Cytori Reports First Quarter 2017 Business and Financial Results
May 11 2017 - 4:25PM
Cytori Therapeutics (NASDAQ:CYTX) (“Cytori” or the “Company”) today
announced its first quarter 2017 financial results and provided
updates on its corporate activity and clinical development.
First quarter 2017 adjusted net loss was $5.9
million, or $0.26 per share, and excludes a $1.7 million non-cash
charge for in process research and development expense from the
Azaya Therapeutics asset acquisition. Q1 2017 GAAP net loss was
$7.5 million, or $0.33 per share. Operating cash burn for the
quarter was approximately $4.8 million. Cytori ended the quarter
with approximately $6.3 million of cash and cash equivalents, or
approximately $15 million pro-forma at March 31,
2017, when considering $8.7 million in net cash proceeds
since March 31, 2017 from the issuance of shares under
Cytori’s underwritten public offering that closed on April 17,
2017.
Selected Key Recent
Highlights:
- Received U.S. FDA approval for thermal burn IDE pilot trial
application related to ongoing BARDA contract.
- Received U.S. FDA orphan drug designation for cryopreserved or
centrally processed HabeoTM for treatment of hand manifestations of
systemic scleroderma.
- Received U.S. Small Business Designation and related fee
reductions.
Q1 2017 Financial
Performance
- Q1 2017 operating cash burn was $4.8 million, compared to $5.1
million for Q1 2016.
- Q1 2017 total revenues were $1.6 million, compared to $2.9
million in Q1 2016.
- Cash and debt principal balances at March 31, 2017 were
approximately $6.3 million and $15.9 million, respectively.
- Q1 2017 adjusted net loss was $5.9 million or $0.26 per share,
compared to a net loss of $5.3 million or $0.41 per share for Q1
2016.
- Q1 2017 GAAP net loss was $7.5 million or $0.33 per share,
compared to a net loss of $5.3 million or $0.41 per share for Q1
2016.
“Our areas of primary focus is on stockholder value creation
through bringing two valuable late stage products to market,” said
Dr. Marc Hedrick, President and CEO of Cytori. “Specifically, our
U.S. pivotal STAR trial for HabeoTM Cell Therapy for scleroderma
will report top line data in Q3. Also, we currently project
completing bulk manufacturing of our nanoparticle doxorubicin
oncology product for testing and validation purposes by year end.
In parallel, our marketing team is preparing for initial commercial
launch of our scleroderma and oncologic products with the goal of
obtaining regulatory approvals in the late 2018 and 2019,
respectively. Until then, we will carefully manage our capital
resources as we have in prior quarters.”
Selected Key Anticipated Milestones:
- Complete contracting discussions with BARDA regarding their
potential funding of our thermal burn trial (Q2)
- Report of 48-week US pivotal/phase III trial data for
scleroderma hand dysfunction and preparation for US PMA filing
(Q3)
- Complete manufacturing activities required for submission of an
MAA to the EMA for our recently acquired nanoparticle doxorubicin
(Q4)
2017 Financial Guidance -
Reiterated
The Company expects full year 2017 operating cash burn to be
higher than 2016, primarily due to the development of assets
acquired from Azaya Therapeutics, as well as costs to be incurred
in preparation of anticipated HabeoTM launch and the Company’s
expansion of its development program for secondary Raynaud’s
Phenomenon.
- Operating cash burn forecasted to be within a range of $26
million to $29 million.
Management Conference Call
Webcast
Cytori will host a management conference call at
5:30 p.m. Eastern Time today to further discuss its 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: 15172159.
