cytx-8k_20170323.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 8-K

 

Current Report 

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  March 23, 2017

 

CYTORI THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

001-34375

33-0827593

(State or Other Jurisdiction of Incorporation)

(Commission File

Number)

(I.R.S. Employer Identification Number)

 

3020 Callan Road, San Diego, California 92121

(Address of principal executive offices, with zip code)

 

(858) 458-0900

(Registrant's telephone number, including area code)

 

n/a

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

 

 □

    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

 □

    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

 □

    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

 □

    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


 

Item 2.02Results of Operations and Financial Condition

 

On March 23, 2017, Cytori Therapeutics, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter and fiscal year ended December 31, 2016. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

The information disclosed under this Item 2.02 in this report, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as expressly set forth in such filing.

 

 

Item 9.01Financial Statements and Exhibits

 

(d)Exhibits

 

Exhibit No.     

Description

99.1

Cytori Therapeutics, Inc. Press Release, dated March 23, 2017

 

 

 


 


 

SIGNATURES

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

CYTORI THERAPEUTICS, INC.

 

 

Date:  March 23, 2017

By: /s/ Tiago Girao

 

Tiago Girao

 

VP Finance and Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 


 


 

Exhibit Index

 

Exhibit No.     

Description

99.1

Cytori Therapeutics, Inc. Press Release, dated March 23, 2017

 

 

 

cytx-ex991_70.htm

 

 

Exhibit 99.1

 

Cytori Therapeutics contact

Tiago Girao

+1.858.458.0900

ir@cytori.com

 

 

 

 

 

 

Cytori Reports Fourth Quarter and Full Year 2016 Business and Financial Results

SAN DIEGO, March 23, 2017—Cytori Therapeutics (NASDAQ: CYTX) (“Cytori” or the “Company”) today announced its fourth quarter and year-end 2016 financial results and provided updates on its corporate activity and clinical development.

Fourth quarter and full year 2016 net loss allocable to common stockholders was $4.9 million, or $0.24 per share, and $22.0 million, or $1.28 per share, respectively. Operating cash burn for the fourth quarter and full year 2016 was approximately $4.2 million and $19.5 million, respectively. Cytori ended the year with approximately $12.6 million of cash and cash equivalents.

Selected Key Recent Highlights:

 

Completed enrollment of U.S. STAR pivotal/phase III trial for scleroderma hand dysfunction.

 

Completed acquisition of Azaya Therapeutics assets, and initiated nanomedicine development programs.

 

Reported 24 month publication of SCLERADEC-I reporting sustained benefit at 24 months across  multiple endpoints in patients with scleroderma hand dysfunction.

 

Received U.S. FDA orphan drug designation for cryopreserved or centrally processed HabeoTM for treatment of hand manifestations of systemic scleroderma.

 

Received U.S. Small Business Designation and related fee reductions.

 

Q4 and year-end 2016 Financial Performance

 

Q4 2016 and year-end operating cash burn was $4.2 million and $19.5 million, compared to $4.5 million and $20.5 million for the same periods in 2015, respectively.

 

Q4 2016 and year-end total revenues were $3.0 million and $11.4 million, compared to $3.4 million and $11.7 million for the same periods in 2015, respectively.

 

Cash and debt principal balances at December 31, 2016 were approximately $12.6 million and $17.7 million, respectively.

 

Q4 2016 net loss allocable to common stockholders was $4.9 million or $0.24 per share, compared to a net loss of $2.8 million or $0.25 per share (or a net loss of $5.4 million and $0.50 per share when excluding a non-cash credit charge of $2.7 million related to the change in fair value of warrant liabilities) for the same period in 2015.

 

2016 net loss allocable to common stockholders was $22.0 million or $1.28 per share, compared to $19.4 million or $2.07 per share (or a net loss of $26.4 million or $2.81 per share, which excludes a non-cash charge of $7.7 million related to the change in fair value of warrant liabilities and a beneficial conversion feature charge for convertible preferred stock of $0.7 million) for the same period in 2015.

