Vasogen
<< Back

Vasogen Announces First Quarter 2007 Results

Mississauga, Ontario - April 09, 2007

Vasogen Inc. (NASDAQ:VSGN; TSX:VAS), today reported the results of operations for the three months ended February 28, 2007. All dollar amounts referenced herein are in Canadian dollars unless otherwise noted.

At February 28, 2007, our cash and cash equivalents and restricted cash totaled $27.4 million, compared with $36.8 million at November 30, 2006.

As of April 1, 2007, the outstanding principal balance of our senior convertible notes has been fully repaid, subject to minor final adjustments. Since September 1, 2006, we have been required, under the terms of the convertible notes, to maintain a balance of cash, including restricted cash and marketable securities, equal to 110% of the convertible notes outstanding. We have satisfied this cash test at all times since it came into effect.

We incurred a net loss for the three months ended February 28, 2007, of $7.7 million, or $0.05 per common share, compared with a net loss of $19.3 million, or $0.23 per common share for the same period in 2006. A key driver of this reduction is the lower costs associated with the completion of our phase III clinical programs and the corporate costs associated with supporting these programs. Another reason for the reduced loss is the reduction in expenses associated with the senior convertible notes. The difference between cash used in operations and our accounting loss includes such non-cash items as stock option grant expense, amortization expense and accretion and amortization of costs associated with the convertible notes, offset by payment of $3.9 million of accrued expenses incurred in fiscal 2006.

For the three months ended February 28, 2007, research and development expenses decreased to $3.0 million from $11.4 million for the comparable period in 2006. The majority of the decrease in our R&D expense resulted from the completion of our phase III clinical trial programs. A significant portion of the 2007 expenses is associated with the preparation for commercial development of Celacade in Europe.

General and administration expenses were $3.6 million for the three months ended February 28, 2007, compared to $4.9 million for the same period in 2006. A reduction in headcount, facilities and insurance costs accounted for the reduction.

Highlights

  • On March 7, 2007, we announced that Terrance H. Gregg succeeded David G. Elsley as President and Chief Executive Officer of Vasogen. Mr. Gregg joined Vasogen’s Board of Directors in 1999, was appointed Vice Chairman in November 2005, and became Chairman of the Board in March 2006. David Elsley, who founded Vasogen, will remain a member of Vasogen’s Board of Directors and Mr. Gregg will retain his position as Chairman. In 1996, Mr. Gregg became President and Chief Operating Officer of MiniMed Inc., now a world leader in insulin pump therapy and continuous glucose monitoring, and was instrumental in Medtronic’s US$3.4 billion acquisition of the company in 2001. Mr. Gregg retired as President of Medtronic MiniMed in 2002. He also served in executive positions with Smith & Nephew plc, a diversified healthcare product company, and Allergan, Inc., a leading ophthalmic device and pharmaceutical company. He is currently a Special Venture Partner with Galen Associates, a private equity firm specializing in the healthcare sector, serves on the boards of DexCom, Inc. and LMS Medical Systems, Inc., and is Executive Chairman of Patton Medical Devices, LC. Mr. Gregg also served on the boards of Amylin Pharmaceuticals, Inc. and Ocular Sciences, Inc., which was purchased by The Cooper Companies, Inc. for US$1.2 billion last year.

  • In consultation with Steering Committee members and external regulatory advisors, our regulatory and medical teams have been preparing for a meeting with the U.S. Food and Drug Administration (FDA) to share the phase III ACCLAIM data and discuss the next steps in the regulatory pathway in the United States for Celacade. At our Annual Shareholders’ Meeting held on April 3, 2007, it was announced that we have submitted a detailed pre-read package to the FDA and have formally requested a meeting date.

    • Due to the fact that we provided an update on corporate activities during our Annual Shareholders’ Meeting on April 3, 2007, we will not host a conference call at this time. A replay of the Annual Shareholders’ Meeting presentation is available at www.vasogen.com.

    About Vasogen:
    Vasogen is a biotechnology company engaged in the research and development of therapies that target the damaging inflammation associated with cardiovascular and neurodegenerative disorders. The Company’s lead product, the Celacade™ technology, is designed to trigger the immune response to apoptosis ¬— an important physiological process that regulates inflammation. Celacade is in late-stage development for the treatment of chronic heart failure. The Company is also developing VP025, an early-stage new drug candidate for the treatment of certain neurodegenerative diseases.

    Certain statements contained in this press release, or elsewhere in our public documents constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and/or “forward-looking information” under the Securities Act (Ontario). These statements may include, without limitation, summary statements relating to results of the ACCLAIM trial in patients with chronic heart failure, plans to advance the development of Celacade™, plans to fund our current activities, statements concerning our partnering activities and health regulatory submissions, strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimated”, “predicts”, “potential”, “continue”, “intends”, “could”, or the negative of such terms or other comparable terminology. We made a number of assumptions in the preparation of these forward-looking statements, including assumptions about the nature, size and accessibility of the market for Celacade in the treatment of chronic heart failure, particularly in Europe, the regulatory approval process leading to commercialization and the availability of capital on acceptable terms to pursue the development of Celacade, and the feasibility of additional trials. You should not place undue reliance on our forward-looking statements which 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, the outcome of further analysis of the ACCLAIM trial results, the requirement or election to conduct additional clinical trials, delays or setbacks in the regulatory approval process, securing and maintaining corporate alliances, the need for additional capital and the effect of capital market conditions and other factors on capital availability, the potential dilutive effects of any financing, risks associated with the outcomes of our preclinical and clinical research and development programs, the adequacy, timing and results of our clinical trials, competition, market acceptance of our products, the availability of government and insurance reimbursements for our products, the strength of intellectual property, reliance on subcontractors and key personnel, losses due to fluctuations in the U.S.-Canadian exchange rate, and other risks detailed from time to time in our public disclosure documents or other filings with the Canadian and U.S. securities commissions or other securities regulatory bodies. Additional risks and uncertainties relating to our Company and our business can be found in the “Risk Factors” section of our Annual Information Form and Form 20-F for the year ended November 30, 2006, as well as in our later public filings. The forward-looking statements are made as of the date hereof, and we disclaim any intention and have 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. Unless otherwise indicated, numerical values indicating the statistical significance (“p-values”) of results included in this document are based on analyses that do not account for endpoint multiplicity.