SAN DIEGO, CA--(Marketwire - November 04, 2010) - Cytori Therapeutics (NASDAQ: CYTX) reports third quarter and nine month 2010 financial results. Further details, including progress of the Company’s commercial activities and product development pipeline, are provided in the ‘November 2010 Shareholder Letter’, which may be accessed at http://ir.cytoritx.com.
Recently, Cytori has executed the following milestones:
Grew system installed-base in Europe, Asia and U.S., bringing cumulative revenue-generating units worldwide to 135;
Shipped 221 consumables, including 162 consumable re-orders during the third quarter;
Expanded European Celution® regulatory approval to include breast reconstruction and other medical indications such as treatment of Crohn’s fistulas;
Received approval for and launched PureGraft™ into the U.S. and European plastic and reconstructive surgery markets;
Finalized protocol and identified initial sites for ADVANCE, the Company’s pivotal European heart attack study, with enrollment anticipated to begin in the first quarter of 2011;
Prepared Celution® pre-IDE applications, which will be submitted to FDA to initiate a U.S. soft tissue defect repair study; and
- Capitalized the Company through 2012 from a public offering, raising $19.3 million in net proceeds.
Financial Results
Product revenues were $1.5 million for the quarter and $5.9 million for the first nine months in 2010, compared to $1.4 million and $4.6 million for the same time periods, respectively, in 2009. Gross profit was $0.6 million for the third quarter and $3.1 million for the first nine months of 2010, compared to $0.6 million and $1.9 million for the same periods respectively in 2009.
Revenue growth for the first nine months of 2010 compared to the same period in 2009 is due in part to increased demand for the Celution® System for private pay cosmetic surgery procedures and the sale of a StemSource® Cell Bank in each of the first two quarters of 2010, compared to one StemSource® Bank sale in the period in 2009. There was no StemSource® Cell Bank sale in the third quarter of 2010. Decline in third quarter 2010 consumable orders reflects seasonality of cosmetic procedures in July and August.
Total operating expenses were $10.3 million and $22.1 million for the third quarter and first nine months of 2010, respectively, compared to $7.0 million and $21.7 million for the same periods in 2009. The increase in operating expenses in the third quarter of 2010 is due in part to a $1.8 million non-cash change in the fair value of the warrant liability. Total operating expenses reflect an increase in sales and marketing and general administration activities that was partially offset by a decrease in research and development costs.
Cash and cash equivalents as of September 30, 2010 were $30.7 million. An additional $19.3 million in net proceeds were raised subsequent to the end of the quarter through a public offering of common stock.
Outlook
Cytori continues to expand the number of Celution® and StemSource® products in the field while simultaneously investing in growing system adoption, consumable usage, and broadening the market. With the recent expanded CE Mark, European sales activities will be focused increasingly on hospitals, where the new medical indications that the Celution® System received will facilitate penetration. The claims expansion coupled with the upcoming release of complete results from RESTORE 2 are expected to support our breast reconstruction reimbursement efforts in Europe. The recently approved PureGraft™ product will be marketed as a broad based fat grafting product to the private pay plastic surgery market. PureGraft™ users then provide an enhanced base of potential customers of the premium Celution® System. The Asia Pacific sales activities will continue to focus on a mix of research and cosmetic surgery sales, while looking to grow into at least one new geographic region by early next year. The U.S. sales activities will continue to focus on penetrating the U.S. private pay autologous fat grafting market with PureGraft™ while continuing to generate StemSource® System sales for research and banking.
Conference Call & Shareholder Letter
Cytori will host a conference call and question and answer session at 5:00 PM Eastern Time today to further discuss these results. The audio webcast of the conference call may be accessed under “Webcasts” in the Investor Relations section of Cytori’s website (www.cytori.com). The webcast will be available live and by replay two hours after the call and archived for 90 days.
Cautionary Statement Regarding Forward-Looking Statements
This press release and shareholder letter include 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, the expectation that expanded European regulatory approval for Celution® and release of complete results from RESTORE 2 will facilitate reimbursement efforts, improve our ability to sell systems to hospitals and expand our market opportunity, our belief that we can fund operations through 2012, our expectation that the US and European launch of PureGraft™ may enhance our Celution® customer base 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, inherent risk and uncertainty in the protection of intellectual property rights, regulatory uncertainties regarding the collection and results of clinical data, uncertainties relating to the future success of our sales and marketing programs, 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 Forms 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.
