Wed, Oct 1, 2014, 1:18 PM EDT - U.S. Markets close in 2 hrs 42 mins

Recent

% | $
Quotes you view appear here for quick access.

Cytomedix, Inc. Message Board

suemadrids 16 posts  |  Last Activity: Sep 24, 2014 7:02 PM Member since: Jul 3, 2012
SortNewest  |  Oldest  |  Highest Rated Expand all messages
  • suemadrids by suemadrids Sep 24, 2014 7:02 PM Flag

    4. To amend the 2013 Equity Incentive Plan to increase the maximum number of shares of common stock which may be (i) issued to key employees as stock options in any calendar year, (ii) used for stock awards and/or stock unit awards intended to qualify as “performance-based” to any key employee in any calendar year under Section 162(m) of the Internal Revenue Code, and (iii) used for stock awards and/or stock unit awards, all as described in more detail in the Proxy Statement.

    Sentiment: Strong Buy

  • Insider
    Relation
    Last Date ▼
    Transaction Type
    OwnerType
    Shares Traded
    Last Price
    Shares Held

    TOZER DEAN
    Officer
    09/12/2014
    Buy
    direct
    40,000
    0.4500
    166,700

    TOZER DEAN
    Officer
    08/29/2014
    Buy
    direct
    40,000
    0.3500
    126,700

    SHALLCROSS STEVEN A
    Officer
    08/26/2014
    Buy
    direct
    27,500
    0.3800
    79,500

    TOZER DEAN
    Officer
    08/22/2014
    Buy
    direct
    38,700
    0.3800
    86,700

    SHALLCROSS STEVEN A
    Officer
    08/20/2014
    Buy
    direct
    52,000
    0.3900
    52,000

    TOZER DEAN
    Officer
    08/20/2014
    Buy
    direct
    48,000
    0.3900
    48,000

    ROSENDALE MARTIN P
    Officer
    08/20/2014
    Buy
    direct
    25,000
    0.4000
    229,149

    Sentiment: Strong Buy

  • suemadrids suemadrids Sep 17, 2014 8:29 PM Flag

    From 31 days to 4 days to cover...GLTA...
    Date
    Short Interest
    % Change
    Avg. Daily Share Volume
    Days to Cover
    Split
    Aug 29, 2014 2,384,323 -24.18 526,694 4.53
    Aug 15, 2014 3,144,582 4.46 100,316 31.35

    Sentiment: Strong Buy

  • Reply to

    Tozer & 750 million, now on Cytomedix team...

    by suemadrids Sep 17, 2014 8:16 PM
    suemadrids suemadrids Sep 17, 2014 8:27 PM Flag

    Simple facts enjoy...
    Under CMS' proposal for packaging in 2014, products like Dermagraft, Apligraf, and new products like Grafix, will become significantly disadvantaged, as all these products cost $1,500 or more. Under the current reimbursement system, hospitals are reimbursed $250 to $500 for the cost of the medical procedure, and are separately reimbursed for the cost of the graft for a total reimbursement of $2,000 to $2,225. The proposed bundled payment of $874 falls far short of the cost of the graft alone. We believe it will be difficult for these manufacturers to reduce their prices sufficiently to be attractive to caregivers in a bundled care environment. Two dermatology KOLs we've spoken with believe that the cost of manufacturing these grafts is in excess of $1,000. As we see it, that's going to create a very challenging sales environment for these two market leading products or new products like Grafix, and a major shift toward cheaper and similar efficacy products.

    CMS moving to a "pay for performance" model could eventually cap the entire reimbursement for "healing a DFU or VFU" to something like $3,000 or $4,000. Above we noted that Apligraf is eligible for reimbursement up to six times in the course of treating a VLU. Things are going to change in our view. The leading products are on their way out

    Sentiment: Strong Buy

  • suemadrids suemadrids Sep 17, 2014 8:24 PM Flag

    .
    Float: 24.76M
    % Held by Insiders 37.76%
    Interesting Insider August buys...GLTA!
    Aug 29, 2014 TOZER DEAN
    Officer direct Buy 0.35 40,000
    Aug 26, 2014 SHALLCROSS STEVEN A
    Officer direct Buy 0.38 27,500
    Aug 22, 2014 TOZER DEAN
    Officer direct Buy 0.38 38,700
    Aug 20, 2014 ROSENDALE MARTIN P
    Officer direct Buy 0.40 25,000
    Aug 20, 2014 TOZER DEAN
    Officer direct Buy 0.39 48,000
    Aug 20, 2014 SHALLCROSS STEVEN A
    Officer direct Buy 0.39 52,000 L

    Sentiment: Strong Buy

  • suemadrids suemadrids Sep 17, 2014 8:19 PM Flag

    Interesting who’s sponsoring one of Cytomedix CMS trials. Let’s connect the dots and GLTA?
    Study Title: A Multi-Center, Randomized Trial Comparing the Effectiveness of APIC-PRP to Control, when added to Standard of Care in the Treatment
    of Non-healing Diabetic Foot Ulcers
    Sponsor: Cytonics Corporation
    ClinicalTrials.gov Number: NCT02209662
    CMS Approval Date: 07/30/2014
    Life Technologies Acquires Cytonix
    July 31, 2009
    By a GenomeWeb staff reporter
    NEW YORK (GenomeWeb News) – Life Technologies recently acquired privately held Cytonix, a microfluidics technologies firm, the firm said earlier this week in its second-quarter earnings statement.
    Life Technologies provided few details about the acquisition of the Beltsville, Md.-based company. However, it said that it acquired the firm for its intellectual property related to its microfluidics-based digital polymerase chain reaction technology.
    Life Technologies also said that it plans to license the technology to partners as well as commercialize new products that can be used for applications ranging from next-generation sequencing library quantification to molecular diagnostic assays.
    Last year, Cytonix's wholly-owned subsidiary, Genomic Nanosystems, licensed to Sequenom exclusive rights to use its digital PCR methods for non-invasive, prenatal diagnostic testing and sample analysis on any platform. In addition, Sequenom obtained exclusive rights to use digital PCR in conjunction with mass spectrometry for all commercial, diagnostic, or research applications except second-generation sequencing

    Sentiment: Strong Buy

  • Reply to

    Tozer & 750 million, now on Cytomedix team...

    by suemadrids Sep 17, 2014 8:16 PM
    suemadrids suemadrids Sep 17, 2014 8:18 PM Flag

    Sheedy and Dejoria facts...
    Beneficial Ownership of Certain Beneficial Owners

    The following table sets forth information regarding the ownership of the Company’s common stock as of March 27, 2014.

