ReGen Biologics (OTC:RGBI) Reports Selected Financials for FY2004 and a Brief CMI Update
BY HUYEN NGUYEN, MARCH 21, 2005
ReGen Biologics, Inc. (OTC:RGBI), a New Jersey-based tissue regeneration company, reported full year 2004 selected financial results on Friday of last week.
In 2004, ReGen reported total sales of $504,000, a 72% increase over the $293,000 reported in 2003. Net loss for the year was $7.5 million compared to $10.1 million in 2003. The increase in revenues was primarily driven by product sales of distributors.
By December 31, 2004, ReGen reported cash and cash equivalents of $12.2 million, of which, $10.3 million was contributed from a private equity financing that the company had received in April 2004.
Source: Company's reports
ReGen Biologics is a tissue repair company whose core technology is the patented CMI (Collagen Meniscus Implant). The CMI is a type I collagen implant intended for patients with a meniscus tear or meniscus loss. By using its biologically active materials, CMI assist the patient's own body to grow new tissues in the meniscus.
CMI is currently distributed in Europe, Australia, Chile and selected regions in Canada by Centerpulse Orthopaedics, Ltd., who was acquired by Zimmer in 2003. In February 1996, ReGen and Centerpulse ("Zimmer") engaged in a distributing agreement where Zimmer was the exclusive distributor of CMI outside of the U.S, but were subjected to certain minimum sales requirements. It seemed that for the past several years Zimmer has failed to meet certain CMI sales requirements and was forced to amend the previously exclusive distributing agreement several times. In January 2002, the agreement was amended and these clauses were contained within the agreement if certain sales requirements were not met by Zimmer, Zimmer was subjected to:
1. Purchase additional CMI to satisfy the minimum requirements
2. Convert the previously exclusive distribution agreement to a non-exclusive arrangement
Again, in 2003, CMI sales requirements were not met by Zimmer and ReGen decided to exercise its right by converting the CMI distributing rights to a non-exclusive agreement. Finally, on February 15/2005, Zimmer entered into a letter of intent to terminate the agreement effective August 11/2005.
After nine years of constraint from an exclusive distributing right with Zimmer, ReGen finally announced that on March 7/2005 the company has established a wholly-owned subsidiary in Switzerland where ReGen will market and distribute the CMI in Europe through a group of independent local market distributors. This is an extremely positive indication for the company since ReGen finally has its own network of sales reps in Europe. As for the U.S., ReGen has the largest Multicenter Pivotal Clinical Trial ever conducted in the area of human meniscus. The company is actively working through the PMA submission progress in the U.S. and is expected to complete the PMA submission to the FDA by 2H:05.
