Cytomedix Inc. Reports First Quarter 2013 Financial Results
GAITHERSBURG, MD--(Marketwired - May 09, 2013) - Cytomedix, Inc. (OTCQX: CMXI), a leading developer of biologically active regenerative therapies, today reported financial results for the three months ended March 31, 2013.
First Quarter 2013 Financial Highlights (all comparisons are with the 2012 first quarter)
- Product revenue of $2.3 million compared with $1.7 million in the prior year, an increase of 34%.
- Net loss to common stockholders of $5.3 million, or ($0.05) per share. This compares to a net loss of $4.7 million, or ($0.07) per share in the prior year.
- Cash and cash equivalents of approximately $7.2 million at March 31, 2013. In February 2013, the Company received $9.5 million of gross proceeds at closing as part of a comprehensive financing plan.
Clinical and Corporate Highlights for the First Quarter and Recent Weeks
- The Centers for Medicare & Medicaid Services (CMS) granted formal approval of the protocols for AutoloGel™ under Coverage with Evidence Development (CED).
- CMS issued coding and reimbursement claims instructions for AutoloGel in non-healing chronic wounds.
- The Angel® Concentrated Platelet Rich Plasma (cPRP) System was approved for marketing in Australia.
- The Company signed a three year agreement with Vibra Healthcare, LLC, an owner and operator of Long Term Acute Care (LTAC) hospitals and Inpatient Rehabilitation Hospitals (IRF). This agreement will facilitate the use of the AutoloGel System for the treatment of wounds at Vibra Healthcare facilities throughout the United States.
- A comprehensive 2013 financing was executed to raise up to a total of $27.5 million, including $9.5 million in initial gross proceeds.
- Steven A. Shallcross, CPA, was appointed as Executive Vice President, Chief Financial Officer, Secretary and Treasurer.
Management Discussion
"Product sales continued along a steady growth trend, and we are pleased to report total sales of nearly $2.3 million in the first quarter," said Martin Rosendale, Chief Executive Officer of Cytomedix. "Angel sales of $2.1 million were particularly strong, up 40% year over year. Both Angel and AutoloGel achieved double digit increases sequentially over the prior quarter. We have now placed more than 500 Angel Systems on a worldwide basis. Over 40,000 patients are currently being treated with the Angel System on an annualized basis."
"We continue to make excellent progress towards reimbursement for AutoloGel which will be covered initially by CMS under the Coverage with Evidence Development (CED) program. We hit another important milestone during the quarter when CMS formally approved the clinical outcomes in the protocols we had submitted in response to the National Coverage Determination (NCD) memo. CMS has also issued coding and reimbursement instructions to its regional contractors. We expect to begin treating Medicare beneficiaries with AutoloGel shortly and will be recording revenues for those AutoloGel treatments soon after the CED implementation date of July 1st, 2013."
"Our Bright Cell technology pipeline continues to move forward. Our clinical development plan includes completion of enrollment in the RECOVER-Stroke trial with top-line data available in the first half of 2014, and beginning enrollment in the Phase 2 PACE study with ALD-301 in patients with intermittent claudication. The RECOVER-Stroke trial is currently enrolling at 10 sites. The first 30 patients have been enrolled, and we expect to have the planned DSMB review soon."
"In February 2013, we strengthened our balance sheet by entering into several financing transactions providing access to up to $27.5 million of capital. These included an equity raise, a tranched senior secured term loan facility, and a committed equity facility. We received approximately $9.5 million in initial gross proceeds with commitments for up to an additional $18 million. As such, we believe we will have sufficient cash to sustain the Company at least through 2013," he concluded.
Financial Results
Three-Month Period Ended March 31, 2013
Total revenues were $2.3 million in the three months ended March 31, 2013, a decrease of approximately $0.7 million compared to the same period last year. The decrease was mostly due to license fee revenue of $1.3 million recognized in 2012 with respect to an option agreement with a top 20 global pharmaceutical company. Product sales in the quarter were $2.3 million, an increase of 34% compared with the same period last year.
Gross margin on product sales decreased to 44% from 50% comparing the three months ended March 31, 2013, to the same period last year. Sales on lower margin products, specifically Angel machines sold to international distributors, made up a more significant portion of the product mix. This, along with the medical device excise tax which took effect in 2013, resulted in a decrease in gross margin on product sales. Overall gross margin decreased to 45% from 72%. The license fee recorded in the first quarter of 2012 had no associated cost of revenue and was the primary reason for the decline in overall gross margin year over year.
First quarter cash margins on product sales were 52%. Cash margins on disposable products in the quarter were 56%. Cash margin is a non-GAAP financial measure, most directly comparable to the U.S. GAAP measure of gross margin, and should not be considered as an alternative thereto. Cytomedix defines cash margin as gross margin exclusive of patent amortization and depreciation expense, and it is a significant performance metric used by management to indicate cash profitability on product sales.
Total operating expenses in the quarter were $6.0 million an increase of $1.1 million or 24% compared to the same period in 2012.
Research & Development expenses were $0.9 million, an increase of $544,000 or 152% year over year. The increase was primarily due to research and development costs related to the ALD-401 Phase II clinical trial. Selling, general and administrative expenses were $5.1 million during the quarter, an increase of 14% over the $4.5 million reported in the same quarter in 2012.
The Company recorded a net loss of $5.4 million, or ($0.05) per share in the three-month period ended March 31, 2013, compared to a net loss of $4.8 million, or ($0.07) per share in the comparable period in 2012.