    Name of Beneficial Owner Beneficial Ownership (1) Percent of Class (1)

    John Paul DeJoria 6,900,044 (2) 9.2%
    Charles E. Sheedy 7,363,798 (3) 9.7

    Sentiment: Strong Buy

  • Tozer sold ABH to Shire for 750 million…



    “ABH did a retrospective data analysis that showed that Dermagraft is cost effective after six months. That’s important to payers because their data show that people typically change insurance every two years. If a product doesn’t avoid cost before then, it won’t save the payer money”.



    Regenerative medicine company Advanced BioHealing is now part of Shire (NASDAQ:SHPGY), but before it was acquired last May, the Westport, Connecticut company was hours from pulling the trigger on an initial public stock offering.

    ABH’s wound healing product for diabetics had made the company profitable in less than three years, but it needed more cash. Dermagraft is a bioengineered skin substitute product consisting of human fibroblast cells on a scaffold. The product is used to treat diabetic foot ulcers. With Dermagraft sales growing, ABH executives last year concluded that they needed to build a second manufacturing facility at a cost of up to $100 million, said Dean Tozer, ABH’s senior vice president of corporate development. ABH was founded in 2004 and had raised $10.4 million in two rounds of venture financing. But the company’s investors were looking for an exit.

    Tozer said that discussions with private equity firms came close to a deal. But in the second half of 2010, management decided to pursue an IPO. The offering would have valued the company at more than $600 million. But on the morning of May 17, the day before ABH was expected to go public, the company instead announced it had been acquired by Shire for $750 million.



    Tozer spoke Tuesday in Chapel Hill, North Carolina at medtech11, the annual conference hosted by North Carolina medical technology group ibiliti. It was the first time he had spoken publicly since the company’s acquisition by Shire.

    The theme of medtech11 is “convergence” and Tozer offered insight on navigating through the regulatory process a product that is part medical device and part biological. He also offered tips on commercialization. Here are some highlights:

    Forget what you know. The U.S. Food and Drug Administration considers Dermagraft a device. The Centers for Medicare & Medicaid Services considers the product a biologic. European regulators classify it as a medicinal product. You can’t think about your product as being in a single category. You’ve got to be able to think about all of them. So Tozer’s advice is to forget what you know. “If your product is a convergence product, it doesn’t apply.”

    Find the right people. Because Dermagraft doesn’t fall into a single category, ABH needed to find the right people who could talk to the FDA and CMS. Finding the right people was also important for sales. The company established strong incentives for sales growth and the team met them. Since Dermagraft’s 2007 launch, sales had grown to $147 million in just three years.

    Leverage. ABH was in the enviable position to choose between either an IPO or a sale. With growing revenue and more than $35 million in profit, the company was a strong IPO candidate. Shire entered the picture late in the game in the weeks before the company was set to enter the public markets. “The leverage we got was a viable IPO ready to go,” Tozer said. The Shire deal was done in 19 days. Tozer said the company chose to be acquired by Shire because of the volatility of the market.

    Show them the money. Companies increasingly must show the economic value of their technology. Clinical trial data is important not only to make the scientific case for a product, it can also make an important economic point to payers. Payers want to see how a new product will avoid cost when compared with the standard of care. “It’s really starting to affect how trials are designed,” Tozer said.

    More on clinical trials. ABH did a retrospective data analysis that showed that Dermagraft is cost effective after six months. That’s important to payers because their data show that people typically change insurance every two years. If a product doesn’t avoid cost before then, it won’t save the payer money.

    Sentiment: Strong Buy

  • Highlights
    - The global tissue engineering and regeneration market reached $17 billion in 2013. This market is expected to grow to nearly $20.8 billion in 2014 and $56.9 billion in 2019, a
    compound annual growth rate(CAGR) of 22.3%.
    - The North American market reached $7.3 billion in 2013. This market is expected to grow to nearly $9 billion in 2014 and $22.8 billion in 2019, a CAGR of 20.5%.
    - The Eupropean market reached nearly $6.9 billion in 2013. This market is expected to grow to nearly $8.3 billion in 2014 and $22.3 billion in 2019, a CAGR of 21.9%.

    Sentiment: Strong Buy

  • Reply to

    Huge Cytomedix advantage...

    by huskytrainer Sep 5, 2014 12:55 PM
    suemadrids suemadrids Sep 5, 2014 1:22 PM Flag

    Registry programs required for Coverage with Evidence Development (CED) are also on track at Cytomedix. By the end of the year, management expects to have roughly 1,000 patients enrolled in all four programs combined. The company currently has nine sales representatives out in the field promoting the product, with a goal of 30 by the end of the year. We went back and looked at the magnitude of business that Advanced BioHealing (ABH) was doing with Dermagraft in 2011 prior to its acquisition by Shire Pharmaceuticals. ABH had Dermagraft sales near $150 million annualized at the time of the deal, with about 100 full-time representatives. That equates to around $1.5 million per rep. If Cytomedix can match even half that efficiency, with a goal of 30 reps in the field at year-end 2014, Cytomedix could be doing $20-30 million in revenue with AutoloGel in 2015. That's an incredible ramp!

    Sentiment: Strong Buy

  • Reply to

    As of 5/15/14 very interesting...

    by suemadrids Sep 4, 2014 8:56 AM
    suemadrids suemadrids Sep 5, 2014 9:53 AM Flag

    Love this tream team too!

