don't forget this...
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. Le
Sentiment: Strong Buy
Great opportunities can just happen to show up when you least expect. Such was the case when I first learned about Cytomedix (CMXI.OB). At the time a family member was having problems with a wound that was responding poorly to standard treatments, and CMXI stock was at about $0.35. I did some research on new treatments and found that CMXI had a product called AutoloGel that sounded like the sort of thing that could really eclipse the current standard of care. Since then, only a year later, my grandfather has recovered (AutoloGel was not readily available in his area),
CMXI could be poised to become a big name in medicine. Autologous blood therapy (essentially the use of technology, to better refine and direct healing mechanisms that the body naturally produces) and platelet rich plasma (a more specified type of autologous therapy) are already becoming readily adopted therapies. Not long ago professional athletes and dental patients were the main recipients of platelet rich plasma, however now it is not uncommon for average people to walk into their doctor's office and ask about it. It could become the standard treatment for a variety of conditions. CMXI has three divisions of products and treatments, which are based on autologous blood therapy (or a bone marrow derived product in the case of the acquired Aldagen technology). The products are currently aimed precisely at specific target markets as they grow the business and develop the technology. However the technology itself has the potential to transcend medical niches and markets; there are applications for autologous blood therapy that range from healing external wounds, to healing internal wounds like sports injuries and vascular problems, even to hair transplantation and more. The former examples only begin to scratch the surface of the range of use. Autologous blood therapy is a platform that is already helping people of many walks and stages of life, without incurring a long list of adverse side effects and risks that typically accompany many pharmaceutical and surgical treatments.
CMXI's most recognizable product for now is AutoloGel. It is a platelet rich plasma therapy for external chronic wounds. The general process involved, requires that a nominal amount of the patients' own blood is removed, which is then refined to individual need (via unique centrifugation), and finally re-applied to the body where needed as a gel. The therapy has been shown to dramatically increase rates of healing, particularly in diabetic patients, who suffer from chronic wounds, some of which do not heal over the course of years under standard care. The diabetes market alone presents incredible opportunity for AutoloGel. With an estimated 285 million people worldwide and growing, and 15% of diabetics experiencing foot ulcers, AutoloGel has a large potential pool of customers, and they potentially have a treatment that can significantly increase their quality of life.
As of 2010, 26 million in the U.S. had diabetes, and the market for platelet rich plasma was estimated to be $126 million by 2016. However, currently AutoloGel has limited availability, sales are growing but they have been limited to just a handful of U.S. states. But AutoloGel was just recently accepted for Medicare & Medicaid approval. Before this, the treatment was limited to private pay sales. AutoloGel has now entered into the Coverage With Evidence Development program, a relatively new but increasingly utilized program for the vetting of new therapies by CMS. Under this program, AutoloGel will receive full reimbursement benefits, but will be subject to continued review. While the focus for AutoloGel is currently directed toward diabetic ulcer patients, it is relevant to chronic wounds of other causes too.
CMXI's other product is called the Angel. It is a whole blood processing kit that is used mainly in surgical settings. It is both highly customizable and quick, which is key in procedures that require fast processing turn-around and precise concentrations of growth factors. Additionally, after an early 2012 acquisition of Aldagen, CMXI now has a third line of products in the pipeline that uses stem cell technology to address various ischemic conditions. More specifically, they seek to address healing of critical limb ischemia, ischemic heart failure, and post-acute treatment of ischemic stroke. Most recently in conjunction with Duke University, one of the stem cell variations will be studied to show its feasibility and safety on patients with malignant gliomas. All of the stem cell therapies are currently in trials, and as they come to fruition it could make CMXI the most well rounded company in its field.
As an investment candidate CMXI is volatile, as evidenced by the aforementioned share price fluctuations. It has had a significant decline in price over recent months. But it has very compelling products targeting burgeoning markets, a sound business plan, and excellent execution particularly in recent years. There are significant barriers to entry in terms of being able to permeate in full the populations that can benefit from its products, mostly due to regulatory and insurance requirements, which of course is a common hurdle for medical companies. But CMXI has shown quite convincingly that autologous blood therapies can solve medical problems more quickly, effectively, and safely than standard treatments; which ultimately creates value for shareholders, reduces cost for insurers and patients, and provides better quality of life for therapy recipients.
Sentiment: Strong Buy
this is a bit more obvious...
Recent Insider buying...
ROSENDALE MARTIN P Common Stock 04/04/2013 P 17,231 A $ 0.52
JORDEN DAVID EMERSON P COMMON STOCK 04/08/2013 P 43,485 A $ 0.51
JORDEN DAVID EMERSON P COMMON STOCK 04/09/2013 P 31,515 A $ 0.52
Feb 27, 2013 JORDEN DAVID EMERSON
Director direct Buy 0.53 4,400
Feb 26, 2013 JORDEN DAVID EMERSON
Director direct Buy 0.52 20,600
Feb 22, 2013 KENT RICHARD S
Director indirect Buy 0.55 963,637
Feb 22, 2013 ALDAGEN HOLDINGS, LLC
Beneficial Owner (10%) indirect Buy 0.55 281,819
Feb 22, 2013 ROSENDALE MARTIN P
Officer direct Buy 0.53 20,000
Feb 22, 2013 JORDEN DAVID EMERSON
Director direct Buy 0.53 20,000
Feb 21, 2013 JORDEN DAVID EMERSON
Director direct Buy 0.53 30,000
Feb 19, 2013 DEL GUERCIO JOSEPH
Director indirect Buy 0.55 509,091
Sentiment: Strong Buy