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  • rookiesareu rookiesareu Jul 19, 2013 7:22 AM Flag

    John Paul Dejoria increases his share position in Cytomedix

    Very interesting….
    John Paul DeJoria
    Net Worth$4 B
    John Paul Mitchell Systems, has roughly $1 billion in annual sales. His Patron Spirits, started as a hobby with pal Martin Crawley in 1989, sold more than 2.4 million cases of tequila in 2011. DeJoria gives to charities that help people help themselves. Chrysalis provides L.A. homeless with a fresh start; Grow Appalachia hands people the supplies and knowledge needed to grow their own food.
    From: John Paul DeJoria 4,021,726
    To: John Paul DeJoria (22) 7,125,974

    Sentiment: Strong Buy

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • another winner on board

    • very, very indeed!

      Sentiment: Strong Buy

    • another whale buying

    • Net Worth$4 B

    • that's increase not decrease

    • what does the billionaire know anyway....LMAO!

    • Buying very interesting....Mmmmmmmmmm!

      Sentiment: Strong Buy

    • very intelligent guy!

    • do you bkame him!

    • now I really know why...GAITHERSBURG, MD--(Marketwired - Aug 7, 2013) - Cytomedix, Inc. (OTCQX: CMXI), a regenerative therapies company commercializing and developing innovative platelet technologies, today released financial results for the second quarter of 2013 and announced a commercial licensing agreement for Angel® that provides for an upfront $5 million payment and an ongoing source of royalty income.

      Announcement Highlights

      Cytomedix has signed a five-year worldwide licensing agreement with Arthrex, Inc., a privately held global leader in orthopedics, for the commercialization of the Angel® Concentrated Platelet Rich Plasma System. As discussed below, Arthrex will pay Cytomedix an upfront payment of $5 million, plus royalties on future sales of Angel®.
      Cytomedix will focus its commercial operations on selling AutoloGel in the wound care market and leverage AutoloGel's current reimbursement status to begin treating Medicare beneficiary patients, which make up over half of the approximately 2.0 million pressure ulcers, 1.7 million venous ulcers and 1.5 million diabetic foot ulcers treated in the U.S. each year. The Company is expected to expand its access to the Veterans Health Administration ("VA") utilizing its listing on the Federal Supply Schedule ("FSS").
      Cytomedix will also continue to evaluate strategic partnerships or co-promotions as a means to further accelerate AutoloGel growth.
      2Q 2013 Earnings (all comparisons are with the 2012 second quarter)

      Product revenue of $2.4 million compared with $1.8 million in the prior year, an increase of 30%.
      Net loss to common stockholders of $5.0 million, or ($0.05) per share. This compares to a net loss of $7.5 million, or ($0.09) per share in the prior year.
      Cash and cash equivalents of approximately $3.4 million at June 30, 2013.
      Angel® Technology Licensed to Arthrex

      Cytomedix announced that today it has signed a five-year exclusive worldwide licensing agreement with Arthrex, Inc., for the commercialization of the Angel® Concentrated PRP System (Angel®). Angel® is the Company's cPRP device and associated disposable products used in surgical settings for the separation of concentrated platelets from whole blood or bone marrow aspirates. Arthrex has a large commercial infrastructure supporting sales throughout the world and will immediately take responsibility for all sales and marketing activities for Angel®. Angel® is currently approved in the U.S., and various countries in Europe and in the Middle East, as well as in Canada and Australia.

      Under the terms of the agreement, Cytomedix will retain ownership of the asset and will grant Arthrex exclusive worldwide rights to develop, manufacture, and commercialize Angel®. Arthrex will pay Cytomedix an upfront payment of $5 million, plus royalties on future sales in the low teen range. The term of the agreement is five years, with a three year renewal option. In connection with the Arthrex technology license agreement, the Company was required to make certain modifications and amendments to its financing arrangement with its senior secured lender, which were executed as of the same date and which are described in the Financial Results section of this press release and in the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2013.

