SAN DIEGO, CA--(Marketwire - March 10, 2011) - Cytori Therapeutics (NASDAQ: CYTX) grew product sales 41% and made substantial progress in advancing its cardiovascular device product pipeline during 2010. An overview of the Company’s 2010 financial results is below and a review of its business plans for 2011 is provided in the ‘2010 Results Shareholder Letter,’ which may be accessed at http://ir.cytoritx.com.
Key highlights for 2010 and through the beginning of 2011 include the following:
-- Grew product revenues 41% year-over-year. Revenue generating units increased by 48 to a cumulative total of 149 and nearly 1,400 consumables were shipped during 2010; -- Reported improved heart function in two cardiovascular disease clinical trials and initiated our European pivotal heart attack trial. Cytori is seeking EU approval for use in no-option chronic myocardial ischemia patients; -- Achieved European approval of the Celution System in breast reconstruction, reported 12 month data from our RESTORE-2 trial and successfully launched PureGraft™ into the U.S. and European plastic and reconstructive surgery markets; -- Made progress towards getting into the U.S. market with multiple submissions underway for FDA approval or clearance of Celution® as part of a comprehensive US regulatory strategy intended to achieve market entry; and -- Strengthened our cash and cash equivalents balance with $52.7 million at the end of 2010 compared with $12.9 million at the end of 2009. Part of this increase resulted from a $10 million equity investment from Astellas Pharma, including certain negotiating rights to a potential liver disease partnership.
Product revenues were $8.3 million for 2010, compared to $5.8 million for 2009, which includes $2.4 million in fourth quarter 2010 product sales. Gross profit improved to $4.3 million for 2010 compared to $2.4 million in 2009, including $1.2 million in gross profit in the fourth quarter 2010. Product revenue growth is attributable mostly to increased sales of systems to private pay plastic surgery clinics, academic centers performing independent investigator-initiated studies and the sale of two StemSource® Cell Banks. Toward the end of the year, Cytori also started to see increased impact from PureGraft™ sales for body contouring procedures.
Cytori ended the year with 149 revenue generating units compared to 101 at the start of year, with 1,392 consumables shipped in 2010 compared to 1,205 shipped in 2009. This includes a record 437 consumables shipped during the fourth quarter of 2010, of which 350 were re-orders. The percentage of re-orders increased in 2010 to 77% compared to 64% for 2009, a positive trend reflecting the recurring revenue opportunity once a system is installed. Separately, 1,847 PureGraft consumables were shipped in 2010, a sign that Cytori is penetrating the growing fat grafting market in the United States and abroad.
Net cash used in operations was $23.6 million in 2010 compared to $23.8 million in 2009, including $4.8 million in the fourth quarter of 2010. During the year, there was a decrease in research and development expenses related to clinical trial costs, offset with, among other items, an increase in SG&A, as we expanded our sales efforts worldwide.
Outlook
“Our key initiatives for 2011 will be to drive enrollment in the ADVANCE heart attack trial, seek approval for no option chronic myocardial ischemia patients in Europe, execute our U.S. regulatory and development strategy, and grow the commercial business,” said Christopher J. Calhoun, chief executive officer of Cytori. “The pieces are coming together for accelerating revenue growth, with expanded indications, longer-term data, and pursuit of country level payment in key geographies. We anticipate the impact from recent RESTORE-2 data to have a greater effect on revenue growth toward the latter half of the year.”