    Sentiment: Strong Buy

  • Reply to

    As of 5/15/14 very interesting...

    by suemadrids Sep 4, 2014 8:56 AM
    suemadrids suemadrids Sep 5, 2014 9:53 AM Flag

    Great DD, Thanks!

    Sentiment: Strong Buy

  • Reply to

    Sheedy and Dejoria facts...

    by biosearchone Sep 4, 2014 8:26 AM
    suemadrids suemadrids Sep 5, 2014 9:51 AM Flag

    Two game changers for sure!

    Sentiment: Strong Buy

  • Reply to

    As of 5/15/14 very interesting...

    by suemadrids Sep 4, 2014 8:56 AM
    suemadrids suemadrids Sep 4, 2014 8:57 AM Flag

    as stated by Husky...

    and they have not sold one single share...GLTA!
    Billionaire entrepreneur John Paul DeJoria made his fortune by cofounding mega-companies like Paul Mitchell hair products and Patron tequila. Now, he's trying to tackle the digital music arena with his new company Rok Mobile.

    Sentiment: Strong Buy

  • Name of Beneficial Owner Ownership (1) Class (1)

    Aldagen Holdings, LLC 14,029,927 (2) 11.5 %
    John Paul DeJoria 9,354,902 (3) 7.6 %
    Charles E. Sheedy 8,148,631 (4) 6.6 %
    Anson Investments Master Fund LP 8,471,392 (5) 6.8 %

