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Osiris Therapeutics, Inc Reports Third Quarter 2018 Results

COLUMBIA, Md., Nov. 07, 2018 (GLOBE NEWSWIRE) -- Osiris Therapeutics, Inc. (NASDAQ: OSIR), a regenerative medicine company focused on developing and marketing products for wound care, orthopedics, and sports medicine, today reported its results for the third quarter ending September 30, 2018.

Business Highlights

  • GrafixPL PRIMETM launched on October 1, 2018
  • Enrollment of patients in a clinical trial evaluating GrafixPL PRIME in the treatment of chronic venous leg ulcers
  • Company re-listed on the Nasdaq Global Market on August 1, 2018

Quarterly Financial Summary

Revenue was $36.5 million for the three-month period ended September 30, 2018, which increased $6.7 million or 22.4%, compared to revenue of $29.8 million for the three-month period ended September 30, 2017.  The increase in revenue was primarily due to higher Grafix®/Stravix® revenue of $5.6 million as a result of increased demand from market awareness and acceptance as we increased selling efforts in the operating room and surgical settings as well as hospital outpatient wound care centers.  In addition, we received a one-time settlement payment of $1.3 million from a former distributor that was accounted for on a cash basis, as collection was not reasonably assured, to settle amounts owed to us from previous years, primarily 2015 and 2016.  BIO revenue increased $1.1 million, or 18.1%, due to increased demand from our distribution arrangement with Stryker. 

Gross profit was $26.7 million for the three-month period ended September 30, 2018, which increased $4.8 million or 22.0%, compared with gross profit of $21.9 million for the three-month period ended September 30, 2017.  This increase was primarily due to higher revenues and the collection of the $1.3 million settlement from a former distributor that was accounted for on a cash basis, which did not have any cost of revenue as the cost of revenue was recognized in the periods the product was shipped.

Cash flow from operations was $8.1 million for the three-month period ended September 30, 2018, which was driven by net income of $4.2 million, collection of outstanding accounts receivable of $2.9 million, and the add back of the non-cash accrued shareholder litigation expense of $0.9 million.

See the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Quarterly Report on Form 10-Q filed today with the Securities and Exchange Commission for additional information concerning our operating results for the three- and nine month periods ended September 30, 2018.

About Osiris Therapeutics

Osiris Therapeutics, Inc., based in Columbia, Maryland, researches, develops, manufactures and commercializes regenerative medicine products intended to improve the health and lives of patients and lower overall healthcare costs.  We have achieved commercial success with products in orthopedics, sports medicine and wound care, including the Grafix product line, Stravix®, BIO and Cartiform®.  We continue to advance our research and development by focusing on innovation in regenerative medicine, including the development of bioengineered stem cell and tissue‑based products.  Osiris®, Grafix®, GrafixPL®, GrafixPL PRIME Cartiform®, and Prestige Lyotechnologysm are our trademarks. BIO is a trademark of Howmedica Osteonics Corp., a subsidiary of Stryker Corporation. More information can be found on the Company’s website, www.Osiris.com. (OSIR-G)

Forward-Looking Statements

Statements herein relating to the future of Osiris Therapeutics, Inc. and the ongoing research and development of our products are forward-looking statements.  Osiris Therapeutics, Inc. cautions that these forward looking statements are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those expressed or implied by such statements.  These risks and uncertainties include those identified under the heading “Risk Factors” in the Osiris Therapeutics Inc. Annual Report on Form 10-K for the years ended December 31, 2017, 2016 and 2015 and Quarterly Report on Form 10-Q for the quarters ended March 31, 2018, June 30, 2018 and September 30, 2018 as filed with the Securities and Exchange Commission (SEC).  We caution investors not to place considerable reliance on the forward-looking statements contained in this press release.  Examples of forward-looking statements may include, without limitation, statements regarding the anticipated efficiencies and advantages of products and the likelihood of customer clinical adoption of any new products.  Although well characterized in scientific literature and studies, preservation of tissue integrity, including cells, may not be indicative of clinical outcome.  Accordingly, you should not unduly rely on these forward-looking statements. You are encouraged to read our filings with the SEC, available at sec.gov, for a discussion of these and other risks and uncertainties.  The forward-looking statements in this press release speak only as of the date of this document, and we undertake no obligation to update or revise any of the statements.  Our business is subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors, and others should give careful consideration to these risks and uncertainties.

