Cytori Therapeutics (NASDAQ: CYTX) today announced its first quarter financial results and provided updates on its corporate activity and clinical development.
Cytori continued to reduce its operating cash burn, spending a total of $5 million in the first quarter 2015, compared to $9 million in Q1 2014. First quarter 2015 net loss allocable to common stock holders was $22.6 million (or $7.2 million and $0.07 per share when excluding a non-cash charge of $15.4 million related to the change in fair value of warrant liability) compared to $10 million (or $0.14 per share) for the same period in 2014. Cytori ended the first quarter of 2015 with $13.2 million of cash and cash equivalents or approximately $39 million pro-forma at March 31, 2015, when considering $25.7 million in net cash proceeds since March 31, 2015 from the issuance of shares under its ATM program, warrant exercises, and the net proceeds from the initial closing of a registered direct offering, which closed on May 8, 2015.
Selected Q1 Highlights:
- Cytori received FDA IDE full approval for Pivotal Phase III trial, STAR TRIAL, to evaluate ECCS-50 in treating hand dysfunction associated with scleroderma – Jan’ 2015
- FDA approved an increase in number of STAR trial sites from 12 to 20 – Feb’ 2015
- Enrollment began for ACT-OA, a 90 patient, US Phase II trial, to study ECCO-50 in treating osteoarthritis of the knee - Feb’ 2015
- Cytori and Lorem Vascular were granted regulatory clearance for Cytori Celution® System by the State Food and Drug Administration of the People’s Republic of China – Apr’ 2015
- Cytori received initial purchase order of Celution devices and 1,100 consumable sets from Lorem Vascular, our Chinese Licensee – Apr’ 2015
- Cytori was granted orphan drug status for treatment of scleroderma in European Union – Apr’ 2015
- Cytori reported top line 12 month follow-up data on SCLERADEC-I Trial – Apr’ 2015
- Cytori presented preclinical and mechanistic data supporting use of Cytori Cell Therapy™ in wounds combining thermal burn and radiation exposure - Apr’ 2015
“We accomplished the key objectives we hoped to achieve over the past 4 quarters and are off to a good start in 2015,” said Dr. Marc H. Hedrick, President and CEO of Cytori Therapeutics. “Now the lion’s share of our corporate focus and energy will go into trial enrollment and strategically managing our clinical pipeline.”
“Enrollment in the ACT-OA trial is proceeding as anticipated; we now have 38 patients enrolled into this 90 patient trial. We are confident that we will complete enrollment this year” said Dr. Steven Kesten, Chief Medical Officer of Cytori Therapeutics. “In addition, the Scleroderma program is a key component of our overall clinical strategy and we are very active in laying the groundwork to begin the U.S. trial in the next few months”.
Q1 Financial Performance
- Cash and debt balances at March 31, 2015 of approximately $13.2 million (or approximately $39 million pro-forma) and $25.4 million, respectively.
- Q1 operating cash burn of $5.0 million, compared to $9.0 million for the same period in 2014.
- Q1 product revenue of $0.9 million, compared to $1.0 million for the same period in 2014.
- Q1 contribution (profit/loss) from our sales and marketing organization, excluding share based compensation, of a loss of $0.5 million, compared to a loss of $1.2 million for the same period in 2014.
- Q1 contract revenue of $1.4 million, compared to $0.4 million for the same period in 2014.
- Q1 net loss allocable to common stock holders was $22.6 million (or $0.21 per share, or $7.2 million and $0.07 per share when excluding a non-cash charge of $15.4 million related to the change in fair value of warrant liability) compared to $10 million (or $0.14 per share) for the same period in 2014.
“The reduced operating cash burn, combined with our renegotiated Olympus liability, the proceeds from recent warrant exercises, ATM, and the first closing of $19.4 million of our recently announced equity offering, significantly strengthened our balance sheet and enhances our ability to restructure our debt obligations, and more importantly, it provides liquidity for well over 12 months of operations,” said Tiago Girao, VP of Finance and CFO of Cytori Therapeutics. “We can now stay laser-focused on the execution of our key clinical objectives with continued emphasis on the two late stage U.S. clinical trials.”
Upcoming Catalysts:
- Complete enrollment of US ACT-OA trial and examine data
- Initiate enrollment of US scleroderma STAR trial
- Publication of SCLERADEC-I 12 month data and initiation of enrollment of French SCLERADEC-II trial
- Begin enrollment of MHLW funded Japanese stress urinary incontinence trial
- Complete core research and development activities for the next generation Celution System and file for IDE in the U.S. for a BARDA funded burn trial
Management Conference Call Webcast and Shareholder Letter Information
Cytori will host a management conference call at 5:30 p.m. Eastern Time today to further discuss the Company's progress. The webcast will be available live and by replay two hours after the call and may be accessed under "Webcasts" in the Investor Relations section of Cytori's website. If you are unable to access the webcast, you may dial in to the call at +1.877.402.3914, Conference ID: 33808048.