    Sentiment: Strong Buy

  • Executives
    Lee Roth – Ruth Group
    Martin Rosendale – Chief Executive Officer
    Steven A. Shallcross – Executive Vice President and Chief Financial Officer
    Dean Tozer – Chief Commercial Officer
    Analysts
    Jason Napodano – Zacks Small Cap Research
    Jason Kolbert – Maxim Group
    Bruce Jackson – Lake Street Capital Markets
    Cytomedix Inc. (OTCQX:CMXI) Q2 2014 Earnings Conference Call August 15, 2014 8:00 AM ET
    Operator
    Greetings and welcome to the Cytomedix Second Quarter 2014 Results Conference Call. At this time all participants are in listen-only mode, a question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder this conference is being recorded.
    I’ll now turn the call over to host Mr. Lee Roth of the Ruth Group, thank you sir, you may begin.
    Lee Roth - Ruth Group
    Thanks Donna, good morning everyone and once again thank you all for joining us. My name is Lee Roth and I’m with the Ruth Group, Investor Relations Advisor to Cytomedix. Joining me for today’s second quarter 2014 financial results conference call from company management are Chief Executive Officer, Martin Rosendale; Chief Financial Officer, Steve Shallcross; and Chief Commercial Officer, Dean Tozer.
    By now you should have all received the press release that was disseminated yesterday after the close of market announcing the company’s financial results for the second quarter of 2014. If you have not yet received this news release or if you like to be added of the company’s distribution list, please call the Ruth Group in New York at 646-536-7000 and ask for myself or just free.
    Before we begin the call, I would like to remind everyone that comments made during this conference call will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of the company. Our actual results could differ materially from those projected. Please review the company’s filings with the Securities and Exchange Commission, including but without limitation the company’s Forms 10-K and 10-Q, which identify specific risk factors that may cause actual results or events to differ materially from those described in such forward-looking statements.
    Furthermore, the content of this conference call includes time sensitive information that is accurate only as of the date of this live broadcast, Friday, August 15, 2014. Cytomedix undertakes no obligation to revise or otherwise update any statements to reflect events or circumstances after the date of this call.
    With that it’s now my pleasure to turn the call over to Martin Rosendale, Chief Executive Officer. Marty?
    Martin Rosendale - Chief Executive Officer
    Thank you, Lee. Good morning everyone and thank you for joining us.
    The first half of 2014 was the start of what we view as the transformational period for the company. We implemented the number of measures that we believe position us to successfully and profitably build our business around the AutoloGel, which is in our view a best in class wound care product. We’re excited about the prospects of this product, the multibillion dollar market characterized by clear and met need for better, more cost effective solutions in those currently in use.
    Since the beginning of 2014, we’ve greatly strengthened our management team through key strategic hires in the areas of commercialization, reimbursement, sales and marketing. This team led by our Chief Commercial Officer Dean Tozer is developing comprehensive go-to market strategy which we are and will continue to rollout in the coming months.
    We believe that the scaled large strategy we’re implementing will serve as a solid foundation for the introduction and ramp of AutoloGel to private wound care centers and review health systems enabling us to maximize value for patients, clinicians and payers.
    Our strategic decision to discontinue the ALD-401 Bright Cell development program and close our Durham, North Carolina R&D facility is supported by the company’s commitment to the success of AutoloGel. This realignment is expected to reduce annual expenses by roughly $4 million and will allow us to devote our full attention and resources to our wound care commercialization efforts.
    Steve will provide further details on this during his review on financial results and Dean will share some highlights of our commercial strategy. But first, I would like to touch on the few topics that I believe are particularly important in light of some of our recent changes as well as we anticipate making during the remainder of the year.
    These are some of the primary reasons behind our high expectations for AutoloGel and our experiment for the future of the company. As those of you familiar with the company likely now, AutoloGel is the only play that risk causes system to be FDA cleared for wound care treatment. It is in our view a best in class wound care product backed by strong clinical data that shows the product to be highly efficacious with a much higher complete wound closure rate than competing solutions.
    Not only that more effective in our view, with an average preparation time of 5 to 8 minutes had achieved these results in far less time than other comparable products. By using the patient’s wound cells as the basis for treatment, AutoloGel provides a maximum biocompatibility for tissue regeneration.
    The safety, efficacy and convenience of AutoloGel all support what we believe is the compelling case for this increased use in the wound care space. However, there is one additional factor that we believe will become crucial as our country’s healthcare lab continues to evolve economic value.
    With the current expected sales price of less than $400 per treatment AutoloGel achieved similar if not better results at a fraction of the cost of competing products which are available to wound care centers at prices typically in the thousands of dollars. Improve the outcomes in value based medicine, our key considerations for medical practitioners and payers as they assess treatment options and we believe that the value proposition of AutoloGel relative to other products will resonate strongly with the physician and payer communities.
    AutoloGel is presently reimbursed under a national coverage decision from CMS for coverage with evidence development. This CED designation requires continued collection of clinical data demonstrating the product impact on health outcomes. As we’ve noted previously, this is the first set of CED protocols approved in the wound care space. This poses some challenges in the near term, mostly related to the collection of patient data and the associated procedural steps required in early stages of commercial availability which are impacting the initial revenue ramp. But we believe in, forwards us a tremendous longer term opportunity to fully differentiate AutoloGel from its peers.
    The CED initiative allows us to establish an extensive volume real world clinical data that we expect will support the expended use of AutoloGel by reinforcing its ability to deliver positive patient outcomes. We believe that this data when available coupled with the obvious economic benefits of AutoloGel should make the product overall value proposition even more clear for clinicians and payers alike.
    Our dedicated reimbursement and clinical teams have maintained close contact with CMS through the facilitation of the CED protocols and establishment of the necessary infrastructure for data collection and administration. We believe that such active engagement with the key regulatory decision makers is integral to the success of the CED initiative and look forward to continued dialogue as we continue the process.
    The development of this data flow will be instrumental in our broader efforts to raise the targeted profile and drive adoption. The reimbursement landscape continues to evolve, as evident in the recently released proposed payment role for 2015 from CMS. Product and servicing bundling remains the key thing and products presenting both clinical and economic benefits like AutoloGel continue to evolve physicians in the market. The proposed rule should be finalized in early November following the public comment and review period and can be found today on the CMS website.
    As I mentioned, we’re putting the pieces in place to make a noticeable impact on a very large market. Over $2 billion in advanced wound care sales in 2013 according to industry research. Where the market is today is certainly important, but what has is mostly cited as where this market is expected to go. According to data from mid market diligence, sales of advanced wound therapies in the U.S. are projected to grow than more than $5 billion by 2021. A market presence represented by share in the mid single digits translates into a revenue opportunity for Cytomedix of several hundred million dollars annually.
