Cytori Reports Second Quarter 2017 Business and Financial Results
Second quarter 2017 net loss was
Selected Key Recent Highlights:
- STAR trial top-line preliminary data announced. Despite missing primary and secondary endpoints, data showed clinically meaningful improvements in more severely affected patients with diffuse cutaneous scleroderma.
American Medical Association approved new category III CPT codes describing Cytori’s scleroderma therapy.- BARDA executed a
$13.4 million contract option to fund the RELIEF burn trial. - Received U.S. FDA IDE approval for RELIEF, a thermal burn pilot trial application related to ongoing BARDA contract.
Q2 2017 Financial Performance
- Q2 2017 and year-to-date operating cash burn was
$5.0 million and$9.9 million , compared to$5.7 million and$10.7 million for the same periods in 2016, respectively. - Q2 2017 and year-to-date total revenues were
$1.5 million and$3.1 million , compared to$2.8 million and$5.7 million for the same periods in 2016, respectively. - Cash and debt principal balances at
June 30, 2017 were approximately$9.0 million and$14.2 million , respectively. - Q2 2017 net loss was
$6.0 million or$0.19 per share, compared to$6.4 million or$0.43 per share for Q2 2016. - Year-to-date adjusted net loss was
$11.9 million , or$0.44 per share, and excludes a$1.7 million non-cash charge for in-process research and development expense from the Azaya Therapeutics asset acquisition, compared to$11.7 million or$0.84 per share for the same period in 2016. - Year-to-date GAAP net loss was
$13.6 million or$0.50 per share, compared to$11.7 million or$0.84 per share for the same period in 2016.
“Based on ongoing analysis of our STAR trial data and observed clinically meaningful improvements in the diffuse cutaneous subgroup, we intend to meet with the US FDA as soon as possible for a post-trial meeting to chart next steps. It is important that our HabeoTM product ultimately be made available for these patients,” said Dr.
Selected Key Anticipated Milestones:
- Complete analysis of STAR full dataset and subsequent meeting with
FDA to determine next steps for Habeo clinical development for scleroderma hand dysfunction (Q3). - Begin enrollment of BARDA’s funded RELIEF burn trial (Q4).
- Complete manufacturing activities required for submission of an MAA to the EMA for our recently acquired nanoparticle doxorubicin (Q4).
2017 Financial Guidance - Updated
The Company expects full year 2017 operating cash burn to be higher than 2016, primarily due to the development of assets acquired from Azaya Therapeutics.
- Updated operating cash burn forecasted to be within a range of
$20 million to $23 million , a reduction from previously guided range of$26 million to $29 million .
Management Conference Call Webcast
Cytori will host a management conference call at
About Cytori
Cytori is a therapeutics company developing regenerative and oncologic therapies from its proprietary cell therapy and nanoparticle platforms for a variety of medical conditions. Data from preclinical studies and clinical trials suggest that Cytori Cell Therapy™ acts principally by improving blood flow, modulating the immune system, and facilitating wound repair. As a result, Cytori Cell Therapy™ may provide benefits across multiple disease states and can be made available to the physician and patient at the point-of-care through Cytori’s proprietary technologies and products. Cytori Nanomedicine™ is developing encapsulated therapies for regenerative medicine and oncologic indications using technology that allows Cytori to use the benefits of its encapsulation platform to develop novel therapeutic strategies and reformulate other drugs to optimize their clinical properties. For more information, visit www.cytori.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes forward-looking statements that involve known and unknown risks and uncertainties. All statements, other than historical facts are forward looking statements. Such statements, including, without limitation, statements regarding anticipated commercial launch of our Habeo™ therapy and ATI-0918 drug candidate (and timing thereof); completion of manufacturing activities necessary to submit an MAA to the EMA for our ATI-0918 drug candidate; our strategy for addressing our capital requirements through various activities, including operational efficiencies, revenue growth and accessing the capital markets; receipt of feedback from, and related discussions with, BARDA regarding our future contractual relationship with BARDA (and proposed BARDA funding of our thermal burn pilot trial); and our expected 2017 cash burn and reasons for the anticipated cash burn; are subject to risks and uncertainties that could cause our actual results and financial position to differ materially. Some of these risks include clinical, pre-clinical and regulatory uncertainties, such as those associated with conduct and completion of the proposed thermal burn trial, as well as the Company’s anticipated submission of data to the EMA from the previously completed bioequivalency trial for ATI-0918 . Specifically, the Company faces risks in the collection and results of the STAR and thermal burn trials, including enrollment risks, the risks that clinical data from one or more of these clinical trials will fail to demonstrate safety or efficacy of our product candidates, and risks that insufficiently positive clinical data will adversely affect government funding, regulatory approval pathways and commercial prospects for our cell therapy (e.g., Habeo), and nanomedicines product candidates. We also face risks that investigator-initiated trials using our Cytori Cell Therapy fail to fully enroll or otherwise are conducted in a manner that ultimately is injurious to our business. We also face the risk that we will be unable to time successfully manufacture our ATI-0918 drug candidate in time to meet our projected timeline for submission of an MAA to the EMA, or at all. We also face risks regarding execution of our managed access program (MAP) strategy in
There may be events in the future that the Company is unable to predict, or over which it has no control, and its business, financial condition, results of operations and prospects may change in the future. The Company assumes no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made unless the Company has an obligation under U.S. Federal securities laws to do so.
