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Nephros Provides Corporate UpdateNephros, Inc. (OTCQB:NEPH), a commercial stage medical device company that develops and sells high performance liquid purification ultrafilters and an on-line mid-dilution hemodiafiltration system for use with a hemodialysis machine for the treatment of chronic renal failure patients, today provided an update on its operations and strategy. Recent Highlights
"This is an exciting time at Nephros as we are engaged in significant commercial activity with differentiated product lines in each of our addressable markets," stated John C. Houghton, President & CEO of Nephros. "We have recently engaged the investor relations firm PCG Advisory Group to help us increase our visibility to investors and are in the process of adding an East Coast Sales representative to provide additional sales and marketing support for our distributors and direct customers. In addition, we believe that more stringent standards for dialysis water, bundling of dialysis reimbursement payments, and the recent FDA clearance of our hospital filters can provide positive momentum for increased adoption of Nephros ultrafiltration products as we enter 2015." Dialysis Blood - U.S. On-line Mid-dilution Hemodiafiltration, Nephros HDF System The OLpur H2H HDF Module and OLpur MD 220 Hemodiafilter are cleared by the U.S. Food and Drug Administration (FDA) to market for use with an Ultrafiltration (UF) controlled hemodialysis machine that provides ultrapure dialysate in accordance with current ANSI/AAMI/ISO standards, for the treatment of patients with chronic renal failure in the United States. Our on-line mid-dilution HDF system is the only on-line mid-dilution HDF system of its kind to be cleared by the FDA to date. On May 13th, DaVita Kidney Care, a division of DaVita HealthCare Partners Inc., announced that it had commenced delivering and evaluating on-line mid-dilution hemodiafiltration treatments to select patients at DaVita's North Colorado Springs Clinic. This marked the first commercial delivery of on-line HDF via the Nephros HDF system in the United States. We anticipate evaluating our on-line mid-dilution HDF system at other clinics throughout the U.S. and although we have not begun to broadly market our on-line mid-dilution HDF system, we are actively seeking commercialization partners for the Nephros HDF system in the U.S. market. Dialysis Blood - European Hemodiafiltration, MD220 Dialyzer In February, we signed an amendment to our current license agreement with Bellco to extend and expand the existing license agreement. The amendment extends the agreement by five years through 2021 and expands the exclusive territories covered by Bellco to include Sweden, Denmark, Norway, Finland and the non-exclusive territories to include Korea, Mexico, Brazil, China and the Netherlands and grants Bellco a right of first offer in connection with a proposed sale of the Nephros patent licensed to Bellco under the agreement. In return, Nephros received €450,000. Nephros also agreed to reduce the fixed royalty payment in return for an increase in the minimum sales volumes required to retain exclusivity. The royalty period begins on January 1, 2015 and extends through December 31, 2021. Hospital and Other Healthcare Facilities Water - DSU-H and SSU-H Ultrafilters In October 2013, Nephros announced the voluntary recalls of its point of use (POU) and DSU in-line ultrafilters used in hospital water treatment applications. As a result, the company recalled all production lots of its POU filters, and also requested that customers remove and discard certain labeling/promotional materials for the products. In addition, the company also requested, for the DSU in-line ultrafilter, that customers remove and discard certain labeling/promotional materials for the product. These voluntary recalls did not affect the company's dialysis products. On October 28th, we announced that we had received 510(k) clearance from the FDA to market our DSU-H and SSU-H Ultrafilters for use in the hospital setting. We ave been working with our existing distributors, Chem-Aqua, Garratt Callahan, H-O-H Water Technology and Total Quality Medical to prepare for the formal launch of these products in January of 2015. The DSU-H and SSU-H Ultrafilters are intended to be used to filter EPA quality drinking water. The filters retain bacteria, viruses and endotoxin. By providing ultrapure water for patient washing and drinking, the filters aid in infection control. The filters also produce water that is suitable for wound cleansing, cleaning of equipment used in medical procedures and washing of surgeon's hands. The filters are not intended to provide water that can be used as a substitute for USP sterile water. Military and Outdoor Recreation Water - HydraGuard In response to a Special Notice Announcement from the U.S. Army, Nephros submitted its individual water purification device (IWPD) containing the Nephros proprietary ultrafilter technology for consideration as part of a standard issue personal hydration pack for soldiers in the field. Nephros was informed by the Military Government Review Agency that its IWPD had been validated to meet the military's NSF P248 standard as a microbiological water treatment device for military operations. In February 2013, Nephros submitted its response to a U.S. Army request for proposal (RFP) relating to IWPDs. In