“Our corporate priority and fundamental driver of stockholder value remains the focused and expeditious development of our late stage clinical pipeline and related commercial preparatory activities. In 2016, we continued our focus on operational efficiency and maintaining momentum in our clinical development programs, nonetheless we reduced our net losses by 20%” said Tiago Girao, VP of Finance and CFO of Cytori. “In 2017, we will continue to make appropriate preparations for commercial launch of HabeoTM in anticipation of receipt of STAR trial data, and we also intend to complete the manufacturing activities necessary to submit a marketing authorisation application (MAA) for our recently acquired nanoparticle doxorubicin, ATI-0918, to the European Medicines Agency (EMA). We will address ongoing capital requirements through targeted activities, including, but not limited to, further operational efficiency measures, tighter working capital management, increased revenue, accessing the capital markets as appropriate, and an intense focus on only those activities that we believe will maximize stockholder value creation, such as business development opportunities.”

 

 


Selected Key Anticipated Milestones:

 

 

Receive feedback from U.S. FDA regarding thermal burn IDE trial application (Q2)

 

Complete contracting discussions with BARDA regarding their potential funding of our thermal burn trial (Q2)

 

Report of 48-week US pivotal/phase III trial data for scleroderma hand dysfunction and preparation for US PMA filing (Q3)

 

Complete manufacturing activities required for submission of an MAA to the EMA for our recently acquired nanoparticle doxorubicin (Q4)

 

2017 Financial Guidance

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, as well as costs to be incurred in preparation of anticipated HabeoTM launch and the Company’s expansion of its development program for secondary Raynaud’s Phenomenon.

 

 

Operating cash burn forecasted to be within a range of $26million to $29 million

 

Management Conference Call Webcast

Cytori will host a management conference call at 5:30 p.m. Eastern Time today to further discuss its progress. The webcast will be available live and by replay two hours after the call and may be accessed under "Webcasts" in the Investor Relations section of Cytori's website. If you are unable to access the webcast, you may dial in to the call at +1.877.402.3914, Conference ID: 9218454.

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; 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 the FDA on our thermal burn IDE, 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 Company-sponsored STAR trial and the proposed thermal burn trial, as well as the Company-supported, investigator-initiated ADRESU trial. Specifically, the Company faces risks in the collection and results of the STAR  and ADRESU trials, including the risks that clinical data from one or more of these clinical trials will fail to demonstrate safety or efficacy of our cellular therapeutics, and risks that insufficiently positive clinical data will adversely affect government funding, regulatory approval pathways and commercial prospects for Habeo, ECCI-50, DCCT-10 and the Company’s other potential cell therapy products. 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 Europe, the Middle East and Africa (EMEA), including risks relating to oiurj efforts to ethically direct prospective scleroderma patients into our MAP program   Some of these risks also include risks relating to regulatory challenges the Company faces (including

2


the U.S,, EU, China, Japan and its other key geographies) due to a number of factors including novelty of the Company’s technology and product offerings, changes in and /or evolution of regulatory approaches to cellular therapeutics like the Company’s in its key geographies, and similar matters. The Company also faces risks relating to achievement of the Company’s financial goals (including balancing capital requirements and meeting projected 2017 operating cash burn guidance). It is possible that the Company could face unexpected revenue shortfalls, expense increases or other occurrences that adversely affect our cash burn and cash management strategies.  Further the Company face risks pertaining to dependence on third party performance and approvals (including performance of investigator-initiated trials, outcome of FDA review of the Company’s proposed burn wound trial pursuant to its contract with BARDA, and outcome of the EMA’s review of our ATI-0918 MAA); performance and acceptance of the Company’s products in clinical studies/trials and in the marketplace (including commercial acceptance of the Company’s products in Japan and other markets where are products are commercially available, and similar risks); material changes in the marketplace that could adversely impact revenue projections (including changes in market perceptions of the Company’s products, and introduction of competitive products); unexpected costs and expenses that could adversely impact liquidity and shorten the Company’s current liquidity projections (which could in turn require the Company to seek additional debt or equity capital sooner than currently anticipated); the Company’s reliance on key personnel; the Company’s ability to identify and develop new programs or assets to expand the Company’s clinical pipeline; the right of the U.S. government (BARDA) to cut or terminate further support of the thermal burn injury program (including any decision by BARDA not to proceed with our proposed thermal burn trial, assuming FDA approval of the Company’s IDE submission); the Company’s abilities to capitalize on its internal restructuring and achieve break-even or profitability (or to continue to reduce our operating losses); and other risks and uncertainties described under the "Risk Factors" in Cytori's Securities and Exchange Commission Filings, included in the Company’s annual and quarterly reports.

