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CYKN News Cyberkinetics Announces Third Quarter 2006 Results
FOXBOROUGH, Mass.--(BUSINESS WIRE)--Cyberkinetics Neurotechnology Systems, Inc. (OTCBB: CYKN; “Company;”“Cyberkinetics”), a
neurotechnology company focused on neurostimulation and neural sensing,
today released financial results for the quarter ended September 30,
2006, and provided updates on the Company’s
progress on its primary development programs.
Total revenue, including research product sales and grant income, for
the three months ended September 30, 2006, was approximately $368,000 as
compared to $189,000 for the same period in 2005. Research product sales
for the three months ended September 30, 2006, were approximately
$278,000 as compared to $119,000 for the three months ended September
30, 2005. Grant income for the three months ended September 30, 2006 was
$91,000 as compared to $69,000 for the three months ended September 30,
2005. The Company reported a net loss of $2.9 million, or $0.10 per
share, for the quarter ended September 30, 2006, compared to a net loss
of $2.4 million, or $0.15 per share, for the same period in 2005. Cash
used in operations was $2.4 million in the third quarter of 2006, as
compared to $1.4 million in the third quarter of 2005. The Company ended
the third quarter of 2006 with approximately $5.1 million in cash and
cash equivalents.
Shortly after the end of the quarter, we increased our cash position
through a private placement of 8.33 million newly issued shares of the
Company’s common stock at a price of $1.20 per
share, together with warrants to purchase up to approximately 4.167
million additional shares of common stock at an exercise price of $1.40
per share, to institutional and accredited investors. We raised gross
proceeds of $10 million from the private placement that closed on
October 18, 2006.
“During the quarter ended September 30, 2006,
we received notification that the FDA granted our Andara™
OFS™ Device a Humanitarian Use Device
designation for the treatment of acute spinal cord injuries -- which
enables us to file a Humanitarian Device Exemption application for the
product,” said Timothy R. Surgenor, President
and Chief Executive Officer of Cyberkinetics. “We
expect to file that application in the first quarter of 2007. Filing
that application is the next step in the process of obtaining clearance
to market this innovative product, which is intended to restore function
by regenerating nerve tissue damaged by spinal cord injury. Obtaining
regulatory approval and launching this product remain our highest
priorities.
“We reached important milestones in our
neural interface programs during the quarter. We received world-wide
recognition for our innovative BrainGate neural sensing platform when it
appeared on the cover of the journal Nature and continued to make
strong progress in our efforts to establish proof-of-concept by
reporting on our initial experience with the use of the BrainGate
technology in the first participant with ALS.
“We also made significant strides in epilepsy
that demonstrate our NeuroPort™ sensor could
be used to detect signals relevant to epileptic seizures more quickly
and more accurately than by using intracranial EEG sensors alone.
Although preliminary, the data suggest that our technology may represent
the first significant advance in the detection and treatment of
drug-resistant epilepsy in a half century. Finally, we significantly
strengthened our management team through the addition of Kurt Kruger as
Chief Financial Officer.”
“Having spent my career analyzing companies
that develop transforming medical products that drive new therapies and
procedures, I’m very pleased to join
Cyberkinetics at this exciting time in the Company’s
development,” stated Kurt Kruger, Chief
Financial Officer. “As we move toward the
planned launch next year of our first commercial product, we are working
apace to deploy the financial, technology and human resources to achieve
traction in the spinal cord injury market -- the first step in building
what we believe will be a significant neurotechnology franchise.”
Third Quarter 2006 and Recent Operational Highlights
The Andara™ OFS Device Technology –
Designed to Repair Neural Connections that Result from Spinal Cord Injury
In September, the Company’s Humanitarian
Use Device (HUD) designation filing for the Andara™
Oscillating Field Stimulator (OFS™) was
granted by the U.S. Food and Drug Administration (FDA). Cyberkinetics
expects to file a Humanitarian Device Exemption application for this
treatment for acute spinal cord injuries in the first quarter of 2007.
Also in September, Cyberkinetics’ Andara™
OFS™ Device was awarded Neurotech
Business Reports’“Gold
Electrode Award” for Best New Product.
According to Jim Cavuoto, editor and publisher of Neurotech Reports,
Cyberkinetics’ Andara™
OFS™ Device “represents
a groundbreaking advance in neurotechnology and the first commercial
neural regeneration stimulation system to reach the market.”
BrainGate System – Designed to Restore
Function via Direct Brain-Computer Control of Communication and Other
Devices
In July, scientific findings from the first participant in
Cyberkinetics’ ongoing pilot clinical
trials of the BrainGate System were featured on the cover of the
journal Nature. Results reported in the journal from the first
participant provided direct, compelling evidence that the area of the
brain that controls movement remains functional even years after a
spinal cord injury in the absence of a neural connection from the
brain to the limbs. Since, according to the data, limb movement
originates in the brain as distinct and predictable patterns of neural
activity, this information may ultimately be tapped to enable
paralyzed people to move their own limbs.
In October, at the Annual Meeting of the Society for Neuroscience in
Atlanta, Georgia, Leigh R. Hochberg, M.D., Ph.D., Principal
Investigator in Cyberkinetics’ pilot trial
of the BrainGate System, presented preliminary findings demonstrating
that the first participant in the trial with ALS was –
almost immediately -- able to voluntarily excite cells in his motor
cortex by simply imagining moving, or intending to move, his own,
paralyzed limb. Also at the meeting, John P. Donoghue, Ph.D., Chief
Scientific Officer, Founder and Director of Cyberkinetics, reported
that the third participant in the trial, paralyzed and unable to speak
due to a brainstem stroke, also achieved significant progress in the
speed and accuracy of cursor control. Due to these improvements, the
third participant was able to operate a commercially available
communications device, as well as demonstrate remote control of a
motorized wheelchair using the BrainGate System and her own thoughts.