| CYTORI THERAPEUTICS, INC. | ||||||||
| CONSOLIDATED CONDENSED BALANCE SHEETS | ||||||||
| (UNAUDITED) | ||||||||
| (in thousands, except share and par value data) | ||||||||
| As of June 30, 2017 |
As of December 31, 2016 |
|||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 9,028 | $ | 12,560 | ||||
| Accounts receivable, net of reserves of $167 in both 2017 and 2016, respectively |
807 | 1,242 | ||||||
| Restricted cash | 429 | 350 | ||||||
| Inventories, net | 4,243 | 3,725 | ||||||
| Other current assets | 1,116 | 870 | ||||||
| Total current assets | 15,623 | 18,747 | ||||||
| Property and equipment, net | 3,387 | 1,157 | ||||||
| Other assets | 1,712 | 2,336 | ||||||
| Intangibles, net | 7,832 | 8,447 | ||||||
| Goodwill | 3,922 | 3,922 | ||||||
| Total assets | $ | 32,476 | $ | 34,609 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 6,485 | $ | 5,872 | ||||
| Current portion of long-term obligations, net of discount | 6,744 | 6,629 | ||||||
| Total current liabilities | 13,229 | 12,501 | ||||||
| Deferred revenues | 110 | 97 | ||||||
| Long-term deferred rent and other | 136 | 17 | ||||||
| Long-term obligations, net of discount, less current portion | 7,771 | 11,008 | ||||||
| Total liabilities | 21,246 | 23,623 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Series A 3.6% convertible preferred stock, $0.001 par value; 5,000,000 shares authorized; 13,500 shares issued; no shares outstanding in 2017 and 2016 |
— | — | ||||||
| Common stock, $0.001 par value; 75,000,000 shares authorized; 33,328,401 and 21,707,890 shares issued and outstanding in 2017 and 2016, respectively |
33 | 22 | ||||||
| Additional paid-in capital | 402,670 | 388,769 | ||||||
| Accumulated other comprehensive income | 1,183 | 1,258 | ||||||
| Accumulated deficit | (392,656 | ) | (379,063 | ) | ||||
| Total stockholders’ equity | 11,230 | 10,986 | ||||||
| Total liabilities and stockholders’ equity | 32,476 | $ | 34,609 | |||||
| CYTORI THERAPEUTICS, INC. | ||||||||||||||||
| CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||||||||||
| (UNAUDITED) | ||||||||||||||||
| (in thousands, except share and per share data) | ||||||||||||||||
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Product revenues | $ | 969 | $ | 1,126 | $ | 1,560 | $ | 2,459 | ||||||||
| Cost of product revenues | 401 | 503 | 811 | 971 | ||||||||||||
| Amortization of intangible assets | 306 | 82 | 612 | 181 | ||||||||||||
| Gross profit | 262 | 541 | 137 | 1,307 | ||||||||||||
| Development revenues: | ||||||||||||||||
| Government contracts and other | 531 | 1,699 | 1,549 | 3,284 | ||||||||||||
| 531 | 1,699 | 1,549 | 3,284 | |||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 2,992 | 5,247 | 6,281 | 9,374 | ||||||||||||
| Sales and marketing | 1,263 | 889 | 2,202 | 1,924 | ||||||||||||
| General and administrative | 2,119 | 2,328 | 4,227 | 4,614 | ||||||||||||
| In process research and development acquired from Azaya Therapeutics | — | — | 1,686 | — | ||||||||||||
| Total operating expenses | 6,374 | 8,464 | 14,396 | 15,912 | ||||||||||||
| Operating loss | (5,581 | ) | (6,224 | ) | (12,710 | ) | (11,321 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 7 | 2 | 18 | 4 | ||||||||||||
