FOR
IMMEDIATE RELEASE
Investor
Contacts:
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|
Richard
T. Schumacher, President & CEO
|
Pressure
BioSciences, Inc.
|
R.
Wayne Fritzsche, Chairman
|
(508)
230-1828 (T)
|
Pressure
BioSciences, Inc. Announces Restructuring,
Significant
Cost Reduction Initiatives, and Sharpened Focus
South
Easton, MA, December 1, 2008 - Pressure BioSciences, Inc. (NASDAQ: PBIO) (“PBI”
or the “Company”) today announced a comprehensive restructuring program designed
to significantly reduce costs, centralize core operations, and refocus the
Company’s business strategy in specific areas where the Company’s products have
found significant market acceptance. The restructuring program
includes:
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· |
a
reduction in personnel of eight full-time employees (40% of the
workforce)
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|
· |
a
shutdown of the Company’s R&D facility in Rockville,
MD
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· |
a
consolidation of the Company’s R&D activities in
Massachusetts
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· |
additional
cost reductions across all
departments
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· |
a
continuation of the cost reductions implemented in July
2008
|
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· |
other
operational changes designed to increase the efficiency of the Company’s
operations
|
The
restructuring plan was designed to retain key personnel needed to achieve both
immediate and long term objectives. It became effective on November
26th.
The
Company expects to record estimated restructuring charges of approximately
$65,000 in the fourth quarter of 2008 related to employee terminations
(including severance and fringe benefits) and costs related to the shutdown
of
the Rockville, MD facility. The Company granted terminated employees
non-qualified stock options to purchase a total of 60,000 shares of common
stock
in return for their agreement to provide consulting services from December
2008
to December 2009. The options will vest over the 12 months from the date of
grant.
The
Company believes that the restructuring program will significantly decrease
its
cash burn, from current levels of just under $1 million per quarter to an
average of just under $600,000 per quarter during 2009. The Company believes
that these actions were necessary to extend its current cash resources through
the second quarter of 2009, to allow time to complete its current equity
financing, to enter into a strategic alliance with one or more marketing and
distribution partners, and/or to seek other strategic options.
Mr.
R.
Wayne Fritzsche, Chairman of the Board of Directors of PBI, commented: “We have
significantly reduced our operating costs while realigning our corporate
strategy to focus on those key product and application areas with the greatest
likelihood for success. One such area is mass spectrometry, a powerful
laboratory tool that we believe is playing an increasingly important role in
the
analysis of biological samples in life sciences research. We believe that mass
spectrometry is a multi-billion dollar market, and that PCT offers significant
advantages in speed and quality compared to current techniques used for protein
digestion prior to mass spectrometry analysis. Other strategic areas where
we
have seen encouraging market penetration are in biomarker discovery, soil
biology, and counter-bioterror applications.”
The
following initiatives are the key ingredients of the new PBI strategic operating
plan:
|
· |
a
primary focus on current PCT-enhanced enzymatic digestion products
geared
specifically for the mass spectrometry
marketplace
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· |
the
accelerated release of a high-throughput sample processing system
-
including consumables
- designed specifically for the mass spectrometry marketplace
|
|
· |
a
sharpened sales focus on established products that have shown acceptance
in the biological
sample preparation market during 2008, specifically in biomarker
discovery, soil
biology, and counter-bioterror
applications
|
|
· |
a
termination of development projects not directly related to these
specific
product areas
|
Mr.
Fritzsche continued: “We believe that this sharpened strategic focus will give
us the greatest opportunity to successfully reach our short and long-term
business goals, including: a significant increase in the installed base of
PCT
Systems, consistent revenue growth, strategic alliances with one or more
marketing and distribution partners, strong presence in the mass spectrometry
market, continued market acceptance of PCT through the publication and
presentation of data by acknowledged scientific leaders, increased shareholder
value, and profitability.”
As
disclosed in its most recently filed Quarterly Report on Form 10-Q, the Company
is seeking to raise additional capital through equity financing under terms
consistent with shareholder approval obtained on September 25, 2008. As a result
of the restructuring announced today, the Company believes that an investment
of
approximately $2 million will be needed to fund its restructured operations
through the second quarter of 2010. The Company believes that these additional
cash resources will allow it sufficient time to make measured progress on its
business goals, as delineated by Mr. Fritzsche above, and that this progress
will result in increased shareholder value.
Mr.
Richard T. Schumacher, President and CEO, commented: “Independent researchers
from Amgen, Pacific Northwest National Labs, NYU, Harvard School of Public
Health, and the Commonwealth of Virginia Labs have recently presented data
indicating that PCT offers major advantages to mass spectrometry laboratories,
including a significant reduction in protein processing time from hours to
minutes, often with a substantial increase in the quality of the results. These
data have been replicated by other organizations in the US, China, and Japan.