    This speaks mainly to as far we’ve come as a company, but how far we believe we can go through from here. Over the next several months in conjunction with the product launch we plan to establish a new corporate identity and new brand for AutoloGel which will fully reflect our focus on commercializing this unique and is potential to initiate paradigm shift in the wound care market.
    We look forward to sharing the details of this with you as we will go ahead. With that I would now like to turn the call over to Dean Tozer, Executive Vice President and Chief Commercial Officer to give you some additional details on the progress we’ve made towards launching AutoloGel. Dean?
    Dean Tozer - Chief Commercial Officer
    Thanks Marty and thanks all for joining us this morning. (Inaudible) that these are incredibly exciting time, exciting for a number of reasons. As Marty outlined, we’re moving forward with a laser focus on the commercial launch with AutoloGel later this year and with good progress and to join the company a few months ago.
    Foremost amongst these recent accomplishments is the continued development of our commercial team. These are the peoples tasked with setting the stage for successful launch as well as those who are in the frontline of AutoloGel enters the market. We’ve assembled a great team of season commercial reimbursement sales and marketing experts to bring a lot of experience in the wound care arena and who like me recognizes sizeable opportunity we have with AutoloGel. We have although several important initiatives in this prelaunch space notably among those is our partnership with IntelliCure, an innovative solutions provider specialized in electronic health record systems for the wound care market.
    Since signing this partnership we work closely with IntelliCure and certain of the customers to ensure that the necessary Medicare reimbursement processes are in place whilst simultaneously developing the data collection infrastructure needed to satisfy CED requirements. IntelliCure’s EHR has been integral to us in the early stages of implementation, we look forward to expanding our footprint within their network of roughly 120 wound care centers as we continue to refine the process. 120 centers is a good start, but it’s just fraction of the addressable market for AutoloGel. We’re pursuing additional partnerships which we believe would significantly AutoloGel’s reach in hospital outpatient facilities. We’re very optimistic on this front and we’ll share additional partnership details with you as we report in subsequent quarter.
    Hospital outpatient centers represent a large segment of the market but another similar attractive opportunity exists for us at the Veterans Administration Hospitals. The VA is the largest integrated healthcare system in the United States. AutoloGel is already being used to treat patients in several centers and our long strategy includes a variety of efforts and expanding our presence within the VA health system.
    During the second half of this year, we expect more than double our dedicated sales force as we continue educated potential customers in both the outpatient hospital and VA markets on the benefits of AutoloGel. Our goal is to finish this year 2014 with a direct AutoloGel sales force of nearly 20 and to increase the sales force significantly in 2015. It is important to note that the requirements under CED will have an impact on the near term productivity of our sales force as we build our commercial team.
    In context with these sales efforts, our team of reimbursement professionals will be working very closely with Medicare administrative contracts (NYSE:MAC) to implement the necessary process to enable reimbursement for AutoloGel at both the facility and provider levels. We’ve also began working with private cares and strategic markets to extricate lot of product and provide them with the necessary information to establish policies and coverages within these plans. The points I covered today are exciting and they’re online, we’re only beginning to scratch the surface. I truly believe that as AutoloGel’s story continues to taking shape over the next several months and with the added benefit and the new product brand that Marty mentioned earlier, you will fully understand why we’re such enthusiasm for the company in the future.
    With that I’ll hand the floor over to Steve for the financial review.
    Steven A. Shallcross - Executive Vice President and Chief Financial Officer
    Thanks Dean. Before reviewing our financial performance for the second quarter, I would like discuss two higher level financial developments from the quarter which directly enfolds our Q2 results and are playing important role for our business going forward.
    First, at the end of June we completed the second tranche of the convertible debt financing through Deerfield Management. The tranche brought in an additional $26 million bringing the total gross proceeds under the facility to $35 million. The significant capital infusion greatly enhances our financial flexibility and enables us to fully advance the AutoloGel commercialization effort. The team at Deerfield shares our excitement for the AutoloGel opportunity and we’re grateful to have the support of one of the leading financial investors in the healthcare space.
    Secondly, in May we completed our strategic realignment with a discontinuation of our ALDH Bright Cell program for ALD-401 and the closing of the Durham, North Carolina R&D facility. This was a decision that provides significant benefits both now and over the long term. As Marty mentioned earlier, the most immediate is that allows us to focus our resources exclusively on the successful AutoloGel launch in meeting our growth objectives as we enter the wound care market.
    In addition, the realignment is expected to result in annualized cost savings of approximately $4 million with the initial benefits to be seen in the third quarter. As I’ll outline in a moment, our second quarter operating expenses reflect Durham related reorganization charges and other severance expenses totaling approximately $500,000 as well as a $4.7 million non-cash impairment charge related to in process R&D associated with the Bright Cell program and a partial write-down of the (inaudible) trademark.
    As already successfully subleased the Durham space to a private life sciences company and as a result our ongoing annual net cash expense for the Durham lease obligation will only be approximately $90,000. I believe that is also important to remind you that the ongoing Phase II case study which is investigating ALD-301 in patients with peripheral artery disease is being funded entirely by the National Heart, Lung and Blood Institute and continues to enroll patients. Current enrolment is 25 patients out of a total expected enrolment of 80 patients. It is the natural of trial and protocol, scheduling the patients into the trial at various CCTRN is confirmed over the next several months which will continue their effort with no expected interruptions.
    Cytomedix retains full ownership of the commercial rights to ALD-301 and the entire rights of technology and intellectual property portfolio and we will continue to explore potential monetization opportunities for this program as appropriate.
    Turning to our financial results for the quarter, total revenues for the second quarter 2014 to $2.3 million compared to $2.4 million in the second quarter of 2013. The year-over-year decline in revenues was the result of the $500,000 decrease in Angel product sales due to ASP reductions under the terms of the Arthrex agreement. This is offset by increased licensees and royalty revenues totaling $400,000.
    Gross margin for the quarter was 18.4% compared to 43.9% in the year-ago period. The decrease in gross margin was primarily related to sale of Angel products to Arthrex. And the licensing agreement we signed last year the contractual selling price of the Angel products to Arthrex which is essentially a pass through sale equal to our class is significantly lower than our historical ASP for the product. This reduced ASP is partially offset by the gross margins we realized from licensing fees and royalty revenues.
    We expect to achieve marketing expansion overtime as we entered wound care market with AutoloGel and our revenue mix began to shift because we still maintain the manufacturing roll and obligation under the Arthrex licensing agreement, our financial statements reflect the sale of Angel devices and disposals at pass through prices for essentially zero gross margin.
    (Inaudible) responsibility for manufacturing, this reporting anomaly will go away and that we’ll see the economic benefit of Arthrex’s efforts in the marketplace with Angel revenues to reflect solely on what we expected to be an attractive and growing royalty stream.