      Martin Rosendale, Chief Executive Officer of Cytomedix, commented, "We are proud to partner with Arthrex, an acknowledged leader in orthopedics. We are confident that the greater commercial resources they will put into marketing Angel® will translate into faster sales growth and a consistent royalty stream for Cytomedix. We believe that, given Arthrex's extensive experience and success in marketing products in this space, it will be able to maximize the global potential of this best in class product."

      Focus on Targeted AutoloGel Expansion

      The licensing of Angel® is expected to provide Cytomedix with additional commercial and financial resources to increase AutoloGel's visibility in the long-term chronic wound care market. The Company's existing commercial operations, which include sales, marketing, clinical and operations, will focus on driving greater awareness and utilization of AutoloGel in outpatient wound care clinics following the Coverage with Evidence Development ("CED") determination by the Centers for Medicare & Medicaid Services ("CMS") and with institutional customers where treatment of non-healing wounds with AutoloGel can help reduce patient healing times and increase quality of care.

      Cytomedix expects to double its experienced device and biologics sales force during 2014 to accommodate the growing number of AutoloGel treatment sites. The Company will also expand access to the VA to leverage AutoloGel's listing on the FSS. The VA is America's largest integrated health care system with over 1,700 sites of care and serves 8.3 million veterans each year.

      To maximize AutoloGel's unique reimbursement position with the CMS following the CED determination, Cytomedix is preparing for a major launch in outpatient wound clinics in early 2014. CMS issued proposed payment regulations on July 8, 2013 that include guidelines covering Medicare reimbursement for AutoloGel under the Physician Fee Schedule and the Hospital Outpatient Prospective Payment System. As previously discussed, the Company will continue to work with CMS with the goal of obtaining appropriate payment for AutoloGel in the hospital outpatient setting. CMS is expected to announce the final ruling in late November 2013, which would take effect on January 1, 2014.

      The Company will also continue to evaluate strategic partnerships or co-promotions as a means to further accelerate AutoloGel growth.

      "We are excited to begin treating Medicare beneficiaries with AutoloGel, which addresses an existing unmet need in wound care," said Martin Rosendale. "We have worked hard to build a strong clinical data package supporting the efficacy and cost advantages of using AutoloGel to treat chronic wounds. The realignment of our commercial organization will now allow us to build on the significant gains we have made in reimbursement. Provided that our reimbursement efforts to date and in the near future bring the anticipated results, we estimate a market opportunity to drive a sustainable revenue ramp to be at least $500 million worldwide."

      Financial Results, Three-Month Period Ended June 30, 2013

      Total revenues were $2.4 million in the three months ended June 30, 2013, a decrease of approximately $1.3 million compared to the same period last year. The decrease was mostly due to license fee revenue of $1.8 million recognized in 2012 with respect to an option agreement with a top 20 global pharmaceutical company. Product sales in the quarter were $2.4 million, an increase of 30% compared with the same period last year.

      Gross margin on product sales decreased to 43% from 46% comparing the three months ended June 30, 2013, to the same period last year. The decrease in gross margin is primarily attributable to Angel® machine refurbishment costs, the medical device excise tax, which took effect in 2013, and a non-cash patent amortization charge related to the AutoloGel product. Overall gross margin decreased to 44% from 73%. The license fee recorded in the second quarter of 2012 had no associated cost of revenue and was the primary reason for the decline in overall gross margin year over year.

      Second quarter cash margins on product sales decreased to 50% from 54%. Cash margin is a non-GAAP financial measure, most directly comparable to the U.S. GAAP measure of gross margin, and should not be considered as an alternative thereto. Cytomedix defines cash margin as gross margin exclusive of patent amortization and depreciation expense, and it is a significant performance metric used by management to indicate cash profitability on product sales. Patent amortization and depreciation expense was $163,000 and $137,000 during the three months ended June 30, 2013 and 2012, respectively.

      Total operating expenses in the second quarter were $5.7 million an increase of $0.7 million or 13% compared to the same period in 2012.

