cytx-8k_20170810.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):  August 10, 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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities

Act of 1933 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 240.12b-2 of this chapter).

 

Emerging growth company

 

     If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 


 

Item 2.02Results of Operations and Financial Condition

 

On August 10, 2017, Cytori Therapeutics, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2017. 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 August 10, 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:  August 10, 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 August 10, 2017

 

 

 

 

cytx-ex991_6.htm

 

Exhibit 99.1

                                                                                                                                                                                                                       

 

 

Cytori Therapeutics contact

Tiago Girao

+1.858.458.0900

ir@cytori.com

 

 

 

 

Cytori Reports Second Quarter 2017 Business and Financial Results

SAN DIEGO, August 10, 2017—Cytori Therapeutics (NASDAQ: CYTX) (“Cytori” or the “Company”) today announced its second quarter 2017 financial results and provided updates on its corporate activity and clinical development.

Second quarter 2017 net loss was $6.0 million, or $0.19 per share. Operating cash burn for the quarter was approximately $5.0 million. Cytori ended the quarter with approximately $9.0 million of cash and cash equivalents.

 

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. Marc Hedrick, President and CEO of Cytori. “In addition, manufacturing validation for our ATI-0918 nanoparticle doxorubicin oncology product is on schedule for filing for EMA submission mid next year and other key trials continue to enroll, ideally completing enrollment of both, Scleradec-II and ADRESU by year end.”

 

 

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 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:67113805.

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 Europe, the Middle East and Africa (EMEA), including risks relating to our 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 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 BARDA’s 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.

3


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.

4


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

 

5


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

)


6


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

 

 

7