CAMBRIDGE, Mass., May 2 /PRNewswire-FirstCall/ -- ViaCell, Inc. today announced its consolidated financial results for the three months ended March 31, 2006.
Total revenues in the first quarter of 2006 were $12.1 million compared to total revenues of $10.1 million for the same period in 2005. Sales of ViaCord(R), ViaCell’s product for the preservation of umbilical cord blood, generated revenues of $11.9 million in the first quarter of 2006, a 20 percent increase over the $10.0 million of revenues in the same period in 2005.
Total operating expenses in the first quarter of 2006 were $18.2 million compared to $14.3 million for the same period in 2005.
* Research and development expenses for the first quarter of 2006 were $3.5 million compared to research and development expenses of $3.6 million for the first quarter of 2005. * Sales and marketing expenses for the first quarter of 2006 were $7.9 million compared to sales and marketing expenses of $5.6 million in the first quarter of 2005. The increase in spending was primarily a result of the planned sales force expansion and higher marketing expenses relating to ViaCord. * General and administrative expenses for the first quarter of 2006 were $4.6 million compared to general and administrative expenses of $3.0 million in the first quarter of 2005. The increase in general and administrative expenses was primarily a result of costs associated with being a publicly traded company.
Effective January 1, 2006, the Company adopted Statement of Financial Accounting Standards no. 123(R), “Share-Based Payment” (“FAS 123R”), which establishes accounting for equity instruments exchanged for employee services, including the requirement to recognize in the statement of operations the fair value of stock options granted to employees. Accordingly, the Company recognized $0.7 million of stock-based compensation expense within operating expenses in the first quarter of 2006 pursuant to FAS 123R. Prior to January 1, 2006, the Company recorded stock-based compensation expense based on the intrinsic value of stock options granted, which resulted in $0.4 million of stock-based compensation expense recorded within operating expenses in the first quarter of 2005. In addition, the Company recorded a one-time benefit of $0.3 million in the first quarter of 2006 representing the cumulative effect of the change in accounting principle relating to the adoption of FAS 123R.
The net loss attributable to common stockholders for the first quarter of 2006 was $5.1 million, or $0.13 per share, compared to a net loss attributable to common stockholders of $5.0 million, or $0.17 per share, for the corresponding period in 2005. On a pro forma basis, considering all convertible preferred stock as common stock for all periods reported, the net loss for the first quarter of 2006 was $5.1 million, or $0.13 per share, compared to $4.0 million, or $0.13 per share, for the corresponding period in 2005. A reconciliation of GAAP basic and diluted net loss per share to pro forma basic and diluted net loss per share is included in the Company’s unaudited consolidated statements of operations included with this press release.
As of March 31, 2006, ViaCell had $58.0 million in cash, cash equivalents, and investments. During the quarter, ViaCell used approximately $2.5 million in cash, primarily for its ongoing operating activities.
“We made significant progress with the planned expansion of our commercial operations during the first quarter, which we believe will contribute to the overall 2006 sales growth of ViaCord(R), our product offering for the preservation of umbilical cord blood,” said Marc D. Beer, President and Chief Executive Officer of ViaCell. “Our ability to manage our cash balance, while increasing expenses, gives us the strategic flexibility to make important investments, such as increasing value by building our commercial business in a more robust manner.
Conference Call and Webcast
ViaCell will host a conference call and live audio webcast with investment analysts today, May 2, 2006, at 10:00 a.m. Eastern Time to discuss its first quarter financial results. To participate by telephone, dial (913) 981-4913. A live audio webcast can be accessed on the ViaCell web site at http://www.viacellinc.com within the Investor Information section.
A replay of this conference call will be available for two weeks, beginning May 2, 2006 at 1:00 p.m. Eastern Time by dialing (719) 457-0820 and using the access code 8041469. In addition, a replay of the webcast will be archived on the ViaCell website in the Investor Information section.
About ViaCell, Inc.
ViaCell is a biotechnology company focused on enabling the widespread use of human cells as medicine. The Company is developing a pipeline of proprietary stem cell product candidates intended to address cancer, cardiac disease, and diabetes. CB001, its lead cord blood derived stem cell therapy product candidate, is being developed for hematopoietic stem cell transplantation in patients affected by a variety of cancers. In addition to its therapeutic development programs, ViaCell’s reproductive health business commercializes ViaCord(R), a product that offers expecting families the option of preserving their baby’s umbilical cord blood. The Company is working to leverage its commercial infrastructure and product development capabilities by developing ViaCyte(SM), its investigational product intended to broaden reproductive choices for women through the cryopreservation of human unfertilized eggs. ViaCell is headquartered in Cambridge, Massachusetts with a processing and storage facility in Kentucky and additional research and development operations in Singapore. Additional information about ViaCell is available online at http://www.viacellinc.com.