    Total operating expenses for the quarter were $10.3 million compared to $5.7 million in the second quarter of 2013. As I mentioned, the increase in operating expense was primarily related to the $4.7 million in net – in non-cash impairment charges and $500,000 in reorganization of severance cost following the discontinuation of the ALDH Bright Cell development program and Durham facility closure.
    Net loss was $11.3 million or $0.09 per share in the second quarter of 2014 compared to $5 million or $0.05 per share in the second quarter of 2013. The majority of the increase in that loss was attributable to the aforementioned realignment related charges.
    We finished the second quarter with cash and cash equivalents totaling approximately $25 million compared to approximately $3.3 million as of December 31, 2013. This increase was primarily attributable to our $35 million convertible debt financing with Deerfield.
    With that said, we’d now like to open the call to your questions, operator?
    Question-and-Answer Session
    Operator
    Thank you. (Operator Instructions) Our first question is coming from Jason Napodano of Zacks. Please proceed with your questions.
    Jason Napodano - Zacks Small Cap Research
    Good morning everyone.
    Martin Rosendale - Chief Executive Officer
    Good morning Jason.
    Jason Napodano - Zacks Small Cap Research
    Let me start with some questions for Steve, I wonder the size of the write down was kind of less than I expected just based on the carrying value for AutoloGel, so do you foresee any more write downs in the third or fourth quarter?
    Steven A. Shallcross - Executive Vice President and Chief Financial Officer
    No. The only additional charge to expect in the third quarter is still related to Durham facility and that is expected to be in the 500,000 to 600,000 range and that would cover the accounting requirements to adjust for lease obligation and the sale of some equipment. There will not be any additional impairment charges anticipated for the foreseeable future and until perhaps at the point in time when phase trials eventually reports out.
    Jason Napodano - Zacks Small Cap Research
    Okay and as far as the revenue numbers, so I understand how the accounting works with Angel, your transfer price was 40% below what your ASP was but Angel sales were down 23%, so can you assume that units were up year-over-year from second quarter this year to last year?
    Steven A. Shallcross - Executive Vice President and Chief Financial Officer
    If you recall the activity over the last call, two, two and half quarters our efforts has been buying product from those, which essentially has been going into their inventory. Now, that the product is in the launch into the market’s patio for sales organization, we’ll start to see the benefit reflected in our financial statements as royalty revenue. So, there is a timing lag there, specifically on the second quarter if you look at our mix about 50:50 was the relationship between centrifuge sales and disposable sales. But very, very tough at this point to draw a correlation between sales in our books to Arthrex in the related royalty revenue stream.
    Jason Napodano - Zacks Small Cap Research
    Okay. But now you seem to increase, I guess, what I’m wondering is the actual end-user sales growing at Arthrex versus where we were last year this time?
    Martin Rosendale - Chief Executive Officer
    Jason, this is Marty. I will take that Arthrex is doing a very good job, end-user sales are growing as Steve said you can discern exactly based upon the growth in our sale to Arthrex because some of that is stocking, there were houses. But sales are growing and in fact they have launched their bone marrow aspirate product, one that we talked about a while back, they launched just a couple of months ago and are already seeing significant sale, significant growth in that product, so we are seeing growth from the Arthrex efforts and are doing an excellent job.
    Jason Napodano - Zacks Small Cap Research
    When would you guys anticipate kind of a P&L bump to come to you guys, it would seem like last if I tried to recall back to the first quarter call we talked about Angel having the pretty significant ramp coming maybe in the second half of the year and I’m just wondering if we were still on pace for that?
    Steven A. Shallcross - Executive Vice President and Chief Financial Officer
    Yes, I would say yes, we an improvement from first quarter to second quarter and based on the feedback we have been receiving from the Arthrex change, we’re seeing an improvement from second to third and I believe also from third to fourth.
    Jason Napodano - Zacks Small Cap Research
    Okay. Then move onto AutoloGel, so Marty with all of the changes that has happened over the past year with respect to CED and reimbursement and expanding your operation, I’m honestly confused as to how we only had now $10,000 in sales or –?
    Martin Rosendale - Chief Executive Officer
    The $10,000 over the last year, so Jason first of all there is no lack of enthusiasm from the customers in the field right now. They are excited about the product, they are even excited about the CED opportunities and I’ll let Dean pick up in just a second. But, what we are seeing is that the implementation of CED creates, it actually flows us down a bit. It flows us down to the tune of above two to four months to bring in new customer onboard and the way it flows us down is in the systems and infrastructures as we put in place with each customer in order to collect the data properly to meet the CMS requirements, to establish the payment processes with the Medicare administrator contractors and all of that. So it’s that aspect of this that is long as down but as far as enthusiasm and interest from the customers that is still going strong. Dean, do you want to pick it from there?
    Dean Tozer - Chief Commercial Officer
    Sure. As Marty said, we continue to see when we walk into customers and right now we are not a very large sales force, so but when we walk into those customers there is a genuine enthusiasm but isn’t a product. What we’ve been going through in the last number of months is working with IntelliCure to figure out how do you go about collecting this data for CED and that’s required a fair amount of effort on our part. Partially why I mentioned earlier that we are going to go ahead and expand our sales team in back half of this year is because we’ve just over the last few months really begun to get our term what that involves and from now we’re getting it down to a process, but as Marty said, it does in a very real way probably add two to four months to the process of getting a customer up and using the product.
    So, if you kind of walk it from when we raised the capital, you can kind of get a sense of where we are, our learning and why we’re already now to start expanding our sales team.
    Martin Rosendale - Chief Executive Officer
    Jason, are you still there?
    Operator
    Gentlemen, would you like me to move onto the next question?
    Martin Rosendale - Chief Executive Officer
    Yes, please Donna, we must have lost Jason.
    Operator
    Thank you. Our next question is coming from Jason Kolbert fo the Maxim Group, please proceed with your question.
    Martin Rosendale - Chief Executive Officer
    Good morning, Jason.
    Jason Napodano - Zacks Small Cap Research
    Good morning, lot of Jason this morning. Can you give me a favor in just kind of backup with me? By the way congratulations on the shutdown of all the gen, I think it makes a lot of sense and it really paves the way now to see AutoloGel and wound care move forward. But I haven’t been as close to the story as I would like to be and I wondered if you could take a few minutes with me and help me understand how AutoloGel has positioned in the competitive landscape. You were talking a little bit about your sales rep and exactly looks back up and what is the marketing plan that a 100% of your focus is here in order to drive share. Just in kind of simple terms that would be very helpful to me?
    Martin Rosendale - Chief Executive Officer
    So, Dean I think that question is best handled by you.
    Dean Tozer - Chief Commercial Officer
    Sure. So, just let me kind of give you a very high level. So, the way we look at the wound care market is, there is about 6 million wounds that we’ve access to. AutoloGel has a great label and that is indicated or cleared since in 10-K for pressure ulcers, diabetic foot ulcers and venous leg ulcers. And when you put all of those together in the U.S. market annually there are about 6 million of those, so they’re the very large market.
