OSIR » Topics » Year ended December 31, 2008 compared to December 31, 2007

These excerpts taken from the OSIR 10-K filed Mar 16, 2009.

Year ended December 31, 2008 compared to December 31, 2007

Revenue

        Total revenues increased to $10.0 million for the twelve months ended December 31, 2008 from $2.0 million in the corresponding period in 2007. The increase is the result of the Genzyme Collaboration Agreement and the DoD contract, each of which was entered during 2008, and the JDRF agreement entered into in 2007. Revenues in 2007 included $1.3 million of unamortized license fees that was recognized in 2007 upon the termination of the agreement with Boston Scientific Corporation in December 2007.

Research and Development Expenses

        Research and development expenses were $69.9 million for the twelve months ended December 31, 2008 compared to $47.1 million in the prior year. The increase in research and development expenses in 2008 reflects the increased number of clinical trials in process versus the prior year and the resulting increases in clinical doses of our drug candidates. We also incurred additional research and

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development costs in connection with the development of our Biologics License Application ("BLA") as we approach the commercialization of Prochymal.

General and Administrative Expenses

        General and administrative expenses were $8.3 million for the twelve months ended December 31, 2008 compared to $6.0 million in the prior year. The increase was attributable to additional personnel and related costs to support our expanded operations as we approach the anticipated commercialization of Prochymal.

Share Based Payments to Related Parties

        We pay fees to members of our Board of Directors through grants of our common stock and/or a combination of stock and cash. In 2008, we issued 21,500 shares of common stock for services on the Board and valued these shares at the then current closing price of our stock on the NASDAQ Global Market, resulting in the $0.3 million charge. In 2007, we also issued 21,5000 shares of common stock for services on the Board and recorded a $0.1 million charge.

Interest Expense, Net

        Interest expense, net was $1.0 million for the twelve months ended December 31, 2008 compared to $6.7 million in the prior year. Interest expense decreased significantly in 2008 due to a reduced amount of debt outstanding throughout the year. We did not have any debt outstanding as of December 31, 2008. Interest expense in 2008 included $0.5 million paid to related parties, as discussed more fully in Note 9 to the accompanying financial statements included in Item 8 to this Annual Report on Form 10-K. Interest expense in 2007 also includes a non-cash charge of $4.8 million resulting from the induced conversion of $18.8 million of our convertible promissory notes into common stock and $0.3 million of previously deferred debt financing fees.

Year ended December 31, 2008 compared to December 31, 2007



Revenue



        Total revenues increased to $10.0 million for the twelve months ended December 31, 2008 from $2.0 million in the
corresponding period in 2007. The increase is the result of the Genzyme Collaboration Agreement and the DoD contract, each of which was entered during 2008, and the JDRF agreement entered into in
2007. Revenues in 2007 included $1.3 million of unamortized license fees that was recognized in 2007 upon the termination of the agreement with Boston Scientific Corporation in December 2007.



Research and Development Expenses



        Research and development expenses were $69.9 million for the twelve months ended December 31, 2008 compared to
$47.1 million in the prior year. The increase in research and development expenses in 2008 reflects the increased number of clinical trials in process versus the prior year and the resulting
increases in clinical doses of our drug candidates. We also incurred additional research and



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HREF="#bg14501a_main_toc">Table of Contents






development
costs in connection with the development of our Biologics License Application ("BLA") as we approach the commercialization of Prochymal.




General and Administrative Expenses



        General and administrative expenses were $8.3 million for the twelve months ended December 31, 2008 compared to
$6.0 million in the prior year. The increase was attributable to additional personnel and related costs to support our expanded operations as we approach the anticipated commercialization of
Prochymal.



Share Based Payments to Related Parties



        We pay fees to members of our Board of Directors through grants of our common stock and/or a combination of stock and cash. In 2008, we
issued 21,500 shares of common stock for services on the Board and valued these shares at the then current closing price of our stock on the NASDAQ Global Market, resulting in the $0.3 million
charge. In 2007, we also issued 21,5000 shares of common stock for services on the Board and recorded a $0.1 million charge.



Interest Expense, Net



        Interest expense, net was $1.0 million for the twelve months ended December 31, 2008 compared to $6.7 million in
the prior year. Interest expense decreased significantly in 2008 due to a reduced amount of debt outstanding throughout the year. We did not have any debt outstanding as of December 31, 2008.
Interest expense in 2008 included $0.5 million paid to related parties, as discussed more fully in Note 9 to the accompanying financial statements included in Item 8 to this
Annual Report on Form 10-K. Interest expense in 2007 also includes a non-cash charge of $4.8 million resulting from the induced conversion of $18.8 million of our
convertible promissory notes into common stock and $0.3 million of previously deferred debt financing fees.



EXCERPTS ON THIS PAGE:

10-K (2 sections)
Mar 16, 2009
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