Amedica Corporation (NASDAQ:AMDA), a company that develops and commercializes silicon nitride ceramics as a biomaterial platform, today announced financial results for the first quarter ended March 31, 2016.
Recent Company Highlights
- Improved Q1 operational cash burn by 51%
- Signed an exclusive silicon nitride distribution agreement with the largest Chinese orthopedic company
- Completed debt exchange agreement and reduced debt by 47% from July 2015
- Met in-person with the FDA regarding the Company’s composite silicon nitride fusion device and intend to submit a response to their inquiry by the end of May
- Became first to 3D print silicon nitride ceramic for medical applications
- Featured unique silicon nitride attributes in several key industry events and publications
- Launched Valeo II™ silicon nitride cervical interbody fusion system
- Signed additional material testing agreements with key orthopedic, dental and other companies
- Announced collaboration on biologically enhanced spinal fusion devices
“I’m pleased with the continued progress we made during the quarter to improve our financial position and support sustainable long-term growth,” said Dr. Sonny Bal, chairman and CEO of Amedica Corporation. “Following our recent in-person meeting with the FDA, we look forward to submitting our response to their inquiry soon and anticipate a final determination from the FDA within 60 days after our submission.”
“As evidenced by our rigorous scientific publication strategy and recent announcement with Weigao Orthopaedics, the momentum taking place within our private label and OEM strategy confirms the unique benefits found only in our advanced silicon nitride technology,” continued Dr. Bal. “Despite lower private label sales and commercial sales declines in a key geographic region this quarter, I’m confident with the commercial sales strategy we began implementing at the end of last year to ensure our surgeons and distributors can enjoy the benefits of our advanced technologies and personalized approaches for their specific needs. As more sales professionals are brought on board and we fully implement our strategy during the first half of the year, I’m confident in our ability to accelerate the adoption of silicon nitride, strengthen our balance sheet, and deliver innovative product launches throughout the balance of this year to increase annual sales and drive excitement for Amedica’s future.”
First Quarter 2016 Financial Results
Total product revenue was $4.2 million in the first quarter of 2016 as compared to $4.7 million in the same period 2015, a decrease of $0.5 million, or 12%. This decrease was due to lower private label sales during the quarter and weaker than expected commercial sales in a key geographic area during the implementation of the Company’s commercial sales expansion strategy. This plan will be fully implemented by the third quarter with benefits expected to be realized during the second half of 2016. The decrease in revenue for the first quarter 2016 was also attributable, in part, to continued market pricing pressure and hospital vendor consolidation.
Cost of revenue decreased $0.6 million, or 41%, as compared to the same period in 2015. The decrease in cost of revenue was primarily due to the decline in sales and the moratorium on the medical device excise tax in addition to receiving a refund for the medical device excise tax. Excluding the impact of excess or obsolete inventory for both periods, first quarter 2016 gross margins ended at 88% of total sales, as compared to 75% during the prior year period. The increase in gross margins as a percentage of sales is primarily attributable to lower private label sales, which have lower gross margins, and to a lesser extent, the impact of the medical device excise tax.
Operating expenses decreased $1.5 million, or 20%, as compared to the same period in 2015. This decline in operating expenses is primarily due to a decrease of $0.7 million in severance expense, a $0.5 million decrease in other personnel related expenses, and a $0.6 million decrease in stock based compensation expense. This was partially offset by a $0.3 million increase in operating expenses that could not be capitalized to inventory as compared to the same period in 2015.
Net loss for the first quarter 2016 was $3.4 million, compared to $5.4 million in the prior-year period, primarily as a result of improved gross profit and decreases in operating costs and other expenses during the quarter.
Adjusted EBITDA, which is defined as earnings before deductions for interest, taxes, depreciation, amortization, non-cash stock compensation expense, change in fair value of derivative liabilities, offering costs, loss on extinguishment of derivative liabilities and loss on extinguishment of debt for the first quarter 2016 was a loss of $1.9 million, compared to a loss of $2.9 million for the first quarter 2015.
Cash and cash equivalents totaled $7.9 million as of March 31, 2016. Operating cash burn decreased to $1.5 million for the three months ended March 31, 2016 as compared to $3.0 million the prior year period, or 51%. Total principal debt obligations were $16.0 million as of March 31, 2016, a decrease of $8.3 million from March 31, 2015. (Original Source)
Shares of Amedica are down over 7% to $1.39 in after-hours trading. AMDA has a 1-year high of $12.59 and a 1-year low of $1.16. The stock’s 50-day moving average is $1.59 and its 200-day moving average is $2.08.
Amedica Corp. operates as a commercial biomaterial company that focuses on using its silicon nitride technology platform to develop, manufacture and sell a broad range of medical devices. It currently markets spinal fusion products and are developing products for use in total hip and knee joint replacements. The company market a complementary line of non-silicon nitride spinal fusion products which allows it to provide surgeons and hospitals with a broader range of products. These products include three lines of spinal fusion devices and five types of orthobiologics, which are used by surgeons to help promote bone growth and fusion in spinal fusion procedures. The company was founded by Aaron A. Hofmann and Ashok C. Khandkar on December 10, 1996 and is headquartered in Salt Lake City, UT.