GAITHERSBURG, MD--(Marketwired - Nov 12, 2013) - Cytomedix, Inc. (
Third Quarter 2013 Financial Highlights (all comparisons are with the 2012 third quarter)
- Product revenues were $2.9 million, up 72% from $1.7 million in the prior year.
- Net loss to common stockholders of $5.0 million, or ($0.05) per share. This compares to a net loss of $3.8 million, or ($0.04) per share in the prior year.
- Cash and cash equivalents were approximately $4.6 million at September 30, 2013.
Nine-Months Ended 2013 Financial Highlights (all comparisons are with the 2012 nine-month period)
- Product revenues grew 45% to $7.5 million from $5.2 million in the prior year.
- Net loss to common stockholders was $15.4 million, or ($0.15) per share compared with $16.0 million or ($0.20) per share in the prior year.
- Cytomedix initiated a tactical commercial launch initiative that is expected to drive AutoloGel™ awareness and usage in the $2.3 billion U.S. chronic wound care market. The Company's commercial operations are now realigned to focus on selling AutoloGel.
- Cytomedix has fully transitioned the commercial activities for Angel under the worldwide licensing agreement that was signed with Arthrex, Inc., in August 2013. Cytomedix will continue to support the manufacturing activities for Angel.
- Cytomedix announced a strategic reorganization of its research and development activities intended to significantly reduce the cash burn.
"This quarter was highlighted by a new corporate strategy for Cytomedix that involves building a profitable and successful company commercially focused on the wound care market," said Martin Rosendale, Chief Executive Officer of Cytomedix. "We are realigning our commercial operations exclusively toward selling AutoloGel in the wound care market and leveraging the product's current reimbursement status as healthcare providers begin treating Medicare patients. We believe AutoloGel offers the most substantial opportunity for meaningful sales growth for Cytomedix.
"In July, CMS issued proposed payment regulations that include Medicare reimbursement for AutoloGel. The proposed Physician Fee Schedule rules, which allow Medicare Administrative Contractors to determine the level of reimbursement for AutoloGel, are reasonable and economically viable for this customer segment. We continue to work with CMS with the goal of obtaining reasonable payment for AutoloGel in the hospital outpatient market segment. During the quarter, and following the release of the proposed payment regulations, Cytomedix, together with key opinion leaders, submitted public comments to CMS providing additional support for an appropriate payment classification. In addition, we met with key CMS representatives to provide a compelling justification for our recommendation. We remain optimistic that CMS will agree to an economically viable Ambulatory Payment Classification (APC) assignment in its final decision to be announced on or about November 27, 2013, and be effective January 1, 2014."
Financial Results, Three-Month Period Ended September 30, 2013
Total revenues were $3.4 million in the three months ended September 30, 2013, compared to the $1.8 million in the same period last year. During the quarter, the Company recognized one-time, non-recurring revenue of $1.3 million for the sale of existing, placed Angel centrifuges to Arthrex made pursuant to the terms and provisions of the Arthrex Agreement and $0.2 million of Angel royalties and $0.1 million of related transition services revenue.
Overall gross margins decreased to 15% from 43% for the quarter as compared to the same period last year. The decrease was primarily due to the sale of existing, placed Angel fixed assets and sale of disposable products under the Arthrex Agreement. Although the cost of the Company's products has remained constant, the contractual selling price of Angel disposable products to Arthrex is significantly lower than the historical average selling price. In addition, and consistent with applicable accounting rules, the sale price of existing Angel centrifuges to Arthrex was at book value resulting in a zero-margin sales transaction. This was offset by the gross margin realized from pre-licensing disposable Angel product sales, accrued royalty income, and other revenue.
Gross margins on product sales were 4% compared with 42% in the same period last year. Cash gross margin on product sales decreased to 7% from 52%. Cytomedix defines cash gross margin as gross margin exclusive of patent and royalty amortization and depreciation expense, and it is a significant performance metric used by management to indicate cash profitability on product sales. Patent and royalty amortization and depreciation expense during the three months ended September 30, 2013 and 2012 were $100,000 and $168,000, respectively.
Total operating expenses in the third quarter were $5.1 million, compared to $5.0 million in the same period of 2012.
Salaries and wages were $2.0 million, compared with $1.7 million reported in the same period last year. The increase was primarily due to additional employees to support increased operational activity and $139,000 related to reorganization charges.
Consulting expenses were $0.4 million, compared with $0.5 million reported in the same period last year. The decrease was due to lower stock-based compensation expense for stock options issued to consultants in 2012 related to the Aldagen acquisition.
Professional fees increased $49,000 to $0.4 million during the quarter due primarily to higher clinical trial related legal fees.
Research and development expenses were $0.9 million, compared to $1.0 million reported in the same period last year. The decrease was primarily due to decreased costs for manufacturing and design fees related to an Angel disposable product. This was offset by increased costs for the development of the CED protocols, and costs related to the sourcing and testing of Angel centrifuge replacement components.