      Salaries and wage expenses during the quarter were $2.0 million compared with $1.8 million last year. The increase was primarily due to additional operational head-count. Total Consulting and Professional fee expenses in the quarter were $1.0 million compared to $0.7 million last year. The increase was primarily due to CMS reimbursement related consulting services and higher legal fees. Research and development expenses in the quarter were $1.2 million compared with $1.1 million last year. The increase was primarily due to one-time manufacturing charges related to the sourcing and testing of Angel® centrifuge replacement components. General and administrative expenses were $1.5 million, essentially even with the same quarter in 2012.

      The Company recorded a net loss of $5.0 million, or ($0.05) per share in the three-month period ended June 30, 2013, compared to a net loss of $7.5 million, or ($0.09) per share in the comparable period in 2012.

      Financial Results, Six-Month Period Ended June 30, 2013

      Total revenues in the first half of 2013 were $4.7 million, compared with $6.7 million in the first half of 2012. The decrease was mostly due to license fee revenue of $3.2 million recognized in 2012 with respect to the option agreement with a top 20 global pharmaceutical company. Product sales for the first six months were $4.6 million, an increase of 32% year over year. Gross margins on product sales were 43% in the first half, compared with 48% in the same period in 2012.

      Salaries and wages for the first half were $4.0 million, compared with $3.8 million the first half of 2012. Consulting expenses and Professional fees were $1.6 million in the first half, down from $1.9 million in the same period last year. Research & development expenses were $2.1 million, compared with $1.4 million last year. General and administrative expenses were $4.0 million in the first half, compared with $2.7 million last year. Total operating expenses in the first six months were $11.8 million, compared with $9.9 million reported in the same period in 2012.

      The Company recorded a net loss of $10.4 million, or ($0.10) per share for the six-month period ended June 30, 2013, compared to a net loss of $12.2 million, or ($0.17) per share in the same period last year. Cash used in operating activities for the six-months ended June 30th was $7.9 million.

      Cash and Liquidity

      Cash and cash equivalents were approximately $3.4 million at June 30, 2013, up from $2.6 million at December 31, 2013. Upon receipt of the Arthrex upfront payment of $5 million, the Company will have cash and cash equivalents of approximately $7 million on or about August 8, 2013.

      In order to complete the Arthrex licensing engagement and the agreement in connection therewith, on August 7, 2013, the Company entered into Consent and First Amendment to Security Agreement (the "Amendment to Credit Agreement") with MidCap Funding III, LLC, its senior secured lender, amending the February 13, 2013 Credit and Security Agreement. MidCap consented to the Company entering the Arthrex Agreement in consideration for, among other things, termination of the Company's ability to borrow an additional $3 million, reducing the loan amount from $7.5 million to $4.5 million, $4.5 million of which has been extended to the Company to date. The parties also agreed to an accelerated payment schedule under the credit facility commencing on September 1, 2013. Finally, the Company granted to the lender a first priority security interest in the royalty payments payable to the Company pursuant to the Arthrex Agreement. For more details relating to this transaction, see the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2013.

      Cash used in operating activities during the quarter was $3.7 million. There were approximately 104.8 million shares of common stock issued and outstanding as of June 30, 2013. Less
      Sentiment: Strong Buy

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      biosearchone biosearchone • 10 hours ago Flag0 users liked this posts users disliked this posts 0 Reply great choice...Welcome to Arthrex… we are a global medical device company and leader in new product development and medical education in orthopaedics. With a corporate mission of helping surgeons treat their patients better, Arthrex has pioneered the field of arthroscopy and developed more than 6... More
      Sentiment: Strong Buy

      No wonder why John Paul Dejoria increased his position in Cytomedix.