About Cytori
Cytori Therapeutics is a late stage cell therapy company developing autologous cell therapies from adipose tissue to treat a variety of medical conditions. Data from preclinical studies and clinical trials suggest that Cytori Cell Therapy™ acts principally by improving blood flow, modulating the immune system, and facilitating wound repair. As a result, Cytori Cell Therapy™ may provide benefits across multiple disease states and can be made available to the physician and patient at the point-of-care through Cytori’s proprietary technologies and products. For more information: visit www.cytori.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes forward-looking statements that involve known and unknown risks and uncertainties. All statements, other than historical facts are forward looking statements. Such statements are subject to risks and uncertainties that could cause our actual results and financial position to differ materially. Some of these risks include the level of future interest in our products by Japan research institutions, performance of our Japan distribution network, clinical, pre-clinical and regulatory uncertainties, such as those associated with the ACT-OA Trial, STAR, SCLERODEC-I and SCLERODEC-II clinical trials, including risks in the collection and results of clinical data, final clinical outcomes, dependence on third party performance, performance and acceptance of our products in the marketplace, unexpected costs and expenses, our reliance on key personnel, the right of the Federal Government to cut or terminate further support of the thermal burn injury program, and other risks and uncertainties described under the "Risk Factors" in Cytori's Securities and Exchange Commission Filings, included in our annual and quarterly reports.
There may be events in the future that we are unable to predict, or over which we have no control, and our business, financial condition, results of operations and prospects may change in the future. We assume no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made unless we have an obligation under U.S. Federal securities laws to do so.
| CYTORI THERAPEUTICS, INC. | |||||||||||
| CONSOLIDATED CONDENSED BALANCE SHEETS | |||||||||||
| (UNAUDITED) | |||||||||||
| As of March 31, 2015 | As of December | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 13,199,000 | $ | 14,622,000 | |||||||
| Accounts receivable, net of reserves of $945,000 and of $1,523,000 in 2015 and 2014, respectively | 704,000 | 1,243,000 | |||||||||
| Inventories, net | 4,614,000 | 4,829,000 | |||||||||
| Other current assets | 1,344,000 | 992,000 | |||||||||
| Total current assets | 19,861,000 | 21,686,000 | |||||||||
| Property and equipment, net | 1,778,000 | 1,583,000 | |||||||||
| Restricted cash and cash equivalents | 350,000 | 350,000 | |||||||||
| Other assets | 1,785,000 | 1,763,000 | |||||||||
| Intangibles, net | 9,350,000 | 9,415,000 | |||||||||
| Goodwill | 3,922,000 | 3,922,000 | |||||||||
| Total assets | $ | 37,046,000 | $ | 38,719,000 | |||||||
| Liabilities and Stockholders’ (Deficit) Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued expenses | $ | 5,614,000 | $ | 5,546,000 | |||||||
| Current portion of long-term obligations, net of discount | 10,000,000 | 7,363,000 | |||||||||
| Joint venture purchase obligation | 3,088,000 | 3,008,000 | |||||||||
| Total current liabilities | 18,702,000 | 15,917,000 | |||||||||
| Deferred revenues | 118,000 | 112,000 | |||||||||
| Warrant liability, long-term | 25,237,000 | 9,793,000 | |||||||||
| Long-term deferred rent and other | 507,000 | 558,000 | |||||||||
| Long-term obligations, net of discount, less current portion | 15,677,000 | 18,041,000 | |||||||||
| Total liabilities | 60,241,000 | 44,421,000 | |||||||||
| Commitments and contingencies | |||||||||||
| Stockholders’ deficit: | |||||||||||
| Series A 3.6% convertible preferred stock, $0.001 par value; 5,000,000 shares authorized; 13,500 shares issued; 325 and 5,311 outstanding in 2015 and 2014 | — | — | |||||||||
| Common stock, $0.001 par value; 290,000,000 shares authorized; 114,097,357 and 99,348,377 shares issued and outstanding in 2015 and 2014, respectively | 114,000 | 99,000 | |||||||||
| Additional paid-in capital | 336,186,000 | 331,772,000 | |||||||||
| Accumulated other comprehensive income | 736,000 | 700,000 | |||||||||
| Accumulated deficit | (360,231,000 | ) | (338,273,000 | ) | |||||||
| Total stockholders’ deficit | (23,195,000 | ) | (5,702,000 | ) | |||||||