Cash and Liquidity
Cash and cash equivalents were approximately $7.2 million at March 31, 2013. In February 2013, the Company entered into several financing transactions for up to $27.5 million overall, which included a tranched $7.5 million senior secured term loan facility, a $5 million equity raise, and a $15 million committed equity facility. Approximately $9.5 million of gross proceeds was received upon closing with commitments for up to an additional $18 million.
Cash used in operating activities during the quarter was $4.2 million. There were approximately 104.3 million shares of common stock issued and outstanding as of March 31, 2013.
Conference Call & Webcast
Friday, May 10, 2013 @ 8:00am Eastern/5:00am Pacific
Domestic dial in: 866-953-6857
International: 617-399-3481
Passcode: 19959894
Webcast: www.cytomedix.com
Replays - Available through May 26, 2013
Domestic: 888-286-8010
International: 617-801-6888
Passcode: 23997367
About Cytomedix, Inc.
Cytomedix, Inc. is a fully integrated regenerative medicine company commercializing and developing innovative platelet and adult stem cell separation products that enhance the body's natural healing processes. The Company's advanced autologous technologies offer clinicians a new treatment paradigm for wound and tissue repair. The Company's patient-derived PRP systems are marketed by Cytomedix in the U.S. and distributed internationally. Our commercial products include the AutoloGel™ System, cleared by the FDA for wound care and the Angel® Whole Blood Separation System. The Company is developing novel regenerative therapies using our proprietary ALDH Bright Cell ("Lahr") technology to isolate a unique, biologically active population of a patient's own stem cells. A Phase 2 trial evaluating the use of ALDHbr for the treatment of ischemic stroke is underway. For additional information please visit www.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, to meet its stroke trial enrollment rates, 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.
CYTOMEDIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
March 31,
--------------------------
2013 2012
------------ ------------
Revenues
Product Sales $ 2,253,129 $ 1,686,392
License Fees -- 1,330,362
Royalties 64,172 --
------------ ------------
Total revenues 2,317,301 3,016,754
------------ ------------
Cost of revenues
Cost of sales 1,267,310 848,436
Cost of royalties 5,134 --
------------ ------------
Total cost of revenues 1,272,444 848,436
------------ ------------
Gross profit 1,044,857 2,168,318
------------ ------------
Operating expenses
Salaries and wages 1,998,196 2,062,128
Consulting expenses 533,512 829,047
Professional fees 125,348 463,037
Research, development, trials and studies 901,685 357,308
General and administrative expenses 2,489,326 1,176,227
------------ ------------
Total operating expenses 6,048,067 4,887,747
------------ ------------
Loss from operations (5,003,210) (2,719,429)
------------ ------------
Other income (expense)
Interest, net (519,029) (267,145)
Change in fair value of derivative liabilities 193,093 (220,314)
Inducement expense -- (1,512,148)
Other (4,533) --
------------ ------------
Total other income (expenses) (330,469) (1,999,607)
------------ ------------
Loss before provision for income taxes (5,333,679) (4,719,036)
Income tax provision 4,890 4,609
------------ ------------
Net loss (5,338,569) (4,723,645)
Preferred dividends:
Series D preferred stock -- 13,562
------------ ------------
Net loss to common stockholders $ (5,338,569) $ (4,737,207)
============ ============
Loss per common share --
Basic and diluted $ (0.05) $ (0.07)
============ ============
Weighted average shares outstanding --
Basic and diluted 99,105,448 63,262,699
============ ============
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
March 31, December 31,
2013 2012
------------ ------------
ASSETS
Current assets
Cash $ 7,216,081 $ 2,615,805
Short-term investments, restricted 53,248 53,248
Accounts and other receivable, net 2,366,175 1,733,742
Inventory 934,245 1,170,097
Prepaid expenses and other current assets 1,872,786 737,445
Deferred costs, current portion 286,192 136,436
------------ ------------
Total current assets 12,728,727 6,446,773
Property and equipment, net 2,208,086 2,440,081
Deferred costs 666,735 180,783
Intangible assets, net 34,043,704 34,135,287
Goodwill 1,128,517 1,128,517
------------ ------------
Total assets $ 50,775,769 $ 44,331,441
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 3,490,177 $ 2,812,371
------------ ------------
Total current liabilities 3,490,177 2,812,371
Notes payable 6,045,208 2,100,000
Derivative and other liabilities 942,432 1,415,159
------------ ------------
Total liabilities 10,477,817 6,327,530
------------ ------------
Commitments and contingencies
Conditionally redeemable common stock (909,091
issued and outstanding) 500,000 --
Stockholders' equity
Common stock; $.0001 par value, authorized
160,000,000 shares;
2013 issued and outstanding - 104,337,377
shares;
2012 issued and outstanding - 93,808,386
shares 10,343 9,381
Common stock issuable 471,250 489,100
Additional paid-in capital 115,635,144 108,485,646
Accumulated deficit (76,318,785) (70,980,216)
------------ ------------
Total stockholders' equity 39,797,952 38,003,911
------------ ------------
Total liabilities and stockholders' equity $ 50,775,769 $ 44,331,441
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Contacts:
Cytomedix, Inc.
Martin Rosendale, Chief Executive Officer
Steven Shallcross, EVP, CFO
David Jorden, Executive Chairman
(240) 499-2680
Investors
Michael Rice
LifeSci Advisors, LLC
mrice@lifesciadvisors.com
(646) 597-6979