Total Quarterly Revenues Increase 41% and
Expenses Decrease 50% versus Prior Year
Caladrius Biosciences, Inc. (NASDAQ:CLBS) (“Caladrius” or the
“Company”), a cell therapy company combining an industry-leading
development and manufacturing services provider through its
subsidiary PCT, LLC a Caladrius Company™ (“PCT”) with a select
therapeutic development pipeline, announces financial results for
the three and six months ended June 30, 2016.
Business highlights for the second quarter and recent weeks
include:
- Achieved total revenues of $8.3 million for the second quarter
of 2016, up 41% compared with $5.9 million in the second quarter of
2015;
- Achieved total operating costs and expenses reduction of 50% in
the second quarter of 2016 when compared with the second quarter of
2015;
- Granted Fast Track designation from the U.S. Food and Drug
Administration (“FDA”) for CLBS03 for the treatment of recent onset
type 1 diabetes mellitus (“T1D”), making it the first known
therapeutic candidate to receive Fast Track designation for
treatment of T1D;
- Granted Orphan Drug designation from the FDA for CLBS03 for the
treatment of T1D with residual beta cell function;
- Expanded PCT’s relationship with Kiadis Pharma with an
agreement for the manufacturing of their lead product, ATIR101™,
for the U.S. and Canadian Phase 3 trial in blood cancers;
- Announced the appointment of Robert A. Preti, Ph.D., the
Company’s Chief Technology Officer, Senior Vice President,
Manufacturing and Technical Operations, and President of PCT, as
Chairman of the Alliance for Regenerative Medicine (“ARM”), the
international advocacy organization representing the gene and cell
therapies and broader regenerative medicine sector; and
- Licensed exclusive global rights to the Company’s tumor
cell/dendritic cell technology for the treatment of ovarian cancer
to AiVita Biomedical, Inc. In return, Caladrius will receive
certain development milestone payments as well as royalties on
sales.
Management Commentary
“We remain very pleased with our year-to-date performance as we
continue to deliver on our strategic goals to grow and expand the
PCT business, to reduce expenses, to advance our Phase 2 T-Rex
clinical trial as a treatment for T1D and to monetize non-core
assets,” stated David J. Mazzo, Ph.D., Chief Executive Officer of
Caladrius. “We are delighted to add Fast Track and
Orphan Drug designations to CLBS03 for the treatment of T1D as they
underscore the significant unmet medical need in this degenerative
disease, and provide regulatory provisions that can accelerate the
review process and expand our market exclusivity. We look
forward to completing enrollment and treatment of the first cohort
of approximately 18 patients toward the end of summer.
Following the three-month post-treatment visit, an interim safety
analysis will be conducted, and we expect to have these results by
year-end 2016.”
“We entered the second half of 2016 in a solid position to
continue advancing our strategic goals and achieving our financial
guidance for the year. We are delighted that a growing number
of cell therapy developers are partnering with PCT to take
advantage of our expertise and our quality, scalable, innovative,
reliable and cost-efficient manufacturing platforms and services to
advance their cellular therapies.”
“Our leadership in regenerative and cell therapy was further
solidified with the appointment of Dr. Robert Preti as Chairman of
ARM. As a pioneer in cell therapy manufacturing and
development, Dr. Preti remains at the forefront of the industry,
influencing regulatory trends and policy making. ARM’s
dedication to advancing regenerative medicine and cell therapies
and to bringing its stakeholders together is unprecedented, and
aligns with PCT’s vision of contributing to a world in which
transformative cell-based therapeutics are accessible to all
patients in need,” concluded Dr. Mazzo.
Second Quarter Financial Highlights
Total revenues for the second quarter of 2016 increased 41% to
$8.3 million compared with $5.9 million for the second quarter of
2015. Gross margin on revenues was 15% in the second quarter
of 2016 compared with 1% in the second quarter of 2015.
Research and development (R&D) expenses for the second
quarter of 2016 decreased 47% to $4.0 million compared with $7.6
million for the second quarter of 2015. The decrease was primarily
related to lower costs subsequent to the discontinuation of the
Intus Phase 3 clinical trial for metastatic melanoma as well as
lower program expenses associated with the Company’s ischemic
repair platform, compared with the prior-year period. These
decreases were partially offset by an increase in expenses related
to The Sanford Project: T-Rex Phase 2 Study in T1D.
Selling, general and administrative (SG&A) expenses
decreased 46% to $4.7 million for the second quarter of 2016
compared with $8.7 million for the same period in 2015. The
decrease is due to both lower equity-based compensation costs and
operational and compensation-related cost reductions compared to
the prior year period.
The operating loss for the second quarter of 2016 was $7.5
million compared with an operating loss of $25.7 million for the
second quarter of 2015, reflecting higher revenues and gross
margin, and lower R&D and SG&A expenses, as well as an
impairment of intangible assets in the second quarter of 2015.
