NEWARK, Calif., Aug. 2, 2012 (GLOBE NEWSWIRE) -- StemCells, Inc. (Nasdaq:STEM), a leading stem cell company developing and commercializing novel cell-based therapeutics and tools for use in stem cell-based research and drug discovery, today reported financial results for the second quarter ended June 30, 2012 and provided a business update.
"We continue to be encouraged by our progress in developing cell-based therapeutics for a broad array of disorders affecting the central nervous system," said Martin McGlynn, President and CEO of StemCells, Inc. "We have already reported top line results from our Phase I PMD trial and I am pleased to report that the manuscript with the complete PMD trial data is under peer review for publication by a top tier journal.
Our other clinical development efforts also continue to advance. We recently reported interim safety data from our chronic spinal cord injury trial, showing that our cells and the procedure have been well tolerated. We have also initiated a Phase I/II trial in dry AMD and look forward to enrolling our first patients in this study soon. Lastly, we recently reported preclinical data showing that our cells restored memory in two animal models relevant to Alzheimer's disease without having to reduce beta-amyloid or tau burden that are the pathological hallmarks of the disease. Results of this kind underscore the potential of our HuCNS-SC cells to potentially address a number of devastating CNS disorders.
Financially, we aim to do more with less and continue to carefully manage our burn rate. Last week's decision by CIRM to award us a $20 million disease team award is exciting and welcome. This award will not only provide additional resources, but is also a vote of confidence in our technology, our program and our people. Moving forward, we will continue to generate clinical data from our HuCNS-SC program in a thoughtful, cost effective manner, which is, we believe, the best pathway to grow shareholder value."
Second Quarter and Recent Business Highlights
Second Quarter Financial Results
Revenue from product sales increased 14% to $211,000 in the second quarter of 2012 compared to the same period of 2011 as our SC Proven media and reagents business continued to see increased unit volume. Total revenue in the second quarter of 2012 was $249,000, compared to $234,000 in the same period of 2011.
Our operating expenses decreased 24% to $5,535,000 in the second quarter of 2012 compared to the same quarter of 2011. Research and development expenses were 26% lower, and selling, general and administrative expenses were 16% lower, compared to the second quarter of 2011. The significant reduction in operating expenses was primarily attributable to continuing tight cost controls and a number of measures taken last year to reduce infrastructure and overhead costs, including a reduction in workforce implemented in May 2011.
Other income in the second quarter of 2012 was $6,184,000, compared to $3,055,000 in the second quarter of 2011. This increase was primarily due to a decrease in the estimated fair value of warrant liability. Our outstanding warrants are classified as a liability, with subsequent changes in the estimated fair value recorded as income or loss.
Loss from operations in the second quarter of 2012 was $5,350,000, a 25% decrease compared to the same period in 2011. Net income for the quarter was $834,000, or $0.03 per share, compared with a net loss of $4,035,000, or $(0.29) per share, for the second quarter of 2011.
Net cash used in operating activities for the quarter was $5,084,000. For the first six months of 2012, net cash used in operating activities was $10,715,000, which was 18% lower than the same period in 2011.
At June 30, 2012, pro forma cash, cash equivalents and marketable debt securities totaled $18,162,000. This total includes $9,259,000 in net proceeds from the exercise of Series A Warrants and the sale of shares of common stock subsequent to the end of the second quarter.
StemCells will host a live conference call and webcast today, August 2, at 4:30 PM Eastern Time (1:30 PM Pacific Time) to discuss its financial results and recent business activities. Interested parties are invited to listen to the call over the Internet via the Investors section of the Company's website at http://investor.stemcellsinc.com/phoenix.zhtml?c=86230&p=irol-irhome. An archived version of the webcast will be available for replay on the Company's website beginning approximately two hours following the conclusion of the live call and continuing for a period of 30 days.
About StemCells, Inc.
StemCells, Inc. is engaged in the research, development, and commercialization of cell-based therapeutics and tools for use in stem cell-based research and drug discovery. The Company's lead therapeutic product candidate, HuCNS-SC® cells (purified human neural stem cells), is currently in development as a potential treatment for a broad range of central nervous system disorders. In a Phase I clinical trial in Pelizaeus-Merzbacher disease (PMD), a fatal myelination disorder in children, the Company has shown preliminary evidence of progressive and durable donor-derived myelination in all four patients transplanted with HuCNS-SC cells. The Company is also conducting a Phase I/II clinical trial in chronic spinal cord injury in Switzerland and has reported positive interim safety data for the first patient cohort. The Company has also initiated a Phase I/II clinical trial in dry age-related macular degeneration (AMD), and is pursuing preclinical studies in Alzheimer's disease. StemCells also markets stem cell research products, including media and reagents, under the SC Proven® brand. Further information about StemCells is available at http://www.stemcellsinc.com.