| Total liabilities and stockholders’ deficit | $ | 37,046,000 | $ | 38,719,000 | |||||||
| CYTORI THERAPEUTICS, INC. | ||||||||||
| CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||||
| (UNAUDITED) | ||||||||||
| For the Three Months Ended March 31, | ||||||||||
| 2015 | 2014 | |||||||||
| Product revenues | $ | 902,000 | $ | 1,031,000 | ||||||
| Cost of product revenues | 598,000 | 421,000 | ||||||||
| Gross profit | 304,000 | 610,000 | ||||||||
| Development revenues: | ||||||||||
| Government contracts and other | 1,444,000 | 403,000 | ||||||||
| Operating expenses: | ||||||||||
| Research and development | 3,963,000 | 4,292,000 | ||||||||
| Sales and marketing | 839,000 | 1,928,000 | ||||||||
| General and administrative | 2,499,000 | 4,340,000 | ||||||||
| Change in fair value of warrants | 15,444,000 | — | ||||||||
| Total operating expenses | 22,745,000 | 10,560,000 | ||||||||
| Operating loss | (20,997,000 | ) | (9,547,000 | ) | ||||||
| Other income (expense): | ||||||||||
| Interest income | 1,000 | 2,000 | ||||||||
| Interest expense | (1,072,000 | ) | (941,000 | ) | ||||||
| Other income, net | 110,000 | 86,000 | ||||||||
| Total other expense | (961,000 | ) | (853,000 | ) | ||||||
| Net loss | $ | (21,958,000 | ) | $ | (10,400,000 | ) | ||||
| Beneficial conversion feature for | ||||||||||
| convertible preferred stock | (661,000 | ) | — | |||||||
| Net loss allocable to common stock holders | $ | (22,619,000 | ) | $ | (10,400,000 | ) | ||||
| Basic and diluted net loss per share allocable to common stockholders | $ | (0.21 | ) | $ | (0.14 | ) | ||||
| Basic and diluted weighted average shares used in calculating net loss per share allocable to common stockholders | 106,208,857 | 74,102,396 | ||||||||
| Comprehensive loss: | ||||||||||
| Net loss | $ | (21,958,000 | ) | $ | (10,400,000 | ) | ||||
| Other comprehensive income (loss) – foreign currency translation adjustments | 36,000 | (50,000 | ) | |||||||
| Comprehensive loss | $ | (21,922,000 | ) | $ | (10,450,000 | ) | ||||
| CYTORI THERAPEUTICS, INC. | ||||||||||
| CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | ||||||||||
| (UNAUDITED) | ||||||||||
| For the Three Months Ended March 31, | ||||||||||
| 2015 | 2014 | |||||||||
| Cash flows from operating activities: | ||||||||||
| Net loss | $ | (21,958,000 | ) | $ | (10,400,000 | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||
| Depreciation and amortization | 213,000 | 160,000 | ||||||||
| Amortization of deferred financing costs and debt discount | 257,000 | 281,000 | ||||||||
| Joint venture acquisition obligation accretion | 203,000 | — | ||||||||
| Provision for doubtful accounts | — | 465,000 | ||||||||
| Change in fair value of warrants | 15,444,000 | — | ||||||||
| Stock-based compensation expense | 459,000 | 687,000 | ||||||||
| Increases (decreases) in cash caused by changes in operating assets and liabilities: | ||||||||||
| Accounts receivable | 546,000 | 49,000 | ||||||||
| Inventories | 100,000 | (551,000 | ) | |||||||
| Other current assets | (470,000 | ) | (172,000 | ) | ||||||
| Other assets | 68,000 | 379,000 | ||||||||
| Accounts payable and accrued expenses | 138,000 | 351,000 | ||||||||
| Deferred revenues | 21,000 | (165,000 | ) | |||||||
| Long-term deferred rent | (51,000 | ) | (46,000 | ) | ||||||
| Net cash used in operating activities | (5,030,000 | ) | (8,962,000 | ) | ||||||
| Cash flows from investing activities: | ||||||||||
| Purchases of property and equipment | (187,000 | ) | (287,000 | ) | ||||||
| Expenditures for intellectual property | — | (155,000 | ) | |||||||
| License agreement termination fee | — | (200,000 | ) | |||||||
| Net cash used in investing activities | (187,000 | ) | (642,000 | ) | ||||||
| Cash flows from financing activities: | ||||||||||
| Joint venture purchase payments | (123,000 | ) | (2,138,000 | ) | ||||||
| Proceeds from exercise of employee stock options and warrants | — | 33,000 | ||||||||
| Proceeds from sale of common stock, net | 3,974,000 | 9,000,000 | ||||||||
| Dividends paid on preferred stock | (72,000 | ) | — | |||||||
| Net cash provided by financing activities | 3,779,000 | 6,895,000 | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | 15,000 | 3,000 | ||||||||
| Net decrease in cash and cash equivalents | (1,423,000 | ) | (2,706,000 | ) | ||||||
| Cash and cash equivalents at beginning of period | 14,622,000 | 15,506,000 | ||||||||
| Cash and cash equivalents at end of period | $ | 13,199,000 | $ | 12,800,000 | ||||||
Contacts:
Shawn Richardson
+1.858.875.5279
ir@cytori.com
