Full Press Release Details
| SANUWAVE Health, Inc. | Lippert/Heilshorn Associates | |
| Barry Jenkins, CFO | Anne Marie Fields | |
| Bernie Laurel, VP of Sales and Marketing | 212-838-3777 | |
| 678-578-0103 | afields@lhai.com |
SANUWAVE HEALTH REPORTS SECOND QUARTER FINANCIAL RESULTS AND
PROVIDES BUSINESS UPDATE
Launched orthoPACE for Musculoskeletal Treatments in Europe
Nearing Completion of Patient Follow-Up in the U.S. Phase III Pivotal Trial of
dermaPACE to Treat Diabetic Foot Ulcers
ALPHARETTA, Ga. (August 13, 2010) SANUWAVE Health, Inc. (OTC BB: SNWV), an emerging medical
technology company focused on regenerative medicine, today reported financial results for the three
and six months ended June 30, 2010 and provided a business update.
Christopher M. Cashman, President and CEO of SANUWAVE, said, We made considerable progress during
the first six months of 2010. We completed enrollment and are now approaching the end of the
patient follow-up phase in our U.S. Phase III pivotal trial of dermaPACE to treat diabetic foot
ulcers (DFU). We also launched the orthoPACE device in Europe for use in orthopedic, trauma and
sports medicine indications following receipt of CE mark approval. Both accomplishments are core
to our strategic development plan and advance our goal to commercialize our regenerative medicine
devices in wound care and orthopedics.
Commenting further on the dermaPACE trial, Mr. Cashman added, The completion of patient
enrollment in our Phase III pivotal trial has brought us closer to our goal to commercialize
dermaPACE in the U.S. for the treatment of diabetic foot ulcers, which represent a $2 billion
market opportunity in the U.S. and remain a major area of unmet medical need. We expect to
complete the patient follow-up phase of this trial in early September, to report top-line results
in the fourth quarter, to file our Premarket Approval Application (PMA) with the FDA no later than
the first quarter of 2011, and, pending a favorable response from the FDA, to launch dermaPACE in
the U.S. in 2011. We continue to speak with leading U.S. surgeons and wound care specialists about
a clinical study of dermaPACE to treat venous and complex chronic wounds, which represent the
largest portion of the $5 billion U.S. advanced wound care market.
Commenting further on the orthoPACE product launch, Mr. Cashman said, We were pleased about the
successful on-time launch of our orthoPACE device for musculoskeletal treatments in certain
European markets at the end of the quarter. We shipped our first devices to distributors in July
2010. The orthoPACE has a compact, portable design that allows for treatments to be performed by a
single operator in the hospital or office setting. The device has a proven success rate in
orthopedic and sports medicine conditions such as nonunion fracture and tendinopathy that is equal
to and often superior to that of surgery usually with just one procedure and without the risks,
complications and lengthy recovery inherent with invasive surgery. Most procedures can be
performed in less than 15 minutes, and patients can return home the same day. Patients can bear
weight immediately and are able to return to normal activity within a few days. Because PACE
treatment is completely non-invasive there is no risk of infection or scarring. Importantly, it
preserves the opportunity for any future treatment options as it does not change the biomechanics
of the underlying musculoskeletal system. This combination of efficiency and proven outcomes
across a broad range of treatment applications will allow us to position orthoPACE as the premium
extracorporeal shock wave technology for musculoskeletal conditions in Europe.
Also in the second quarter of 2010, the Company was granted a European patent that provides the
Company exclusive rights in human and animal treatment devices that include the novel use of
piezoelectric fibers to produce acoustic energy in the shock wave spectrum. This provides a
significant competitive advantage for the Company s PACE technology as the smaller, targeted focal
volume created by piezoelectric fiber technology allows for the delivery of shock waves with
greater accuracy by focusing the energy to a precise point in the targeted tissue while minimizing
exposure of the delivered energy to the surrounding tissue.
Second Quarter Financial Results
SANUWAVE s financial results for the second quarter of 2010 reflect the Company s ongoing research
and development of PACE technology for the dermaPACE DFU study and development work for
orthopedic and cosmetic uses.
Revenues for the three months ended June 30, 2010 were $117,000, compared with $142,000 in the
corresponding 2009 quarter. The decrease is primarily the result of declining revenue from
SANUWAVE s legacy Evotron device as the Company eliminated its European sales and marketing staff
in 2009 in order to focus resources in the U.S. The first shipments of the new orthoPACE devices
were made in July 2010 and the corresponding revenue and cost of goods sold will be recorded in the
third quarter of 2010.
For the second quarter of 2010, the Company reported a loss from continuing operations of $2.7
million, compared with a loss from continuing operations of $1.7 million for the same period in
2009. The higher loss is due primarily to increased research and development expenses related to
ongoing clinical work and to higher general and administrative expenses. General and
administrative expenses were higher due to increases in non-cash stock compensation expense to
$454,000 for the second quarter of 2010, from $134,000 in the prior-year quarter, due to new grants
of options and restricted stock to management and directors of the Company in September 2009 and
January 2010. In addition, higher general and administrative expenses were the result of bonus
expense of $147,000 recorded during the 2010 second quarter compared with a bonus credit of
$303,000 recorded during same period in 2009, which was the result of a reversal of the 2008 bonus
accrual determined not to be payable due to the Company s capital constraints at the time.
The net loss for the second quarter of 2010 was $2.7 million or ($0.22) per share, compared with
net income of $1.1 million or $0.10 per diluted share reported during the second quarter of 2009.
The second quarter of 2009 included a gain, net of tax, of $2.5 million on the sale of the
Company s veterinary division in June 2009.
First Half Financial Results
Revenues for the six months ended June 30, 2010 were $260,000, compared with $404,000 in the
corresponding 2009 period. The decrease is primarily the result of declining revenue from
SANUWAVE s legacy Evotron device as the Company eliminated its European sales and marketing staff
in 2009 in order to focus resources in the U.S. The first shipments of the new orthoPACE devices
were made in July 2010 and the corresponding revenue and cost of goods sold will be recorded in the
third quarter of 2010.
For the six months ended June 30, 2010, the Company reported a loss from continuing operations of
$5.7 million, compared with a loss from continuing operations of $3.8 million for the same period
in 2009. The higher loss is due primarily to increased research and development expenses related to
ongoing clinical work and to higher general and administrative expenses. General and
administrative expenses were higher due to increases in non-cash stock compensation expense to
$938,000 for the six months ended June 30, 2010, from $267,000 in the prior-year period, due to new
grants of options and restricted stock to management and directors of the Company in September 2009
and January 2010. In addition, higher general and administrative expenses were the result of bonus
expense of $297,000 recorded during first half of 2010 compared with a bonus credit of $150,000
recorded during same period in 2009, which was the result of a reversal of the 2008 bonus accrual
determined not to be payable due to the Company s capital constraints at the time.
The net loss for the six months ended June 30, 2010 was $5.7 million or ($0.46) per share, compared
with net loss of $750,000 or ($0.07) per share reported during the same period of 2009. The six
months ended June 30, 2009 included a gain, net of tax, of $2.5 million on the sale of the
Company s veterinary division in June 2009.
As of June 30, 2010 the Company had cash and cash equivalents of $277,000, compared with $1.8
million as of December 31, 2009. The Company s net cash used by continuing operations for the six
months ended June 30, 2010 was $3.0 million, compared with $4.0 million for the same period of
2009. The reduction in the use of cash from continuing operations in 2010 was primarily due to the
timing of accounts payable payments. Subsequent to quarter end, the Company issued a convertible