Attached files
file | filename |
---|---|
8-K - FORM 8-K - SANUWAVE Health, Inc. | c14813e8vk.htm |
Exhibit 99.1
SANUWAVE Health, Inc.
|
Lippert/Heilshorn & Associates | |
Barry Jenkins, CFO
|
Anne Marie Fields | |
Bernie Laurel, VP of Sales and Marketing
|
212-838-3777 | |
678-578-0103
|
afields@lhai.com | |
investorrelations@sanuwave.com |
FOR IMMEDIATE RELEASE
SANUWAVE HEALTH REPORTS 2010 FINANCIAL RESULTS
ALPHARETTA, GA, March 28, 2011 SANUWAVE Health, Inc. (OTC/BB: SNWV) (www.sanuwave.com), an
emerging medical technology company focused on the development and commercialization of
non-invasive, biological response activating devices in regenerative medicine, today reported
financial results for the year ended December 31, 2010, and reviewed 2010s accomplishments and
progress.
Christopher M. Cashman, President and CEO of SANUWAVE, said, Throughout 2010, we made significant
progress toward our goal of becoming a leading regenerative medicine company serving the wound
care, orthopedics and plastic surgery markets. Most importantly, we completed our
dermaPACE® pivotal Phase III clinical trial to treat diabetic foot ulcers (DFU) and
reported compelling top-line safety and efficacy results during the fourth quarter. We also
submitted the first of three modules of our Premarket Approval (PMA) application to the U.S. Food
and Drug Administration (FDA), which included preclinical data and the results of prior clinical
testing. By completing this rigorous Phase III clinical trial and immediately initiating our
modular PMA submission process, we have surpassed a key milestone for transforming SANUWAVE from a
development-stage entity into a commercial company.
As demonstrated by the robust results from our DFU clinical trial, dermaPACE has the potential to
help a large number of patients who suffer through the physical and emotional distress of these
debilitating foot ulcers, Mr. Cashman added. Pending FDA approval, we look forward to bringing
dermaPACE to medical professionals and patients alike, as we aim to make a significant impact on
wound healing and quality of life, while reducing the total cost of patient care.
Business highlights from 2010 include the following:
| Completed the dermaPACE pivotal Phase III, prospective, randomized,
double-blinded,
sham-controlled, multi-center, 206-patient, Investigational Device Exemption (IDE) clinical
trial in diabetic foot ulcers in 24 centers in the U.S. and Europe. |
| Comparing wound area closure at 12 weeks, 48% of patients treated with dermaPACE
and 31% of Sham control patients experienced a ≥ 90% closure (p=0.0161). |
| For dermaPACE-treated patients achieving ≥ 90% wound closure at 12 weeks, the
median wound closure exceeded 99%. |
| Of patients treated with dermaPACE who achieved wound closure at 12 weeks, only
4.5% had recurrence at 24 weeks, compared with 20% in the Sham control group. |
| The average percentage wound area reduction in the target ulcer in patients
treated with dermaPACE was 54%, compared with only 7% in patients who received Sham
control. |
| The FDA accepted SANUWAVEs shell application for dermaPACE proposing a modular PMA
application submission plan containing three sections or modules, and the Company
submitted the first module, which included preclinical data and the results of prior
clinical testing. |
| Obtained CE Mark approval for the new orthoPACE® regenerative medicine
device, allowing for product sales in Europe for orthopedics, sports medicine and trauma
indications. |
| Completed product development of the Profile regenerative medicine device for plastic
and cosmetic surgery applications, and initiated collaborations with several key opinion
leaders to identify research opportunities and develop treatment protocols. |
Mr. Cashman added, We continue to build strong relationships in the research and medical
communities across several key market verticals. As a result, awareness is growing of the potential
of PACE technology to improve chronic and acute conditions of bone and soft tissue. We believe
that we will offer medical professionals and their patients a novel solution to many common,
challenging medical conditions with both clinical and economic benefit. Our recently completed
Phase III DFU clinical trial represents a major step towards delivering on this promise.