About Cytori
Cytori is a leader in providing patients and physicians around the world with medical technologies that harness the potential of adult regenerative cells from adipose tissue. The Celution® System family of medical devices and instruments is being sold into the European and Asian cosmetic and reconstructive surgery markets but is not yet available in the United States. Our StemSource® product line is sold globally for cell banking and research applications. Our PureGraft™ products are available in North America and Europe for fat grafting procedures. www.cytori.com
Cautionary Statement Regarding Forward-Looking Statements
This press release includes forward-looking statements regarding events, trends and business prospects, which may affect our future operating results and financial position. Such statements, including, but not limited to, those regarding our belief in the recurring revenue opportunities for sales of our consumable products, our ability to continue to penetrate the fat grafting market with our PureGraft™ products, our ability to obtain regulatory approval for our products both in the United States and abroad and our ability to accelerate revenue growth, are all subject to risks and uncertainties that could cause our actual results and financial position to differ materially. Some of these risks and uncertainties include, but are not limited to, risks related to our history of operating losses, the need for further financing and our ability to access the necessary additional capital for our business, the quality and effectiveness of our products, the effectiveness of our regulatory and sales and marketing programs, the acceptance of our clinical data, dependence on third party performance, as well as other risks and uncertainties described under the “Risk Factors” in Cytori’s Securities and Exchange Commission Filings on Form 10-K and Form 10-Q. We assume no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made.
Consolidated Balance Sheets As of December 31, -------------------------- 2010 2009 (Unaudited) ------------ ------------ Assets Current assets: Cash and cash equivalents $ 52,668,000 $ 12,854,000 Accounts receivable, net of reserves of $306,000 and of $751,000 in 2010 and 2009, respectively 2,073,000 1,631,000 Inventories, net 3,378,000 2,589,000 Other current assets 834,000 1,024,000 ------------ ------------ Total current assets 58,953,000 18,098,000 Property and equipment, net 1,684,000 1,314,000 Restricted cash and cash equivalents 350,000 -- Investment in joint venture 459,000 280,000 Other assets 566,000 500,000 Intangibles, net 413,000 635,000 Goodwill 3,922,000 3,922,000 ------------ ------------ Total assets $ 66,347,000 $ 24,749,000 ============ ============ Liabilities and Stockholders’ Equity (Deficit) Current liabilities: Accounts payable and accrued expenses $ 6,770,000 $ 5,478,000 Current portion of long-term obligations 6,453,000 2,705,000 ------------ ------------ Total current liabilities 13,223,000 8,183,000 Deferred revenues, related party 5,512,000 7,634,000 Deferred revenues 4,929,000 2,388,000 Warrant liability 4,987,000 6,272,000 Option liability 1,170,000 1,140,000 Long-term deferred rent 398,000 -- Long-term obligations, net of discount, less current portion 13,255,000 2,790,000 ------------ ------------ Total liabilities 43,474,000 28,407,000 Commitments and contingencies Stockholders’ equity (deficit): Preferred stock, $0.001 par value; 5,000,000 shares authorized; -0- shares issued and outstanding in 2010 and 2009 -- -- Common stock, $0.001 par value; 95,000,000 shares authorized; 51,955,265 and 40,039,259 shares issued and 51,955,265 and 40,039,259 shares outstanding in 2010 and 2009, respectively 52,000 40,000 Additional paid-in capital 232,819,000 178,806,000 Accumulated deficit (209,998,000) (182,504,000) Treasury stock, at cost -- -- ------------ ------------ Total stockholders’ equity (deficit) 22,873,000 (3,658,000) ------------ ------------ Total liabilities and stockholders’ equity (deficit) $ 66,347,000 $ 24,749,000 ============ ============ CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS Three Months Ended For the Years Ended December 31, December 31, ------------------------ ------------------------ 2010 2009 2010 2009 (Unaudited) (Unaudited) (Unaudited) ----------- ----------- ----------- ----------- Product revenues Related party $ 9,000 $ 9,000 $ 590,000 $ 591,000 Third party 2,369,000 1,253,000 7,664,000 5,246,000 ----------- ----------- ----------- ----------- 