August 2014, we were notified that the Army had cancelled the RFP, and a new request for information (RFI) was released in October. Nephros submitted its response to the RFI in November. We anticipate that the Army will release a new RFP in the first quarter of 2015; however, we have no control over when or if such RFP will be released. In addition to the RFI, we continue to make the HydraGuard available to the U.S. military via our distributor agreements with W.S. Darley & Company, Source (News - Alert) One Distribution Inc. and Atlantic Diving Supply, Inc. This press release does not constitute an offer to sell or a solicitation of an offer to buy securities of the company, nor shall there be any sale of such securities, in any jurisdiction in which such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any jurisdiction. About Nephros, Inc. Nephros is a commercial stage medical device company that develops and sells high performance liquid purification filters. Our filters, which we call ultrafilters, are primarily used in dialysis centers for the removal of biological contaminants from water, bicarbonate concentrate and/or blood. We were founded in 1997 by healthcare professionals affiliated with Columbia University Medical Center/New York-Presbyterian Hospital to develop and commercialize an alternative method to hemodialysis (HD). We have extended our filtration technologies to meet the demand for liquid purification in other areas, in particular water purification. Presently, we offer ultrafilters for sale to customers in five markets:
For more information about Nephros, please visit the company's website at www.nephros.com. Forward-Looking Statements Certain statements in this press release constitute "forward-looking statements." Such statements include statements regarding the efficacy and intended use of our technologies under development, the timelines for bringing such products to market and the availability of funding sources for continued development of such products and other statements that are not historical facts, including statements which may be accompanied by the words "intends," "may," "will," "plans," "expects," "anticipates," "projects," "predicts," "estimates," "aims," "believes," "hopes," "potential" or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond our control. Actual results may differ materially from the expectations contained in the forward-looking statements. Factors that may cause such differences include, but are not limited to, the risks that: (i) we may not be able to continue as a going concern; (ii) we may not be able to obtain funding if and when needed or on terms favorable to us in order to continue operations and successfully implement our business plan; (iii) we face significant challenges in obtaining market acceptance of our products and sales growth in key geographic areas, which could adversely affect our potential sales and revenues; (iv) a default under the terms of the secured note with Lambda Investors LLC would result in the lender foreclosing upon substantially all of our assets and could result in our inability to continue business operations and restrictions in the secured note and related security agreement may restrict our ability to operate our business, sell the company or sell our assets; (v) we may not be able to complete the contemplated rights offering which could result in our inability to continue business operations; (vi) we face potential liability associated with the production, marketing and sale of our products including with respect to potential serious injuries, product-related deaths or product malfunctions, product recalls, product liability claims, class action lawsuits or other events that could cause us to incur expenses and may also limit our ability to generate revenues from such products; (vii) to the extent our products or marketing materials are found to violate any provisions of the FDC Act or any other statutes or regulations then we could be subject to enforcement actions by the FDA or other governmental agencies; (viii) the voluntary recalls of point of use and DSU in-line ultrafilters used in hospital water treatment applications announced on October 30, 2013 and the related circumstances could subject us to claims or proceedings by consumers, the FDA or other regulatory authorities which may adversely impact our sales and revenues; (ix) we may encounter problems with our suppliers, manufacturers and distributors; (x) we may encounter unanticipated internal control deficiencies or weaknesses or ineffective disclosure controls and procedures; and (xi) we may not be able to secure or enforce adequate legal protection, including patent protection, for our products. More detailed information about us and the risk factors that may affect the realization of forward-looking statements, including the forward-looking statements contained in this press release, is set forth in our filings with the SEC (News - Alert), including our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, and our other periodic reports filed with the SEC. We urge investors and security holders to read those documents free of charge at the SEC's website at www.sec.gov. We do not undertake to publicly update or revise our forward-looking statements as a result of new information, future events or otherwise, except as required by law.
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