Product revenues which consists primarily of BioGlue and HemoStase increased 4% in the fourth quarter and full year of 2010 compared to the corresponding periods in 2009. For the three month and full year periods HemoStase revenue increased partially offset by a slight decrease in BioGlue revenues. Fourth quarter of 2010 also included $264,000 of PerClot revenue as we began to roll out PerClot in international markets.
Total gross margins were 60% for the fourth quarter of 2010 compared to 61% for the fourth quarter of 2009. Total gross margins excluding the write off of $1.6 million for the HemoStase inventory were 60% for the full year of 2010 compared to 62% in the full year of 2009. Preservation services gross margins for the fourth quarters of 2010 and 2009 were 39% for each period and 40% in the full year of 2010 compared to 42% in the full year of 2009.
Product gross margins for the fourth quarter of 2010 were 80% compared to 82% in the corresponding period in 2009. Product gross margins excluding the write down of $1.6 million of HemoStase inventory were 81% in the full year of 2010 compared to 83% in the full year of 2009. General administrative and marketing expenses for the fourth quarter of 2010 were $12.2 million compared to $12.6 million for the fourth quarter of 2009. These expenses for the fourth quarter of 2010 included approximately $474,000 in costs related to business development activities and $268,000 in costs related to our litigation with Medafor.
General administrative and marketing expenses for the full year of 2010 were $49.1 million compared to $50 million for the full year of 2009. The full year of 2010 included a charge of approximately $1.4 million in costs related to our litigation with Medafor $1 million related to business development activities and $729,000 related to the write off of capitalized legal expenses associated with our BioGlue intellectual property rights in Germany.....
Raymond Myers – The Benchmark Company
Okay. Good. When were you targeting PerClot approval and launch?
Product revenues which consists primarily of BioGlue and HemoStase increased 4% in the fourth quarter and full year of 2010 compared to the corresponding periods in 2009. For the three month and full year periods HemoStase revenue increased partially offset by a slight decrease in BioGlue revenues. Fourth quarter of 2010 also included $264,000 of PerClot revenue as we began to roll out PerClot in international markets.
Total gross margins were 60% for the fourth quarter of 2010 compared to 61% for the fourth quarter of 2009. Total gross margins excluding the write off of $1.6 million for the HemoStase inventory were 60% for the full year of 2010 compared to 62% in the full year of 2009. Preservation services gross margins for the fourth quarters of 2010 and 2009 were 39% for each period and 40% in the full year of 2010 compared to 42% in the full year of 2009.
Product gross margins for the fourth quarter of 2010 were 80% compared to 82% in the corresponding period in 2009. Product gross margins excluding the write down of $1.6 million of HemoStase inventory were 81% in the full year of 2010 compared to 83% in the full year of 2009. General administrative and marketing expenses for the fourth quarter of 2010 were $12.2 million compared to $12.6 million for the fourth quarter of 2009. These expenses for the fourth quarter of 2010 included approximately $474,000 in costs related to business development activities and $268,000 in costs related to our litigation with Medafor.
General administrative and marketing expenses for the full year of 2010 were $49.1 million compared to $50 million for the full year of 2009. The full year of 2010 included a charge of approximately $1.4 million in costs related to our litigation with Medafor $1 million related to business development activities and $729,000 related to the write off of capitalized legal expenses associated with our BioGlue intellectual property rights in Germany.....
Raymond Myers – The Benchmark Company
Okay. Good. When were you targeting PerClot approval and launch?
Steve Anderson
I think that PerClot’s approval will be sometime towards the end of 2012 or early 2013 the clinical study that we are going to run is includes about 300 patients and will be across a number of different specialties for a number of different indications. But I would say the soonest we could get it done at the end of 2012 probably a more timely expectation is early 2013.
Raymond Myers – The Benchmark Company
And that’s for approval or for finishing this study.
Steve Anderson
That’s approval.
Raymond Myers – The Benchmark Company
And so well let’s start with the study through this to finish the 300 patient study if you would follow your IDE at the end of March when do you think you can finish the study.
Steve Anderson
It will go pretty quickly but I don’t think that we would be finished with the 300 patient enrollment until fourth quarter of 2011.
Raymond Myers – The Benchmark Company
And that leaves about a year for FDA is that your thought?
Steve Anderson
Yeah.
Raymond Myers – The Benchmark Company
Great, your HemoStase revenue was quite strong in the fourth quarter is that related to winding down the sales and a desirable push out the last of your inventory before you can’t sell it anymore or does that more represent underlying strength in the market.
Ashley Lee
I think it represents both you know I mean you know this full area of powdered hemostatic agents is rolling and that’s why we’ve made the commitment to be in it long-term with the acquisition of the PerClot distribution rights and at the same time you know as you mentioned we do have some inventory that we are trying to sell prior to our discontinuing distributing HemoStase which is going to be in late March so it’s a combination of both.
Raymond Myers – The Benchmark Company
So should we expect similar sales on Q1 as if we saw in Q4.
Ashley Lee
For HemoStase.
Raymond Myers – The Benchmark Company
Yeah.
Ashley Lee
No.
Raymond Myers – The Benchmark Company
Lower, higher?
Ashley Lee
That would be lower than the fourth quarter of 2010 and I think that our guidance for again for the full year for all powdered hemostats is between $4 million and $6 million.
Raymond Myers – The Benchmark Company
Okay, and is some of the HemoStase that you might be selling in Q1 product that is already written off?
Ashley Lee
Potentially.
Raymond Myers – The Benchmark Company
So there could be a potential of a reversal of the prior charges?
Ashley Lee
I wouldn’t say a reversal of the prior charges we could be recognizing some revenue for which there is no associated – costs associated with the revenues so not by that finish in reversal but we could have some revenue with very high gross margin on it.
Raymond Myers – The Benchmark Company
Do you expect that to be potentially meaningful to earnings in the quarter.
Ashley Lee
I wouldn’t expect it to be meaningful to earnings in the quarter.
Raymond Myers – The Benchmark Company
Okay well.
Ashley Lee
It might be meaningful to cash flow though.
Raymond Myers – The Benchmark Company
Nice your cash flow is already very good. You’ve had a share buyback consistently through 2010 do you intend to continue that in 2011?
Ashley Lee
The buyback has continued into the first couple of months of 2011 and just to give you an idea of where we are we have purchased roughly about 1.3 million to 1.4 million stock in the first two months 2011 at an average price of you know somewhere around 5.25 [ph] that’s a guess.
Raymond Myers – The Benchmark Company
So you’ve purchased $1.3 million or shares?
Ashley Lee
Dollars.
Raymond Myers – The Benchmark Company
Dollars.....
Raymond Myers – The Benchmark Company
Yeah, thank you I’m here. Ashley and Steve could you maybe start with reminding us how many sales people do you have now and what are your plans to expand that.
Steve Anderson
Steve Anderson
I think that PerClot’s approval will be sometime towards the end of 2012 or early 2013 the clinical study that we are going to run is includes about 300 patients and will be across a number of different specialties for a number of different indications. But I would say the soonest we could get it done at the end of 2012 probably a more timely expectation is early 2013.
FYI BioGlue paper, click on thumbnail.
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