      John Paul Dejoria increases his share position in Cytomedix
      Very interesting….
      John Paul DeJoria
      Net Worth$4 B
      John Paul Mitchell Systems, has roughly $1 billion in annual sales. His Patron Spirits, started as a hobby with pal Martin Crawley in 1989, sold more than 2.4 million cases of tequila in 2011. DeJoria gives to charities that help people help themselves. Chrysalis provides L.A. homeless with a fresh start; Grow Appalachia hands people the supplies and knowledge needed to grow their own food.
      From: John Paul DeJoria 4,021,726
      To: John Paul DeJoria (22) 7,125,974

      That's good news, right?
      “That's very good news for Cytomedix! Prior to the decision there was virtually no government business for AutoloGel; and the lack of government business significantly impeded uptake in the private pay market. CMS-NCD provides a pathway for reimbursement of AutoloGel to Medicare and Medicaid beneficiaries, which make up over half of the approximate 2.0 million pressure ulcers and 1.5 million diabetic foot ulcers treated in the U.S. each year”.

      On July 10, 2013, Cytomedix, Inc. CMXI announced that the Centers for Medicare and Medicaid Services (CMS) has issued proposed payment regulations under the Physician Fee Schedule (PFS) and the Hospital Outpatient Prospective Payment System (HOPPS) that include proposed guidelines covering Medicare reimbursement for AutoloGel.
      What the heck does that mean?
      Before we get into that, let's take a step back and review where we've come with respect to Medicare reimbursement and AutoloGel over the past year.
      On August 2, 2012, the CMS issued a National Coverage Determination (NCD) for autologous blood-derived products for the treatment of chronic non-healing wounds. The decision reversed nearly 20 years of non-coverage for autologous platelet rich plasma (PRP) treatments, including Cytomedix's AutoloGel - the only FDA approved PRP treatment option for wound care (view the CMS memo). Essentially, the CMS decision to cover PRP treatment options for wound care opens the door for reimbursement of AutoloGel to Medicare and Medicaid beneficiaries in both the inpatient and outpatient market.
      That's good news, right?
      That's very good news for Cytomedix! Prior to the decision there was virtually no government business for AutoloGel; and the lack of government business significantly impeded uptake in the private pay market. CMS-NCD provides a pathway for reimbursement of AutoloGel to Medicare and Medicaid beneficiaries, which make up over half of the approximate 2.0 million pressure ulcers and 1.5 million diabetic foot ulcers treated in the U.S. each year.
      That sounds like a fairly large market.
      It's an enormous market! For example, Frost & Sullivan estimates the U.S. chronic wound care market is $2.3 billion in size, with more than 6 million chronic non-healing wounds treated annually. PRP products like AutoloGel represent only a small fraction of the market share despite strong clinical and pharmacoeconomic data supporting their use.
      But don't get lost on that $2.3 billion number. Truth be told, there are dozens of alternative therapies that compete with AutoloGel, some of them commodity types of products that have established habitual use patterns or set provider contracts to encourage standardized use. So AutoloGel isn't fighting for market share of $2.3 billion. The product competes more directly with skin substitutes (~$250 million) or enzymes and growth factors (~$150 million). See this fancy chart below:
      (click to enlarge)
      But what is important to note is that there is virtually no government business for AutoloGel now. Instead, management has been focusing on private pay procedures, long-term acute care hospitals (LTAC), veterans administration (VA) facilities, and certain state Medicaid agencies. However, the lack of a national coverage decision on the product has limited uptake in this area as well. So the CMS coverage decision not only kicks open the door to Medicare and Medicaid, it also meaningfully expands private pay coverage as well as many private insurance companies follow the CMS's lead.
      Can you explain the CMS coverage, because it looks like there is still work to be done with respect to finalizing the decision?
