SANUWAVE Health, Inc., (OTC BB: SNWV) (www.sanuwave.com), an emerging medical technology company focused on the development and commercialization of non-invasive, biological response activating devices in the regenerative medicine area, reports its achievements and financial results for the three and nine months ended September 30, 2009.
Christopher M. Cashman, President and CEO of SANUWAVE said, “We are pleased to update our shareholders on a regular basis, and are reporting on our achievements for the third quarter. Included in this quarterly review are our business achievements and financial results. It is important to note that our efforts are on the continued research and development of dermaPACE™, our lead product in our technology platform.”
“Our initial focus is on the $10 billion global wound care opportunity for dermaPACE™, including the diabetic foot ulcer market, for which we are in the midst of an Investigational Device Exemption (“IDE”) wound care study. SANUWAVE is also pursuing with the FDA alternative regulatory pathways to Class III PMA routes which could provide for the clearance of a PACE™ device to be marketed for applicable orthopedic and plastic/cosmetic conditions that would benefit from improved circulation into the localized site. We expect to finalize next steps for a submission package by the end of 2009.”
He continued, “We have a broad product development pipeline that includes degenerative disease and non-healing injuries in the orthopedics, spine/neuro, plastic/aesthetics and cardiac markets. Our preclinical studies in each of these areas demonstrate the potential use of our technology for multiple platforms.”
Corporate and Clinical Updates for the Third Quarter:
- Surpassed 75% of expected final patient enrollment in our dermaPACE™ (IDE) wound care study on diabetic foot ulcers.
- Increased the number of active sites for the IDE clinical trial evaluating dermaPACE™ to 22, with 20 in the United States and two international sites in the United Kingdom and Germany. Southern Arizona VA Medical Center in Tucson became the newest site in this randomized, double blinded, placebo controlled study.
- Completed a reverse merger with a subsidiary of Rub Music Enterprises, Inc. on September 25, 2009. The Company’s name was changed to SANUWAVE Health, Inc. on November 5, 2009 and we received a new stock symbol (“SNWV”), which became effective on November 12, 2009.
- Subsequent to the end of the quarter, Dr. Myron Spector, PhD, Professor of Orthopedic Surgery (Biomaterials) at Harvard Medical School and Director of Orthopedic Research at Brigham and Women’s Hospital, presented the results of preclinical research that support the proposition that PACE™ shows promise in stimulating autogenous sources of progenitor stem cells for harvest and re-transplantation in bone tissue engineering. Dr. Spector was an invited guest speaker at the Bone-Tec Congress in Hannover, Germany on October 9, 2009. The procedure could have meaningful use in clinical applications whereby a patient’s own osteoprogenitor cells could be harvested and reimplanted for procedures such as bone fusion, joint reconstruction and cartilage repair.
- Also subsequent to the end of the third quarter, Drs. Reichenberger, Germann, Roth, Meirer and Engel published in the October 7, 2009 Annals of Plastic Surgery, Volume 63 - Issue 4, “Preoperative Shock Wave Therapy Reduces Ischemic Necrosis in an Epigastric Skin Flap Model” demonstrating the use of PACE™ technology as a non-invasive technique to precondition flap tissue in a rat epigastric skin flap model. This study indicates that preoperative extracorporeal shock wave therapy may enhance skin flap survival in a rodent model.
Financial Results for the Third Quarter
SANUWAVE’s financial results for the third quarter of 2009 reflect the Company’s ongoing research and development of PACE™ technology for the dermaPACE™ IDE wound care study and development work for orthopedic and cosmetic uses. For the three months ended September 30, 2009, the Company reported a loss from continuing operations of $2.7 million, or ($0.23) per diluted share, compared to a loss from continuing operations of $2.9 million, or ($0.26) per diluted share, for the same period in 2008. The loss from continuing operations includes: the non-cash compensation costs included in general and administrative expenses for stock compensation of $0.3 million for the three months ended September 30, 2009, compared to $0.1 million for the same period in 2008, due to new grants of options and restricted stock to management and directors of the Company in the three months ended September 30, 2009; the non-cash costs for depreciation and amortization of $0.1 million for the three months ended September 30, 2009, compared to $0.1 million for the same period in 2008; and the costs of accrued deferred interest on notes payable to related parties of $0.2 million for the three months ended September 2009, compared to $0.1 million for the same period in 2008. In addition, included in general and administrative expenses for the three months ended September 30, 2009, are legal, accounting and other expenses of $0.3 million related to the reverse merger.
For the three months ended September 30, 2009, the Company reported a net loss of $2.7 million, or ($0.23) per diluted share, compared to a net loss of $2.4 million, or ($0.21) per diluted share, for the same period in 2008. The net loss includes income from discontinued operations of $0 and $0.6 million for the three months ended September 30, 2009 and 2008, respectively, related primarily to the veterinary product line sold in June, 2009 for $3.5 million.
For the nine months ended September 30, 2009, the Company reported a net loss of $3.5 million, or ($0.30) per diluted share, compared to a net loss of $7.8 million, or ($0.73) per diluted share, for the same period in 2008. The net loss for the nine months ended September, 2009 includes the gain on the sale of the veterinary product line in June, 2009 of $2.5 million.
The Company ended the third quarter of 2009 with $3.3 million of cash and cash equivalents compared with $0.5 million as of December 31, 2008.
Mr. Cashman concluded, “SANUWAVE has a proven technology, with superior efficacy and cost profile, multiple near-term milestones that we believe will create value for our shareholders, a broad patent estate and protection, and a significant product development pipeline addressing global markets. With a strong team in place, we believe there are a number of significant milestones ahead of us that will enable the company to enhance shareholder value. We appreciate the support of our new shareholders and look forward to reporting on our future achievements.”