8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 10, 2008

Artes Medical, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	001-33205	33-0870808
(State or Other Jurisdiction	(Commission	(I.R.S. Employer
of Incorporation)	File Number)	Identification No.)

5870 Pacific Center Boulevard
San Diego, California 92121
(Address of Principal Executive Offices, with zip code)

(858) 550-9999
(Registrant’s telephone number, including area code)

n/a
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

     On November 10, 2008, the Company issued a press release announcing its financial results for the quarter ended September 30, 2008. A copy of the press release is furnished herewith as Exhibit 99.1.

     In accordance with General Instruction B.2. of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed ‘filed’ for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the ‘Exchange Act’), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	Press Release, dated November 10, 2008, announcing financial results for the quarter ended September 30, 2008.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: November 10, 2008	ARTES MEDICAL, INC.
	By:	/s/ Karla R. Kelly
		Karla R. Kelly
		Chief Legal Officer, General Counsel and Corporate Secretary

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release, dated November 10, 2008, announcing financial results for the quarter ended September 30, 2008.

EX-99.1

Exhibit 99.1

Corporate Media Contact:
Kate Wilkinson
Manning Selvage & Lee
323-866-6025
kate.wilkinson@mslpr.com

Investor Relations Contact:
Cheryl Monblatt Allen
Artes Medical
858-550-9999
callen@artesmedical.com

ARTES MEDICAL REPORTS THIRD QUARTER 2008 FINANCIAL RESULTS AND
RECENT COMPANY HIGHLIGHTS

- PRODUCT SALES INCREASE 85% FROM Q3-2007

          San Diego, California — November 10, 2008 — Artes Medical, Inc. (Nasdaq: ARTE), a medical aesthetics company, today reported recent company highlights and financial results for the three months ended September 30, 2008.

Financial Results

          The Company reported product sales of $2.3 million for the quarter ended September 30, 2008, an increase of $1.1 million, or 85%, over product sales of $1.2 million for the quarter ended September 30, 2007. In addition, during the third quarter, the Company shipped over $500,000 of ArteFill to physicians to support the on-going long-term safety study, completing initial enrollment during October. This quarterly increase in sales resulted from the expansion of the Company’s field sales force, increased consumer marketing, continued increase in the number of ArteFill-trained physicians, and the launch of Elevess^TM, a new FDA-approved temporary dermal filler. Revenues for the quarter ended September 30, 2007 also included license fee revenue of $5.5 million representing an accelerated royalty payment from a third party.

          The Company reported improved gross profit resulting from increased product sales and allocation of manufacturing overhead. In this regard, the Company reported a negative gross profit on product sales for the quarter ended September 30, 2008 of $82 thousand compared with a negative gross profit for the quarter ended September 30, 2007 of $1.8 million.

          Total operating expenses for the quarter ended September 30, 2008 were $10.4 million, an increase of $3.0 million, over the quarter ended September 30, 2007 operating expenses of $7.4 million. This increase in operating expenses is primarily due to the Company’s expanded sales force, increased consumer marketing initiatives for ArteFill, costs to launch Elevess and costs associated with the Company’s five-year post-marketing safety and skin test removal studies. This resulted in a net loss of $11.2 million for the quarter ended September 30, 2008, compared to $3.7 million for the quarter ended September 30, 2007, which was reduced by the one-time receipt of the $5.5 million

accelerated royalty payment. The Company also reported cash and cash equivalents of $5.9 million as of September 30, 2008.

          “The top-line growth in product sales reflects the progress we have made over the past year,” said Christopher J. Reinhard, Executive Chairman, Artes Medical, Inc. “While the challenging economic times have adversely impacted the aesthetics sector, we have advanced product revenues over the prior year period while launching a new product, Elevess. The summer is often considered a slow quarter for sales in our industry. However, we and all of our competitors have experienced the negative effects of the current recession and credit crisis and the weather conditions in the Gulf Coast region, especially during the month of September. As a result, based on the deteriorating economic outlook, unfavorable market and poor financial metrics of the medical aesthetics industry, the Company is not in a position at this time to estimate projected revenues for the fourth quarter of the year. We are therefore suspending our guidance for the remainder of the 2008 calendar year.”

Recent Company Highlights

• In August, the Company announced its commercial launch of Elevess, an FDA-approved hyaluronic acid-based dermal filler with lidocaine for patient comfort. The Company previously announced that it had broadened its product portfolio through an agreement with Anika Therapeutics to sell Elevess exclusively in the U.S. Elevess and ArteFill allow the Company to offer both short-term and long-lasting solutions to wrinkle correction.