The Company reported a net loss for the second quarter of 2016
of $7.9 million, or $1.33 per share, compared with a net loss for
the second quarter of 2015 of $17.2 million, or $3.84 per
share.
First Half Financial Highlights
Total revenues for the six months ended June 30, 2016 increased
75% to $15.8 million compared with $9.0 million for the first six
months of 2015. Gross margin for the first half of 2016 was
16% compared with a negative 1% for the first half of 2015.
R&D expenses for the first half of 2016 decreased to $9.9
million compared with $14.4 million for the first half of 2015.
SG&A expenses decreased to $11.2 million for the first half of
2016 compared with $19.8 million for the same period in 2015.
The first half of 2015 included expenses associated with executive
management changes including one-time new hire compensation-related
costs. The first half of 2016 included separation-related
costs incurred during the first quarter of 2016, while equity-based
compensation expenses were significantly lower in the first half of
2016 compared to the prior year period.
The operating loss for the first half of 2016 was $18.6 million
compared with an operating loss of $43.8 million for the first half
of 2015.
The net loss for the six months ended June 30, 2016 was $19.9
million, or $3.39 per share, compared with a net loss for the six
months ended June 30, 2015 of $36.4 million, or $8.83 per
share.
Balance Sheet and Cash Flow Highlights
As of June 30, 2016, Caladrius had cash and cash equivalents of
$17.7 million. Net cash used in operating activities for the
six months ended June 30, 2016 was $14.6 million, compared with
$21.8 million for the six months ended June 30, 2015.
2016 Financial Guidance
The Company reaffirms its previous guidance as follows:
- Consolidated Revenues: to exceed $30
million or a greater than 30% increase compared with
2015
- Capital Improvements at PCT’s Allendale, NJ
facility: ~$6
million, to be completed by end of first half of 2017
- CLBS03 Phase 2 Study Costs in 2016: $6
million to $7 million
- Consolidated Annual Operating Cash
Burn: $25 million to $28 million in 2016, with lower
operating cash burn in the second half of 2016 than in the first
half of the year
Conference Call
As previously announced, Caladrius management will host a
conference call to discuss these results and provide a company
update today at 5:00 pm Eastern time. To participate in the
conference call, dial 877-562-4460 (U.S.) or 513-438-4106
(international) and provide conference ID 95709219.
To access the live webcast, visit the Investor Relations section
of the Company’s website at www.caladrius.com/events.
The webcast will be archived on the website for 90 days.
About Caladrius Biosciences
Caladrius Biosciences, Inc., through its PCT subsidiary, is a
leading development and manufacturing partner to the cell therapy
industry. PCT works with its clients to overcome the
fundamental challenges of cell therapy manufacturing by providing a
wide range of innovative services including product and process
development, GMP manufacturing, engineering and automation, cell
and tissue processing, logistics, storage and distribution, as well
as expert consulting and regulatory support. PCT and Hitachi
Chemical Co., Ltd. have entered into a strategic global
collaboration to accelerate the creation of a global commercial
cell therapy development and manufacturing enterprise with deep
engineering expertise. Around the core expertise of PCT,
Caladrius strategically develops select product candidates, which
currently includes an innovative therapy for type 1 diabetes based
on a proprietary platform technology for immunomodulation. For more
information, visit www.caladrius.com.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements reflect management’s current
expectations, as of the date of this press release, and involve
certain risks and uncertainties. All statements other than
statements of historical fact contained in this press release are
forward-looking statements, including statements regarding the
realization of the benefits of fast track designation for CLB03,
the achievement of clinical milestones for CLB03 and the
establishment of a partnership for CLBS03. The Company’s
actual results could differ materially from those anticipated in
these forward-looking statements as a result of various factors.
