Q1/13 Results – BUY, this is the year for growth and return!
The Bottom Line: Revenues decreased $700 K – a license fee recognition issue – happens. Cost of revenues increased resulting in gross margins decreased. But, SG&A expenses increased 14%. R&D jumped but on the basis of the ALD P2 trial costs which are important to the future. The cash raise was successful in traunches for $18 million. CMXI will have sufficient cash to sustain itself through 2013. This is a consolidation and focus quarter setting CMXI’s gears to move exponentially forward. CMXI also expects to begin treating Medicare beneficiaries with AutoloGel shortly and will be recording revenues for those AutoloGel treatments soon after the CED implementation date of July 1st 2013.
Product sales continued a steady growth trend, with total sales of $2.3 million in Q1/13 – Angel sales of $2.1 million were particularly strong, up 40% year over year. Both Angel and AutoloGel achieved double digit increases sequentially over Q1/12 with more than 500 Angel Systems on a worldwide basis. Over 40,000 patients are currently being treated with the Angel System on an annualized basis. Reimbursement is the most important milestone for any device – AutoloGel will be covered initially by CMS under the CED program – when CMS formally approved the clinical outcomes in the protocols submitted in response to the NCD memo. CMS has also issued coding and reimbursement instructions to its regional contractors.
The Bright Cell technology pipeline continues to move forward; the clinical development plan includes completion of enrollment in the RECOVER-Stroke Trial with top-line data available in the first half of 2014, and beginning enrollment in the P2 PACE study with ALD-301 in patients with intermittent claudication. The RECOVER-Stroke trial is currently enrolling at 10 sites. The first 30 patients have been enrolled, and CMXI expects to have the planned DSMB review soon. On the whole I am giving credit to Martin and Ed – but caution on cost and expense containment - isn’t that what a new CFO is for!
CMXI closed at $0.47 on 5/9/13. The 50 day moving average is $0.50 compared with the 200 day of $0.63 – the needle needs to be pushed! Investors should compare CMXI to Cytori (CYTX) who is trading at $2.59 as a good hybrid comparable. Let’s watch the statistics – short interest if low ! The issue is visibility which is being addressed in the upcoming Q’s. Expectation is “murky” how perception will be – post earnings but I project a … BUY.