About Cytori
Cytori is a therapeutics company developing
regenerative and oncologic therapies from its proprietary cell
therapy and nanoparticle platforms for 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. Cytori Nanomedicine™ is
developing encapsulated therapies for regenerative medicine and
oncologic indications using technology that allows Cytori to use
the benefits of its encapsulation platform to develop novel
therapeutic strategies and reformulate other drugs to optimize
their clinical properties. 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, including, without limitation,
statements regarding anticipated commercial launch of our Habeo™
therapy and ATI-0918 drug candidate (and timing thereof); our
receipt and disclosure of STAR clinical trial data; completion of
manufacturing activities necessary to submit an MAA to the EMA for
our ATI-0918 drug candidate; our strategy for addressing our
capital requirements through various activities, including
operational efficiencies, revenue growth and accessing the capital
markets; receipt of feedback from, and related discussions with,
BARDA regarding our future contractual relationship with BARDA (and
proposed BARDA funding of our thermal burn pilot trial); and our
expected 2017 cash burn and reasons for the anticipated cash burn;
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 conduct and completion of the
Company-sponsored STAR trial and the proposed thermal burn trial,
as well as the Company’s anticipated submission of data to the EMA
from the previously completed bioequivalency trial for ATI-0918.
Specifically, the Company faces risks in the collection and results
of the STAR and thermal burn trials, including enrollment risks,
the risks that clinical data from one or more of these clinical
trials will fail to demonstrate safety or efficacy of our product
candidates, and risks that insufficiently positive clinical data
will adversely affect government funding, regulatory approval
pathways and commercial prospects for our cell therapy (e.g.,
Habeo), and nanomedicines product candidates. We also face risks
that investigator-initiated trials using our Cytori Cell Therapy
fail to fully enroll or otherwise are conducted in a manner that
ultimately is injurious to our business. We also face the
risk that we will be unable to time successfully manufacture our
ATI-0918 drug candidate in time to meet our projected timeline for
submission of an MAA to the EMA, or at all. We also face
risks regarding execution of our managed access program (MAP)
strategy in Europe, the Middle East and Africa (EMEA), including
risks relating to our efforts to ethically direct prospective
scleroderma patients into our MAP program. Some of these
risks also include risks relating to regulatory challenges the
Company faces (including the U.S, EU, China, Japan and its other
key geographies) due to a number of factors including novelty of
the Company’s technology and product offerings, changes in and /or
evolution of regulatory approaches to cellular therapeutics like
the Company’s in its key geographies, and similar matters. The
Company also faces risks relating to achievement of the Company’s
financial goals (including balancing capital requirements and
meeting projected 2017 operating cash burn guidance). It is
possible that the Company could face unexpected revenue shortfalls,
expense increases or other occurrences that adversely affect our
cash burn and cash management strategies. Further the Company
face risks pertaining to dependence on third party performance and
approvals (including performance of investigator-initiated trials,
outcome of BARDA’s review of the Company’s proposed burn wound
trial pursuant to its contract with BARDA, and outcome of the EMA’s
review of our ATI-0918 MAA); performance and acceptance of the
Company’s products in clinical studies/trials and in the
marketplace (including commercial acceptance of the Company’s
products in Japan and other markets where are products are
commercially available, and similar risks); material changes in the
marketplace that could adversely impact revenue projections
(including changes in market perceptions of the Company’s products,
and introduction of competitive products); unexpected costs and
expenses that could adversely impact liquidity and shorten the
Company’s current liquidity projections (which could in turn
require the Company to seek additional debt or equity capital
sooner than currently anticipated); the Company’s reliance on key
personnel; the Company’s ability to identify and develop new
programs or assets to expand the Company’s clinical pipeline; the
right of the U.S. government (BARDA) to cut or terminate further
support of the thermal burn injury program (including any decision
by BARDA not to proceed with our proposed thermal burn trial,
assuming FDA approval of the Company’s IDE submission); the
Company’s abilities to capitalize on its internal restructuring and
achieve break-even or profitability (or to continue to reduce our
operating losses); and other risks and uncertainties described
under the "Risk Factors" in Cytori's Securities and Exchange
Commission Filings, included in the Company’s annual and quarterly
reports.
