GAITHERSBURG, Md., May 15, 2014 (GLOBE NEWSWIRE) -- Cytomedix, Inc. (OTCQX:CMXI), a leading developer of biologically active regenerative therapies, today reported financial results for the three months ended March 31, 2014.
First Quarter 2014 Financial Summary (All Comparisons Are With the First Quarter of 2013)
- Total revenues were $1.8 million, a 20% decrease from $2.3 million in the prior year.
- Net loss of $5.6 million, or $0.05 per share compared with a net loss of $5.3 million, or $0.05 per share in the prior year.
- Cash and cash equivalents of approximately $7.7 million at March 31, 2014.
First Quarter 2014 and Recent Corporate Highlights
- Announced up to $35 million convertible debt financing with Deerfield Management Company.
- $2 Million additional equity investment with Anson Group
- Company remains focused on the commercial launch of AutoloGel™ in the hospital outpatient setting.
- 2014 payment level is commercially viable and expected to support broad AutoloGel expansion into the outpatient wound care market.
- Established new commercial leadership team with appointment of several key positions.
- Highly experienced reimbursement team is also in place.
- Two oral presentations demonstrating clinical benefit of AutoloGel® in healing pressure ulcers presented at the Symposium on Advanced Wound Care (SAWC) Spring Meeting.
- Announced results from RECOVER-Stroke phase 2 trial in patients with neurological damage arising from an ischemic stroke treated with ALD-401, which trial showed no significant clinical benefit.
"Our top priority continues to be the commercial launch of AutoloGel under the Coverage with Evidence Development (CED) program," said Martin Rosendale, Chief Executive Officer of Cytomedix. "Physician interest in the product continues to be high. We believe the hospital outpatient setting is the greatest opportunity for the product and we are therefore working hard to get our processes and people focused on that segment of the market. Our new commercial leadership team is now in place, and we also have a highly experienced reimbursement team. We are confident that our growing commercial team has the experience and skill set required to establish the AutoloGel brand and grow sales in the estimated $3.4 billion U.S. wound care market."
"We were very pleased to announce the financial transactions at the end of the quarter with Deerfield Management and Anson Group," continued Mr. Rosendale. "These financings are expected to provide sufficient funding and give us the necessary resources to execute on the AutoloGel commercial plan."
Financial Results for the First Quarter Ended March 31, 2014
Total revenues were $1.8 million in the first quarter, compared to $2.3 million in the same period of 2013. The decrease was primarily due to lower product sales of $0.8 million offset by an increase in royalty revenue of $0.3 million and license fee revenue of $0.1 million. The decrease in product sales was primarily due to a reduction in Angel average selling price under the terms of the Arthrex Agreement. AutoloGel sales for the quarter were $0.2 million.
Overall gross margin decreased to 21% in the first quarter of 2014 from 45% in the first quarter of 2013. The decrease was primarily due to the sale of devices and disposable products to Arthrex under the licensing agreement signed last year. Although the cost of the Company's products has remained constant, the contractual selling price of Angel disposable products to Arthrex is significantly lower than the historical average selling price. This was offset by the gross margin realized from licensing fees, accrued royalty income, and other revenue.
The negative impact on gross margins is primarily the result of the requirement under Generally Accepted Accounting Principles to record revenues and cost of goods related to Angel product sales on a pass through basis. The Company expects to realize the economic benefit from the Arthrex license agreement in the form of future royalty revenues. Future reported gross margins are expected to recover as the launch of AutoloGel in the wound care market gathers momentum and these related sales begin to account for a more significant portion of overall revenues.
Total operating expenses in the first quarter were $5.0 million, compared to $6.0 million in the same period of 2013. The change in total operating expenses is primarily the result of a non-cash charge of $1 million recognized in 2013 related to the effect of the amendment to the contingent consideration associated with the Aldagen acquisition.
Net loss in the first quarter was $5.6 million, or a loss of $0.05 per share compared to a net loss of $5.3 million, or a $0.05 loss per share in the first quarter of 2013.
