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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 5, 1999
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Aastrom Biosciences, Inc.
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(Exact name of registrant as specified in charter)
Michigan 0-22025 94-3096597
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
24 Frank Lloyd Wright Drive, P.O. Box 376, Ann Arbor Michigan 48106
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (734) 930-5555
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
Aastrom has announced its retention of Salomon Smith Barney to assist it
with corporate strategic alternatives, including a possible merger or
acquisition. Concurrently, Aastrom announces reductions in its operations to
align its resources with the merger and acquisition process. See press
releases attached hereto as Exhibits 99.1 and 99.2.
Item 7. Exhibits.
(a) Financial statements of business acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
Exhibit
No. Description
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99.1 Press Release dated October 5, 1999
99.2 Press Release dated October 21, 1999
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Aastrom Biosciences, Inc.
By: /s/ Todd E. Simpson
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Vice President, Finance and Administration
and Chief Financial Officer (Principal
Date: October 25, 1999 Financial and Accounting Officer)
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EXHIBIT INDEX
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Exhibit
No. Description
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99.1 Press Release dated October 5, 1999
99.2 Press Release dated October 21, 1999
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Exhibit 99.1
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For Immediate Release
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AASTROM BIOSCIENCES RETAINS SALOMON SMITH BARNEY FOR
MERGER AND ACQUISITION SERVICES
-- Company Plans to Streamline Operations to Facilitate Merger and Acquisition
Activities --
Ann Arbor, Michigan, October 5, 1999 -- Aastrom Biosciences, Inc. (Nasdaq: ASTM)
announced today the retention of Salomon Smith Barney to assist the Company with
corporate strategic alternatives, including possible merger or acquisition.
Concurrent with this action, Aastrom plans to reduce operations to align the use
of its current resources with the Company's increased focus on the merger and
acquisition process.
"The purpose of these expanded acquisition activities is to seek broader market
opportunities for the AastromReplicell(TM) System product line and to develop
new product areas for Aastrom's technology," stated R. Douglas Armstrong, Ph.D.,
President and CEO of Aastrom Biosciences. Dr. Armstrong continued, "Given the
current financing alternatives available to the Company in the capital markets
in both the U.S. and Europe, we believe that a business combination can best
achieve these objectives. Salomon Smith Barney will provide us with significant
expertise in this process."
Aastrom has developed technology to enable the production of primary human cells
outside of the body and the AastromReplicell(TM) System to make living cells
accessible to care providers and patients for therapeutic procedures. This
patented technology has been shown to enable the production of human stem cells,
and allows other human cells such as T-cells, dendritic cells, and the cells
that give rise to bone and cartilage, to be grown with superior biological
characteristics compared to standard cell culture processes.
Aastrom is currently selling the AastromReplicell(TM) System in Europe for stem
cell and cord blood transplants, and has conducted clinical trials in the U.S.
for similar applications, including a Phase III-type trial in breast cancer
patients which is currently in process. The plan to reduce operations towards a
new strategic alliance will cause a suspension of further European marketing of
the AastromReplicell(TM) System and also deferral of Aastrom's U.S. clinical
trial programs. This action will allow the Company to reduce headcount to bring
down overall operating expenses. Aastrom intends to continue grant-funded
research activities, as well as preparatory activities for clinical trials in
adult cord blood transplantation and in the treatment of severe osteoporosis,
while merger and acquisition efforts are underway.
The Company also recently established a wholly-owned German subsidiary, Zellera
AG (Zellera), in Berlin, to pursue the development of non-stem cell therapy
applications of the Company's technologies. Private equity and German
government-subsidized funding is being pursued. This funding, if obtained, will
be used to support Zellera's own operations, but is not expected to directly
support Aastrom.
Aastrom Biosciences, Inc. is pioneering the development of proprietary clinical
systems including the AastromReplicell(TM) System, a first of its kind product,
to enable physicians and
<PAGE>
patients greater accessibility to cells used for therapy. Aastrom has received
patents covering methods and devices for the ex vivo production of human stem
and other types of cells, as well as for the genetic modification of stem cells.