General and administrative expenses increased $53,000 to $1.4 million during the quarter. The increase was primarily due to higher employee benefit costs and marketing expenses related to AutoloGel. This was partially offset by a decrease in stock-based compensation expense.
Other expenses for the quarter were approximately $0.4 million, compared with income of $0.4 million reported the same period last year. The difference was primarily due to a non-cash change in the fair value of derivative liabilities and a net increase in interest expense and debt issuance fees related to various financing activities in 2013.
The company reported a net loss to common stockholders of $5.0 million, or ($0.05) per share for the quarter. This compares to a net loss of $3.8 million, or ($0.04) per share in the prior year.
Financial Results, Nine-Month Period Ended June 30, 2013
Total revenues for the nine-months ended 2013 were $8.1 million, compared with $8.5 million in the same period last year. This was primarily due to a decrease in license fee revenue of $3.2 million, offset by increased product sales of approximately $2.3 million, $0.3 million of higher royalty income and Angel related transition service revenue of $0.1 million. Higher product sales were primarily due to the recognition of one-time, non-recurring revenue related to sale of $1.3 million of existing, placed Angel centrifuges to Arthrex made pursuant to the terms and provisions of the Arthrex Agreement along with higher Angel disposable sales.
Gross profit in the first nine months of the year was $2.6 million, compared with $5.6 million in the same period last year. Overall gross margin decreased to 32% from 67% in the same period last year. The decrease in gross profit and margin were primarily due to approximately $3.2 million in license fee revenue recognized in 2012 (which had no associated cost) and the sale of existing, placed Angel fixed assets to Arthrex at book value and disposable products to Arthrex under the Arthrex Agreement at a contractual selling price significantly lower than the historical average selling price. Cash gross margin on product sales decreased to 34% from 54%. Cytomedix defines cash gross margin as gross margin exclusive of patent and royalty amortization and depreciation expense, and it is a significant performance metric used by management to indicate cash profitability on product sales. Patent and royalty amortization and depreciation expense during the nine months ended September 30, 2013 and 2012 were $447,000 and $420,000, respectively.
Total operating expenses in the nine-month period were $16.9 million, compared with $14.9 million reported in the same period in 2012.
Salaries and wages for the nine months were $6.0 million, compared with $5.6 million in 2012. The increase was primarily due to increased head-count to support increased operational activity and severance payments.
Consulting expenses for the nine months were $1.6 million, compared with $1.8 million in 2012. The decrease was due to lower stock-based compensation expense for options issued to consultants in 2012 related to the Aldagen acquisition, partially offset by expenses related to the management, promotion, and roll-out of the CED protocols and CMS reimbursement matters.
Professional fees decreased $0.2 million in 2013 to $0.8 million. The decrease was primarily due to legal and accounting costs related to the Aldagen acquisition in the first quarter of 2012.
Research & development expenses were $3.1 million, compared with $2.5 million last year. The increase was primarily due to increased costs related to the ALD-401 Phase II trial, one-time charges for the sourcing and testing of Angel centrifuge replacement components and costs associated with the development of the CED protocols.
General and administrative expenses were $5.4 million in the first nine-months, compared with $4.1 million last year. The increase was primarily due to a non-cash charge of $1.0 million recognized for the effect of the amendment to the contingent consideration associated with the Aldagen acquisition, higher personnel placement fees, employee benefit costs and marketing expenses related to AutoloGel. These were primarily offset by lower stock-based compensation expenses.
The Company recorded a net loss of $15.4 million, or ($0.15) per share for the nine-month period ended September 30, 2013, compared to a net loss of $16.0 million, or ($0.20) per share in the same period last year. Cash used in operating activities for the nine-months ended September 30, 2013 was $8.1 million.
Cash and Liquidity
Cash and cash equivalents were approximately $4.6 million at September 30, 2013, up from $2.6 million at December 31, 2012.
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Wednesday, November 13, 2013 @ 8:00am Eastern/5:00am Pacific
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Cytomedix, Inc. is an autologous regenerative therapies company commercializing innovative platelet technologies for wound care. The Company markets the AutoloGel™ System, a device for the production of autologous platelet rich plasma ("PRP") gel for use on a variety of exuding wounds. For additional information please visit cytomedix.com.