On March 31, 2014, Cytomedix entered into a financing agreement with certain investment funds managed by Deerfield Management Company, L.P. Under the terms of this agreement, Deerfield agreed to provide to the Company up to $35 million through a senior secured convertible debt facility. The commitment consists of two separate tranches. Deerfield initially provided $9 million at the closing of the transaction and has agreed to provide a second tranche of $26 million contingent upon shareholder approval of the authorization of a sufficient number of common shares available for conversion of notes and warrants. Provided such conditions are met, the Company anticipates closing on the second tranche in the second quarter of 2014. Concurrently with the Deerfield financing, the Company also raised an additional $2 million in the private placement of common stock and warrants to Anson Investments.
On May 5th, 2014, the Company announced plans to discontinue further funding of the ALDH Bright Cell development program and close its R&D Facility in Durham, NC. This decision was consistent with the ongoing realignment of commercial operations to focus on the wound care market and is currently expected to result in annual savings of approximately $4 million. In connection with this R&D reorganization, the Company currently estimates that it will incur total pre-tax exit and disposal costs in the range of $500,000-$600,000. The Company may also incur non-cash impairment charges related to intangible and fixed assets, such as facilities and equipment, or amortizing and non-amortizing intangible assets. No such charges would result in any current or future cash expenditures. The ongoing Phase 2 PACE (Patients with Intermittent Claudication Injected with ALDH Bright Cells) study investigating ALD-301 in patients with peripheral artery disease continues to enroll patients. The study is being funded entirely by NHLBI/NIH. Cytomedix retains ownership of the commercial rights to this program and will continue to seek and pursue opportunities that would potentially allow the asset to be monetized and create additional value for shareholders.
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The AutoloGel System utilizes a proprietary unique technology that enables the rapid isolation and activation of PRP from a patient's own blood. The PRP is subsequently processed to produce a bioactive gel for application to the wound bed, re-establishing a balance needed for natural healing to occur. In normal healing, platelets migrate from the blood into the wound site where they serve as the primary source of growth factors for effective wound healing. In chronic wounds, blood supply may be impaired and the delivery of platelets is impeded, disallowing adequate concentrations of growth factors. The AutoloGel System is used at the point-of-care and is the only PRP system cleared by the U.S. Food and Drug Administration for use on exuding wounds, such as leg ulcers, pressure ulcers and diabetic ulcers, and for the management of mechanically or surgically-debrided wounds. Cytomedix's clinical studies have shown that AutoloGel rapidly and more effectively improved healing compared with control-treated wounds. This has been demonstrated in a variety of clinical studies including a systematic review of 21 comparison studies and a number of other observational and case series publications as well.
Cytomedix, Inc. is an autologous regenerative therapies company commercializing innovative platelet technologies for wound care. The Company markets the AutoloGel(TM) System, a device for the production of autologous platelet rich plasma ("PRP") gel for use on a variety of exuding wounds. For additional information please visit cytomedix.com.
