Vasogen Inc. - Vasogen Announces Third Quarter 2002 Results

Vasogen Announces Third Quarter 2002 Results

Toronto, Ontario - October 30, 2002

Vasogen Inc. (TSX:VAS; AMEX:VSV) today reported the results of operations for the third quarter of 2002. Comparative figures relate to the three-month and nine-month periods ending August 31, 2002, and to the three-month and nine-month periods ending August 31, 2001. All amounts referenced herein are in Canadian dollars, unless otherwise stated.

The loss for the third quarter of 2002 was $4.2 million, or $0.08 per share, compared to a loss of $3.5 million, or $0.08 per share, in 2001. The loss for the nine months ended August 31, 2002 was $13.7 million, or $0.28 per share, compared to $10.3 million, or $0.23 per share, for the comparable period in 2001. The increased loss resulted primarily from higher costs associated with the expansion of clinical research and development activities and the corporate costs associated with supporting these activities.

Research and development expenditures totaled $2.5 million in the third quarter of 2002, compared to $2.4 million in 2001. For the nine months ended August 31, research and development expenditures totaled $8.5 million, compared to $6.7 million for the same period in 2001. The increase in spending in the year to date results primarily reflects costs to support Vasogen’s expanded clinical development activity, as further discussed in the “Highlights” below.

General and administration expenditures totaled $2.1 million for the third quarter of 2002, compared to $1.7 million in 2001. For the nine months ended August 31, general and administration expenditures totaled $5.9 million, compared to $5.3 million for the same period in 2001. The increase relates to the growing infrastructure requirements necessary to support advancing the development of the Company’s immune modulation therapy.

For the third quarter of 2002, investment income totaled $0.3 million, compared to $0.6 million in 2001. For the nine months ended August 31, investment income totaled $0.7 million, versus $1.7 million for the comparable period in 2001. Investment income was lower, primarily due to the decline in market yields available on short-term investments.

Cash, cash equivalents, and marketable securities held to maturity totaled $47.2 million, versus $39.5 million at year-end 2001. The total number of common shares outstanding at the end of the third quarter of 2002 increased to 51.9 million from 46.4 million at year-end.

An expanded Management’s Discussion & Analysis for the quarter is accessible on Vasogen’s web site at www.vasogen.com.

Highlights

Clinical results for Vasogen’s immune modulation therapy in advanced chronic heart failure (CHF) were selected for both an oral and an oral poster presentation at the Annual Scientific Meeting of the Heart Failure Society of America (HFSA), the largest conference in North America dedicated to heart failure research. These results, from a double-blind, placebo-controlled 73-patient trial conducted at leading centers in the U.S. and Canada, represented one of only five presentations that was selected for the ‘Late Breaking Clinical Trials’ session.
The oral presentation at the HFSA conference was made by Guillermo Torre-Amione, MD, PhD, Medical Director of the Heart Transplant Service at Baylor College of Medicine and the DeBakey Heart Center of The Methodist Hospital in Houston, Texas, and lead investigator in Vasogen’s initial CHF trial. New and previously reported findings, demonstrating a significant reduction in the risk of death and hospitalization, improvements in a clinical composite score, and improvements in key electrocardiogram measures among patients receiving Vasogen’s immune modulation therapy, were presented to a large audience of cardiologists and medical professionals. These results were supported by positive trends in quality of life and clinical status.
Vasogen’s clinical results in CHF have also been selected for an oral and a poster presentation at the American Heart Association’s Scientific Sessions 2002, the world’s largest meeting of scientists and healthcare professionals devoted to cardiovascular disease. Dr. Torre-Amione will present findings from the trial during the conference, to be held November 17-20 in Chicago.
Vasogen announced plans to initiate a double-blind, placebo-controlled, pivotal trial in advanced CHF in support of FDA and Health Canada regulatory approval. The initiation of this trial, which is subject to regulatory approval, will position the Company with two pivotal (phase III) trials addressing major underserved cardiovascular disease indications.
Dr. James B. Young, Medical Director of the Kaufman Center for Heart Failure and Head of the Section of Heart Failure and Cardiac Transplant Medicine at The Cleveland Clinic, was appointed as Global Principal Investigator and Chairman of the Steering Committee for Vasogen’s pivotal (phase III) trial in CHF. Dr. Torre-Amione was selected as Principal Investigator for the U.S. arm of the study, and Dr. Jean-Lucien Rouleau will be Principal Investigator for the Canadian arm of the trial. Dr. Rouleau is Head, Division of Cardiology, University Health Network at the University of Toronto.
Previously reported results from Vasogen’s preclinical studies in neuroinflammation, an underlying mechanism in Alzheimer’s disease and other degenerative neurological conditions, were published in the October issue of NeuroImmunoModulation (10:40-46, 2002). This research was conducted under the direction of Professor Marina Lynch, PhD, at the Department of Physiology, Trinity College, Dublin, Ireland. Findings demonstrated the ability of Vasogen’s immune modulation therapy to significantly reduce key measures of inflammation and cell death in the brain and to improve physiological measurements that correlate with memory and learning.

A quarterly conference call will be conducted on Wednesday, October 30, 2002 at 4:10 p.m. Eastern Time. The conference can be accessed by calling 416-695-5261 or 1-877-888-3855 ten minutes prior to the call. An audio web cast of the event will also be available at www.vasogen.com.

View entire press release with Financials.

Vasogen is developing immune modulation therapies for the treatment of cardiovascular and other inflammatory diseases.

This press release contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. For this purpose, any statements that are contained herein that are not statements of historical fact may be deemed to be forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Without limiting the foregoing, the words "believes," "anticipates," "plans," "intends," "will," "should," "expects," "projects," and similar expressions are intended to identify forward-looking statements. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause actual results, future circumstances, or events to differ materially from those projected in the forward-looking statements. These risks include, but are not limited to, those associated with the success of research and development programs, the regulatory approval process, competition, securing and maintaining corporate alliances, market acceptance of the Company's products, the availability of government and insurance reimbursements for the Company’s products, the strength of intellectual property, financing capability, the potential dilutive effects of any financing, reliance on subcontractors and key personnel and other risks detailed from time-to-time in the Company's public disclosure documents or other filings with the Canadian and U.S. securities commissions or other securities regulatory bodies. The forward-looking statements are made as of the date hereof, and the Company disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

CONTACT:
Glenn Neumann, Investor Relations
2155 Dunwin Drive
Mississauga, ON, Canada L5L 4M1
tel: (905) 569-9065 fax: (905) 569-9231
www.vasogen.com / investor@vasogen.com