There may be events in the future that the
Company is unable to predict, or over which it has no control, and
its business, financial condition, results of operations and
prospects may change in the future. The Company assumes no
responsibility to update or revise any forward-looking statements
to reflect events, trends or circumstances after the date they are
made unless the Company has an obligation under U.S. Federal
securities laws to do so.
|
|
CYTORI THERAPEUTICS, INC. |
|
CONSOLIDATED CONDENSED BALANCE
SHEETS |
|
(UNAUDITED) |
|
(in thousands, except share and par value
data) |
|
|
|
|
|
As of March 31,2017 |
|
|
As of December 31,2016 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
6,255 |
|
|
$ |
12,560 |
|
Accounts
receivable, net of reserves of $167 in both 2017 and 2016,
respectively |
|
|
873 |
|
|
|
1,242 |
|
Restricted cash |
|
|
350 |
|
|
|
350 |
|
Inventories, net |
|
|
4,107 |
|
|
|
3,725 |
|
Other
current assets |
|
|
500 |
|
|
|
870 |
|
Total
current assets |
|
|
12,085 |
|
|
|
18,747 |
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
|
3,611 |
|
|
|
1,157 |
|
Other assets |
|
|
2,008 |
|
|
|
2,336 |
|
Intangibles, net |
|
|
8,145 |
|
|
|
8,447 |
|
Goodwill |
|
|
3,922 |
|
|
|
3,922 |
|
Total
assets |
|
$ |
29,771 |
|
|
$ |
34,609 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable and accrued expenses |
|
$ |
6,196 |
|
|
$ |
5,872 |
|
Current
portion of long-term obligations, net of discount |
|
|
6,686 |
|
|
|
6,629 |
|
Total
current liabilities |
|
|
12,882 |
|
|
|
12,501 |
|
|
|
|
|
|
|
|
|
|
Deferred revenues |
|
|
109 |
|
|
|
97 |
|
Long-term deferred rent
and other |
|
|
17 |
|
|
|
17 |
|
Long-term obligations,
net of discount, less current portion |
|
|
9,400 |
|
|
|
11,008 |
|
Total
liabilities |
|
|
22,408 |
|
|
|
23,623 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity: |
|
|
|
|
|
|
|
|
Series A
3.6% convertible preferred stock, $0.001 par value; 5,000,000
shares authorized; 13,500 shares issued; no shares
outstanding in 2017 and 2016 |
|
|
— |
|
|
|
— |
|
Common
stock, $0.001 par value; 75,000,000 shares authorized; 23,767,423
and 21,707,890 shares issued and outstanding in 2017 and
2016, respectively |
|
|
24 |
|
|
|
22 |
|
Additional paid-in capital |
|
|
392,748 |
|
|
|
388,769 |
|
Accumulated other comprehensive income |
|
|
1,198 |
|
|
|
1,258 |
|
Accumulated deficit |
|
|
(386,607 |
) |
|
|
(379,063 |
) |
Total
stockholders’ equity |
|
|
7,363 |
|
|
|
10,986 |
|
Total
liabilities and stockholders’ equity |
|
$ |
29,771 |
|
|
$ |
34,609 |
|
|
|
|
|
|
|
|
|
|
CYTORI THERAPEUTICS, INC. |
|
|
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS |
|
|
(UNAUDITED) |
|
|
(in thousands, except share and per share
data) |
|
|
|
|
|
|
|
For the Three Months Ended
March 31, |
|
|
|
|
2017 |
|
|
2016 |
|
|
Product revenues |
|
$ |
591 |
|
|
$ |
1,333 |
|
|
Cost of product
revenues (excluding below amortization of intangible assets) |
|
|
410 |
|
|
|
468 |
|
|
Amortization of
intangible assets |
|
|
306 |
|
|
|
99 |
|
|
Gross
(loss) profit |
|
|
(125 |
) |
|
|
766 |
|
|
|
|
|
|
|
|
|
|
|
|
Development
revenues: |
|
|
|
|
|
|
|
|
|
Government contracts and other |
|
|
1,018 |
|
|
|
1,585 |
|
|
|
|
|
1,018 |
|
|
|
1,585 |
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
Research
and development |
|
|
3,289 |
|
|
|
4,127 |
|
|
Sales and
marketing |
|
|
939 |
|
|
|
1,035 |
|
|
General
and administrative |
|
|
2,108 |
|
|
|
