OrthoLogic Reports 2004 Results: Fired Up On All Burners
BY JOHN MCCORMICK, JANUARY 31, 2005
On Thursday of last week, OrthoLogic Corp. (Nasdaq: OLGC) announced its Q4:04 results. The Company, which has effectively been a drug development company since the sale of its bone growth stim business, reported a net loss of $4.9 million or $(0.13) per share for Q4:04. For the entire 2004 calendar year (OLGC's fiscal year), the Company reported a net loss of $41.7 million or $(1.16) per share. These expenses represent an expansion of OrthoLogic's efforts in product research and clinical evaluation as well as the acquisition of Chrysalis Biotechnology in August of last year.
Throughout the year the Company has augmented the profile of its core technology Chrysalin which is based on the Chrysalin synthetic peptide. To sum up the year, Tom Trotter, Orthologic's CEO noted that the Company has "initiated several programs to explore Chrysalin-based product candidates in diabetic wound healing and cardiovascular repair". He added that "these new potential product applications... could present additional large market opportunities for the Chrysalin technology in the future." We note that the expansion of these programs were significantly aided by the Chrysalis Biotechnology acquisition. Orthologic is now seeking to address three major indications (orthopedic, dermal and cardiovascular) with six specific product categories.
On a conference call and in a press release to the public, management summarized the current menu of indications it is seeking to address with various Chrysalin products:
ORTHOPEDIC
Fracture Repair: This is the Company's most advanced area of progress. Chrysalin is being tested as a percutaneous method with which to accelerate fracture repair. According to the Company, more than 400 of the approximately 500 total patients in its Phase 3 human clinical trial for fracture repair are now enrolled. Allowing time for patient follow-up, the Company expects to have data from this trial before the end of 2005. No adverse events have been reported.
Spinal Fusion: According to the management, enrollment in the pilot Phase 1/2 clinical trial for spine fusion was completed last spring and, allowing time for patient follow-up, the Company expects to have data from the trial in the summer of 2005. According to the Millenium Research Group, the potential entry of Chrysalin into the spine fusion market may have an effect powerful enough to reduce the price of Medtronic's InFuse. We believe this is one of the major developments to watch in orthopedics.
Cartilage Defect Repair: The Company expects to submit an Investigational New Drug (IND) application for a Chrysalin-based product candidate for cartilage defect repair later in the year.
Tendon/Ligament Repair: Orthologic's first pre-clinical study evaluating Chrysalin in a tendon repair model is nearing completion. We expect to have data from this study in the first half of 2005."
DERMAL
Dermal Wound Healing: Orthologic's research term is still testing formulations for a Chrysalin-based product candidate for dermal wound healing. The Company plans to complete this work before the end of 2005 and initiate a new human clinical trial for a diabetic ulcer indication in 2006.
CARDIOVASCULAR
Cardiovascular Repair: The Company is still evaluating various delivery mechanisms for a myocardial revascularization Chrysalin product, as well as complete a series of pre-clinical studies. Management is seeking to "initiate a 'proof of concept' human clinical trial for this indication, potentially as early as 2006", according to a press release last week.
