CAMBRIDGE, Mass., Aug. 3 /PRNewswire-FirstCall/ -- ViaCell, Inc. today announced its consolidated financial results for the second quarter ended June 30, 2006.
Total revenues were $13.5 million for the second quarter of 2006 compared to $11.4 million for the same period in 2005. Sales of ViaCord(R), ViaCell’s product for the preservation of umbilical cord blood, generated revenues of $13.4 million in the second quarter of 2006, representing a 19 percent increase over the $11.2 million of revenues in the same period in 2005.
“This quarter we completed our planned commercial expansion and, coupled with other initiatives, we expect that this will support a further acceleration of ViaCord sales growth,” said Marc D. Beer, President and Chief Executive Officer. “We have built a highly leverageable commercial organization focused on obstetricians and gynecologists that we hope will support an expanded product line in the future including ViaCyte(SM), our investigational product for oocyte cryopreservation, if we are successful in our development efforts. We have satisfied all the FDA requirements to begin the ViaCyte pivotal trial and expect enrollment to begin in late 2006.”
Total operating expenses in the second quarter of 2006 were $21.2 million compared to $14.9 million for the same period in 2005.
* Research and development expenses for the second quarter of 2006 were $3.7 million compared to research and development expenses of $3.1 million for the second quarter of 2005, reflecting ongoing clinical and preclinical testing of ViaCell’s programs for cancer, cardiac disease, and diabetes. * Sales and marketing expenses for the second quarter of 2006 were $10.0 million compared to sales and marketing expenses of $6.1 million in the second quarter of 2005. The higher sales and marketing expenses were a result of increased spending on ViaCord sales and marketing, including an expansion of the ViaCord sales force, which was completed in the first half of 2006. * General and administrative expenses for the second quarter of 2006 were $5.0 million compared to $3.6 million in the second quarter of 2005. The increase in general and administrative expenses was primarily a result of costs associated with being a publicly traded company.
The net loss attributable to common stockholders for the second quarter of 2006 was $6.9 million, or $0.18 per share, compared to a net loss attributable to common stockholders of $3.1 million, or $0.08 per share, for the corresponding period in 2005.
As of June 30, 2006, ViaCell had $56.7 million in cash, cash equivalents, and investments as compared to $58.0 million at March 31, 2006 and $60.5 million as of December 31, 2005.
As previously communicated, the Company expects ViaCord sales growth of greater than 20 percent in 2006 compared to 2005, with higher growth in the second half of the year than in this first half, compared to corresponding prior periods. In addition, the Company increased its sales and marketing expenses in the first half of the year to drive sales growth and believes the sales and marketing expenses in the second quarter of 2006 provide a reasonable approximation for sales and marketing expenses in the third and fourth quarters of 2006. Consequently, the Company expects net loss per share in 2006 to be in the range of $0.56 to $0.59 per share before charges for stock-based compensation expense. The Company estimates that charges for stock-based compensation will be $0.08 to $0.09 per share for the year, resulting in an expected GAAP-based net loss per share in 2006 of $0.64 to $0.68 per share.
Highlights
ViaCell achieved several milestones related to its ViaCord business and the advancement of its pipeline. The following is a summary of selected highlights.
ViaCord sales force expansion. ViaCell completed its commercial expansion in the second quarter of 2006. The expanded sales force, coupled with other sales and marketing initiatives, is intended to support an acceleration of ViaCord sales growth in the second half of 2006. In addition, ViaCell expanded its management team in the second quarter with the appointment of Jim Corbett to the position of President, ViaCell Reproductive Health. The Company also achieved a significant milestone in passing the 100,000 customer mark during the second quarter.
Launch of first FDA-approved collection bag. As part of its initiative to differentiate its ViaCord product offering, ViaCell launched the first FDA-approved sterile field collection bag, Cell Sentinel(TM), as part of the ViaCord collection kit during the second quarter of 2006. Pall Corporation and ViaCell collaborated on the development and design of the new collection bag.
Agreement with CHORI to expand cord blood program. In May 2006, ViaCell signed an agreement with Children’s Hospital Oakland Research Institute (CHORI) to combine the companies’ directed transplant programs for sibling donor cord blood. ViaCell believes the combined programs establish it as a leading provider of related cord blood stem cells for directed transplantation. In addition, the Company reported patient outcomes for transplants from 19 cord blood units at a scientific conference in May. The data compare favorably with reports of unrelated cord blood transplantation.
Enrollment in ViaCyte pivotal trial expected to begin in late 2006. In June 2006, ViaCell received conditional approval from the FDA to begin enrolling patients in the pivotal clinical trial for ViaCyte. ViaCell has responded to the FDA and satisfied all requests required to begin the ViaCyte pivotal trial. The Company expects to begin enrollment in the trial in late 2006.
CB001 Phase I study completed. In July 2006, ViaCell completed enrollment and treatment in the ten person CB001 Phase 1 study. CB001 is being studied for hematopoietic stem cell transplantation for the treatment of a variety of cancers. Following the 100-day post transplant follow up, ViaCell expects to complete the analysis of the study data and report top-line data by the end of 2006.
Cardiac agreement with Centocor. In June 2006, ViaCell entered into a research collaboration with Centocor Research and Development to evaluate, in preclinical studies, ViaCell’s cord blood-derived multi-potent stem cells delivered using Cordis Corporation’s NOGA XP delivery system as a potential treatment for cardiac disease. If the preclinical data support further development, ViaCell expects to file an Investigational New Drug Application in 2007.