2,286 |
|
|
In
process research and development acquired from Azaya
Therapeutics |
|
|
1,686 |
|
|
|
— |
|
|
Total
operating expenses |
|
|
8,022 |
|
|
|
7,448 |
|
|
Operating
loss |
|
|
(7,129 |
) |
|
|
(5,097 |
) |
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
|
|
Interest
income |
|
|
11 |
|
|
|
2 |
|
|
Interest
expense |
|
|
(591 |
) |
|
|
(657 |
) |
|
Other
income, net |
|
|
165 |
|
|
|
413 |
|
|
Total
other expense |
|
|
(415 |
) |
|
|
(242 |
) |
|
Net
loss |
|
$ |
(7,544 |
) |
|
$ |
(5,339 |
) |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss per share |
|
$ |
(0.33 |
) |
|
$ |
(0.41 |
) |
|
Basic and diluted
weighted average shares used in calculating net loss per share |
|
|
22,736,366 |
|
|
|
13,086,376 |
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss: |
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(7,544 |
) |
|
$ |
(5,339 |
) |
|
Other comprehensive
loss – foreign currency translation adjustments |
|
|
(60 |
) |
|
|
(249 |
) |
|
Comprehensive loss |
|
$ |
(7,604 |
) |
|
$ |
(5,588 |
) |
|
|
|
|
|
|
|
|
|
|
|
CYTORI THERAPEUTICS, INC. |
|
CONSOLIDATED CONDENSED STATEMENTS OF
CASH FLOWS |
|
(UNAUDITED) |
|
(in thousands) |
|
|
|
|
|
For the Three Months Ended
March 31, |
|
|
|
2017 |
|
|
2016 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(7,544 |
) |
|
$ |
(5,339 |
) |
Adjustments to
reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
442 |
|
|
|
291 |
|
Amortization of deferred financing costs and debt discount |
|
|
219 |
|
|
|
232 |
|
In
process research and development acquired from Azaya
Therapeutics |
|
|
1,686 |
|
|
|
— |
|
Joint
Venture acquisition obligation accretion |
|
|
— |
|
|
|
17 |
|
Provision
for expired inventory |
|
|
340 |
|
|
|
— |
|
Stock-based compensation expense |
|
|
199 |
|
|
|
317 |
|
Loss on
asset disposal |
|
|
2 |
|
|
|
2 |
|
Increases
(decreases) in cash caused by changes in operating assets and
liabilities: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
335 |
|
|
|
155 |
|
Inventories |
|
|
7 |
|
|
|
(206 |
) |
Other
current assets |
|
|
(65 |
) |
|
|
(408 |
) |
Other
assets |
|
|
24 |
|
|
|
(211 |
) |
Accounts
payable and accrued expenses |
|
|
(484 |
) |
|
|
176 |
|
Deferred
revenues |
|
|
12 |
|
|
|
(4 |
) |
Long-term
deferred rent |
|
|
— |
|
|
|
(80 |
) |
Net cash
used in operating activities |
|
|
(4,827 |
) |
|
|
(5,058 |
) |
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
Purchases of property
and equipment |
|
|
(5 |
) |
|
|
(69 |
) |
Purchase of long-lived
assets part of Azaya Therapeutics acquisition |
|
|
(1,158 |
) |
|
|
— |
|
Net cash
used in investing activities |
|
|
(1,163 |
) |
|
|
(69 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
Principal payments on
long-term obligations |
|
|
(1,770 |
) |
|
|
— |
|
Joint Venture purchase
payments |
|
|
— |
|
|
|
(500 |
) |
Proceeds from sale of
common stock, net |
|
|
1,435 |
|
|
|
562 |
|
Net cash
(used in) provided by financing activities |
|
|
(335 |
) |
|
|
62 |
|
Effect of
exchange rate changes on cash and cash equivalents |
|
|
20 |
|
|
|
85 |
|
Net
decrease in cash and cash equivalents |
|
|
(6,305 |
) |
|
|
(4,980 |
) |
Cash and cash
equivalents at beginning of period |
|
|
12,560 |
|
|
|
14,338 |
|
Cash and cash
equivalents at end of period |
|
$ |
6,255 |
|
|
$ |
9,358 |
|
|
|
|
|
|
|
|
|
|
CYTORI THERAPEUTICS CONTACT
Tiago Girao
+1.858.458.0900
ir@cytori.com
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