| Interest expense | (538 | ) | (645 | ) | (1,129 | ) | (1,302 | ) | ||||||||
| Other income, net | 63 | 462 | 228 | 876 | ||||||||||||
| Total other expense | (468 | ) | (181 | ) | (883 | ) | (422 | ) | ||||||||
| Net loss | $ | (6,049 | ) | $ | (6,405 | ) | $ | (13,593 | ) | $ | (11,743 | ) | ||||
| Basic and diluted net loss per share | $ | (0.19 | ) | $ | (0.43 | ) | $ | (0.50 | ) | $ | (0.84 | ) | ||||
| Basic and diluted weighted average shares used in calculating net loss per share | 31,250,872 | 14,778,616 | 26,993,619 | 13,932,496 | ||||||||||||
| Comprehensive loss: | ||||||||||||||||
| Net loss | $ | (6,049 | ) | $ | (6,405 | ) | $ | (13,593 | ) | $ | (11,743 | ) | ||||
| Other comprehensive loss – foreign currency translation adjustments |
(15 | ) | (130 | ) | (75 | ) | (379 | ) | ||||||||
| Comprehensive loss | $ | (6,064 | ) | $ | (6,535 | ) | $ | (13,668 | ) | $ | (12,122 | ) | ||||
| CYTORI THERAPEUTICS, INC. | ||||||||
| CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | ||||||||
| (UNAUDITED) | ||||||||
| (in thousands) | ||||||||
| For the Six Months Ended June 30, | ||||||||
| 2017 | 2016 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (13,593 | ) | $ | (11,743 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 1,052 | 574 | ||||||
| Amortization of deferred financing costs and debt discount | 418 | 468 | ||||||
| In process research and development acquired from Azaya Therapeutics | 1,686 | — | ||||||
| Joint Venture acquisition obligation accretion | — | 24 | ||||||
| Provision for expired inventory | 340 | 26 | ||||||
| Stock-based compensation expense | 410 | 645 | ||||||
| Loss on asset disposal | 19 | 2 | ||||||
| Increases (decreases) in cash caused by changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 409 | 66 | ||||||
| Inventories | 159 | (380 | ) | |||||
| Other current assets | (736 | ) | 137 | |||||
| Other assets | 43 | 34 | ||||||
| Accounts payable and accrued expenses | (194 | ) | (431 | ) | ||||
| Deferred revenues | 13 | 1 | ||||||
| Long-term deferred rent | 119 | (158 | ) | |||||
| Net cash used in operating activities | (9,855 | ) | (10,735 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | (95 | ) | (105 | ) | ||||
| Purchase of long-lived assets part of Azaya Therapeutics’ acquisition | (1,201 | ) | — | |||||
| Change in restricted cash | (79 | ) | — | |||||
| Net cash used in investing activities | (1,375 | ) | (105 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Principal payments on long-term obligations | (3,540 | ) | — | |||||
| Joint Venture purchase payments | — | (1,774 | ) | |||||
| Proceeds from sale of common stock, net | 11,225 | 18,179 | ||||||
| Net cash provided by financing activities | 7,685 | 16,405 | ||||||
| Effect of exchange rate changes on cash and cash equivalents | 13 | 139 | ||||||
| Net (decrease) increase in cash and cash equivalents | (3,532 | ) | 5,704 | |||||
| Cash and cash equivalents at beginning of period | 12,560 | 14,338 | ||||||
| Cash and cash equivalents at end of period | $ | 9,028 | $ | 20,042 | ||||
CYTORI THERAPEUTICS CONTACTTiago Girao +1.858.458.0900 ir@cytori.com
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