Conference Call and Webcast
ViaCell will host a conference call and live audio webcast with investment analysts today, August 3, 2006, at 10:00 a.m. Eastern Time to discuss its second quarter financial results. To participate by telephone, dial (913) 981-5550. 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 August 3, 2006 at 1:00 p.m. Eastern Time by dialing (719) 457-0820 and using the access code 7231484. 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 offering 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, the level of sales and marketing expenses and estimated net loss per share, the potential for new products and plans for its development programs. These statements are based on management’s current expectations, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the Company’s current expectations. For example, the Company’s financial performance and its ability to achieve its expectations for growth and stated financial goals may be negatively affected by 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 unexpected material issues, delays or failures in the collection, processing or storage of umbilical cord blood by the Company or others in the industry, and by the fluctuations in the level and timing of expenses as a result of difficulties or delays in the development of the Company’s product candidates or in connection with licensing deals or collaborations, and any other unexpected expenses or costs. The development of product candidates and product offerings like those being developed by ViaCell involve a high degree of risk. The success of the Company’s development programs and the potential for new products could be negatively impacted by a number of factors, including new data regarding the safety or efficacy of the Company’s product candidates or offerings, unexpected delays, technical or intellectual property hurdles, or unexpected concerns or requirements raised by regulatory authorities. The Company’s long-term financial performance and growth is 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, except per share data) (unaudited) Three Months Ended Six Months Ended June 30, June 30, 2006 2005 2006 2005 Processing and storage revenues $13,362 $11,188 $25,299 $21,163 Grant revenues 177 195 320 360 Total revenues 13,539 11,383 25,619 21,523 Operating expenses: Cost of processing and storage revenues 2,536 2,028 4,864 3,981 Research and development 3,660 3,116 7,126 6,762 Sales and marketing 9,995 6,076 17,916 11,645 General and administrative 5,013 3,588 9,650 6,635 Restructuring 0 90 (180) 211 Total operating expenses (Note 1) 21,204 14,898 39,376 29,234 Loss from operations (7,665) (3,515) (13,757) (7,711) Interest income (expense): Interest income 803 458 1,527 773 Interest expense (17) (38) (43) (193) Total interest income, net 786 420 1,484 580 Loss from operations before cumulative effect of change in accounting principle (6,879) (3,095) (12,273) (7,131) Cumulative effect of change in accounting principle (Note 2) -- -- 283 -- Net loss (6,879) (3,095) (11,990) (7,131) Accretion on redeemable convertible preferred stock -- -- -- 987 Net loss attributable to common stockholders $(6,879) $(3,095) $(11,990) $(8,118) Net loss per share: Net loss per common share, basic and diluted $(0.18) $(0.08) $(0.31) $(0.24) Weighted average shares used in basic and diluted net loss per share computation 38,367 37,526 38,329 33,261 Pro forma net loss per common share, basic and diluted (Note 3) $(0.18) $(0.08) $(0.31) $(0.20) Weighted average shares used in pro forma basic and diluted net loss per share computation 38,367 37,526 38,329 36,398
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 Ended Six Months Ended June 30, June 30, 2006 2005 2006 2005 Cost of processing and storage revenues $ 17 $ 5 $ 32 $ 10 Research and development 136 90 240 160 Sales and marketing 70 42 127 120 General and administrative 597 221 1,132 504 Total stock-based compensation expense $ 820 $ 358 $ 1,531 $ 794
Note 2: The requirement of Statement of Financial Accounting Standards No. 123R (FAS 123R) to estimate future forfeitures resulted in a cumulative benefit of $283,000 in the three months ended March 31, 2006 from the adoption of FAS 123R related to estimating forfeitures rather than recording the benefit of the forfeitures as they occur.
Note 3: The non-GAAP financial measure of pro forma basic and diluted net loss per common share presented below for the six months ended June 30, 2005 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 (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2006 2005 2006 2005 Net loss attributable to common stockholders $(6,879) $ (3,095) $(11,990) $(8,118) Accretion on redeemable convertible preferred stock -- -- -- 987 Pro forma net loss attributable to common stockholders $(6,879) $(3,095) $(11,990) $(7,131) Weighted average shares used in basic and diluted net loss per share calculation 38,367 37,526 38,329 33,261 Increase in weighted average common shares outstanding assuming conversion of preferred stock at January 1 -- -- -- 3,137 Weighted average shares used in pro forma basic and diluted net loss per share calculation 38,367 37,526 38,329 36,398 Condensed Consolidated Balance Sheet Data (in thousands) (unaudited) June 30, December 31, 2006 2005 Cash, cash equivalents and investments $56,688 $60,544 Accounts receivable, net 11,876 13,736 Other current assets 3,377 2,841 Property & equipment, net 8,877 8,702 Intangible assets 6,343 6,444 Other assets 1,975 1,963 Total assets $89,136 $94,230 Current liabilities 19,793 16,175 Deferred revenue & rent 15,808 13,806 Contingent purchase price 8,155 8,155 Long-term debt 53 84 Stockholders’ equity 45,327 56,010 Total liabilities and stockholders’ equity $89,136 $94,230
ViaCell(R) and ViaCord(R) are federally registered trademarks, Cell Sentinel(TM) is a trademark 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 of ViaCell, Inc., +1-617-914-3494
Web site: http://www.viacellinc.com/
