Market Overview

Cytori Reports Third Quarter 2015 Business and Financial Results

Share:
SAN DIEGO--(BUSINESS WIRE)--

Cytori Therapeutics (NASDAQ: CYTX) today announced its third quarter financial results and provided updates on its corporate activity and clinical development.

Third quarter 2015 net income allocable to common stockholders was $1.5 million, or a net loss of $5.8 million and $0.04 per share when excluding a non-cash charge of $7.3 million related to the change in fair value of warrant liabilities. Cytori continued to reduce its operating cash burn, spending approximately $6.1 million in the third quarter 2015. Cytori ended the second quarter of 2015 with $19 million of cash and cash equivalents.

"This has been a good quarter for us; our trials are progressing on schedule and we have a number of anticipated milestones over the next 12 months related to our lead programs in scleroderma and osteoarthritis," said Dr. Marc H. Hedrick, President and CEO of Cytori Therapeutics. "In parallel, we are preparing for commercial success through expansion of our market access activities in Europe for scleroderma, broadening our business development efforts and strengthening our leadership team. Also, we are analyzing additional opportunities to cost effectively expand our clinical pipeline and better develop the technology platform upon which it is based."

Select Q3 Highlights:

  • Publication of extended follow-up data showing sustained benefit of results in pilot/phase I/II trial for scleroderma hand dysfunction
  • Initiated enrollment in two late stage trials for scleroderma hand dysfunction in both the US (STAR trial) and Europe (SCLERADEC-II trial)
  • Initiated enrollment of Japanese pivotal/phase III trial for stress urinary incontinence (ADRESU trial)
  • Publication of twelve-month follow up data in patients with intractable inflammatory bowel disease

Q3 and Year-To-Date Financial Performance

  • Q3 and year-to-date operating cash burn of $6.1 million and $15.9 million, compared to $7.2 million and $25.4 million for the same periods in 2014, respectively.
  • Cash and debt principal balances at September 30, 2015 of approximately $19 million and $17.7 million, respectively.
  • Q3 and year-to-date product revenues of $0.8 million and $3.3 million, compared to $0.5 million and $2.5 million for the same periods in 2014, respectively.
  • Q3 and year-to-date contribution (profit/loss) from our sales and marketing organization, excluding share based compensation, of a loss of $0.3 million and $1.1 million, compared to a loss of $1.2 million and $4.0 million for the same periods in 2014, respectively.
  • Q3 and year-to-date contract revenue of $1.7 million and $5.0 million, compared to $0.6 million and $1.3 million for the same periods in 2014, respectively.
  • Q3 and year-to-date net loss/income allocable to common stockholders was a net income of $1.5 million (or $0.01 per share, or a net loss of $5.8 million and $0.04 per share when excluding a non-cash charge of $7.3 million related to the change in fair value of warrant liabilities) and a net loss of $16.6 million (or $0.12 per share, or $21.6 million and $0.16 per share when excluding a non-cash charge of $5 million related to the change in fair value of warrant liabilities), compared to a net loss of $9.4 million (or $0.12 per share, or $9.5 million and $0.12 per share when excluding a non-cash charge of $0.1 million related to the change in fair value of warrant liabilities) and $31.6 million (or $0.41 per share, or $31.7 million and $0.41 per share when excluding a non-cash charge of $0.1 million related to the change in fair value of warrant liabilities) for the same periods in 2014, respectively.

"We continue to seek to hold the overall cash burn down while expanding the overall spending in research and development," said Tiago Girao, VP of Finance and CFO of Cytori Therapeutics. "We have been successful at this thus far through the implementation of ‘across-the-board' operational efficiencies, tighter management of working capital, better support from key stakeholders and service providers, and ultimately by maintaining a clear company-wide focus on only those activities than management feels will bring shareholder value in the most compressed time frame possible."