Research published in 2010 on SANUWAVEs technology includes the following:
| Maria Siemionow, MD, PhD, DSc, Director of Plastic Surgery Research and Head of
Microsurgery Training in the Plastic Surgery Department of Cleveland Clinic, in a study
published in The Journal of Trauma entitled, Pulsed Acoustic Cellular Treatment Induces
Expression of Proangiogenic Factors and Chemokines in Muscle Flaps, showed that PACE
treatment resulted in an immediate increase in blood vessel diameter, suggesting an
increase in blood perfusion that can benefit the healing of ischemic conditions. PACE also
increased proangiogenic expression of several protein indicators (known as growth factors)
of vessel growth and regeneration, including vascular endothelial growth factor (VEGF),
endothelial nitric oxide synthase (eNOS) and von Willebrand factor (vWF), and this
expression correlated with new blood vessel formation. Most importantly, this expression is
known to increase cellular proliferation and tissue regeneration, and ultimately influence
tissue viability and healing. |
| A study by Contaldo et al., entitled Microvascular Response to Shock Wave Application
in Striated Skin Muscle, was conducted at the University Hospital in Zurich, Switzerland
in conjunction with Shanghai Jiao Tong University School of Medicine in China. This study,
published in the Journal of Surgical Research, observed changes in microvascular response
after PACE treatment using a literal viewing window implanted into the skin folds of mice
that allowed a very thin living tissue layer to be observed in real time. Based on the
results of this study, the authors suggest that non-invasive PACE technology applied with
one treatment session from SANUWAVEs dermaPACE device results in a favorable and continuous
microcirculatory response that occurs within one hour of treatment and lasts for at least
three days. |
| The paper entitled Extracorporeal Shock Wave Treatment in Ischemic Tissues: What is the
Appropriate Number of Shock Wave Impulses?, by Kamelger et al., appeared in the February
2010 issue of the Journal of Reconstructive Microsurgery, and detailed the optimized number
of impulses for improving blood flow in ischemic skin indications. This study became the
basis for the protocol development utilized in the dermaPACE pivotal Phase III clinical
trial. The authors found that the application of 500 shock wave impulses showed the highest
mean percentage of healthy, viable tissue after seven days, making the protocol the most
promising for clinical applications treating ischemic conditions. |
| In the March 2010 issue of the Journal of Orthopaedic Trauma, in an article entitled
Extracorporeal Shock Wave Therapy for Nonunion of the Tibia, Elster et al. detailed a
six-year study that included 172 patients undergoing treatment for tibia nonunion fractures
(incomplete fracture healing). The results of this study demonstrated that non-invasive
Extracorporeal Shock Wave Therapy (ESWT) applied with SANUWAVEs Ossatron®
device, with one treatment session of 4,000 pulses followed by fracture immobilization,
resulted in an 80% rate of healing of the nonunion bone fractures within an average of 4.8
months, as assessed by both clinical and radiographic means. SANUWAVEs new orthoPACE
device treats with the equivalent energy range utilized in this study, which when combined
with its compact, portable design, makes it an efficient, user-friendly alternative to the
much larger format Ossatron. |
The growing body of preclinical and clinical work demonstrates that SANUWAVEs technology
activates a complex cascade of biological processes that improves microcirculation. We know that
PACE induces vasculogenesis and angiogenesis, ultimately leading to complete healing of acute and
chronic conditions of bone and soft tissue. We believe that these biological effects make PACE
clinically relevant and ideally suited for widespread clinical application, said Mr. Cashman.
At SANUWAVE, we are making a difference in peoples lives. PACE is a versatile platform with
potential clinical and economic benefits across a wide range of conditions. The degenerative
conditions and tissue regenerative markets we are addressing have large, well-documented needs that
can benefit from the ability of PACE to stimulate neovascularization, healing, and long-term tissue
stability and durability in a cost-effective, clinically efficient manner, he concluded.
2010 Financial Results
Revenues for 2010 were $728,000, compared with $661,000 for 2009. Revenues are primarily from sales
of devices and applicators in Europe of the Companys new orthoPACE device for orthopedic
conditions launched in June 2010 and from its legacy Evotron device.
Research and development expenses for 2010 were $3.9 million, compared with $3.4 million for 2009.
The increase is due to higher costs of the dermaPACE clinical trial for treating diabetic foot
ulcers in the United States. Patient follow-up was completed in 2010, and statisticians and
consultants were engaged to assist in the data review and preparation of regulatory submissions.
General and administrative expenses for 2010 were $7.1 million, compared with $5.0 million for
2009. The increase is primarily due to non-cash stock based compensation expense of $3.0 million
for 2010, compared with $1.1 million for 2009, due to a shorter requisite period on the new grants
of options to employees and directors of the Company in 2010 as compared to 2009.
The net loss for 2010 was $14.9 million, or $1.15 per share, compared with a net loss of $6.2
million, or $0.54 per share, for 2009. The net loss for 2010 includes the $2.7 million non-cash
loss from extinguishment of debt related to the exchange of promissory notes for equity in October
2010. The net loss for 2009 was reduced by the $1.5 million gain, net of taxes, on the sale of the
veterinary product line in June 2009.
