Financial Results for the Second Quarter of 2014 (all comparisons are with the Second Quarter of 2013):
Total revenue for the three months ended June 30, 2014 was $4.5 million, up 3 percent from $4.4 million for the prior year period. Clinical services and reimbursable revenue, representing approximately 80% of total revenues, increased slightly compared with the prior year period. Of note, the number of clinical service contracts for process development in the current year nearly doubled, resulting in $2.1 million of deferred revenue as of June 30, 2014. This revenue will be recognized in future periods upon completion of the associated contracts.
For the three months ended June 30, 2014, research and development expenses were $5.8 million compared with $4.0 million for the quarter ended June 30, 2013, an increase of $1.8 million. The increase was primarily comprised of the following:
• Targeted Cancer Immunotherapy Program: $2.0 million increase in expenses associated with the cancer immunotherapy program, and specifically efforts to initiate the Phase 3 clinical trial of NeoStem's lead product candidate NBS20, which targets malignant melanoma initiating cells. The oncology platform was acquired in the CSC merger on May 8, 2014.
• Immune Modulation Program using T regulatory cells: $1.4 million increase in expenses associated with the immune modulation program, primarily due to efforts to develop Tregs for the treatment of type 1 diabetes, steroid resistant asthma, and organ transplant rejection.
• The above increases were partially offset by a $1.6 million decrease in expenses related to the Company's PreSERVE AMI clinical trial of NBS10, which completed enrollment in 2013.
Selling, general and administrative expenses were $7.4 million, up from $4.3 million a year ago. The increase was related to increased corporate development activities, including those associated with the acquisition of CSC, expenses associated with the additional CSC operating activities since the acquisition date, increased corporate infrastructure needed to support the Company's expanded clinical activities, and higher equity-based compensation paid in exchange for services.
Net loss for the three months ended June 30, 2014 was $12.8 million compared with $8.6 million for the three months ended June 30, 2013. Net loss for the six months ended June 30, 2014 was $26.6 million (or $19.4 million when excluding non-cash charges -- see appendix for reconciliation) compared with $17.5 million for the six months ended June 30, 2013 (or $13.1 million when excluding non-cash charges -- see appendix for reconciliation).
At June 30, 2014 NeoStem's cash and cash equivalents, and marketable securities totaled $33.8 million. This compares with cash and cash equivalents of $46.1 million at December 31, 2013.
To me, looks very non-eventful. PCT revenue is up, not huge. Expenses up, but that is due to the increase in ongoing trials and new acquisition. Cash on hand is good. The PPS very much relies on upcoming data from the trials which can be a gamechanger. All in all, a growing business. Any other significance from the release?
THIS IS THE BIG ONE THAT SENDS THE STOCK SKYROCKETING SOON.............
"NeoStem has had an exciting first half as we make progress towards our goal of delivering transformative cell based therapies. We expect to continue to build on our progress through the rest of 2014 with a number of important programs," said Dr. Robin Smith, Chairman and CEO of NeoStem. These include:
•Anticipated release of Phase 2 data from the PreSERVE AMI trial of NBS10:This randomized, double-blind, placebo-controlled clinical trial is testing NBS10, the Company's second most advanced product candidate and lead candidate in its ischemic repair program, an autologous adult stem cell product, to treat patients with left ventricular dysfunction following acute ST segment elevation myocardial infarction (STEMI).
If successful, NBS10 would address a significant unmet medical need as the indication currently has no effective treatment. For those suffering a STEMI this treatment has the potential to improve longevity and quality of life and positions NeoStem to capture a meaningful share of the worldwide market. The Company is evaluating other clinical indications that might benefit from this ischemic repair platform technology, including traumatic brain injury, chronic heart failure and critical limb ischemia.