Sientra CEO ducks questions about company’s future
Sientra CEO Hani Zeini said in a conference call on Oct. 28 that he will not speculate about the company’s future.
Zeini dodged questions better than a Brooklyn Dodger dodges street cars during the call with investors, analysts and reporters to update all parties about implants contaminated by Sientra’s manufacturer.
Sientra shares nosedived on Sept. 24 from $20.58 to $9.70 after British regulators found breast, pectoral, calf and other implants contaminated by particles of silica and cotton at the Rio de Janeiro factory of Sientra’s manufacturer, Silimed. Sales of Silimed products were quickly suspended in Europe, Australia and Brazil.
Sientra voluntarily stopped selling products in the U.S. on Oct. 9, but maintained its products are safe ever since.
On Oct. 22 a fire broke out at Silimed’s factory. Zeini confirmed on Oct. 28 that building on fire, known as F-2, was indeed the building where Sientra breast implants are made. Zeini said there have been no reports of significant injuries.
Another smaller building at Silimed’s factory was undamaged by the fire and could be retrofitted to make Sientra breast implants if significant renovations are made.
During the call, analysts peppered Zeini with questions but he was reluctant to talk about what might lay ahead for his company.
“I can always count on you to keep asking the same questions but as I indicated on this call, we’re not going to give guidance, we’re not going to discuss long term guidance, future guidance, and 2016 guidance, as we have done in the past. When the appropriate time arrives, we’re fully transparent and we’ll do so accordingly,” Zeini said.
A date for Sientra’s third quarter earnings call has not been released but Zeini said it would be held sometime in November.
Zeini claimed the company was on solid financial ground. As of Sept. 30, he said, the company had $148.9 million worth of cash on hand. On Oct. 27, Oxford Finance LLC notified Sientra that it was in default on a $24.5 million loan. On Oct. 28, the company repaid all $24.5 million and fulfilled all obligations listed under the loan.
“Sientra remains well funded with cash and cash equivalents,” Zeini said. “Today the company has no outstanding debt obligations.”
Zeini also said Sientra has about 12 months worth of inventory already produced that it could sell. Before Sientra puts any of those products on the market the company will consult the Food and Drug Administration and Zeini said no definitive timetable has been created to put those products on the market.
The amount of cash Sientra has on hand is likely much smaller though. On Sept. 23, Sientra held a follow-on public offering that raised $66 million in cash. That offering was held at nearly the same time that British regulators were about to suspend sales of Sientra implants.
A lawsuit was filed in Los Angeles seeking class-action status that alleges Sientra knew about the forthcoming actions by European regulators.
A source who wishes to remain anonymous told the Business Times on Oct. 27 that Sientra will likely have to pay back all $66 million the company raised in the offering plus legal fees and penalties if it can be proven that Sientra knew about but did not disclose the forthcoming actions by European regulators.
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