Safe Harbor Statement -- Statements contained in this press release not relating to historical facts are forward-looking statements that are intended to fall within the safe harbor rule for such statements under the Private Securities Litigation Reform Act of 1995. The information contained in the forward-looking statements is inherently uncertain, and Cytomedix' actual results may differ materially due to a number of factors, many of which are beyond Cytomedix' ability to predict or control, including among many others, risks and uncertainties related to the Company's ability to successfully execute its Angel and AutoloGel sales strategies, to achieve AutoloGel expected reimbursement rates in 2014 and thereafter, the Company's ability to comply with the debt covenants and restrictions under the existing loan facilities, the Company's ability to realize expected benefits from the Arthrex licensing arrangement, the Company's ability to collect the data necessary for the grant of the unconditional coverage, the Company's ability to continue in its efforts to expand in the wound care market, its ability to successfully negotiate with physician offices as anticipated and to realize the anticipated sales growth from such treatments, the likelihood of a favorable CMS determination relating to the reimbursement rates for AutoloGel(TM), to meet its stroke trial enrollment rates, to successfully realize sales of the Angel Technology resulting in the royalty stream to the Company, the Company's ability to successfully integrate the Aldagen acquisition, the Company's ability to expand patient populations as contemplated, its ability to provide Medicare patients with access as expected, the Company's expectations of favorable future dialogue with potential strategic partners, and its ability to successfully manage contemplated clinical trials, to manage and address the capital needs, human resource, management, compliance and other challenges of a larger, more complex and integrated business enterprise, viability and effectiveness of the Company's sales approach and overall marketing strategies, commercial success or acceptance by the medical community, competitive responses, the Company's ability to raise additional capital and to continue as a going concern, and Cytomedix's ability to execute on its strategy to market the AutoloGel(TM) System as contemplated. To the extent that any statements made here are not historical, these statements are essentially forward-looking. The Company uses words and phrases such as "believes", "forecasted," "projects," "is expected," "remain confident," "will" and/or similar expressions to identify forward-looking statements in this press release. Undue reliance should not be placed on forward-looking information. These forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual events to differ from the forward-looking statements. More information about some of these risks and uncertainties may be found in the reports filed with the Securities and Exchange Commission by Cytomedix, Inc. Cytomedix operates in a highly competitive and rapidly changing business and regulatory environment, thus new or unforeseen risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. Except as is expressly required by the federal securities laws, Cytomedix undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, changed circumstances or future events or for any other reason. Additional risks that could affect our future operating results are more fully described in our U.S. Securities and Exchange Commission filings, including our Annual Report for the year ended December 31, 2013, as amended to date, and other subsequent filings. These filings are available at www.sec.gov.
|Condensed Consolidated Statement of Operations|
|Three Months Ended|
|Cost of revenues|
|Cost of sales||1,408,821||1,267,310|
|Cost of royalties||44,244||5,134|
|Total cost of revenues||1,453,065||1,272,444|
|Salaries and wages||1,682,086||1,998,196|
|Research, development, trials and studies||953,683||901,685|
|General and administrative expenses||1,331,831||2,489,326|
|Total operating expenses||5,043,024||6,048,067|
|Loss from operations||(4,650,160)||(5,003,210)|
|Other income (expense)|
|Change in fair value of derivative liabilities||201,062||193,093|
|Total other income (expenses)||(978,108)||(330,469)|
|Net loss before provision for income taxes||(5,628,268)||(5,333,679)|
|Income tax provision||4,645||4,890|
|Earnings (loss) per common share --|
|Weighted average shares outstanding --|
|Consolidated Balance Sheets|
|March 31,||December 31,|
|Short-term investments, restricted||53,356||53,257|
|Accounts and other receivable, net||2,371,189||3,926,681|
|Prepaid expenses and other current assets||1,979,463||1,258,282|
|Deferred costs, current portion||433,314||316,551|
|Total current assets||13,222,421||9,952,991|
|Property and equipment, net||869,112||919,469|
|Intangible assets, net||33,677,371||33,768,954|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Accounts payable and accrued expenses||$7,940,540||$8,018,672|
|Deferred revenues, current portion||470,009||740,990|
|Note payable, current portion||--||1,800,000|
|Total current liabilities||8,410,549||10,559,662|
|Derivative and other liabilities||12,781,414||3,615,521|
|Commitments and contingencies|
|Conditionally redeemable common stock (909,091 issued and outstanding)||500,000||500,000|
|Common stock; $.0001 par value, authorized 200,000,000 shares; 2014 issued and outstanding - 121,326,733 shares; 2013 issued and outstanding - 107,164,855 shares||12,042||10,626|
|Common stock issuable||432,100||432,100|
|Additional paid-in capital||121,449,271||117,097,844|
|Total stockholders' equity||25,031,924||26,311,994|
|Total liabilities and stockholders' equity||$50,240,397||$46,252,280|
CONTACT: Cytomedix, Inc. Martin Rosendale, Chief Executive Officer Steven A. Shallcross, EVP/Chief Financial Officer (240) 499-2680 Investors Andrew McDonald Ph.D. LifeSci Advisors, LLC firstname.lastname@example.org (646) 597-6987Source:Cytomedix, Inc.