Upcoming Near Term Catalysts:

  • Evaluate and release 24-week data from 94 patient US pilot/phase IIb ACT-OA trial (anticipated Q1 2016) and identify partner for late stage US clinical development
  • Complete enrollment of US STAR trial (anticipated mid 2016) for scleroderma hand dysfunction
  • Complete enrollment of EU pivotal/phase III SCLERADEC-II trial (anticipated mid 2016) for scleroderma hand dysfunction
  • Complete enrollment of Japanese pivotal/phase III ADRESU trial (anticipated 2017) for stress urinary incontinence
  • Work with FDA to plan a burn wound therapy trial related to contract with BARDA (anticipated in 2016)

Management Conference Call Webcast

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: 58684057.

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 clinical, pre-clinical and regulatory uncertainties, such as those associated with the ACT-OA Trial, STAR, SCLERADEC-I and SCLERADEC-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 that could adversely impact liquidity, 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 September 30,
2015

As of December 31,
2014

Assets
Current assets:
Cash and cash equivalents $ 18,970,000 $ 14,622,000
Accounts receivable, net of reserves of $900,000 and of $1,523,000 in 2015 and 2014, respectively 1,134,000 1,243,000
Inventories, net 4,612,000 4,829,000
Other current assets   1,314,000   992,000
 
Total current assets 26,030,000 21,686,000
 
Property and equipment, net 1,734,000 1,583,000
Restricted cash and cash equivalents 350,000 350,000
Other assets 1,214,000 1,763,000
Intangibles, net 9,196,000 9,415,000
Goodwill   3,922,000   3,922,000
 
Total assets $ 42,446,000 $ 38,719,000
 
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Accounts payable and accrued expenses $ 6,279,000 $ 5,546,000
Current portion of long-term obligations, net of discount 1,446,000 7,363,000
Joint venture purchase obligation   1,725,000   3,008,000
 
Total current liabilities 9,450,000 15,917,000
 
Deferred revenues 143,000 112,000
Warrant liabilities, long-term 12,527,000 9,793,000
Long-term deferred rent and other 348,000 558,000
Long-term obligations, net of discount, less current portion   14,978,000   18,041,000
 
Total liabilities 37,446,000 44,421,000
 
Commitments and contingencies
Stockholders' equity (deficit):
Series A 3.6% convertible preferred stock, $0.001 par value; 5,000,000 shares authorized; 13,500 shares issued; 0 and 5,311 outstanding in 2015 and 2014, respectively
Common stock, $0.001 par value; 290,000,000 shares authorized; 158,474,745 and 99,348,377 shares issued and outstanding in 2015 and 2014, respectively 159,000 99,000
Additional paid-in capital 358,035,000 331,772,000
Accumulated other comprehensive income 1,061,000 700,000
Accumulated deficit   (354,255,000 )   (338,273,000 )
 
Total stockholders' equity (deficit)   5,000,000   (5,702,000 )
 
Total liabilities and stockholders' equity (deficit) $ 42,446,000 $ 38,719,000

CYTORI THERAPEUTICS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

   
For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

  2015       2014     2015     2014  
 
Product revenues $ 766,000 $ 518,000 $ 3,281,000 $ 2,484,000
 
Cost of product revenues   502,000     337,000     2,395,000     1,524,000  
 
Gross profit   264,000     181,000     886,000     960,000  
 
Development revenues:
Government contracts and other   1,711,000     585,000     5,002,000     1,345,000  
  1,711,000     585,000     5,002,000     1,345,000  
Operating expenses:
Research and development 4,352,000 3,140,000 14,363,000 12,106,000
Sales and marketing 566,000 1,471,000 2,059,000 5,332,000
General and administrative 2,370,000 4,179,000 7,662,000 13,121,000
Change in fair value of warrant liabilities   (7,310,000

)

 

  (134,000 )   (4,988,000 )   (134,000 )
 
Total operating expenses   (22,000 )   8,656,000     19,096,000     30,425,000  
 
Operating income (loss)   1,997,000     (7,890,000 )   (13,208,000 )   (28,120,000 )
 
Other income (expense):
Income (loss) on asset disposal (3,000

)

 

(14,000

)

 

6,000 (15,000 )
Loss on debt extinguishment (260,000 )
Interest income 3,000 1,000 6,000 4,000
Interest expense (669,000