2,378,000 1,262,000 8,254,000 5,837,000 Cost of product revenues 1,175,000 749,000 3,908,000 3,394,000 ----------- ----------- ----------- ----------- Gross profit (loss) 1,203,000 513,000 4,346,000 2,443,000 ----------- ----------- ----------- ----------- Development revenues: Development, related party -- 1,590,000 2,122,000 8,840,000 Research grants and other 158,000 26,000 251,000 53,000 ----------- ----------- ----------- ----------- 158,000 1,616,000 2,373,000 8,893,000 ----------- ----------- ----------- ----------- Operating expenses: Research and development 2,661,000 3,226,000 9,687,000 12,231,000 Sales and marketing 3,684,000 2,213,000 11,040,000 6,583,000 General and administrative 3,240,000 3,129,000 12,570,000 10,415,000 Change in fair value of warrants 540,000 3,016,000 (1,285,000) 4,574,000 Change in fair value of option liabilities (150,000) (360,000) 30,000 (920,000) ----------- ----------- ----------- ----------- Total operating expenses 9,975,000 11,224,000 32,042,000 32,883,000 ----------- ----------- ----------- ----------- Operating loss (8,614,000) (9,095,000) (25,323,000) (21,547,000) ----------- ----------- ----------- ----------- Other income (expense): Interest income 3,000 -- 9,000 20,000 Interest expense (763,000) (307,000) (2,052,000) (1,427,000) Other income (expense), net 174,000 (79,000) 23,000 (218,000) Equity loss from investment in joint venture (53,000) (9,000) (151,000) (44,000) ----------- ----------- ----------- ----------- Total other income (639,000) (395,000) (2,171,000) (1,669,000) ----------- ----------- ----------- ----------- Net loss (9,253,000) (9,490,000) (27,494,000) (23,216,000) =========== =========== =========== =========== Basic and diluted net loss per common share $ (0.18) $ (0.24) $ (0.60) $ (0.65) =========== =========== =========== =========== Basic and diluted weighted average common shares 50,207,187 39,043,024 45,947,966 35,939,260 =========== =========== =========== =========== Consolidated Statement of Cash Flows For the Years Ended December 31, ---------------------------- 2010 2009 (Unaudited) ------------- ------------- Cash flows from operating activities: Net loss $ (27,494,000) $ (23,216,000) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 931,000 1,681,000 Amortization of deferred financing costs and debt discount 703,000 709,000 Warranty provision (reversal) -- (23,000) Increase (reduction) in allowance for doubtful accounts 460,000 663,000 Change in fair value of warrants (1,285,000) 4,574,000 Change in fair value of option liability 30,000 (920,000) Stock-based compensation 3,055,000 2,649,000 Equity loss from investment in joint venture 151,000 44,000 Increases (decreases) in cash caused by changes in operating assets and liabilities: Accounts receivable (902,000) (986,000) Inventories (777,000) (446,000) Other current assets 36,000 41,000 Other assets (110,000) 75,000 Accounts payable and accrued expenses 811,000 413,000 Deferred revenues, related party (2,122,000) (8,840,000) Deferred revenues 2,541,000 (57,000) Long-term deferred rent 398,000 (168,000) ------------- ------------- Net cash used in operating activities (23,574,000) (23,807,000) ------------- ------------- Cash flows from investing activities: Proceeds from the sale and maturity of short-term investments -- -- Purchases of short-term investments -- -- Purchases of property and equipment (610,000) (221,000) Cash invested in restricted cash (350,000) -- Investment in joint venture (330,000) -- ------------- ------------- Net cash used in investing activities (1,290,000) (221,000) ------------- ------------- Cash flows from financing activities: Principal payments on long-term obligations (5,454,000) (2,053,000) Proceeds from long-term obligations 20,000,000 -- Debt issuance costs and loan fees (559,000) -- Proceeds from exercise of employee stock options and warrants 7,128,000 531,000 Proceeds from sale of common stock 45,486,000 23,196,000 Costs from sale of common stock (1,923,000) (1,336,000) Proceeds from sale of treasury stock -- 3,933,000 ------------- ------------- Net cash provided by financing activities 64,678,000 24,271,000 ------------- ------------- Net increase in cash and cash equivalents 39,814,000 243,000 Cash and cash equivalents at beginning of year 12,854,000 12,611,000 ------------- ------------- Cash and cash equivalents at end of year $ 52,668,000 $ 12,854,000 ============= =============
Contact:
Tom Baker
+1.858.875.5258
tbaker@cytori.com