NeuroPort™ System –
Designed to Improve Diagnosis and Treatment of Nervous System Conditions
and Injuries
In November, Ronald G. Emerson, M.D., a world-recognized leader in the
field of neurophysiological and critical care monitoring and advanced
methods of EEG analysis and a professor of clinical neurology in the
Columbia Comprehensive Epilepsy Center at Columbia University College of
Physicians & Surgeons, reported preliminary results from an ongoing
study of Cyberkinetics’ NeuroPort™
Neural Monitoring System at the Annual Meeting of the American Clinical
Neurophysiology Society in Chicago, Illinois. Results from a patient who
had the NeuroPort™ sensor implanted along
with standard implantable intracranial Electroencephalography (iEEG)
sensors, showed that with the Cyberkinetics’
NeuroPort™ System physicians were able to:
record and monitor brain electrical activity in greater detail than
with iEEG;
better characterize seizure genesis due to recording the granularity
of neural networks;
correlate this activity to an epileptic seizure; and
identify the onset of seizure activity earlier than with iEEG.
Conference Call Instructions
Cyberkinetics’ management will hold a
conference call at 10:30 am Eastern Time, Wednesday, November 8, 2006,
to discuss results of the third quarter of 2006. Those who would like to
participate in the conference call should dial 800-591-6942, or
617-614-4909 for international participants, and use the pass code
20398844. To access a replay of the conference call, which will be
available from 12:30 pm Eastern Time on November 8 until 5:00 pm Eastern
Time on November 15, please dial 888-286-8010, or 617-801-6888 for
international callers, and use the pass code 62331640.
An audio webcast of the conference call will also be available at www.cyberkineticsinc.com.
The webcast is also being distributed through the Thomson StreetEvents
Network. Individual investors can listen to the call at www.earnings.com,
Thomson’s individual investor portal, powered
by StreetEvents. Institutional investors can access the call via www.streetevents.com,
a password-protected event management site.
About Cyberkinetics Neurotechnology Systems, Inc.
Cyberkinetics Neurotechnology Systems, Inc., a leader in the
neurotechnology industry, is developing neural stimulation, sensing and
processing technology to improve the lives of those with severe
paralysis resulting from spinal cord injuries, neurological disorders
and other conditions of the nervous system. Cyberkinetics’
product development pipeline includes: the Andara™
Oscillating Field Stimulator (OFS) Device, an investigative device
designed to stimulate regeneration of the neural tissue surrounding the
spinal cord; the BrainGate System, an investigative device designed to
provide communication and control of a computer, assistive devices, and,
ultimately, limb movement; and the NeuroPort™
System, cleared to market in the United States, a neural monitor
designed for acute inpatient applications and labeled for temporary
(less than 30 days) recording and monitoring of brain electrical
activity. Additional Information is available at Cyberkinetics’
website at http://www.cyberkineticsinc.com.
Forward-Looking Statements
This announcement contains forward-looking statements, including
statements about Cyberkinetics' product development plans and progress,
potential development of proprietary inventions and benefits that may be
realized by certain research programs. These statements are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, and can be identified by the use of
forward-looking terminology such as "may," "will," "believe," "expect,"
"anticipate" or other comparable terminology. Forward-looking statements
involve risks and uncertainties that could cause actual results to
differ materially from those projected in forward-looking statements and
reported results shall not be considered an indication of our future
performance. Factors that might cause or contribute to such differences
include our limited operating history; our lack of profits from
operations; our ability to successfully develop and commercialize our
proposed products; a lengthy approval process and the uncertainty of FDA
and other governmental regulatory requirements; clinical trials may fail
to demonstrate the safety and effectiveness of our products; the degree
and nature of our competition; our ability to employ and retain
qualified employees; compliance with recent legislation regarding
corporate governance, including the Sarbanes-Oxley Act of 2002; as well
as those risks more fully discussed in our public filings with the
Securities and Exchange Commission, all of which are difficult to
predict and some of which are beyond our control.
Financial results for the quarter ended September 30, 2006, are
summarized in the tables below.
Cyberkinetics Neurotechnology Systems, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2006
2005
2006
2005
Revenues:
Product sales
$
277,589
$
119,281
$
704,541
$
495,948
Grant income
90,873
69,294
520,012
280,217
Total revenues
368,462
188,575
1,224,553
776,165
Operating expenses:
Cost of product sales
83,076
20,173
278,401
96,842
Research and development
1,804,006
1,445,984
4,804,769
4,283,589
Sales and marketing
279,615
77,675
608,970
245,858
General and administrative
1,063,311
918,109
3,219,931
2,994,879
Purchased in-process research and development
-
-
1,602,239
-
Total operating expenses
3,230,008
2,461,941
10,514,310
7,621,168
Operating loss
(2,861,546)
(2,273,366)
(9,289,757)
(6,845,003)
Other income (expense):
Interest income
76,573
28,222
280,622
61,503
Interest expense
(137,706)
(134,751)
(460,129)
(257,821)
Other expense, net
(61,133)
(106,529)
(179,507)
(196,318)
Net loss
$
(2,922,679)
$
(2,379,895)
$
(9,469,264)
$
(7,041,321)
Basic and diluted net loss per common share
$
(0.10)
$
(0.15)
$
(0.34)
$
(0.44)
Shares used in computing basic and diluted net loss per common share
27,916,186
16,228,603
27,567,879
15,887,463
Cyberkinetics Neurotechnology Systems, Inc. Condensed
Consolidated Balance Sheets (Unaudited)
