Product Royalty Income Generated in First Half 2011
New Product Introductions and Key Regulatory Approval Support Outlook for Growth
LEXINGTON, Ky.--(BUSINESS WIRE)-- MedPro Safety Products, Inc. (OTCBB:MPSP), a leading developer of transformational technologies that enable safer medication delivery and blood collection, today reported on several key financial highlights for the second quarter ended June 30, 2011, as well as significant corporate developments.
In the second quarter of 2011, the Company received $631,000 in product royalty income generated under a six-year agreement signed in July 2010 granting manufacturing and distribution rights for three MedPro blood collection and infusion products to a strategic medical products distribution partner. Royalty payments, based on minimum volume commitments, commenced on October 1, 2010 with the first payment received in January 2011. Year to date, product royalty income totaled $781,000. The royalties received from the sale of MedPro’s blood collection and infusion products are committed to pay principal and interest to holders of a $30 million Senior Secured Note Offering completed in September 2010.
Operating expenses declined 39% in the second quarter of 2011 compared with the second quarter of 2010. The decrease was driven by a significant reduction in employee salary and compensation expense, the result of lower amortization charges on share-based compensation related to stock options granted to employees and directors in 2008. The net loss of the quarter was $2.9 million, or $0.22 per share, compared with a net loss of $3.4 million, or $0.26 per share, for the second quarter of 2010.
Cash, cash equivalents and restricted cash increased 7% from the end of December 2010 to $13.0 million at June 30, 2011. The increase was largely the result of receipt of a reserve associated with the FDA clearance on the wing device, which totaled $7.9 million, partially offset by a decline in restricted cash reflecting interest payments made to the holders of the senior notes.
“The second quarter product royalty payments represent a good start to our efforts to build sales. We are excited about the future of the product and technology in the marketplace,” said W. Craig Turner, Chairman and CEO of MedPro Safety Products. “We anticipate product royalty payments will continue to grow as healthcare professionals become increasingly aware of the benefits of the blood collection product in providing superior safety through a truly passive needlestick prevention feature.”
“We continue to believe that our strategy to work with partners in bringing innovative safety technologies and design for blood collection and infusion devices to market is the best approach to driving awareness and sales of the products,” continued Mr. Turner. “To that end, we have made substantial progress in recent months in introducing new products and receiving a key regulatory approval, significant milestones in our efforts to attract new partners.”
Operational highlights during the second quarter of 2011 include:
- Receipt of CE Mark approval for the sale of the blood collection devices throughout the European Union. This, along with the FDA approval received in 2010, positions the Company well in its efforts to expand the products globally.
- Introduction of the passive hypodermic safety syringe, which incorporates a proprietary safety shield that is automatically released during the administration of medicine, covering the needle as it is removed, and thereby enhancing patient and operator safety.
- Introduction of the pre-filled safety syringe, that contains a precise dose of pharmaceutical stored within a syringe system equipped with MedPro’s fully passive safety mechanism, nearly eliminating the risk of needlestick injury.
- Participation in the APIC Annual Educational Conference, where the Company met with many of its target users to learn about their specific safety needs with respect to needlesticks and syringes and to educate them on the benefits of MedPro products.
- Presented the MedPro investment story in Atlanta, South Florida and Denver.
“We are optimistic about the outlook for MedPro, based on the reception that our products have received. We believe our patent-protected technologies are unique. We have a full product pipeline. At $3 billion, the market opportunity is large and we are excited by the interest shown by potential strategic partners. We remain focused on expanding our presence and driving enhanced valuation for our shareholders and we look forward to our continued progress,” Mr. Turner concluded.
About MedPro Safety Products, Inc.
Headquartered in Lexington, Kentucky, MedPro Safety Products, Inc. is a leading developer of safer medication delivery and blood collection systems. The Company licenses, develops and manufactures transformational technologies marketed through its global medical device partners. MedPro’s products address multiple product categories within the medication delivery (injection and infusion) and blood collection (blood collection sets and blood tube holders) markets. Unlike competitive products currently available on the market, MedPro’s products incorporate safety features that operate without user activation, and therefore require little or no clinician training to use. The total global market opportunity for safer medication delivery and blood collection products is believed to be more than $6 billion. For additional information, please refer to the ‘Investor Relations’ link on the Company’s website (www.medprosafety.com).
Safe Harbor Statement
This release includes forward-looking statements based upon current expectations of the management of MedPro Safety Products, Inc. that involve risks and uncertainties, such as plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including our ability to identify and acquire medical safety device safety technologies with product development potential; our ability to successfully develop and bring products to market, including obtaining regulatory approvals; our ability to successfully increase sales of our products; our ability to obtain additional financing on satisfactory terms; our ability to attract and retain qualified employees; and governmental regulation associated with the medical safety products industry. Words such as "anticipate," "estimate," "plan," "continuing," "ongoing," "expect," "believe," "intend," "may," "will," "should," "could," and similar expressions are used to identify forward-looking statements. We refer you to the more detailed discussion of risks and uncertainties under "Risk Factors" in our Annual Report on Form 10-K and our other reports on file with the Securities and Exchange Commission.
Doug Sherk/Jenifer Kirtland, 415-568-9349
Christopher Gale, 646-201-5431
KEYWORDS: United States North America Kentucky
INDUSTRY KEYWORDS: Health Biotechnology Hospitals Medical Devices