      So CMS granted coverage to AutoloGel under its Coverage with Evidence Development (CED) program. Now I want to be clear - CED is full coverage by the government to Medicare and Medicaid beneficiaries, but the coverage comes with a stipulation that Cytomedix will continue to generate meaningful clinical data on AutoloGel to support the continued coverage over time. It's kind of like CMS saying, "Yes, but can you send us more data in a year or two so we can all feel better about this decision?"
      Remember that AutoloGel is an FDA-approved product. The FDA establishes hurdles, guidelines and regulations to protect patients from potentially dangerous experimental drugs and devices. Cytomedix cleared that hurdle, many years ago. However, use of AutoloGel to date has been limited due to a lack of reimbursement coverage. And Cytomedix is a small company with limited financial flexibility, so for years they have been stuck in Catch-22 of, "How do we generate data without coverage / How do we obtain coverage without data." Quite the conundrum. CED provides the pathway from CMS to provide the coverage in order for Cytomedix to collect additional data while selling the product on the market for a profit. It's the perfect solution.
      Can you talk a little about what data Cytomedix has generated to date?
      Sure! AutoloGel, in our view, is a potential significant leap forward in the treatment paradigm for chronic non-healing wounds. Not only is the product more effective than the more commonly used Dermagraft (~$195M in sales in 2011) and Apligraf (~$125M in sales in 2011), but it costs less. The data below was compiled by B&D Consulting in September 2007. B&D is an independent advisory and advocacy firm located in Washington. The firm completed a cost effectiveness analysis of AutoloGel compared to alternative therapies for patients with diabetic foot ulcers. Results of this study demonstrate AutoloGel offers a lower cost and better healing outcomes than the other therapies analyzed. This study was published in the Journal of Advances in Skin and Wound Care in December 2008.
      Cytomedix has conducted its own market research and clinical studies to assess the cost and effectiveness of AutoloGel when compared to readily available, and fully covered, alternative therapies. For example, included in the company's dossier requesting reconsideration on NCD in May 2011 was a number of case studies collected over the previous seven years.
      .
      Also, prior to filing the reconsideration application, Cytomedix published a comprehensive systematic review and meta-analysis (statistical pooling) of the use of PRP gel in wound healing in ePlasty, an open access to the Journal of Plastic Surgery. Data at SAWC in April 2011 highlighted comparing the use of PRP gel (AutoloGel) and negative pressure wound therapy (NPWT) in the long-term acute care setting. Results demonstrate that PRP greatly improved the wound healing outcomes while also cutting costs associated with the overall treatment. The study was conducted at the Asheville Specialty Hospital, in Asheville, NC.
      So you're pretty confident that Cytomedix will be able to generate the necessary data in the next few quarters to satisfy the CED requirement?
      Yes. Cytomedix has already announced they are working with wound care centers around the country to build the registry program. The company will be using Intellicure to aid in the collection and analysis of the data as it is being generated. Management tells us that each use of AutoloGel will generate a profit to the company. That's important for investors to understand. CED allows Cytomedix to earn a profit as it collects the data and funnels that back to CMS for review. That's different from a traditional clinical trial, which normally cost companies money. Cytomedix will be selling AutoloGel with CMS coverage, and booking revenues as it ramps.
      Back in May 2013, when Cytomedix held its first quarter 2013 conference call, CEO Martin Rosendale said he expects to be able to treat 1,000 patients with AutoloGel in 2013 (see conference call transcript). That's a significant acceleration from the approximate 300 patients treated in 2012. I think we'll hear more about this on the company's second quarter call in early August 2013. I wouldn't be surprised to see Cytomedix either expand their sales force to start actively promoting AutoloGel, something they have not been doing prior to this year, or strike a co-promotional agreement with a larger organization in the chronic-wound market.
