CollPlant Biotechnologies announces financial results for the second quarter ended June 30, 2022

CollPlant Biotechnologies (NASDAQ: CLGN), a regenerative and aesthetic medicine company developing innovative human collagen-based technologies and products for tissue regeneration and organ manufacturing, announced financial results for the second quarter ended June 30, 2022 and provided an update on the Company’s business developments.

“I am very pleased with the company’s execution and significant advances across our diverse and expanding product portfolio. We are targeting large commercial opportunities where we believe our recombinant human collagen (rhCollagen) has the ability to deliver performance and safety advantages,” said Yehiel Tal, CollPlant’s Chief Executive Officer. “Our agreement with AbbVie to co-develop dermal and soft tissue fillers with rejuvenative properties for the medical aesthetic market is a perfect example of our strategy.  We are excited by the direction of this program  and continue as well  to develop on our own the agreement’s option products, including a photocurable dermal filler and an injectable breast implant.”

“We also continue to make important progress with our 3D bioprinted regenerative breast implant program, and anticipate our first large animal study to conclude as planned by the end of 2022. Our collagen-based implants have the potential to meet an enormous unmet need by overcoming the safety challenges of existing breast procedures while promoting natural tissue regeneration. The results of this study, which will evaluate formulation, surgical technique, implant degradation rate and vascularization, will provide the basis for the design of a large pivotal study planned to begin in Q1 2023. We anticipate these studies to support advancement to human clinical trials”.

Recent Corporate Highlights

Strategic Collaboration Agreement with AbbVie: CollPlant’s exclusive worldwide development and commercialization agreement with AbbVie for dermal and soft tissue fillers continues to advance. Within the framework of this collaboration, CollPlant’s proprietary rhCollagen and AbbVie’s technology are combined to develop products for the medical aesthetic market. In February 2021, CollPlant received an upfront payment of $14 million and has the potential to receive an additional $89 million in milestone and option payments for additional products, which include an injectable breast implant and photocurable dermal filler. According to the agreement, CollPlant will also receive royalties on product sales and will manufacture and sell rhCollagen to AbbVie.

3D Bioprinted Regenerative Breast Implant Program:  CollPlant’s implants are comprised of the Company’s plant-derived rhCollagen in combination with other biomaterials, and intended to degrade over time while promoting natural tissue regeneration. The 3D bioprinting technology used for the implant fabrication, enables scalable production of highly precise and repeatable constructs, which can be customized to the individual anatomy of a patient. CollPlant initiated a large animal study in June 2022 which is expected to conclude by the end of 2022. The global market for breast implants is estimated to be $2.5B.

Aseptic Production Process for rhCollagen:  CollPlant is developing and implementing a fully controlled, closed-loop production process to mass produce sterile rhCollagen. The sterile plant-based collagen is expected to provide better bifunctionality and homogeneity relative to collagen derived from animals or cadavers, with improved safety and reduced risk of contamination.

rhCollagen-based Bioinks: In November 2021, CollPlant launched Collink.3D, a collagen-based Bioink platform, designed to support a wide variety of 3D bioprinting applications. Collink.3D is the first of a portfolio of Bioink products and CollPlant intends to release two additional Bioinks in Q4 2022.

Second Quarter 2022 Financial Results

Cash, cash equivalents and short-term deposits as of June 30, 2022, were $36.3 million.

GAAP revenues for the second quarter of 2022 were $66,000 and included mainly income from sales of the Company’ BioInk and rhCollagen. Revenues decreased by $625,000 compared to $691,000 in the second quarter of 2021 which mainly related to a decrease in sales of BioInk and Vergenix products.

GAAP cost of revenue for the second quarter of 2022, was $43,000, a decrease of 90% compared to $429,000 in the second quarter of 2021. Cost of revenue includes mainly the cost of the Company’ rhCollagen based products, and royalties to the IIA for our sales. The decrease in cost of revenue in the amount of approximately $386,000 is mainly comprised of: (i) approximately $145,000 in royalty expenses to the IIA, inventory impairment and (ii) approximately $241,000 relating to BioInk, FG and rhCollagen sales.

GAAP gross profit for the second quarter of 2022 was $23,000, compared to gross profit of $262,000 in the second quarter of 2021.