Apart from statements of historical fact, the text of this press release constitutes forward-looking statements within the meaning of the U.S. securities laws, and is subject to the safe harbors created therein. These statements include, but are not limited to, statements regarding the future business operations of StemCells, Inc. (the "Company"); the potential for the Company's HuCNS-SC cells to treat a broad array of disorders affecting the central nervous system (CNS), such as spinal cord injury and age related macular degeneration; the timing and prospect for detecting a clinical benefit from the use of HuCNS-SC cells in CNS diseases such as Alzheimer's; the Company's ability to secure in 2012 funding from the California Institute of Regenerative Medicine; and the Company's ability to continue generating clinical data while reducing operating expenses. These forward-looking statements speak only as of the date of this news release. The Company does not undertake to update any of these forward-looking statements to reflect events or circumstances that occur after the date hereof. Such statements reflect management's current views and are based on certain assumptions that may or may not ultimately prove valid. The Company's actual results may vary materially from those contemplated in such forward-looking statements due to risks and uncertainties to which the Company is subject, including uncertainties with respect to the fact that additional trials will be required to confirm the safety and demonstrate the efficacy of HuCNS-SC cells for the treatment of any disease or disorder; uncertainties about whether myelination formed by donor cells, if any, will have any biologic effect; risks whether the FDA, other applicable regulatory agencies or institutional review boards will permit the Company to initiate or continue clinical testing in any disease or disorder; uncertainties regarding the potential for the Company to grow its SC Proven business; uncertainties regarding the Company's ability to obtain the increased capital resources needed to continue its current and planned operations; uncertainties about the Company's ability to secure funding from any governmental agency, such as the California Institute of Regenerative Medicine; uncertainty as to whether HuCNS-SC cells and any products that may be generated in the future in the Company's cell-based programs will prove safe and clinically effective and not cause tumors or other adverse side effects; uncertainties regarding whether results in preclinical research in animals will be indicative of future clinical results in humans; uncertainties regarding the Company's manufacturing capabilities given its increasing preclinical and clinical commitments; uncertainties regarding the validity and enforceability of the Company's patents; and other factors that are described under the heading "Risk Factors" disclosed in Part I, Item 1A in the Company's Annual Report on Form 10-K for the year ended December 31, 2011 and in its subsequent reports on Form 10-Q and Form 8-K.
|Unaudited Condensed Consolidated Statements of Operations|
|(in thousands, except share and per share amounts)|
|Three months ended||Six months ended|
|June 30||June 30|
|Revenue from licensing agreements and grants||$ 38||$ 49||$ 411||$ 122|
|Revenue from product sales||211||185||482||334|
|Cost of product sales||64||52||136||107|
|Research and development||3,749||5,054||7,687||10,580|
|Selling, general and administrative||1,776||2,103||3,700||4,179|
|Total operating expenses||5,535||7,272||11,432||14,949|
|Loss from operations||(5,350)||(7,090)||(10,675)||(14,600)|
|Other income (expense):|
|Change in fair value of warrant liability||6,206||3,020||1,265||4,803|
|Realized gain on sale of marketable securities||--||84||--||84|
|Interest income (expense), net||(11)||(13)||(22)||(32)|
|Other income (expense), net||(11)||(36)||36||(37)|
|Total other income (expense), net||6,184||3,055||1,279||4,818|
|Net income (loss)||$ 834||$ (4,035)||$ (9,396)||$ (9,782)|
|Basic and diluted net loss per share||$ 0.03||$ (0.29)||$ (0.39)||$ (0.71)|
|Weighted average number of common shares outstanding, basic and diluted*||24,806,769||13,802,372||23,882,634||13,741,481|
|* Adjusted for 1 for 10 reverse stock split|
|Unaudited Condensed Consolidated Balance Sheets|
|June 30, 2012||December 31, 2011|
|Cash & cash equivalents||$ 7,203||$ 13,311|
|Other current assets||1,506||796|
|Total current assets||10,409||17,388|
|Property, plant and equipment, net||1,683||2,055|
|Goodwill and other intangible assets, net||3,811||3,906|
|Other assets, non-current||1,051||1,856|
|Total assets||$ 16,954||$ 25,205|
|LIABILITIES AND STOCKHOLDERS' EQUITY:|
|Fair value of warrant liability||5,396||6,042|
|Other non-current liabilities||1,916||2,785|
|Total liabilities and stockholders' equity||$ 16,954||$ 25,205|
Rodney Young StemCells, Inc. Chief Financial Officer (510) 456-4128 Ian Stone Russo Partners (619) 308-6541
Newark, California, UNITED STATES
Rodney Young StemCells, Inc. Chief Financial Officer (510) 456-4128 Ian Stone Russo Partners (619) 308-6541
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