This press release contains forward-looking statements regarding the Company’s financial outlook, including the potential for growth in the ViaCord business, and the Company’s plans for its development programs. These statements are based on management’s current expectations. The Company’s financial performance and ability to achieve its expectations for growth and stated financial goals are subject to a number of risks and uncertainties. Factors which could cause actual results to differ materially from the Company’s current expectations include, but are not limited to: the impact of competition in the umbilical cord preservation industry, the impact of any potential adverse outcome in pending patent infringement litigation related to the cord blood preservation business, any other unexpected material issues, delays or failures in the collection, processing or storage of umbilical cord blood by the Company, and fluctuations in the level and timing of expenses as a result of difficulties or delays in the development of the Company’s product candidates. Success of the Company’s development programs could be negatively impacted by new data regarding the safety or efficacy of the Company’s product candidates, unexpected delays or technical or intellectual property hurdles or concerns or requirements raised by regulatory authorities. The Company’s long-term financial performance and growth is also expected to be dependent on the Company’s ability to bring new products to the marketplace. Currently, the Company’s product candidates are at an early stage of development. There can be no assurance that the Company will be successful in its efforts to develop these or other products. For more detailed information on the risks and uncertainties associated with these forward looking statements and the Company’s other activities, see the periodic reports filed by the Company with the Securities and Exchange Commission. The Company does not undertake any obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise.
- Financial Tables to Follow - ViaCell, Inc. Condensed Consolidated Statements of Operations (in thousands) (unaudited) Three Months Three Months Ended Ended March 31, March 31, 2006 2005 Processing and storage revenues $11,937 $9,975 Grant revenues 144 165 Total revenues 12,081 10,140 Operating expenses: Cost of processing and storage revenues 2,328 1,953 Research and development 3,466 3,646 Sales and marketing 7,922 5,569 General and administrative 4,638 3,047 Restructuring (181) 121 Total operating expenses (Note 1) 18,173 14,336 Loss from operations (6,092) (4,196) Interest income (expense): Interest income 724 315 Interest expense (26) (155) Total interest income, net 698 160 Loss from operations before cumulative effect of change in accounting principle (5,394) (4,036) Cumulative effect of change in accounting principle (Note 2) 283 -- Net loss (5,111) (4,036) Accretion on redeemable convertible preferred stock -- 987 Net loss attributable to common stockholders $(5,111) $(5,023) Net loss per share: Net loss per common share, basic and diluted $(0.13) $(0.17) Weighted average shares used in basic and diluted net loss per share computation 38,295 29,719 Pro forma net loss per common share, basic and diluted $(0.13) $(0.13) Weighted average shares used in pro forma basic and diluted net loss per share computation 38,295 31,153 Note 1: The following table presents share-based compensation expense for continuing operations included in the Company’s unaudited consolidated statements of operations (in thousands): Three Months Three Months Ended Ended March 31, March 31, 2006 2005 Cost of processing and storage revenues $15 $5 Research and development 104 70 Sales and marketing 57 78 General and administrative 535 283 Total stock-based compensation expense $711 $436 Note 2: The requirement of FAS 123R to estimate future forfeitures resulted in a cumulative benefit of $283,000 from the adoption of FAS 123R related to estimating forfeitures rather than recording the benefit of the forfeitures as they occur.
The non-GAAP financial measure of pro forma basic and diluted net loss per common share presented below is utilized by ViaCell’s management to gain an understanding of the comparative financial performance of the Company. Management believes that this non-GAAP financial measure is useful because it includes all outstanding shares of the Company, whether common or preferred, in the calculation of basic and diluted earnings per share. The presentation of this information is not meant to be considered in isolation or as a substitute for GAAP financial measures. Pro forma disclosure assumes all convertible preferred shares were considered as outstanding common stock and no related accretion was recorded during both periods reported.
Reconciliation of GAAP Basic and Diluted Net Loss Per Common Share to Pro Forma Basic and Diluted Net Loss Per Common Share Three Months Ended March 31, (in thousands) 2006 2005 Net loss attributable to common stockholders $(5,111) $(5,023) Accretion on redeemable convertible preferred stock - 987 Pro forma net loss attributable to common stockholders $(5,111) $(4,036) Weighted average shares used in basic and diluted net loss per share calculation 38,295 29,719 Increase in weighted average common shares outstanding assuming conversion of preferred stock at January 1 - 1,434 Weighted average shares used in pro forma basic and diluted net loss per share calculation 38,295 31,153 Condensed Consolidated Balance Sheet Data (in thousands) (unaudited) March 31, December 31, 2006 2005 Cash, cash equivalents and investments $58,002 $60,544 Accounts receivable, net 12,727 13,736 Other current assets 3,752 2,841 Property & equipment, net 8,593 8,702 Intangible assets 6,394 6,444 Other assets 1,966 1,963 Total assets $91,434 $94,230 Current liabilities 17,446 16,176 Deferred revenue & rent 14,406 13,805 Contingent purchase price 8,155 8,155 Long-term debt 69 84 Stockholders’ equity 51,358 56,010 Total liabilities and stockholders’ equity $91,434 $94,230
ViaCell(R) and ViaCord(R) are federally registered trademarks and ViaCyte(SM) is a service mark of ViaCell, Inc.
For More Information Contact: Justine E. Koenigsberg Senior Director, Corporate Communications (617) 914-3494
Photo: http://www.newscom.com/cgi-bin/prnh/20060303/VIACELLLOGOAP Archive: http://photoarchive.ap.orgPRN Photo Desk photodesk@prnewswire.comViaCell, Inc.
CONTACT: Justine E. Koenigsberg, Senior Director, Corporate Communicationsof ViaCell, Inc., +1-617-914-3494
Web site: http://www.viacellinc.com//