CYTORI THERAPEUTICS, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) -------------- -------------- As of As of September 30, December 31, 2010 2009 -------------- -------------- Assets Current assets: Cash and cash equivalents $ 30,729,000 $ 12,854,000 Accounts receivable, net of allowance for doubtful accounts of $314,000 and $751,000 in 2010 and 2009, respectively 1,664,000 1,631,000 Inventories, net 3,065,000 2,589,000 Other current assets 974,000 1,024,000 -------------- -------------- Total current assets 36,432,000 18,098,000 Property and equipment, net 1,172,000 1,314,000 Restricted cash and cash equivalents 350,000 -- Investment in joint venture 512,000 280,000 Other assets 520,000 500,000 Intangibles, net 469,000 635,000 Goodwill 3,922,000 3,922,000 -------------- -------------- Total assets $ 43,377,000 $ 24,749,000 ============== ============== Liabilities and Stockholders’ Equity (Deficit) Current liabilities: Accounts payable and accrued expenses $ 5,406,000 $ 5,478,000 Current portion of long-term debt 4,211,000 2,705,000 -------------- -------------- Total current liabilities 9,617,000 8,183,000 Deferred revenues, related party 5,512,000 7,634,000 Deferred revenues 2,417,000 2,388,000 Warrant liability 4,448,000 6,272,000 Option liability 1,320,000 1,140,000 Long-term deferred rent 302,000 -- Long-term debt, less current portion 15,243,000 2,790,000 -------------- -------------- Total liabilities 38,859,000 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; 45,909,194 and 40,039,259 shares issued and 45,909,194 and 40,039,259 shares outstanding in 2010 and 2009, respectively 46,000 40,000 Additional paid-in capital 205,219,000 178,806,000 Accumulated deficit (200,747,000) (182,504,000) -------------- -------------- Total stockholders’ equity (deficit) 4,518,000 (3,658,000) -------------- -------------- Total liabilities and stockholders’ equity (deficit) $ 43,377,000 $ 24,749,000 ============== ============== CYTORI THERAPEUTICS, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) For the Three Months For the Nine Months Ended September 30, Ended September 30, -------------------------- -------------------------- 2010 2009 2010 2009 ------------ ------------ ------------ ------------ Product revenues: Related party $ 581,000 $ 9,000 $ 590,000 $ 582,000 Third party 938,000 1,377,000 5,286,000 3,994,000 ------------ ------------ ------------ ------------ 1,519,000 1,386,000 5,876,000 4,576,000 ------------ ------------ ------------ ------------ Cost of product revenues 920,000 782,000 2,733,000 2,645,000 ------------ ------------ ------------ ------------ Gross profit 599,000 604,000 3,143,000 1,931,000 ------------ ------------ ------------ ------------ Development revenues: Development, related party -- -- 2,122,000 7,250,000 Research grant and other 65,000 5,000 93,000 27,000 ------------ ------------ ------------ ------------ 65,000 5,000 2,215,000 7,277,000 ------------ ------------ ------------ ------------ Operating expenses: Research and development 2,480,000 2,618,000 7,026,000 9,006,000 Sales and marketing 2,932,000 1,621,000 7,356,000 4,369,000 General and administrative 3,060,000 2,483,000 9,331,000 7,287,000 Change in fair value of warrants 1,803,000 446,000 (1,824,000) 1,558,000 Change in fair value of option liability (20,000) (140,000) 180,000 (560,000) ------------ ------------ ------------ ------------ Total operating expenses 10,255,000 7,028,000 22,069,000 21,660,000 ------------ ------------ ------------ ------------ Operating loss (9,591,000) (6,419,000) (16,711,000) (12,452,000) ------------ ------------ ------------ ------------ Other income (expense): Interest income 3,000 2,000 6,000 19,000 Interest expense (759,000) (346,000) (1,288,000) (1,120,000) Other expense, net (27,000) (31,000) (152,000) (139,000) Equity loss from investment in joint venture (43,000) (8,000) (98,000) (35,000) ------------ ------------ ------------ ------------ Total other expense (826,000) (383,000) (1,532,000) (1,275,000) ------------ ------------ ------------ ------------ Net loss $(10,417,000) $ (6,802,000) $(18,243,000) $(13,727,000) ============ ============ ============ ============ Basic and diluted net loss per common share $ (0.23) $ (0.18) $ (0.40) $ (0.39) ============ ============ ============ ============ Basic and diluted weighted average common shares 45,905,580 37,176,165 45,185,774 34,893,303 ============ ============ ============ ============ CYTORI THERAPEUTICS, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) For the Nine Months Ended September 30, ------------------------------ 2010 2009 -------------- -------------- Cash flows from operating activities: Net loss $ (18,243,000) $ (13,727,000) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 772,000 1,279,000 Amortization of deferred financing costs and debt discount 449,000 559,000 Warranty provision -- (23,000) Provision for doubtful accounts 428,000 450,000 Change in fair value of warrants (1,824,000) 1,558,000 Change in fair value of option liability 180,000 (560,000) Share-based compensation expense 2,294,000 1,991,000 Equity loss from investment in joint venture 98,000 35,000 Increases (decreases) in cash caused by changes in operating assets and liabilities: Accounts receivable (452,000) (997,000) Inventories (476,000) 249,000 Other current assets (104,000) (26,000) Other assets (64,000) 49,000 Accounts payable and accrued expenses (72,000) (1,066,000) Deferred revenues, related party (2,122,000) (7,250,000) Deferred revenues 29,000 (33,000) Long-term deferred rent 302,000 (168,000) -------------- -------------- Net cash used in operating activities (18,805,000) (17,680,000) -------------- -------------- Cash flows from investing activities: Purchases of property and equipment (473,000) (100,000) Cash invested in restricted cash (350,000) -- Investment in joint venture (330,000) -- -------------- -------------- Net cash used in investing activities (1,153,000) (100,000) -------------- -------------- Cash flows from financing activities: Principal payments on long-term debt (5,454,000) (1,419,000) Proceeds from long-term debt 20,000,000 -- Debt issuance costs and loan fees (559,000) -- Proceeds from exercise of employee stock options and warrants 7,050,000 71,000 Proceeds from sale of common stock and warrants 17,314,000 16,865,000 Costs from sale of common stock and warrants (518,000) (1,141,000) Proceeds from sale of treasury stock -- 3,933,000 -------------- -------------- Net cash provided by financing activities 37,833,000 18,309,000 -------------- -------------- Net increase in cash and cash equivalents 17,875,000 529,000 Cash and cash equivalents at beginning of period 12,854,000 12,611,000 -------------- -------------- Cash and cash equivalents at end of period $ 30,729,000 $ 13,140,000 ============== ==============
Contact:
Tom Baker
858.875.5258
tbaker@cytori.com