      Ok, so take us back to the press release last week on the proposed payment regulations.
      Sure. So investors need to understand the progression here. The process starts with CMS granting NCD. The next step is granting of the temporary reimbursement coding and claims payment instructions. CMS put this memo out in March 2013. The assignment of a Healthcare Common Procedure Coding System (HCPCS) establishes the reimbursement mechanism for physicians and other providers submitting claims for services provided to Medicare beneficiaries. The next step after that is the payment procedure. This is what Cytomedix released last week. The press release was a little bit of a mixed bag.
      With respect to physicians' offices, CMS has proposed that Medicare Administrative Contractors (MACs) determine the payment amount for AutoloGel for claims as they are submitted. Historically, Medicare contractors have paid these types of claims based on product invoices presented by the healthcare provider. That's perfect! Cytomedix will essentially get paid under the Physician Fee Schedule for what they bill - around $450 per single use. This took effect July 1, 2013. That means that Cytomedix can immediately now go out and promote AutoloGel to physicians, mostly podiatrists and wound-care specialists, for in-office use of AutoloGel and get reimbursed full price for each sales. Beautiful - the system is working!
      For hospital outpatient services, CMS has placed the reimbursement code for AutoloGel in an Ambulatory Payment Classification (APC) that provides limited reimbursement for use of the product. Therefore, under the HOPPS guideline, AutoloGel will be reimbursed only comparable to a Level-2 debridement product. The reimbursement of which is less than $100 per use. That puts Cytomedix at a significant disadvantage trying to charge $450 for a product hospitals are only authorized to reimburse at around $100 per use. Cytomedix tells us that they are already in communication with CMS on revising the APC listing to authorize reimbursement of AutoloGel similar to a skin substitute, which would put the reimbursement for the product and associated application service in the area of $875 to $1375 per use.
      If this can be accomplished by January 1, 2014, which Cytomedix management thinks it can, then AutoloGel immediately jumps from "extremely disadvantaged" on a reimbursement standpoint to "extremely advantaged" given the cost of only $450 per use and the potential for reimbursement at 2-3x that level. Products like Dermagraft and Apligraf cost $1500 or more per use, so wide-scale implementation of these new procedural codes could have a profound impact on the chronic wound market in 2014. I don't think people have realized that yet, so keep an eye on the preliminary and final CMS decision with respect to this topic coming later in the year.
      Very interesting. Anything else to note on this topic?
      Well, I think investors need to realize that these changes to the reimbursement process for AutoloGel are not incremental, they are monumental. AutoloGel is going from no reimbursement to potentially very favorable reimbursement. Cytomedix expects to see a meaningful pick-up in AutoloGel sales as soon as this quarter. Above we noted essentially two avenues for growth: in-patient hospital settings that include acute long-term care facilities and VA hospitals, and out-patient settings that include the physician's office or hospital outpatient facility. We think the market is pretty evenly split here for AutoloGel between in-patient and out-patient, and within out-patient, it's pretty even between the physician's office and the hospital facilities. So on about 75% of the market, AutoloGel is ready to go. On the proposed guidelines under HOPPS, we're optimistic this can be resolved by the start of 2014.
      Any final thoughts on Cytomedix?
      So we've been Neutral on Cytomedix since earlier in the year given some of the challenges we previously noted on enrollment in the company's Phase 2 RECOVER-Stroke trial. We love the Angel business and think that AutoloGel may finally be poised for a hockey-stick like ramp in revenues starting in 2014. We'd like a little more visibility on this ramp, an update on enrollment in the Phase 2 stroke trial, and an update on the cash position following the $27.5 million committed financing secured in February 2013.