As of December 31, 2010, the Company had cash and cash equivalents of $417,000, compared with $1.8
million as of December 31, 2009. Net cash used by operations for 2010 was $5.9 million, compared
with $5.5 million for 2009. The increase was primarily due to higher expenses related to the
dermaPACE clinical trial.
During 2010 the Company raised $4.3 million from the issuance of promissory notes, which were
subsequently exchanged into common stock units, and from the sale of common stock units to
accredited investors. Each common stock unit consisted of a share of common stock, a Class D
warrant and an option, which as amended expired on January 31, 2011, to purchase the same number of
units at the same purchase price per unit. In December 2010, the option holders mentioned above
exercised options for net proceeds to the Company of $202,000. Subsequent to fiscal year end, in
January 2011 the option holders mentioned above exercised options for net proceeds to the Company
of $3.9 million.
About PACE
PACE, defined as Pulsed Acoustic Cellular Expression, delivers high-energy acoustic pressure waves
to produce compressive and tensile stresses on cells and tissue structures to promote angiogenic
and positive inflammatory responses, and quickly initiate the healing cascade. This results in
revascularization and microcirculatory improvement, including the production of angiogenic growth
factors, enhanced new blood vessel formation (angiogenesis), and the subsequent regeneration of
tissue such as skin, musculoskeletal and vascular structures. PACE treatment triggers the
initiation of an accelerated inflammatory response that speeds wounds into proliferation phases of
healing and subsequently returns a chronic condition to an acute condition to help re-initiate the
bodys own healing response.
About SANUWAVE Health, Inc.
SANUWAVE Health, Inc. (www.sanuwave.com) is an emerging regenerative medicine company focused on
the development and commercialization of non-invasive, biological response-activating devices for
the repair and regeneration of tissue, musculoskeletal and vascular structures. SANUWAVEs
portfolio of products and product candidates activate biologic signaling and angiogenic responses,
including new vascularization and microcirculatory
improvement, helping to restore the bodys normal healing processes and regeneration. SANUWAVE
intends to apply its PACE technology in wound healing, orthopedic/spine, plastic/cosmetic and
cardiac conditions. Its lead product candidate for the global wound care market, dermaPACE, is CE
marked for treatment of the skin and subcutaneous soft tissue and recently completed its highly
positive pivotal Phase III, Investigational Device Exemption (IDE) trial in the U.S. for the
treatment of diabetic foot ulcers. SANUWAVE researches, designs, manufactures, markets and services
its products worldwide, and believes it has demonstrated that this technology is safe and effective
in stimulating healing in chronic conditions of the foot (plantar fasciitis) and the elbow (lateral
epicondylitis) through its U.S. Class III PMA approved Ossatron device, as well as stimulating bone
and chronic tendonitis regeneration in the musculoskeletal environment through the utilization of
its Ossatron, Evotron and orthoPACE devices in Europe.
Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, such as statements relating to financial results and
plans for future business development activities, and are thus prospective. Forward-looking
statements include all statements that are not statements of historical fact regarding intent,
belief or current expectations of the Company, its directors or its officers. Investors are
cautioned that any such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties, many of which are beyond the Companys ability to control. Actual
results may differ materially from those projected in the forward-looking statements. Among the key
risks, assumptions and factors that may affect operating results, performance and financial
condition are risks associated with the marketing of the Companys product candidates and products,
unproven pre-clinical and clinical development activities, regulatory oversight, the Companys
ability to manage its capital resource issues, competition, and the other factors discussed in
detail in the Companys periodic filings with the Securities and Exchange Commission. The Company
undertakes no obligation to update any forward-looking statement.