Factors that could cause future results to materially differ from
the recent results or those projected in forward-looking statements
include the “Risk Factors” described in the Company’s Annual Report
on Form 10-K filed with the Securities and Exchange Commission
(“SEC”) on March 15, 2016, and in the Company’s other periodic
filings with the SEC, including: risks related to: (i) our
expected continued losses and negative cash flows; (ii) our
anticipated need for substantial additional financing; (iii) the
significant costs and management resources required to comply with
the requirements of being a public company; (iv) the
possibility that a significant market for cell therapy may not
emerge; (v) the potential variability in PCT’s revenues; (vi) PCT’s
limited manufacturing capacity; (vii) the need to improve
manufacturing efficiency at PCT; (viii) the limited marketing staff
and budget at PCT; (ix) the logistics associated with the
distribution of materials produced by PCT; (x) government
regulation; (xi) our intellectual property; (xii) cybersecurity;
(xiii) the development, approval and commercialization of our
products; (xiv) enrolling patients in and completing, clinical
trials; (xv) the variability of autologous cell therapy; (xvi) our
access to reagents we use in the clinical development of our cell
therapy product candidates; (xvii) the validation and establishment
of manufacturing controls; (xviii) the failure to obtain regulatory
approvals outside the United States; (xix) our failure to realize
benefits relating to “fast track” and “orphan drug” designations;
(xx) the failure of our clinical trials to demonstrate the safety
and efficacy of our product candidates; (xxi) our current lack of
sufficient manufacturing capabilities to produce our product
candidates at commercial scale; (xxii) our lack of revenue from
product sales; (xxiii) the commercial potential and profitability
of our products; (xxiv) our failure to realize benefits from
collaborations, strategic alliances or licensing arrangements;
(xxv) the novelty and expense of the technology used in our cell
therapy business; (xxvi) the possibility that our competitors will
develop and market more effective, safer or less expensive products
than our product candidates; (xxvii) product liability claims and
litigation, including exposure from the use of our products;
(xxviii) our potential inability to retain or hire key employees;
and (xxix) risks related to our capital stock. The Company’s
further development is highly dependent on, among other things,
future medical and research developments and market acceptance,
which are outside of its control.
Caladrius Biosciences, Inc. Selected Financial Data
(unaudited) |
(in thousands,
except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
Statement of Operations Data: |
|
|
|
|
|
|
|
Revenues |
$ |
8,300 |
|
|
$ |
5,867 |
|
|
$ |
15,790 |
|
|
$ |
9,039 |
|
Costs and expenses: |
|
|
|
|
|
|
|
Cost of revenues |
|
7,052 |
|
|
|
5,799 |
|
|
|
13,280 |
|
|
|
9,167 |
|
Research and development |
|
4,028 |
|
|
|
7,601 |
|
|
|
9,904 |
|
|
|
14,404 |
|
Impairment of intangible assets |
|
- |
|
|
|
9,400 |
|
|
|
- |
|
|
|
9,400 |
|
Selling, general, and administrative |
|
4,706 |
|
|
|
8,736 |
|
|
|
11,164 |
|
|
|
19,824 |
|
Total operating costs and expenses |
|
15,785 |
|
|
|
31,536 |
|
|
|
34,348 |
|
|
|
52,796 |
|
Operating loss |
|
(7,485 |
) |
|
|
(25,669 |
) |
|
|
(18,558 |
) |
|
|
(43,757 |
) |
Other income (expense), net |
|
7 |
|
|
|
5,355 |
|
|
|
13 |
|
|
|
4,809 |
|
Interest expense |
|
(360 |
) |
|
|
(547 |
) |
|
|
(1,287 |
) |
|
|
(1,098 |
) |
Loss before income taxes and noncontrolling
interests |
|
(7,838 |
) |
|
|
(20,861 |
) |
|
|
(19,832 |
) |
|
|
(40,046 |
) |
Provision for income taxes |
|
47 |
|
|
|
(3,703 |
) |
|
|
100 |
|
|
|
(3,657 |
) |
Net loss |
|
(7,885 |
) |
|
|
(17,158 |
) |
|
|
(19,933 |
) |
|
|
(36,390 |
) |
Less
- loss attributable to noncontrolling interests |
|
(50 |
) |
|
|
(32 |
) |
|
|
(117 |
) |
|
|
(76 |
) |
Net loss attributable to Caladrius Biosciences, Inc. common
stockholders |
$ |
(7,835 |
) |
|
$ |
(17,126 |
) |
|
$ |
(19,816 |
) |
|
$ |
(36,313 |
) |
|
|
|
|
|
|
|
|
Basic and diluted loss per share attributable to Caladrius
Biosciences, Inc. common stockholders |
|
(1.33 |
) |
|
|
(3.84 |
) |
|
|
(3.39 |
) |
|
|
(8.83 |
) |
Weighted average common shares outstanding |
|
5,907 |
|
|
|
4,457 |
|
|
|
5,840 |
|
|
|
4,110 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2016 |
|
December 31, 2015 |
Balance Sheet Data: |
|
|
|
|
|
|
|
Cash, cash equivalents, and marketable securities |
|
|
|
|
$ |
17,700 |
|
|
$ |
20,318 |
|
Total assets |
|
|
|
|
|
56,713 |
|
|
|
57,205 |
|
Total liabilities |
|
|
|
|
|
31,676 |
|
|
|
33,921 |
|
Total redeemable securities |
|
|
|
|
|
19,400 |
|
|
|
- |
|
Total equity |
|
|
|
|
|
5,637 |
|
|
|
23,284 |
|
Investors:
LHA
Anne Marie Fields
Senior Vice President
Phone: +1-212-838-3777
Email: afields@lhai.com
Media:
Caladrius Biosciences, Inc.
Eric Powers
Director, Communications and Marketing
Phone: +1-212-584-4173
Email: epowers@caladrius.com
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