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.

3


CYTORI THERAPEUTICS, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and par value data)

 

 

 

As of December 31,

 

 

 

2016

 

 

2015

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

12,560

 

 

$

14,338

 

Accounts receivable, net of reserves of $167 and $797 in 2016 and 2015,

   respectively

 

 

1,242

 

 

 

1,052

 

Restricted cash

 

 

350

 

 

 

 

Inventories, net

 

 

3,725

 

 

 

4,298

 

Other current assets

 

 

870

 

 

 

1,555

 

Total current assets

 

 

18,747

 

 

 

21,243

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

1,157

 

 

 

1,631

 

Restricted cash

 

 

 

 

 

350

 

Other assets

 

 

2,336

 

 

 

1,521

 

Intangibles, net

 

 

8,447

 

 

 

9,031

 

Goodwill

 

 

3,922

 

 

 

3,922

 

Total assets

 

$

34,609

 

 

$

37,698

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

5,872

 

 

$

6,687

 

Current portion of long-term obligations, net of discount

 

 

6,629

 

 

 

 

Joint venture purchase obligation

 

 

 

 

 

1,750

 

Total current liabilities

 

 

12,501

 

 

 

8,437

 

 

 

 

 

 

 

 

 

 

Deferred revenues

 

 

97

 

 

 

105

 

Long-term deferred rent and other

 

 

17

 

 

 

269

 

Long-term obligations, net of discount, less current portion

 

 

11,008

 

 

 

16,681

 

Total liabilities

 

 

23,623

 

 

 

25,492

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value; 5,000,000 shares

   authorized; 13,500 shares issued; no shares outstanding in 2016 and 2015

 

 

 

 

 

 

Common stock, $0.001 par value; 75,000,000 shares authorized; 21,707,890 and

   13,003,893 shares issued and outstanding in 2016 and 2015, respectively

 

 

22

 

 

 

13

 

Additional paid-in capital

 

 

388,769

 

 

 

368,214

 

Accumulated other comprehensive income

 

 

1,258

 

 

 

996

 

Accumulated deficit

 

 

(379,063

)

 

 

(357,017

)

Total stockholders’ equity

 

 

10,986

 

 

 

12,206

 

Total liabilities and stockholders’ equity

 

$

34,609

 

 

$

37,698

 

 

 


4


CYTORI THERAPEUTICS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(UNAUDITED)

(in thousands, except share and per share data)

 

 

 

For the Three Months

 

 

For the Twelve Months

 

 

 

Ended December 31,

 

 

Ended December 31,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product revenues

 

$

1,466

 

 

$

1,556

 

 

$

4,656

 

 

$

4,838

 

Cost of product revenues

 

945

 

 

791

 

 

 

2,715

 

 

 

3,186

 

Gross profit

 

521

 

 

765

 

 

 

1,941

 

 

 

1,652

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Development revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government contracts and other

 

 

1,561

 

 

 

1,820

 

 

 

6,724

 

 

 

6,821

 

 

 

 

1,561

 

 

 

1,820

 

 

 

6,724

 

 

 

6,821

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

2,862

 

 

 

4,629

 

 

 

16,197

 

 

 

19,000

 

Sales and marketing

 

869

 

 

603

 

 

 

3,611

 

 

 

2,662

 

General and administrative

 

 

1,939

 

 

 

2,104

 

 

 

8,563

 

 

 

9,765

 

Change in fair value of warrant liabilities

 

 

 

 

(2,680

)

 

 

 

 

(7,668

)

Total operating expenses

 

 

5,670

 

 

 

4,656

 

 

 

28,371

 

 

 

23,759

 

Operating loss

 

 

(3,588

)

 

 

(2,071

)

 

 

(19,706

)

 

 

(15,286

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on debt extinguishment

 

 

 

 

 

 

 

 