(FINANCIAL TABLES FOLLOW)
SANUWAVE HEALTH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Year Ended | Year Ended | |||||||
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
REVENUES |
$ | 728,446 | $ | 660,725 | ||||
COST OF REVENUES |
250,326 | 225,790 | ||||||
GROSS PROFIT |
478,120 | 434,935 | ||||||
OPERATING EXPENSES |
||||||||
Research and development |
3,879,146 | 3,387,204 | ||||||
General and administrative |
7,100,621 | 5,026,425 | ||||||
Depreciation |
829,576 | 365,108 | ||||||
Amortization |
306,757 | 306,756 | ||||||
Write down of assets held for sale |
169,581 | | ||||||
TOTAL OPERATING EXPENSES |
12,285,681 | 9,085,493 | ||||||
OPERATING LOSS |
(11,807,561 | ) | (8,650,558 | ) | ||||
OTHER INCOME (EXPENSE) |
||||||||
Transitional services provided to Pulse Veterinary Technologies, LLC |
360,125 | 230,625 | ||||||
Gain on sale of assets |
6,565 | 3,207 | ||||||
Extinguishment of debt |
(2,693,896 | ) | | |||||
Interest expense |
(961,585 | ) | (739,847 | ) | ||||
Loss on foreign currency exchange |
(66,058 | ) | (30,184 | ) | ||||
TOTAL OTHER INCOME (EXPENSE) |
(3,354,849 | ) | (536,199 | ) | ||||
LOSS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES |
(15,162,410 | ) | (9,186,757 | ) | ||||
INCOME TAX BENEFIT |
239,969 | 1,203,172 | ||||||
LOSS FROM CONTINUING OPERATIONS |
(14,922,441 | ) | (7,983,585 | ) | ||||
DISCONTINUED OPERATIONS |
||||||||
Income from discontinued operations, net of tax |
| 344,200 | ||||||
Gain on sale of veterinary division, net of tax |
| 1,486,345 | ||||||
INCOME FROM DISCONTINUED OPERATIONS |
| 1,830,545 | ||||||
NET LOSS |
(14,922,441 | ) | (6,153,040 | ) | ||||
OTHER COMPREHENSIVE INCOME (LOSS) |
||||||||
Foreign currency translation adjustments |
(10,962 | ) | 218,510 | |||||
TOTAL COMPREHENSIVE INCOME (LOSS) |
$ | (14,933,403 | ) | $ | (5,934,530 | ) | ||
EARNINGS (LOSS) PER SHARE: |
||||||||
Loss from continuing operations basic |
$ | (1.15 | ) | $ | (0.70 | ) | ||
Loss from continuing operations diluted |
$ | (1.15 | ) | $ | (0.70 | ) | ||
Income from discontinued operations basic |
$ | | $ | 0.16 | ||||
Income from discontinued operations diluted |
$ | | $ | 0.16 | ||||
Net loss basic |
$ | (1.15 | ) | $ | (0.54 | ) | ||
Net loss diluted |
$ | (1.15 | ) | $ | (0.54 | ) | ||
Weighted average shares outstanding basic |
12,924,872 | 11,405,490 | ||||||
Weighted average shares outstanding diluted |
12,924,872 | 11,405,490 | ||||||
SANUWAVE HEALTH, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
ASSETS |
||||||||
CURRENT ASSETS |
||||||||
Cash and cash equivalents |
$ | 417,457 | $ | 1,786,369 | ||||
Accounts receivable trade, net |
95,549 | 47,966 | ||||||
Inventory |
463,643 | 592,589 | ||||||
Prepaid expenses |
121,084 | 121,157 | ||||||
Due from Pulse Veterinary Technologies, LLC |
45,389 | 127,878 | ||||||
TOTAL CURRENT ASSETS |
1,143,122 | 2,675,959 | ||||||
PROPERTY AND EQUIPMENT, at cost, less accumulated depreciation |
13,386 | 88,706 | ||||||
OTHER ASSETS |
32,253 | 32,169 | ||||||
INTANGIBLE ASSETS, at cost, less accumulated amortization |
1,840,538 | 2,147,295 | ||||||
ASSETS HELD FOR SALE |
| 922,956 | ||||||
TOTAL ASSETS |
$ | 3,029,299 | $ | 5,867,085 | ||||
LIABILITIES |
||||||||
CURRENT LIABILITIES |
||||||||
Accounts payable |
$ | 1,829,815 | $ | 1,069,423 | ||||
Accrued employee compensation |
1,101,410 | 509,905 | ||||||
Accrued expenses |
256,204 | 629,029 | ||||||
Notes payable, related parties |
4,247,290 | | ||||||
Interest payable, related parties |
82,977 | | ||||||
Liabilities related to discontinued operations |
655,061 | 655,061 | ||||||
TOTAL CURRENT LIABILITIES |
8,172,757 | 2,863,418 | ||||||
NOTES PAYABLE, RELATED PARTIES |
5,372,743 | 8,887,981 | ||||||
TOTAL LIABILITIES |
13,545,500 | 11,751,399 | ||||||
COMMITMENTS AND CONTINGENCIES |
| | ||||||
GOING CONCERN |
| | ||||||