    Then the next way of our cut we make on that is, we then look at point of care and when you start to break it down in a point of care where the vast majority of those chronic venous pressure or diabetic foot ulcers are treated is, either hospital outpatient specialized wound care clients, which is about 2,000 to 2,200 in the United States or and I guess, I should say the VA system. And the VA system has about a 152 facilities in the United States and so that again is a very large segment of the market that’s treating these patients. I kind of used the specific chronic because we target with AutoloGel as with most event mentality the chronic wound care market. And that tend to wounds set as – and in existence for more than 30 days is kind of rule of thumb. So, if you kind of then go down, two segments that’s where we’ll be focusing, so is looking at the chronic wound care market and the primarily the hospital outpatient and VA system. And then the new answer to that as we’re covered or reimbursed by Medicare would be related to CED. So, in the hospital outpatient environment, a Medicare beneficiary is treated and covered through CMS through this coverage with evidence development or CED process. So that’s kind of a complicated or maybe a –
    Jason Kolbert - Maxim Group
    No, no, I understand. But, walk me through how many centers in the United States where you would like to place units and how many units are out there in the field today and let’s say a year from now how many units would you like to see placed out there?
    Dean Tozer - Chief Commercial Officer
    Right. So, we as a policy at this point don’t provide guidance. I can give you some general ideas of where we see opportunities, so one of the things as we talk quite a bit about CED, one of the challenges or areas we have to deal with is, to participate in CED we need to have a means to collect the patient data because its purposes CED is kind of like a registry. We’ve to be able to presume as collect that patient data. So, there are as I mentioned about 2,000 specialized wound care centers in the United States. As mentioned related to IntelliCure, we now have a partnership with IntelliCure that they have their EMR or electronic health record system in 120 of those centers. So the reason I say this is, this is one of the new options of selling within a CED environment in that we primarily will sell in centers where we have partnerships to more easily collect this data.
    And so, I mentioned in my remarks that we are working very hard to expand outside that 120 IntelliCure sites through other partnerships and that we will come out in the next number of months and provide more information as we move forward with looking at other partnerships. I would love to have access to all 2,000 centers that’s going to take a little while to get there. So this is kind of an unusual and that’s why we’re spending a lot of time educating people on this CED because it is a little unusual or little different way to access the market, with the national coverage so we complain any part in the United States, but we need to get that patient information.
    Jason Kolbert - Maxim Group
    So now, can you now connect that with the fact that you got a strong balance sheet, you’ve closed on the second tranche of financing with Deerfield so help me understand how you might use some of that capital in order to drive share and is it a question of more educational programs focused specialized sales reps, does the physician education or advertizing come into play, so help me understand how you going to what is the highly competitive market typically financed by larger device companies?
    Dean Tozer - Chief Commercial Officer
    Sure, it’s yes to all of what you said, so it will require when I call or you would think of kind of a traditional boots on the ground, selling in these hospital outpatient centers and the only new answer I would say is, as you ask related to how you are going to use the capital. The one new answer of our approach is this data collection, so we will use parts of our capital that we will consider commercial launch or commercial execution will be somewhat systems oriented in that we have to put the necessary infrastructure in place to collect this information. Everything else will be what you would expect to see in a commercial launch in this marketplace, sales reps, marketing, medical conferences, physician education, those will all be as you would expect to see, the answer as I said is we have to put the systems in place to collect this patient data and that’s when I said in my remarks that our – last few months working with IntelliCure has been very educational, it has been very helpful in the centers that we began with IntelliCure to really get a sense of what’s working and some things that haven’t and that we have to tweak our systems to make it more efficient.
    Jason Kolbert - Maxim Group
    Great, one down, thank you. Marty could you just close with me on my last question which is, in all honesty you had pursued Aldagen with great vigor over the last two years. Now that how much of a distraction was Aldagen and now that you’re going to be completely focused on developing this core business, should we be looking at this almost like the re-launch coming out now?
    Martin Rosendale - Chief Executive Officer
    I think so Jason, and that’s why we continued to refer to it as the AutoloGel launch in our prepared remarks and in our comments and what you just heard from Dean. This is truly a re-launch or in fact a new launch of AutoloGel. You could expect as I mentioned in my comments, there is going to be some rebranding, one of the things that we’ve realized is that the name AutoloGel for some people is difficult to pronounce. And so, the effort here now is going to be entirely focused on the launch of AutoloGel, it is in fact a re-launch, rebranding or re-launch of the product to take it out in the market.
    And as far as how much time and effort has closing down the Durham facility created or added, essentially mostly I think of it in terms of resources and capital right. As Steve pointed out it’s saving us $4 million per year that’s $4 million per year that we’ve been focused additionally on the AutoloGel launch it allows us to conduct the expansion that Dean was talking about. It allows us in order to accommodate the need for CED the resources required, the additional reimbursement in clinical staff that we’ll have back in the commercial and sales organization, we can fund that. So absolutely to re-launching and we’re focusing on the wound care market with AutoloGel.
    Jason Kolbert - Maxim Group
    Okay. Thanks everyone down this morning, really excited to watch at the numbers build.
    Martin Rosendale - Chief Executive Officer
    Great, thank you Jason.
    Operator
    (Operator Instructions) Our next question is coming from Bruce Jackson of Lake Street Capital Markets, please proceed with your question.
    Bruce Jackson - Lake Street Capital Markets
    I’m new to the CED process frankly, so I was hoping if you could just give me some background on how that process works, if you walk into a hospital today, would they be able to participate in this process?
    Martin Rosendale - Chief Executive Officer
    So Bruce, just quickly, coverage to that in this development first and foremost is coverage. And I don’t know if you recall, but one of the challenges with AutoloGel is, the particle is cut up in a 1992 non-coverage decision that effected products in this category and CMS would not pay for it. So, we worked hard, we collected data, we got coverage decision, so coverage level of this development is coverage the product, it’s covered throughout the country now. But, the requirement as Dean pointed out is that we continue to collect evidence of effectiveness for CMS in order to get this coverage and that means that any Medicare beneficiary can be covered, any hospital that treats those patients can use the product. But the patients, the Medicare beneficiaries must consent to having their personal clinical data collected, entered into this registry and at some point in the future studied. So, it’s a matter of consent and then it’s a matter of the infrastructure that the process be in place to collect all of the data that CMS want us to collect.
    Bruce Jackson - Lake Street Capital Markets
    Okay. And then, with the clinical sets if you can call on that if you wanted to add a new customer today, could you do that or they have to join in existing study or could they start a new study?
    Martin Rosendale - Chief Executive Officer
    We can add customers, we can continue to add customers there is no limitation placed on that. They would need to join one of the studies or implement one of the protocols that we have approved with CMS. There is no opportunity to create their own protocol or their own study, they must participate in one of the protocols that we’ve cleared with CMS
    Bruce Jackson - Lake Street Capital Markets
    Okay. Then going back to the commercialization, so you’re focused primarily on the hospital outpatient market and VS, what’s your sales coverage like for going after those markets?
    Martin Rosendale - Chief Executive Officer
    Dean, would you like to take that?
    Dean Tozer - Chief Commercial Officer