The AastromReplicell(TM) System is under development, and is not available for
sale at this time in the U.S., except for research and investigational use.
This document contains forward-looking statements, including without limitation,
statements concerning potential strategic alliances, product development
objectives, clinical trial results, commercial introduction, and potential
advantages of the AastromReplicell(TM) System, which involve certain risks and
uncertainties. The forward-looking statements are also identified through use of
the words "anticipates," "believes," "intends," "expects," "plans," and other
words of similar meaning. Actual results may differ significantly from the
expectations contained in the forward-looking statements. Among the factors that
may result in differences are the availability of resources, evaluations by
potential strategic collaborators or acquirers, the results obtained from
clinical trial and development activities, regulatory approval requirements,
market demand in areas where the Company's products have been launched and the
degree to which the Company's products achieve market acceptance. These and
other significant factors are discussed in greater detail in Aastrom's Annual
Report on Form-10K and other filings with the Securities and Exchange
Commission.
Contact: Todd E. Simpson
VP Finance & Administration, CFO
Aastrom Biosciences, Inc.
phone: 734-930-5777
Investor & Media
Contacts: Francesca T. DeVellis
Feinstein Kean Partners Inc.
phone: 617-577-8110
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Exhibit 99.2
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For Immediate Release
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AASTROM BIOSCIENCES REPORTS FINANCIAL RESULTS
FOR ITS FIRST FISCAL QUARTER
-- Company Also Initiates Planned Operational Changes to Support Business
Combination Strategy --
Ann Arbor, Michigan, October 21, 1999 - Aastrom Biosciences, Inc. (Nasdaq: ASTM)
announced today financial results for its first fiscal quarter. The Company
also announced the initiation of planned reductions in operations designed to
decrease operating expenses and to align the Company's resources with its
current focus on pursuing corporate strategic alternatives, including a possible
merger or acquisition. Aastrom has retained Salomon Smith Barney to assist with
this process.
For the first quarter ended September 30, 1999, the Company reported a net loss
of $3,535,000, or $.21 per common share, compared to a net loss of $3,362,000,
or $.27 per common share for the same period last year. Revenues were $385,000
for the quarter ended September 30, 1999 compared to $163,000 in 1998. The
revenues for the first quarter of fiscal year 2000 include product sales of
$114,000 for AastromReplicell(TM) System therapy kits and equipment rentals, up
from $34,000 last quarter. They also reflect repeat sales of therapy kits from
the fourth quarter of the last fiscal year. There were no sales or rental
revenues in the quarter ended September 30, 1998.
"The Company has now successfully brought its first product, the
AastromReplicell(TM) System, to the European marketplace for stem cell and cord
blood therapies, and we are pleased to report increased product revenues.
However, given the current financing alternatives available to the Company in
the U.S. and European capital markets, we believe that a business combination
can best achieve the objective of leveraging the product line into broader
market opportunities," stated R. Douglas Armstrong, Ph.D., President and CEO of
Aastrom. Dr. Armstrong continued, "The previously planned operational changes
that we are now implementing are intended to use our existing resources to best
support the corporate partnering direction."
Costs and expenses for the quarter ended September 30, 1999 were $4,001,000,
compared to $3,744,000 in 1998. Management noted that cost and expenses for the
quarter ended September 30, 1999 include cost of product sales of $1,230,000,
consisting principally of AastromReplicell(TM) System inventory that was written
down as a result of the operational changes being announced today. Otherwise,
1999 expenses reflect a decline in research and development expense for the
AastromReplicell(TM) System from $3,093,000 in 1998 to $1,610,000 in 1999 as the
product line reached the European marketplace. Selling, general and
administrative expense increased from $651,000 in 1998 to $1,161,000 in 1999,
relating to increased European marketing costs for the AastromReplicell(TM)
System and other European activities.