(260

)

Interest income

 

13

 

 

3

 

 

19

 

 

9

 

Interest expense

 

 

(644

)

 

 

(702

)

 

 

(2,592

)

 

 

(3,379

)

Other income (loss), net

 

 

(699

)

 

14

 

 

233

 

 

172

 

Total other expense

 

 

(1,330

)

 

 

(685

)

 

 

(2,340

)

 

 

(3,458

)

Net loss

 

$

(4,918

)

 

$

(2,756

)

 

$

(22,046

)

 

$

(18,744

)

Beneficial conversion feature for

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

convertible preferred stock

 

 

 

 

 

 

 

 

(661

)

Net loss allocable to common stockholders

 

$

(4,918

)

 

$

(2,756

)

 

$

(22,046

)

 

$

(19,405

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per share allocable to common stockholders

 

$

(0.24

)

 

$

(0.25

)

 

$

(1.28

)

 

$

(2.07

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares used in calculating net loss per share allocable to common stockholders

 

 

20,685,307

 

 

 

10,894,552

 

 

 

17,290,933

 

 

 

9,386,488

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(4,918

)

 

 

(2,756

)

 

 

(22,046

)

 

 

(18,744

)

Other comprehensive income (loss) – foreign currency translation adjustments

 

583

 

 

 

(65

)

 

262

 

 

296

 

Comprehensive loss

 

$

(4,335

)

 

$

(2,821

)

 

$

(21,784

)

 

$

(18,448

)


5


CYTORI THERAPEUTICS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

 

 

 

For the Years Ended

December 31,

 

 

 

2016

 

 

2015

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(22,046

)

 

$

(18,744

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

1,182

 

 

 

1,093

 

Amortization of deferred financing costs and debt discount

 

 

954

 

 

 

979

 

Joint Venture acquisition obligation accretion

 

 

24

 

 

 

365

 

Provision for doubtful accounts

 

 

 

 

 

(105

)

Provision for expired inventory

 

 

172

 

 

 

 

Change in fair value of warrants

 

 

 

 

 

(7,668

)

Share-based compensation expense

 

 

1,080

 

 

 

2,041

 

(Gain) loss on asset disposal

 

 

(127

)

 

 

8

 

Loss on debt extinguishment

 

 

 

 

 

260

 

Increases (decreases) in cash caused by changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(179

)

 

 

328

 

Inventories

 

 

471

 

 

 

490

 

Other current assets

 

 

633

 

 

 

(637

)

Other assets

 

 

(764

)

 

 

363

 

Accounts payable and accrued expenses

 

 

(673

)

 

 

1,045

 

Deferred revenues

 

 

(8

)

 

 

3

 

Long-term deferred rent

 

 

(252

)

 

 

(289

)

Net cash used in operating activities

 

 

(19,533

)

 

 

(20,468

)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(67

)

 

 

(611

)

Expenditures for intellectual property

 

 

 

 

 

(13

)

Proceeds from sale of assets

 

131

 

 

 

11

 

Net cash provided by (used in) investing activities

 

 

64

 

 

 

(613

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Principal payments on long-term obligations

 

 

 

 

 

(25,032

)

Proceeds from long-term obligations

 

 

 

 

 

17,700

 

Debt issuance costs and loan fees

 

 

 

 

 

(1,854

)

Joint Venture purchase payments

 

 

(1,774

)

 

 

(1,623

)

Proceeds from exercise of employee stock options and warrants

 

 

 

 

 

4,997

 

Proceeds from sale of common stock

 

 

21,467

 

 

 

29,054

 

Costs from sale of common stock

 

 

(2,084

)

 

 

(2,370

)

Dividends paid on preferred stock

 

 

 

 

 

(75

)

Net cash provided by financing activities

 

 

17,609

 

 

 

20,797

 

Effect of exchange rate changes on cash and cash equivalents

 

 

82

 

 

 

 

Net decrease in cash and cash equivalents

 

 

(1,778

)

 

 

(284

)

Cash and cash equivalents at beginning of period

 

 

14,338

 

 

 

14,622

 

Cash and cash equivalents at end of period

 

$

12,560

 

 

$

14,338

 

 

6