    Sure. So, as I mentioned in my remarks, we’re about to add a number of reps which will bring us to a sales team by the end of the year of just under about 20 direct sales reps, they will be split between VA and hospital outpatients. We’re not willing to talk specific on either channel, how many reps in each, but I will say at this point there will be more weighted to the hospital outpatient market at this point. But, expectation will continue to build out both of those teams over the next year or two.
    Bruce Jackson - Lake Street Capital Markets
    Okay. And then, would you say that you’re going to be, just give me like a nationwide effort or they will be focused towards some particular max?
    Dean Tozer - Chief Commercial Officer
    It will be an issue of effort, so when we do this expansion, we will cover the entire U.S. We will also cover the VA, but I’ll tell you we’ll go at the VA in a, what I would call a targeted fashion. And one of the new launches which is really exciting about AutoloGel which makes it relatively unique in wound care space is that we have an indication or clearance for pressure ulcers. So one in the things that we’re very excited about and our early interactions with various VA facilities has been excited, in the opportunity to go into a number of these VA facilities that have what I call spinal cord injury units, where pressure ulcers have tremendous issue. So there are new answers and this is when I joined back in April, I shared at that time why I joined is, the labeling on this product is tremendously vary and gives us a lot of room to go after different segments. And so, this is an example we’re in the VA, we believe although the pressure ulcer and venous leg ulcer is a great and use of the product, there is a unique opportunity for example to go into parking the VA with this pressure ulcer indication and really benefit the people in the way who need the products. So that’s an example where it will be a national deployment of reps but we will use some elements of the labeling of the product to go into more specific areas where we think there is a higher initial value for the patients.
    Bruce Jackson - Lake Street Capital Markets
    Okay. That’s very helpful. Thank you very much.
    Martin Rosendale - Chief Executive Officer
    Thank you, Bruce.
    Operator
    Thank you. Our next question is coming from Jason Napodano of Zacks, please proceed with your follow up question.
    Jason Napodano - Zacks Small Cap Research
    Hi guys, can you hear me?
    Martin Rosendale - Chief Executive Officer
    We can Jason.
    Jason Napodano - Zacks Small Cap Research
    I apologize for that I’m on a cell phone. I just wanted to follow up on the two to four month that you mentioned the lag, is that a two to four months lag of enrolling patients into the trials and treating patients or two to four months lag of actually getting paid after you treated a patient?
    Dean Tozer - Chief Commercial Officer
    So Jason, and this is one of the things we’ve learned as alluded to from the time I joined to now that we’ve learned a number of things partnering with IntelliCure and what this is related to the simplest way I can explain it is, from the time of that walks through the door at a site and the site as well, that is a great product I want to use it. So, if you take that kind of a time zero. We have found that there are a number of steps that we have to go through I would call kind of administrative steps to get that site to a place with the data collection and all the administrative parts of doing this in place and ready to go.
    So, it is two to four months right now because we’re still learning from the things about how to do this as efficiently as possible. My expectation is we’ll shorten that. But, right now that is what we’re seeing and to give you an example the way that this is done, CED is executed, it is prongs and purposes considered at any of the site A study or a trial so there are parts that of the administrative side of those facilities that then have to be put in place. For example an IRB approval that’s just an administrative step, we know how to do it, how to work with the facility to get that done, but it does require time and working with that facility to put that in place. So, they are very specific things that we have to do to make sure that the site is ready to participate and seeking fee.
    Jason Napodano - Zacks Small Cap Research
    Okay. So, it’s safe to say that as part of the second quarter numbers are concerned, you really haven’t started enrolling these registry and one randomized trial that you have to do, you really haven’t started enrolling those yet?
    Martin Rosendale - Chief Executive Officer
    As this is a second quarter Jason, that’s an accurate statement, yes.
    Jason Napodano - Zacks Small Cap Research
    And then, we’re talking and believe it was over a 1,000 patients in total that you had, I can’t remember the total number it was almost 2,000? The total number of patients that were in the free trials and the one randomized trial?
    Martin Rosendale - Chief Executive Officer
    The total numbers of patients, it’s about a 1,000, just over a 1,000.
    Jason Napodano - Zacks Small Cap Research
    So Marty, let me just try to get a sense, by the time you guys have this process ironed out, I mean, I feel like you’re going to be the world’s foremost experts on how to implement a CED. From a partnership standpoint, can you provide any color on that process what it’s like, I mean, obviously I think you guys need to iron out the process and then have a partnership come in and then you explain the process to the partner. But, I’m trying to get a sense when from your point of view it makes sense to bring in a partner and if that’s something that you may see either later this year or in 2015 after the kind of process has been ironed out?
    Martin Rosendale - Chief Executive Officer
    Sure. So, let me think where to begin to answer that. So first of all, you’re absolutely right, before we would bring a partner in or enter into deep partner discussions, we want this process to be fully ironed out, running smoothly without any hiccups so that it could be transferred smoothly. As we pointed out we’re getting there, we know much more today than we knew just a few months ago, as far as becoming the world experts in CED, maybe I wouldn’t be surprised but I do think that what we’re going to find is that CED is going to become a much bigger part of reimbursement in this country going forward. One of our advisors, there is a former director of the coverages and analysis group and CMS and he advices us that this is a tool that CMS needs to use and will use much more extensively going forward in order to control the cost of healthcare.
    So anyway, back up to your question, we do need to get the process ironed out, we’re getting closer everyday Jason, and we understand today what it will take as Dean pointed out. Now, it’s a matter of smoothing out those processes, making sure that we have the tools in place, when the facility does need to go their IRB making sure that we’ve got all the documents packaged in the packet so that they can walk into the IRB and explain what CED is and explain the IRB that their need for oversight really has to do with hip up requirements and patients, patient privacy protection and that this is an approved product and that is investigational product those kinds of things, need to be neatly packaged and supplied to the facility.
    So once you have got all that operating smoothly which is in the coming few months then we could consider talking to some potential partners, so it’s not something that you’re going to see us doing this year.
    Jason Napodano - Zacks Small Cap Research
    Got it. I think that’s interesting as CED becomes a bigger part of our healthcare system, I think you guys will have acquired a very competitive advantage so to speak in terms of knowledge in the space and I think that would be attractive. So, I’ll leave it at that thank you.
    Martin Rosendale - Chief Executive Officer
    Thank you, Jason. Donna, do we have any more questions?
    Operator
    We’re showing no further questions at this time, do you have any additional or closing comments?
    Martin Rosendale - Chief Executive Officer
    Yes, thank you Donna. So, we’ve accomplished a great deal thus far, but I believe that our most significant achievements lie ahead of us. We’re confident that we have the right strategy in place as we discussed this morning and that we’re building a team that is fully capable of executing the strategy as we continue to move forward. We believe that the measures taken to-date provide a solid foundation for our future success and step the stage for sustainable long-term growth and profitability.
    With that I thank you all for your continued support and your participation this morning, have a great day.

    Sentiment: Strong Buy

CMXI
0.395-0.005(-1.23%)Oct 1 12:01 PMEDT

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.