Artes Medical Forms New Subsidiary to Commercially Develop and License Medical Applications of Its Microsphere Technology

SAN DIEGO--(BUSINESS WIRE)--Jun 12, 2007 - Artes Medical, Inc. (Nasdaq:ARTE) today announced the formation of a new wholly-owned subsidiary named Spheris Medical, Inc. to develop and commercialize new and innovative medical applications of its proprietary microsphere tissue bulking technology. Artes Medical's proprietary technology is currently incorporated in ArteFill(R), the first and only FDA-approved non-resorbable injectable dermal filler for the correction of wrinkles known as smile lines or nasolabial folds. Artes Medical will license the non-aesthetic applications of its medical technology to Spheris Medical, which going forward will focus on the development of new product applications, enter into licensing arrangements and selected strategic partnerships.

Spheris Medical plans to apply Artes Medical's patented microsphere technology to develop soft tissue augmentation products which provide long-lasting tissue reshaping for a variety of therapeutic uses. In pre-clinical studies, materials produced with the Artes Medical technology have been used to provide bulking of the esophageal sphincter and the urinary sphincter to assess the possible use of the technology for the treatment of GERD (Gastro Esophageal Reflux Disease) and SUI (Stress Urinary Incontinence). Other non-company pre-clinical studies have also been conducted to evaluate the technology for spinal disk bulking and repair. Additional potential uses include bulking of the soft palate and respiratory tissue to treat snoring for patients with sleep apnea, adding cushioning to the bottom of the foot to treat painful foot syndrome, and treatment of fecal incontinence.

About ArteFill(R)

ArteFill is the first and only FDA-approved non-resorbable injectable dermal filler for the correction of wrinkles known as smile lines or nasolabial folds. The unique microspheres in ArteFill are not absorbed by the body and therefore provide the first-of-its-kind permanent support for long-lasting wrinkle correction in one to two treatments.

ArteFill was approved by the FDA in October 2006 based on data from the Company's 12-month controlled, randomized, double-masked, multi-center U.S. clinical trial, which compared outcomes for patients treated with ArteFill with those of patients treated with the leading bovine collagen-based filler. At the 6-month evaluation, which was the primary efficacy evaluation period for the clinical trial, the wrinkle correction in patients treated with ArteFill persisted and showed statistically significant improvement compared to the wrinkle correction in the patients treated with the collagen control, who returned to their pretreatment status. The ArteFill patients were also evaluated one year after treatment, demonstrating continued safety and wrinkle correction.

The Company recently completed a 5-year follow-up study of 145 patients who were treated with ArteFill in the Company's U.S. clinical trial.

In addition to demonstrating the safety profile of ArteFill, the study showed statistically significant (p less than 0.001) improvement in patient wrinkle correction five years after the patient's last ArteFill treatment, and a statistically significant (p=0.002) improvement in wrinkle correction at the 5-year point compared to the 6-month evaluation period. As part of the study, physician investigators and patients were asked to provide their assessment of ArteFill treatment. Over 90% of the physician assessments were either "completely successful" or "very successful;" and over 90% of the patient assessments were either "very satisfied" or "satisfied." The Company has submitted the data from the study to the FDA for review in order to enhance the product labeling for ArteFill.

An ArteFill Skin Test is required before initial treatment. The most common adverse events associated with ArteFill treatment, similar to those observed with other dermal fillers, are lumpiness, persistent swelling or redness and increased sensitivity at the injection site.

ArteFill is a proprietary formulation comprised of polymethylmethacrylate, or PMMA, microspheres and bovine collagen, and is the only PMMA-based injectable product that has been approved by the FDA for the treatment of facial wrinkles. Artes Medical is the sole manufacturer of ArteFill, which is only available in the United States through our Company, and we have not entered into distribution or licensing arrangements with any third party for the distribution or sale of ArteFill outside the United States.

About Artes Medical, Inc.

Artes Medical is a medical technology company focused on developing, manufacturing and commercializing a new category of aesthetic injectable products for the dermatology and plastic surgery markets. There were approximately two million dermal filler procedures in the U.S. in 2006, an increase of 25% over the prior year, according to the American Society of Aesthetic Plastic Surgeons, or ASAPS. The Company's initial product, ArteFill, is being marketed to men and women as a treatment option for the correction of nasolabial folds. Additional information about Artes Medical and ArteFill is available at www.artesmedical.com and www.artefill.com.

Forward-Looking Statements

This news release may contain forward-looking statements that are based on the Company's current beliefs and assumptions and on information currently available to its management. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. As a result of these risks, uncertainties and other factors, which include the Company's history of net losses, its reliance on its sole FDA-approved product, ArteFill, its limited experience in commercializing ArteFill, and its future receipt of FDA approval to enhance the product label for ArteFill to extend the efficacy period of ArteFill beyond six months, readers are cautioned not to place undue reliance on any forward-looking statements included in this press release. A more extensive set of risks and uncertainties is set forth in the Company's SEC filings available at www.sec.gov. These forward-looking statements represent beliefs and assumptions only as of the date of this news release, and the Company assumes no obligation to update these forward-looking statements publicly, even if new information becomes available in the future. Artes Medical(R) and ArteFill(R) are registered trademarks of Artes Medical, Inc.

Contact

Artes Medical, Inc.
Cheryl Monblatt Allen, 858-550-9999 (Investor Relations)
callen@artesmedical.com
OR
Schwartz Communications, Inc.
Jenni Rosenberg or Thea Lavin, 415-512-0770 (Media)
artes@schwartz-pr.com

Posted: June 2007


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