      • partnership picking up steam....
      dots now in place...

      I want to make sure that’s clear, that nobody has walked away. Secondly, the process is beginning to pick up steam because we’ve now turned up a number of uncertainties. There are uncertainties around coverage revenue development and uncertainties around our own financial position. And so with that clarity the discussions are beginning to pick up speed. As far as what we’re looking for with AutoloGel, what we’re talking about is a supply and distribution agreement. So we would continue to supply the product and the partner would be responsible for the sales and marketing and distribution to the customer base. Ideally for us it would be an upfront payment, a royalty with milestones built in along the way. I don’t want to get into specific numbers, Ren only because I don’t want to inhibit or impair our negotiations.
      • 2013 S/B very exciting for Cytomedix...
      Good morning everyone and thank you for joining us today. Cytomedix had a year of strong execution in 2012, making significant progress in both commercial operations and research and development. In the second half of the year we achieved important milestones for our two commercial products, Autologel and Angel, which we believe will contribute in a material way to our topline in 2013.

      We delivered solid financial performance throughout the year and in the fourth quarter. As we pre-announced in our press from February 20, we reported overall fourth quarter product sales of just over $2 million, representing an increase of 27% over the same period in 2011 and a 20% sequential increase over the third quarter of 2012. Both the Angel system and the Autologel showed double digit growth, with Angel achieving record quarterly sales of $1.9 million. We are confident that our efforts to enhance market penetration will continue to build momentum.

      In August last year, we announced that the Center for Medicare and Medicaid Services, CMS, had agreed to provide reimbursement for Autologel in the treatment of chronic non-healing wounds. This national coverage determination was a significant development for Cytomedix and gives us the opportunity to re-launch Autologel into the marketplace with Medicare coverage. CMS will provide coverage through CED, Coverage with Evidence Development, a program intended to provide access for Medicare beneficiaries through promising medical technologies by providing coverage and reimbursement while generating additional clinical data to demonstrate the impact and help the outcomes.

      Since August of last year, we have collaborated with CMS to prepare the protocols for collecting evidence in support of the use of Autologel. Earlier this month we announced that CMS granted formal approval of the clinical outcomes to find in all four of our clinical protocols submitted to CMS. In addition, we announced yesterday that CMS has issued guidance to Medicare administrative contractors and fiscal intermediaries, which includes the building codes and procedures that will be used to process claims for Autologel.

      While the process has taken longer than we anticipated, the outcome is what we predicted. There was specificity in the claims process to identify and monitor Autologel. Beginning on the implementation date of July 1, 2013, all Medicare claims for Autologel provided after August 2 of 2012 and within the guidelines of the CED protocols will be processed for reimbursement. To clarify, actual claims processing will begin July 1 of this year and claims for Autologel provided since August 2 of last year will be eligible. Obviously including treatments under the approved data collection protocol which we expect to begin shortly.

      The national coverage decision opens up a very large market for us. The market for advanced products addressing clinic wounds in the U.S is estimated to be over $2.3 billion annually, with 6 million wounds primarily diabetic foot ulcers, venous leg ulcers and pressure ulcers per year. Importantly, significantly more than 50% of the patients are Medicare beneficiaries, with Medicare coverage now secured for Autologel. In 2013 we will expand our sales and marketing efforts, starting with outpatient wound care centers.

      Coverage with evidence development provides us with a unique market development opportunity to expand the use of Autologel while continuing to collect evidence on the effectiveness in diabetic ulcers, pressure ulcers and venous ulcers through the U.S. Wound Registry. In a few minutes, Dr. Jim Hinson, our Chief Medical Officer will discuss in more detail the progress we have made in achieving coverage with evidence development for Autologel.

      CMS coverage is also driving partnering discussions. Our plan continues to be to secure an appropriate commercial partnership for Autologel. Discussions are now ongoing with several potential partners with the possibility of (inaudible) cash in the transaction. Although I cannot predict the timing of an agreed upon transaction, the possibility of us securing a partner who can help us unlock the true commercial potential of Autologel remains favorable.

      Turning to the Angel cPRP system. Angel remains a product that is driving the majority of our sales today. Most of our growth today is in orthopedic procedures, especially in sports medicine to treat tendinitis and tendonosis . Angel continues to be used in cardiovascular surgeries, specifically open heart surgery where it’s being used to facilitate fusion of the sternum and to prevent infection. We have now placed over 425 Angel devices in the U.S market and over 100 internationally. Angel is currently used in the treatment of close to 40,000 patients every year.

      The second important milestone we achieved in 2012 was the addition of a second indication for the Angel system. In November we received the 510(K) clearance from the FDA and the CE mark to process bone marrow. This significantly expands our opportunity in the orthopedic surgical market and should further contribute directly to our topline sales in 2013. The new indication creates potential for physician use in bone repair and regeneration procedures that include spinal, periodontal and joint revision surgery.