STOCKHOLDERS EQUITY (DEFICIT) |
||||||||
PREFERRED STOCK |
| | ||||||
COMMON STOCK |
14,795 | 12,510 | ||||||
ADDITIONAL PAID-IN CAPITAL |
43,728,133 | 33,428,902 | ||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME |
10,902 | 21,864 | ||||||
RETAINED DEFICIT |
(54,270,031 | ) | (39,347,590 | ) | ||||
TOTAL STOCKHOLDERS EQUITY (DEFICIT) |
(10,516,201 | ) | (5,884,314 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT) |
$ | 3,029,299 | $ | 5,867,085 | ||||
SANUWAVE HEALTH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended | Year Ended | |||||||
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
Net loss from continuing operations |
$ | (14,922,441 | ) | $ | (7,983,585 | ) | ||
Adjustments to reconcile net loss to net cash
used by operating activities |
||||||||
Amortization |
306,757 | 306,756 | ||||||
Accrued interest |
799,712 | 756,166 | ||||||
Depreciation |
829,576 | 365,108 | ||||||
Change in allowance for doubtful accounts |
16,141 | (43,728 | ) | |||||
Gain on sale of property and equipment |
(6,565 | ) | (3,207 | ) | ||||
Stock-based compensation |
3,037,634 | 1,078,128 | ||||||
Extinguishment of debt |
2,693,896 | | ||||||
Write down of assets held for sale |
169,581 | | ||||||
Changes in assets (increase)/decrease |
||||||||
Accounts receivable trade |
(63,724 | ) | 48,176 | |||||
Inventory |
128,946 | 92,161 | ||||||
Prepaid expenses |
73 | (14,540 | ) | |||||
Due from Pulse Veterinary Technologies, LLC |
82,489 | (127,878 | ) | |||||
Other |
(1,400 | ) | 48,848 | |||||
Changes in liabilities increase/(decrease) |
||||||||
Accounts payable |
760,392 | 93,612 | ||||||
Accrued employee compensation |
591,505 | (310,492 | ) | |||||
Accrued expenses |
(372,825 | ) | 180,787 | |||||
Interest payable, related parties |
82,977 | | ||||||
NET CASH USED BY CONTINUING OPERATIONS |
(5,867,276 | ) | (5,513,688 | ) | ||||
NET CASH USED BY DISCONTINUED OPERATIONS |
| (758,244 | ) | |||||
NET CASH USED BY OPERATING ACTIVITIES |
(5,867,276 | ) | (6,271,932 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
Continuing operations |
||||||||
Proceeds from sale of property and equipment |
7,000 | 9,827 | ||||||
Purchase of property and equipment |
| (10,363 | ) | |||||
NET CASH PROVIDED (USED) BY CONTINUING OPERATIONS |
7,000 | (536 | ) | |||||
NET CASH PROVIDED BY DISCONTINUED OPERATIONS |
| 3,601,772 | ||||||
NET CASH PROVIDED BY INVESTING ACTIVITIES |
7,000 | 3,601,236 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
Continuing operations |
||||||||
Proceeds from notes payable, related parties |
| 2,125,000 | ||||||
Proceeds from promissory notes, related parties |
2,250,000 | | ||||||
Proceeds from promissory notes |
200,000 | | ||||||
Proceeds from sale of capital stock units, related parties |
350,000 | | ||||||
Proceeds from sale of capital stock units |
1,702,326 | | ||||||
Proceeds from sale of common stock |
| 1,819,844 | ||||||
Repurchase of common stock |
| (180,000 | ) | |||||
Payment of development period liabilities |
| (69,915 | ) | |||||
NET CASH PROVIDED BY FINANCING ACTIVITIES |
4,502,326 | 3,694,929 | ||||||
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS |
(10,962 | ) | 218,510 | |||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
(1,368,912 | ) | 1,242,743 | |||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR |
1,786,369 | 543,626 | ||||||
CASH AND CASH EQUIVALENTS, END OF YEAR |
$ | 417,457 | $ | 1,786,369 | ||||
SUPPLEMENTAL INFORMATION |
||||||||
Cash paid for interest |
$ | 81,864 | $ | | ||||
NON-CASH INVESTING AND FINANCING ACTIVITIES |
||||||||
Capital stock units issued in exchange for promissory
notes, related parties |
2,313,007 | | ||||||
Capital stock units issued in exchange for promissory notes |
204,653 | | ||||||
TOTAL NON-CASH INVESTING AND FINANCING ACTIVITIES |
$ | 2,517,660 | $ | | ||||