)

 

(1,260,000

)

 

(2,677,000 ) (3,286,000 )
Other income (expense), net   199,000     (222,000

)

 

  152,000     (195,000 )
 
Total other expense   (470,000

)

 

  (1,495,000

)

 

  (2,773,000 )   (3,492,000

)

 

 
Net income (loss) $ 1,527,000 $ (9,385,000

)

 

$ (15,981,000 ) $ (31,612,000 )
Beneficial conversion feature for
convertible preferred stock           (661,000 )    
Net income (loss) allocable to common stockholders $ 1,527,000   $ (9,385,000

)

 

$ (16,642,000 ) $ (31,612,000 )
 
Net income (loss) per share allocable to common stockholders
Basic $ 0.01   $ (0.12

)

 

$ (0.12 ) $ (0.41

)

 

Diluted $ 0.01   $ (0.12

)

 

$ (0.12 ) $ (0.41

)

 

 
Weighted average shares used in calculating net income (loss) per share allocable to common stockholders
Basic   153,798,471     80,430,061     133,174,133     77,091,624  
Diluted   157,968,958     80,430,061     133,174,133     77,091,624  
 
Comprehensive income (loss):
Net income (loss) $ 1,527,000 $ (9,385,000

)

 

$ (15,981,000 ) $ (31,612,000

)

 

Other comprehensive income (loss) – foreign currency translation adjustments  
110,000
   

58,000

    361,000     201,000  
Comprehensive income (loss) $ 1,637,000   $ (9,327,000 ) $ (15,620,000 ) $ (31,411,000

)

 

 

CYTORI THERAPEUTICS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 
For the Nine Months Ended September 30,
  2015       2014  
Cash flows from operating activities:
Net loss $ (15,981,000 ) $ (31,612,000

)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 761,000 525,000
Amortization of deferred financing costs and debt discount 714,000 961,000
Joint Venture acquisition obligation accretion 340,000 362,000
Provision for doubtful accounts 1,126,000
Provision for expired enzyme 313,000
Change in fair value of warrants (4,988,000 ) (134,000 )
Stock-based compensation expense 1,617,000 2,566,000
Loss on asset disposal 5,000 15,000
Loss on debt extinguishment 260,000
Increases (decreases) in cash caused by changes in operating assets and liabilities:
Accounts receivable 131,000 2,505,000
Inventories (10,000 ) (1,158,000 )
Other current assets (258,000 ) (19,000 )
Other assets 762,000 (124,000 )
Accounts payable and accrued expenses 870,000 (666,000 )
Deferred revenues 41,000 47,000
Long-term deferred rent   (210,000 )   (81,000 )
 
Net cash used in operating activities   (15,946,000 )   (25,374,000 )
 
Cash flows from investing activities:
Purchases of property and equipment (544,000 ) (792,000 )
Expenditures for intellectual property (13,000 ) (255,000 )
License agreement termination fee     (400,000 )
 
Net cash used in investing activities   (557,000 )   (1,447,000 )
 
Cash flows from financing activities:
Principal payments on long-term obligations (25,032,000 ) (1,303,000 )
Proceeds from long-term obligations 17,700,000
Debt issuance costs and loan fees (1,854,000 )
Joint Venture purchase payments (1,623,000 ) (2,236,000 )
Proceeds from exercise of employee stock options and warrants 4,986,000 4,066,000
Proceeds from sale of common stock, net 26,749,000 18,650,000
Dividends paid on preferred stock   (75,000 )    
 
Net cash provided by financing activities   20,851,000   19,177,000  
 
Effect of exchange rate changes on cash and cash equivalents     (13,000 )
 
Net increase (decrease) in cash and cash equivalents 4,348,000 (7,657,000 )
 
Cash and cash equivalents at beginning of period   14,622,000   15,506,000  
 
Cash and cash equivalents at end of period $ 18,970,000 $ 7,849,000  

Cytori Therapeutics
Tiago Girao, +1.858.458.0900
ir@cytori.com

View Comments and Join the Discussion!