GAAP operating expenses for the second quarter of 2022 were $4.2 million compared to $3.3 million in the second quarter of 2021. The net increase of $900,000 in expenses is mainly comprised of: (i) $453,000 in research and product development activities including process development, (ii) $235,000 in employees’ salaries and share base compensation, including recruitment of new employees for development of new products in 3D bioprinting and medical aesthetics, and (iii) $520,000 in employees and director’s salaries and insurance policy expenses, offset by (iv) a decrease of  $410,000 in one-time legal expenses  relating to the end of the Company’s ADS program, and the registration of the ordinary shares for listing on Nasdaq Global Market in 2021. On a non-GAAP basis, the operating expenses for the second quarter of 2022 were $3.9 million compared to $2.8 million in the second quarter of 2021. Non-GAAP measures exclude certain non-cash expenses.

GAAP financial expenses, net for the second quarter of 2022 totalled $100,000 compared to financial income net, of $25,000 in the second quarter of 2021. The increase in financial expenses is due to the weakening of the Dollar currency compared to the Shekel currency during the second quarter, and the corresponding effect on the Company’s lease liabilities.

GAAP net loss for the second quarter of 2022 was $4.3 million or $0.39 basic loss per share, compared to a net loss of $3 million, or $0.30 basic loss per share, for the second quarter of 2021. Non-GAAP net loss for the second quarter of 2022 was $4 million or $0.36 loss per share, compared to a net loss of $2.5 million, or $0.25 basic loss per share, for the second quarter of 2021.

Six months period ended June 30, 2022, compared to six months period ended June 30, 2021

GAAP revenues for the six months ended June 30, 2022, were $132,000 and included mainly income from sales of the Company’ BioInk and rhCollagen. Revenues decreased by $15.1 million compared to $15.2 million in the six months ended June 30, 2021 which mainly derived from the $14 million consideration for the license granted to AbbVie and to decrease in sales of BioInk Vergenix products.

GAAP gross profit for the six months ended June 30, 2022, was $58,000, compared to gross profit of $13.9 million in the six months ended June 30, 2021.

GAAP operating expenses for the six months ended June 30, 2022, accumulated to $8 million, compared to $6.9 million in the six months ended June 30, 2021. The net increase of $1.1 million in expenses is mainly comprised of: (i) an increase of $784,000 in research and product development activities including process development, (ii) an increase of $538,000 in employees’ salaries and share base compensation, including recruitment of new employees for development of new products in 3D bioprinting and medical aesthetics, (iii) an increase of $210,000 in general and administrative employees and directors salaries and insurance policy expenses, offset by (iv) a decrease of  $410,000 in one-time legal expenses  relating to the end of the Company’s ADS program, and the registration of the ordinary shares for listing on Nasdaq Global Market in 2021. On a non-GAAP basis, the operating expenses for the  six months ended June 30, 2022 were $3.9 million compared to $2.8 million in the six months ended June 30,  2021. Non-GAAP measures exclude certain non-cash expenses.

GAAP financial expenses, net for the six months ended June 30, 2022, totaled $192,000 compared to financial income net, of $123,000 in the six months ended June 30, 2021. The increase in financial expenses is due to the weakening of the Dollar currency compared to the Shekel currency mainly during the second quarter, and the corresponding effect on the Company’s lease liabilities.

GAAP net loss for the six months ended June 30, 2022 was $8.1 million, or $0.74 basic loss per share, compared to a net income of $7.1 million, or $0.76 basic income per share, for the six months ended June 30, 2021. Non-GAAP net loss for the six months ended June 30, 2022 was $7.5 million, or $0.69 basic loss per share, compared to $7.9 million income, or $0.85 basic income per share, for the six months ended June 30, 2021.

Cash used in operating activities during the six months ended June 30, 2022, was $7.2 million compared to $7.7 million cash provided from operating activities in the six months ended June 30, 2021. The change is mainly attributed to the $14 million consideration for the license granted to AbbVie in 2021.

Cash provided by investing activities during the six months ended June 30, 2022, was $30 million compared to $30.4 cash used in the six months ended June 30, 2021. The change is mainly attributed to repayment and investment in short term cash deposits.

Cash provided by financing activities during the six months ended June 30, 2022, was $1.5 million compared to cash provided by financing activities of $36.9 million in the six months ended June 30, 2021. The decrease is mainly attributed to the Company’s registered direct offering in February 2021, which resulted in net proceeds of $32 million and  $4.1 million proceeds in exercise of options and warrants.

For more information, please visit collplant.com.