      Let me put some numbers around that. There are approximately 400,000 spinal fusion procedures performed every year in the United States alone and as many as 90% of these would be eligible for use of the Angel system. The biologics market associated with spinal fusion procedures is worth approximately $700 million annually.

      On the strength of our new indication, we have engaged in partnering discussions with companies focused in orthopedic surgery. Our plans for Angel are to pursue additional orthopedic indications, explore expansion opportunities in pain management, and evaluate options for use as a delivery vehicle for other biological therapies.

      In support of our sales growth plans for 2013, we are currently increasing the size of our field sales force and adding technical and scientific specialists. We have begun sponsoring a series of PRP workshops. The first workshop was held in February and was an unqualified success. Today, participants in that workshop are preparing to begin using the Angel system in their medical practices. Outside the U.S, our focus in 2013 is to help the international distribution partners we have established to expand their angel business in the regions they serve. Our international business should deliver robust growth in 2013.

      This week we are exhibiting at the American Academy of Orthopedic Surgeons, AAOS conference in Chicago. Immediately following this earnings call, Ed Field, our Chief Operating Officer, will be presenting at the Annual Canaccord Musculoskeletal Conference which is held each year in proximity to the AAOS meeting. Ed’s presentation will be webcast and recorded.

      So let’s talk about our Bright Cell technology pipeline. We have two Phase 2 studies ongoing. The first of these is the recovery stroke trial designed to treat ischemic stroke. It is a 100 patient, double blind placebo controlled study. We are now in the open enrolment period and reasonably expect to be fully enrolled by the end of the year, with topline data released about four months post the final enrolment. We have enrolled 26 of the target 100 patients and our enrolment rate continues to improve.

      My optimism for our ability to enroll the study by yearend stems from a number of things. We recently received FDA approval for protocol amendments that modify the inclusion and exclusion criteria that allow more patients to qualify for the study. I recently toured the country with our Chief Medical Officer visiting a number of our trial sites and saw firsthand the enthusiasm for the study and commitment to success by our investigators.

      Ultimately we expect to have up to 15 sites. There are nine sites up and running today and several more are indicative of the strong desire to participate. Our plan continues to be to seek a partner for ALD-401 and to the extent we show a positive clinical benefit in this study, we anticipate that we will be able to attract a partner to fund the Phase 3 study and take this product onto commercialization.

      We also announced in late 2012 an NIH sponsored Phase 2 Bright Cell clinical study with ALD-301 in peripheral arterial disease, PAD. The phase study is an 80 patient, double blind, placebo controlled clinical trial in patients diagnosed with intermittent claudication which make up a significant subset of the PAD population. This is the first randomized clinical trial to look at the benefits of autologous stem cell therapy in this specific indication. We anticipate enrolment for the phase study to begin in the coming weeks and to be fully enrolled by the end of the year. The study is fully funded by the NIH in collaboration with the Cardiovascular Cell Therapy Research Network, the CCTRN. So there will be very little direct expense for Cytomedix aside from what we will incur in manufacturing the product.

      In 2012, we also announced an open label clinical study funded by the Duke University Medical Center to treat cognitive disorders in patients that have been treated for malignant glioma. One of the 12 patients has been enrolled to date. The initiation of this study further demonstrates the potential value of Bright Cells in regenerative medicine.

      Before I conclude, I want to draw your attention to the comprehensive strategic financing plan we put into place in February. It included an equity raise, a trust senior secured term loan facility and a committed equity facility. We received approximately $9.5 million in gross proceeds with the closing of the transaction and have commitments for up to an additional $18 million. While we expect our commercial product to get us to profitability, it is important that we have sufficient capital to continue to execute on our growth plans in the near term. The capital will be used to fund our priority activities in 2013 which include the launch of Autologel with CED, sales expansion for the Angel cPRP system, business development and partnering activities and completion of the recover stroke Phase 2 study. Drew will provide more details on the financing.

      Sentiment: Strong Buy

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