• The Company announced completion of enrollment in its 1,000-patient, 5-year post-marketing ArteFill study required by the FDA, and completion of enrollment and treatment in its ArteFill skin test removal study in October. In connection with the post-marketing study, the Company shipped ArteFill valued at approximately $1.8 million during the year, including over $500,000 during the third quarter.

• In September, the Company announced it had completed a financing with accredited investors raising approximately $2.4 million from a private placement of its common stock and related warrants. This financing represents an important first step in raising additional equity capital.

• The Company announced the promotion of Michael K. Green to Chief Operating Officer in September. In addition to his continued responsibilities as Chief Financial Officer, Mr. Green assumed oversight responsibility for departments including marketing, sales, manufacturing, clinical and regulatory, corporate facilities, information technology and human resources.

• The Company announced in October the winner of the “ArteFill Face Forward Makeover Contest” — celebrating women’s changing lives. The grand prize winner received a complimentary treatment with ArteFill and a $10,000 makeover.

About Artes Medical, Inc.

          Artes Medical is a medical aesthetics company focused on developing, manufacturing and commercializing new and innovative medical aesthetic products including injectable products for the dermatology and plastic surgery markets. 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 contains 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 ability to timely raise additional funds to support its operations, its ability to manage its operating expenses, its limited experience in commercializing ArteFill and Elevess, its future receipt of FDA approval to extend the efficacy period of ArteFill beyond six months and eliminate the skin test requirement, and the risk that the Company’s revenue projections may prove incorrect because of unexpected difficulty in generating sales and market acceptance of ArteFill or Elevess, 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^® and ArteFill^® are registered trademarks of Artes Medical, Inc. All other trademarks referred to in this press release are the property of their respective owners.

Artes Medical, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2008			2007			2008			2007
Revenues:
Product sales	$	2,261		$	1,220		$	7,095		$	4,716
License fees		—			5,500			—			6,232
		2,261			6,720			7,095			10,948
Cost of product sales		2,343			3,002			7,404			6,880
Gross profit (loss)		(82	)		3,718			(309	)		4,068
Operating expenses:
Selling and marketing		4,347			2,846			14,673			8,252
General and administrative		2,943			3,022			10,530			9,513
Research and development		3,088			1,541			7,865			3,709
		10,378			7,409			33,068			21,474
Loss from operations		(10,460	)		(3,691	)		(33,377	)		(17,406	)
Other income (expense):
Interest expense		(1,063	)		(342	)		(2,755	)		(873	)
Interest income		20			310			219			1,181
Other income (expense), net		227			(10	)		235			—
Loss before benefit from income taxes		(11,276	)		(3,733	)		(35,678	)		(17,098	)
Benefit from income taxes		70			51			217			151
Net loss	$	(11,206	)	$	(3,682	)	$	(35,461	)	$	(16,947	)
Basic and diluted net loss per share	$	(0.67	)	$	(0.22	)	$	(2.14	)	$	(1.03	)
Basic and diluted weighted average shares		16,654,516			16,493,767			16,561,289			16,444,915

Artes Medical, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
(Unaudited)

	September 30,			December 31,
	2008			2007
Assets
Current Assets:
Cash and cash equivalents	$	5,858		$	20,293
Accounts receivable, net		1,470			792
Inventories, net		6,075			5,528
Other current assets		790			1,044
Total Current Assets		14,193			27,657
Property and equipment, net		5,798			5,034
Intangibles, net		1,255			2,385
Other assets		604			645
Total Assets	$	21,850		$	35,721
Liabilities and Stockholders’ Equity (Deficit)
Current Liabilities:
Accounts payable and accrued expenses	$	6,132		$	3,074
Accrued compensation and benefits		1,571			1,802
Revenue interest financing, current portion		1,775			—
Term note payable, current portion		—			1,250
Revolving credit line		—			5,000
Other current liabilities		120			42
Total Current Liabilities		9,598			11,168
Revenue interest financing, less current portion (net of discount of $1,016)		13,391			—
Note payable (net of discount of $779)		5,721			—
Term note payable (net of discount of $165)		—			2,231
Deferred tax liability		316			915
Other liabilities		2,051			783
Commitments and Contingencies
Stockholders’ Equity (Deficit):
Series A Participating Preferred Stock, $0.001 par value, 200,000 shares authorized; 0 shares issued and outstanding		—			—
Common stock, $0.001 par value, 200,000,000 shares authorized; 19,742,285 and 16,514,163 shares issued and outstanding at September 30, 2008 and December 31, 2007, respectively		20			17
Additional paid-in capital		132,501			126,894
Accumulated deficit		(141,748	)		(106,287	)
Total Stockholders’ Equity (Deficit)		(9,227	)		20,624
Total Liabilities and Stockholders’ Equity (Deficit)	$	21,850		$	35,721