Amedica Corporation Reports Third Quarter 2016 Financial Results
SALT LAKE CITY, UT–(Marketwired – Nov 10, 2016) – Amedica Corporation ( NASDAQ : AMDA ), a company that develops and commercializes silicon nitride ceramics as a biomaterial platform, today announced financial results for the third quarter ended September 30, 2016.
Recent Company Highlights
- Decreased year-to-date operational cash burn by 25%
- Received FDA clearance for Valeo® II Lateral Lumbar interbody fusion device
- Submitted 510(k) to FDA for new Taurus metals system with first implantation expected by end of the year
- The first stage of testing of silicon nitride by the CFDA (chinese FDA) has begun and is expected to be completed by January 2017.
- Submitted materials testing data and clinical data to the Japan PMDA
- Reduced headcount by 38% which will reduce operating cash burn by about $2 million per year
- Submitted response to FDA clarifying 510(k) application for composite silicon nitride spacer (C+CSC)
“Despite the decrease in commercial sales this quarter, we are confident with our commercial sales strategy targeted at adding new surgeons and distributors and expanding our sales into new territories,” said Dr. Sonny Bal, Chairman and Chief Executive Officer. “Later this month, we will announce a new sales leader; a seasoned, proven individual with credibility in the spine field.”
“We believe that our silicon nitride ceramic is the best-characterized biomaterial available, and offers a compelling set of advantages, especially for use in spine surgery. Even as we explore strategic development opportunities with external partners, we will remain focused on driving our spine sales,” added Dr. Bal.
Third Quarter 2016 Financial Results
Total product revenue was $3.4 million in the third quarter of 2016 as compared to $4.8 million in the same period of 2015, a decrease of $1.4 million, or 29%. This decrease was due to lower private label sales during the quarter and weaker than expected commercial sales during the final stages of the implementation of the Company’s commercial sales expansion strategy. We expect that our commercial sales expansion strategy will be substantially completed during the fourth quarter with benefits expected to begin during the first quarter of 2017. The decrease in revenue for the third quarter 2016 was also attributable, in part, to continued market pricing pressure and hospital vendor consolidation.
Cost of revenue decreased $0.9 million, or 53%, as compared to the same period in 2015. The decrease in cost of revenue was primarily due to the decline in product sales. Excluding the impact of excess or obsolete inventory for both periods, third quarter 2016 gross margins ended at 82% of total sales, as compared to 73% 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 moratorium.
Operating expenses decreased $0.2 million, or 3%, as compared to the same period in 2015. This decline in operating expenses is primarily due to a decrease of $0.5 million in commissions as a result of decreased sales and a $0.3 million decrease in personnel related expenses. This improvements were offset by an increase of $0.6 million in legal expenses.
Net loss for the third quarter 2016 was $4.3 million, compared to a net loss of $10.1 million in the prior-year period. The reduction in net loss was primarily the result of improved gross profit, decreases in operating costs, and improvements in other income (expense).
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 third quarter 2016 was a loss of $2.7 million, compared to a loss of $2.2 million for the third quarter 2015.
Cash and cash equivalents totaled $10.6 million as of September, 2016. Operating cash burn decreased to $5.3 million for the nine months ended September 30, 2016 as compared to $7.1 million the prior year period, or 25%. Total principal debt obligations were $9.0 million as of September 30, 2016, a decrease of $1.8 million from September 30, 2015.
The Company will hold an investor conference call to discuss the financial results on Thursday November 10, 2016 at 5:00 PM Eastern Time. The Company invites all interested parties to join the call by dialing Toll Free 877-524-8416, any time after 4:50 p.m. Eastern Time on November 10th. The Conference ID number is 13649236. International callers should dial 412-902-1028. For those who are not available to listen to the live webcast, a digital replay will be archived on the investor relations section of the Amedica website under News/Events.