Safe Harbor Statement - Statements contained in this press release not relating to historical facts are forward-looking statements that are intended to fall within the safe harbor rule for such statements under the Private Securities Litigation Reform Act of 1995. The information contained in the forward-looking statements is inherently uncertain, and Cytomedix' actual results may differ materially due to a number of factors, many of which are beyond Cytomedix' ability to predict or control, including among many others, risks and uncertainties related to the Company's ability to successfully execute its Angel and AutoloGel sales strategies, to achieve AutoloGel expected reimbursement rates in 2013, and thereafter, to successfully negotiate with physician offices as anticipated and to realize the anticipated sales growth from such treatments, the likelihood of a favorable CMS determination relating to the reimbursement rates for AutoloGel™, to meet its stroke trial enrollment rates, to successfully realize sales of the Angel Technology resulting in the royalty stream to the Company, the Company's ability to successfully integrate the Aldagen acquisition, the Company's ability to expand patient populations as contemplated, its ability to provide Medicare patients with access as expected, the Company's expectations of favorable future dialogue with potential strategic partners, and its ability to successfully manage contemplated clinical trials, to manage and address the capital needs, human resource, management, compliance and other challenges of a larger, more complex and integrated business enterprise, viability and effectiveness of the Company's sales approach and overall marketing strategies, commercial success or acceptance by the medical community, competitive responses, the Company's ability to raise additional capital and to continue as a going concern, and Cytomedix's ability to execute on its strategy to market the AutoloGel™ System as contemplated. To the extent that any statements made here are not historical, these statements are essentially forward-looking. The Company uses words and phrases such as "believes", "forecasted," "projects," "is expected," "remain confident," "will" and/or similar expressions to identify forward-looking statements in this press release. Undue reliance should not be placed on forward-looking information. These forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual events to differ from the forward-looking statements. More information about some of these risks and uncertainties may be found in the reports filed with the Securities and Exchange Commission by Cytomedix, Inc. Cytomedix operates in a highly competitive and rapidly changing business and regulatory environment, thus new or unforeseen risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. Except as is expressly required by the federal securities laws, Cytomedix undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, changed circumstances or future events or for any other reason. Additional risks that could affect our future operating results are more fully described in our U.S. Securities and Exchange Commission filings, including our Annual Report for the year ended December 31, 2012, as amended to date, and other subsequent filings. These filings are available at www.sec.gov.
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS|
|Three Months Ended||Nine Months Ended|
|September 30,||September 30,|
|Cost of revenues|
|Cost of sales||2,817,386||992,277||5,439,401||2,815,623|
|Cost of royalties||32,504||5,658||41,578||10,774|
|Total cost of revenues||2,849,890||997,935||5,480,979||2,826,397|
|Salaries and wages||1,967,965||1,745,520||6,011,337||5,586,743|
|Research, development, trials and studies||922,999||1,006,049||3,050,038||2,454,615|
|General and administrative expenses||1,433,611||1,380,449||5,415,768||4,082,400|
|Total operating expenses||5,125,866||4,969,522||16,900,917||14,911,106|
|Loss from operations||(4,609,537||)||(4,208,146||)||(14,274,478||)||(9,276,085||)|
|Other income (expense)|
|Change in fair value of derivative liabilities||5,789||689,264||250,349||442,743|
|Change in fair value of contingent consideration||--||--||--||(4,334,932||)|
|Settlement of contingency||--||--||--||(471,250||)|
|Total other income (expenses)||(360,722||)||427,832||(1,061,220||)||(6,674,479||)|
|Loss before provision for income taxes||(4,970,259||)||(3,780,314||)||(15,335,698||)||(15,950,564||)|
|Income tax provision||4,890||4,609||14,670||13,827|
|Series D preferred stock||--||--||--||13,562|
|Net loss to common stockholders||$||(4,975,149||)||$||(3,784,923||)||$||(15,350,368||)||$||(15,977,953||)|
|Loss per common share -- Basic and diluted||$||(0.05||)||$||(0.04||)||$||(0.15||)||$||(0.20||)|
|Weighted average shares outstanding -- Basic and diluted||104,890,396||91,214,635||102,891,983||78,502,867|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|September 30,||December 31,|
|Short-term investments, restricted||53,257||53,248|
|Accounts and other receivable, net||2,132,403||1,733,742|
|Prepaid expenses and other current assets||1,624,224||737,445|
|Deferred costs, current portion||211,776||136,436|
|Total current assets||10,468,031||6,446,773|
|Property and equipment, net||894,621||2,440,081|
|Intangible assets, net||33,860,537||34,135,287|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Accounts payable and accrued expenses||$||5,176,773||$||2,812,371|
|Deferred revenues, current portion||2,502,254||--|
|Note payable, current portion||1,800,000||--|
|Total current liabilities||9,479,027||2,812,371|
|Derivative and other liabilities||913,087||1,415,159|
|Commitments and contingencies|
|Conditionally redeemable common stock (909,091 issued and outstanding)||500,000||--|
|Common stock; $.0001 par value, authorized 200,000,000 shares;|
|2013 issued and outstanding - 105,190,479 shares;|
|2012 issued and outstanding - 93,808,386 shares||10,428||9,381|
|Common stock issuable||432,100||489,100|
|Additional paid-in capital||116,309,680||108,485,646|
|Total stockholders' equity||30,421,624||38,003,911|
|Total liabilities and stockholders' equity||$||46,890,194||$||44,331,441|
- Investment & Company Information
- gross margin
Chief Executive Officer
Steven A. Shallcross
EVP/Chief Financial Officer
LifeSci Advisors, LLC