With these reported advantages in such a large and growing market, and with
a
developing relationship with several important players in this area, we believe
this a pivotal opportunity for PBI, and we expect to take full advantage of
the
growing acceptance of the PCT Sample Preparation System in the mass spectrometry
market going forward.”
Mr.
Schumacher continued: “Despite the current, difficult economic environment, we
reported record installations and revenue for the third quarter of 2008, and
have continued to observe strong interest for PCT-related products during the
current fourth quarter. We believe this is confirmation that market acceptance
of the PCT Sample Preparation System has begun. We have approximately 20 NEP3229
instruments in inventory, and have ordered an additional 50 NEP2320 instruments
for receipt during the next three months. These instruments are very important
to our future growth and revenue expectations.”
Mr.
Schumacher concluded: “We have reduced our cash burn and extended our cash
resources through the second quarter of 2009, we have maintained our key staff,
we have sharpened our focus to the mass spectrometry market where we have
significant competitive advantages, we have refocused our sales efforts to
specific PCT product areas where market penetration and customer purchases
have
begun, we have active evaluations being performed with key thought leaders
and
with potential customers and strategic partners, and we are optimistic that
we
will successfully complete our current equity financing. We firmly believe
that
market acceptance of PCT has begun, that it is important to extend our cash
resources to give us more time to take advantage of developing opportunities,
that a new, sharpened focus is crucial to our growth and development, and that
we are now prepared for success going forward.”
About
Pressure BioSciences, Inc.
Pressure
BioSciences, Inc. (PBI) is a publicly traded company focused on the development
of a novel, enabling technology called Pressure Cycling Technology (PCT). PCT
uses cycles of hydrostatic pressure between ambient and ultra-high levels (up
to
35,000 psi and greater) to control bio-molecular interactions. PBI currently
holds 13 US and 6 foreign patents covering multiple applications of PCT in
the
life sciences field, including such areas as genomic and proteomic sample
preparation, pathogen inactivation, the control of chemical (enzymatic)
reactions, immunodiagnostics, and protein purification. PBI currently focuses
its efforts in the areas of mass spectrometry and biological sample
preparation.
Forward
Looking Statements
Statements
contained in this press release regarding the Company's intentions, hopes,
beliefs, expectations, or predictions of the future are "forward-looking''
statements within the meaning of the Private Securities Litigation Reform Act
of
1995. Forward looking statements include statements regarding the effect of
the
Company’s decision to focus primarily on the application of PCT-enhanced protein
digestion for the mass spectrometry market and the advantages of PCT in this
market, the importance and size of the potential mass spectrometry market for
PCT-enhanced protein digestion, the use of PCT in biomarker discovery, soil
biology and counter-bioterror, the Company’s estimate of restructuring charges,
the availability of cash to fund operations through the second quarter of 2009,
the amount of equity financing needed to fund the Company’s operations through
the second quarter of 2010, and the Company’s ability to achieve its short term
and long term business objectives, including the increase in shareholder value.
These statements are based upon the Company's current expectations, forecasts,
and assumptions that are subject to risks, uncertainties, and other factors
that
could cause actual outcomes and results to differ materially from those
indicated by these forward-looking statements. These risks, uncertainties,
and
other factors include, but are not limited to: possible difficulties or delays
in the implementation of the Company's strategies that may adversely affect
the
Company's continued commercialization of its PCT System; changes in customer’s
needs and technological innovations; the Company’s sales force may not be
successful in selling the Company’s PCT product line because scientists may not
perceive the advantages of PCT over other sample preparation methods,
particularly in the mass spectrometry market; and scientists may not be able
to
duplicate the results achieved at particular laboratories having already used
PCT. Further, the Company needs substantial additional capital to fund its
restructured operations beyond the second quarter of 2009. While the Company
is
in discussions with potential investors, to date the Company has been unable
to
secure additional equity or debt financing on acceptable terms. If the Company
remains unable to secure additional financing in the near-term, the Company
expects to implement additional cost reductions, including further reductions
in
the cost of our workforce and the discontinuation of business initiatives to
further reduce our rate of cash utilization and extend our existing cash
balances. In the event that the Company is unable to obtain financing on
acceptable terms, the Company will be required to limit or cease operations,
pursue a plan to sell its operating assets, or otherwise modify its business
strategy, which will materially harm our future business prospects. Additional
risks and uncertainties that could cause actual results to differ materially
from those indicated by these forward-looking statements are discussed under
the
heading "Risk Factors" in the Company's Annual Report on Form 10-K for the
year
ended December 31, 2007, and other reports filed by the Company from time to
time with the SEC. The Company undertakes no obligation to update any of the
information included in this release, except as otherwise required by
law.
Visit
us
at our website http://www.pressurebiosciences.com