Perth-based burns treatment developer Clinical Cell Culture Ltd, or C3, has announced that lower-than-expected sales and approval delays will keep it from reaching its $5-7 million revenue target for the 2007 financial year.
Perth-based burns treatment developer Clinical Cell Culture Ltd, or C3, has announced that lower-than-expected sales and approval delays will keep it from reaching its $5-7 million revenue target for the 2007 financial year.
C3 chief executive Bob Atwill said he expected revenue would be similar to last year's $1.1 million, identifying the recent trends as being of concern to the company.
The full text of a company announcement is pasted below
Clinical Cell Culture Ltd today announces revised guidance to the market in relation to revenue targets for the 2007 financial year.
The Board of C3 wishes to advise that the revenue target of $5-7 million for the 2007 financial year will not be met.
The revision has resulted from a number of factors, including lower than expected sales from existing and new markets as well as delays in approvals in major countries, the implications of which have only become apparent in recent times.
In the quarterly update announced to the market on 30 January 2007, the Company noted that there were a number of areas that needed to show significant improvement in the current quarter if revenue milestones were to be met. These were:
- A material improvement in sales traction from existing markets for ReCell
- Reinvigoration of CellSpray and CellSpray XP
- Ensuring no further slippage in the regulatory approval process in Russia, Mexico and China
In addition the Company continues to experience delays in patient recruitment in the FDA trial. To date a total of 18 patients have been screened with no patients meeting the criteria for inclusion in the trial.
Both ReCell and CellSpray reorder rates and volumes since the start of the 2007 calendar year have been materially less than expected. With respect to CellSpray and CellSpray XP no new patients have been treated since December 2006.
Regulatory approval remains outstanding in Russia and Mexico and, due to a request for extended testing, the Chinese approval decision will now be pushed back to Q3/Q4 CY 2007. These three major countries accounted for a significant portion of the 2007 forecast and it is now unlikely any revenue will be derived from these countries in FY 2007.
As a result of all these factors the Board of C3 has formed the view that the above mentioned milestones will not be achieved.
C3 Chief Executive Officer Bob Atwill said the recent trends were a concern. He said that revenue for this financial year will be reasonably similar to last year.
The Board is undertaking a detailed assessment of sales activity and prospects for FY07 and beyond, including the commissioning of an external review of the Company's short and medium term strategic options, to be completed by 28 March 2007.
C3 Chairman Dalton Gooding said the revised revenue guidance was very disappointing and the Board had resolved to take immediate action.
"The Board regrets having to inform shareholders that the revenue target will not be achieved," said Mr Gooding.
"We are considering a range of short and medium term strategic options, as well as implementing a number of immediate and material cost saving initiatives."