The operational changes are expected to reduce recurring operating expenses by
an estimated 30%. Staff and operations that are required for product support,
technology transfer and key management to support the merger and acquisition
process have been retained. Grant-funded research activities will also continue,
as well as preparatory activities for clinical trials in adult
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cord blood transplantation and in the treatment of severe osteoporosis. The
Company has suspended further European marketing of the AastromReplicell(TM)
System and has deferred its U.S. clinical trial programs while strategic
partnering is pursued. Further reductions in expenses may become necessary to
bring the partnering process to completion.
Aastrom reported cash reserves of $5,015,000 at September 30, 1999 and expects
to report severance and other costs related to the operational changes announced
today in its results for the quarter ended December 31, 1999.
Aastrom Biosciences, Inc. is pioneering the development of proprietary clinical
systems including the AastromReplicell(TM) System, a first of its kind product,
to enable physicians and patients greater accessibility to cells used for
therapy. Aastrom has received patents covering methods and devices for the ex
vivo production of human stem and other types of cells, as well as for the
genetic modification of stem cells. The AastromReplicell(TM) System is under
development, and is not available for sale at this time in the U.S., except for
research and investigational use.
This document contains forward-looking statements, including without limitation,
statements concerning potential strategic alliances, possible merger and
acquisition activities, product development objectives, clinical trial results,
commercial introduction, and potential advantages and applications of the
AastromReplicell(TM) System, which involve certain risks and uncertainties. The
forward-looking statements are also identified through use of the words
"anticipates," "believes," "intends," "expects," "plans," and other words of
similar meaning. Actual results may differ significantly from the expectations
contained in the forward-looking statements. Among the factors that may result
in differences are the availability of resources, evaluations and decisions made
by potential strategic collaborators or acquirers, the results obtained from
clinical trial and development activities, regulatory approval requirements,
market demand in areas where the Company's products have been launched and the
degree to which the Company's products achieve market acceptance. These and
other significant factors are discussed in greater detail in Aastrom's Annual
Report on Form-10K and other filings with the Securities and Exchange
Commission.
Contact: Todd E. Simpson
VP Finance and Administration, CFO
Aastrom Biosciences, Inc.
phone: 734-930-5777
Investor & Media
Contacts: Francesca T. DeVellis
Feinstein Kean Partners Inc.
phone: 617-577-8110
- Financial Table Follows -
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AASTROM BIOSCIENCES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
<TABLE>
<CAPTION>
Quarter ended September 30,
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1998 1999
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(Unaudited)
<S> <C> <C>
REVENUES:
Product sales and rentals............................. $ - $ 114,000
Grants and other...................................... 163,000 271,000
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Total revenues....................................... 163,000 385,000
COSTS AND EXPENSES:
Cost of product sales and rentals..................... - 1,230,000
Research and development.............................. 3,093,000 1,610,000
Selling, general and administrative................... 651,000 1,161,000
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Total costs and expenses............................. 3,744,000 4,001,000
OTHER INCOME........................................... 219,000 81,000
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NET LOSS............................................... $(3,362,000) $(3,535,000)
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COMPUTATION OF NET LOSS
APPLICABLE TO COMMON SHARES:
Net loss............................................... $(3,362,000) $(3,535,000)
Dividends and yields on Preferred Stock............... (220,000) (96,000)
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Net loss applicable to Common Shares................... $(3,582,000) $(3,631,000)
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NET LOSS PER COMMON SHARE (Basic and Diluted).......... $(.27) $(.21)
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Weighted average number of common shares outstanding... 13,384,000 16,985,000
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<CAPTION>
CONSOLIDATED BALANCE SHEET DATA:
September 30,
1999
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<S> <C>
ASSETS
Cash, cash equivalents and short-term investments..... $ 5,015,000
Other current assets.................................. 791,000
Property, net......................................... 448,000
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Total assets......................................... $ 6,254,000
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities................................... $ 1,254,000
Shareholders' equity.................................. 5,000,000
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Total liabilities and shareholders' equity........... $ 6,254,000
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</TABLE>
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