For additional information, please contact:
Diane Savoie
Osiris Therapeutics, Inc.
(443) 545-1834
OsirisPR@Osiris.com


FINANCIAL TABLES TO FOLLOW

             
             
OSIRIS THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except per share data)
(Unaudited)
             
    September 30,   December 31,
    2018   2017
Assets            
Current assets            
Cash and cash equivalents   $ 31,658     $ 3,081  
Short-term investments     8,701       24,807  
Trade receivables, net     20,592       26,053  
Inventory, net     10,576       11,278  
Insurance receivable     4,788       4,788  
Prepaid expenses and other current assets     3,421       2,920  
Total current assets     79,736       72,927  
Property and equipment, net     3,116       3,587  
Other assets     1,849       1,608  
Total assets   $ 84,701     $ 78,122  
             
Liabilities and Equity            
Current liabilities            
Accounts payable   $ 4,291     $ 5,269  
Accrued liabilities     10,704       9,399  
Accrued shareholder litigation     19,400       18,500  
Other current liabilities     1,994       1,934  
Total current liabilities     36,389       35,102  
Other long-term liabilities     2,450       1,626  
Total liabilities     38,839       36,728  
             
Equity            
Common stock, $0.001 par value, 72,000 shares authorized, 34,526 shares issued and outstanding at September 30, 2018, and 90,000 shares authorized, 34,526 shares issued and outstanding at December 31, 2017     35       35  
Additional paid-in-capital     284,124       283,905  
Accumulated other comprehensive loss     (330 )     (208 )
Accumulated deficit     (237,967 )     (242,338 )
Total equity     45,862       41,394  
Total liabilities and equity   $ 84,701     $ 78,122  


                           
OSIRIS THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(amounts in thousands, except per share data)
(Unaudited)
                           
    Three Months Ended   Nine Months Ended  
    September 30,   September 30,  
    2018     2017     2018     2017    
Revenue   $ 36,491     $ 29,806     $ 102,001     $ 85,938    
Cost of revenue     9,808       7,926       28,333       23,405    
Gross profit     26,683       21,880       73,668       62,533    
Operating expenses:                          
Research and development     1,590       909       4,886       3,052    
Sales and marketing     15,931       14,825       49,107       44,256    
General and administrative     4,302       6,634       15,150       16,920    
Shareholder litigation expense     900             900          
Total operating expenses     22,723       22,368       70,043       64,228    
Income (loss) from continuing operations     3,960       (488 )     3,625       (1,695 )  
Other (expense) income, net     (21 )     (1,763 )     548       (1,371 )  
Income (loss) before income taxes from continuing operations     3,939       (2,251 )     4,173       (3,066 )  
Income tax (expense) benefit     (100 )     198       (170 )     134    
Income (loss) from continuing operations     3,839       (2,053 )     4,003       (2,932 )  
Discontinued operations, net of tax     368       9,811       368       9,811    
Net income     4,207       7,758       4,371       6,879    
Other comprehensive income (loss):                          
Unrealized (loss) gain on investments     (100 )     (21 )     (122 )     33    
Comprehensive income   $ 4,107     $ 7,737     $ 4,249     $ 6,912    
Net income (loss) per share from continuing operations:                          
Basic   $ 0.11     $ (0.06 )   $ 0.12     $ (0.08 )  
Diluted   $ 0.11     $ (0.06 )   $ 0.12     $ (0.08 )  
Net income per share from discontinued operations:                          
Basic   $ 0.01     $ 0.28     $ 0.01     $ 0.28    
Diluted   $ 0.01     $ 0.28     $ 0.01     $ 0.28    
Net income per share:                          
Basic   $ 0.12     $ 0.22     $ 0.13     $ 0.20    
Diluted   $ 0.12     $ 0.22     $ 0.13     $ 0.20    
Weighted average common shares outstanding:                          
Basic     34,526       34,526       34,526       34,524    
Diluted     34,594       34,526       34,565       34,525    


               
OSIRIS THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(Unaudited)
               
    Nine Months Ended September 30,  
    2018     2017    
CASH FLOWS FROM OPERATING ACTIVITIES              
Net income   $  4,371     $  6,879    
Adjustments to reconcile net income to net cash provided by (used in) operating activities:              
Receipt of Mesoblast common stock      —        (10,000 )  
Shareholder litigation expense      900        —    
Provision for excess and obsolete inventory      1,238        180    
Loss on disposal of fixed assets      —        123    
Realized loss on investments      240        2,102    
Depreciation      658        518    
Stock-based compensation expense      219        49    
Changes in operating assets and liabilities:              
Accounts receivables, net      5,461        1,220    
Inventory, net      (536 )      (1,228 )  
Prepaid expenses and other assets      (742 )      (651 )  
Accounts payable, accrued liabilities, and other liabilities      1,211        (1,791 )  
Net cash provided by (used in) operating activities      13,020        (2,599 )  
CASH FLOWS FROM INVESTING ACTIVITIES              
Purchases of property and equipment      (187 )      (718 )  
Proceeds from sale of investments      16,248        23,250    
Purchases of investments      (504 )      (19,660 )  
Net cash provided by investing activities      15,557        2,872    
CASH FLOWS FROM FINANCING ACTIVITIES              
Proceeds from the exercise of options to purchase common stock      —        128    
Net cash provided by financing activities      —        128    
NET INCREASE IN CASH AND CASH EQUIVALENTS      28,577        401    
Cash and cash equivalents at beginning of period      3,081        2,833    
Cash and cash equivalents at end of period   $  31,658     $  3,234    

 

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Source: Osiris Therapeutics, Inc.