinical trials, product development activities, litigation and
other business matters. To access the live audio broadcast or the
subsequent archived recording, visit the webcast section of the
company's website located at http://www.conormed.com/. Please log
on to Conor's website several minutes prior to the start of the
presentation to ensure adequate time for any software download that
may be necessary. A replay of the web cast will remain at this
location until such time as the company reports its financial
results for the second quarter of 2006. The webcast is also being
distributed through the Thomson StreetEvents Network to both
institutional and individual investors. Individual investors can
listen to the call at http://www.fulldisclosure.com/ and
institutional investors can access the call via
http://www.streetevents.com/. The dial-in number for the conference
call is 866-700-6979 in the U.S., 617-213-8836 outside the U.S.,
and the participant passcode is 53938795. About Conor Medsystems
Conor Medsystems, Inc. develops innovative controlled vascular drug
delivery technologies and has initially focused on the development
of drug- eluting stents to treat coronary artery disease. For
further information about Conor and controlled vascular delivery,
visit http://www.conormed.com/. CoStar(TM) is not available for
sale in the United States. CoStar is an investigational device
limited by federal law to investigational use. Except for the
historical information contained herein, this press release
contains certain forward-looking statements that involve risks and
uncertainties, including without limitation the statements related
to commercialization of the company's CoStar stent and product
pipeline development. All forward-looking statements and other
information included in this press release are based on information
available to Conor Medsystems as of the date hereof, and the
company assumes no obligation to update any such forward-looking
statements or information. The company's actual results could
differ materially from those described in the company's
forward-looking statements. Factors that could cause or contribute
to such differences include, but are not limited to, those
discussed in detail under "Item 1A. Risk Factors" in the company's
Annual Report on Form 10-K for the year ended December 31, 2005,
filed with the SEC on March 16, 2006, including (i) risks related
to the commercialization of company's CoStar stent, including,
among other things (a) the risk that the company's CoStar stent may
never achieve market acceptance or obtain marketing approval in the
United States from the FDA, (b) the risk that the company's
manufacturing facilities may be unable to provide an adequate
supply of its CoStar stent, (c) the risk that the loss of the
company's single source suppliers could interrupt or delay the
company's commercialization efforts, (d) the risk that the company
may fail to comply with ongoing regulatory requirements, or that
the company may experience unanticipated problems with its CoStar
stent, (e) the risk that the company may not obtain adequate levels
of reimbursement for its CoStar stent by third-party payors, and
(f) the risk that the company's competitors may develop and market
products that are safer and more effective than the CoStar stent;
(ii) risks related to the uncertain, lengthy and expensive clinical
development process, including, among other things, (a) the risk
that the company may not be successful in its efforts to expand its
portfolio of products and develop additional drug delivery
technologies, (b) the risk that a clinical trial, including the
company's COSTAR II trial, may not be completed on schedule, or at
all, including as a result of patients experiencing adverse side
effects or events related to the company's stents, (c) the risk
that issues in the company's manufacturing processes could delay or
impede the company's clinical development plans, and (d) the risk
that the third parties on whom the company relies to conduct its
clinical trials may not perform as contractually required or
expected; and (iii) risks related to patent infringement,
including, among other things, (a) the risk that if any patent
infringement claims or other intellectual property claims against
the company are successful, the company may, among other things (1)
be enjoined from, or required to cease, the development,
manufacture, use and sale of products that infringe the patent
rights of others, including the company's CoStar stent, (2) be
required to expend significant resources to redesign its technology
so that it does not infringe others' patent rights, which may not
be possible, and/or (3) be required to obtain licenses to the
infringed intellectual property, which may not be available to the
company on acceptable terms, or at all, and (b) the risk that
intellectual property litigation against the company could
significantly disrupt the company's development and
commercialization efforts, divert management's attention and
quickly consume the company's financial resources. The risks and
other factors discussed above should be considered only in
connection with the fully discussed risks and other factors
discussed in detail in the company's periodic reports filed with
the SEC, including the company's Annual Report on Form 10-K for the
year ended December 31, 2005. Conor Medsystems, Inc. Consolidated
Statement of Operations Data (In thousands, except per share
amounts) (unaudited) Three months ended March 31, 2006 2005 Product
sales $4,387 $36 Cost of sales (1) 3,839 238 Gross margin 548 (202)
Operating expenses: Research and development (1) 14,160 7,653
General and administrative (1) 5,360 4,605 Total operating expenses
19,520 12,258 Loss from operations (18,972) (12,460) Interest
income 702 679 Other income, net 122 33 Net loss $(18,148)
$(11,748) Basic and diluted net loss per share $(0.54) $(0.37)
Shares used to compute basic and diluted net loss per share 33,452
31,974 (1) Includes non-cash stock-based compensation expense as
follows: Cost of sales $187 $-- Research and development 2,282
1,247 General and administrative 1,824 1,844 Total $4,293 $3,091
Consolidated Balance Sheet Data (In thousands) (unaudited) March
31, December 31, 2006 2005 Cash and cash equivalents $61,699
$78,470 Working capital 57,572 69,326 Total assets 80,239 92,070
Long-term liabilities 107 147 Accumulated deficit (121,285)
(103,137) Total shareholders' equity 65,753 78,723 DATASOURCE:
Conor Medsystems, Inc. CONTACT: investors, Michael Boennighausen,
Chief Financial Officer of Conor Medsystems, Inc., +1-650-614-4100,
or media, Karen L. Bergman of BCC Partners, +1-650-575-1509, for
Conor Medsystems, Inc. Web site: http://www.conormed.com/
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