NEWARK, Calif., Nov. 8, 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 third quarter ended September 30, 2012 and provided a business update.
"We remain committed to building shareholder value by generating meaningful preclinical and clinical data in a cash-efficient manner," said Martin McGlynn, President and CEO of StemCells, Inc. "As to meaningful data, we recently published two papers demonstrating the therapeutic potential of our proprietary HuCNS-SC® cells for a range of myelination disorders, including the data from our Phase I clinical trial in Pelizaeus-Merzbacher disease showing evidence of new myelination and measurable gains in neurological function; we reported interim data from our spinal cord injury trial showing considerable gains in sensory function in two of three patients compared to pre-transplant baselines; and we reported exciting preclinical data in two animal models relevant to Alzheimer's disease. The data we are generating and reporting illustrate the considerable potential of our HuCNS-SC human neural stem cells to address a broad range of CNS disorders.
"As to cash management, we continue to look for ways to do more with less. This quarter we reported further reductions in operating expenses, continuing a downward trend begun in 2010, while sales of reagents marketed under the SC Proven® brand continue to show good growth. During the quarter, we strengthened our balance sheet and now have $27 million in the bank. In addition, we were approved for two disease team awards from the California Institute for Regenerative Medicine (CIRM) for up to $40 million in funding, and are working with CIRM to finalize the terms and conditions associated with this funding."
Third Quarter and Recent Business Highlights
Therapeutic Product Development
Other Business Activities
Third Quarter Financial Results
Revenue from product sales increased 11% to $203,000 in the third 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 third quarter of 2012 was $264,000, compared to $224,000 in the same period of 2011.
Our operating expenses decreased 17% to $5,269,000 in the third quarter of 2012 compared to the same quarter of 2011. Research and development expenses were 23% lower, and selling, general and administrative expenses were 6% lower. The significant reduction in operating expenses was primarily attributable to tight cost controls and a number of measures taken previously to reduce infrastructure and overhead costs.
Other expense in the third quarter of 2012 was $11,259,000, compared to other income of $1,829,000 in the third quarter of 2011. This increase in other expense was primarily due to a non-cash expense from an increase in the estimated fair value of warrant liability. Our outstanding warrants are classified as a liability, with changes in the estimated fair value recorded as income or loss.
Loss from operations in the third quarter of 2012 was $5,077,000, an 18% decrease compared to the same period in 2011. Net loss for the quarter was $16,337,000, or $0.54 per share, compared with a net loss of $4,334,000, or $0.31 per share, for the third quarter of 2011.
Net cash used in operating activities for the third quarter of 2012 was $4,235,000. Net cash used in operating activities for the first three quarters of 2012 was $14,950,000, which was 11% lower than the same period in 2011.
At September 30, 2012, pro forma cash, cash equivalents and marketable debt securities totaled $27,356,000. This total includes $5,611,000 in net proceeds from the exercise of Series A Warrants and the sale of shares of common stock subsequent to the end of the quarter.
StemCells will host a live conference call and webcast today, November 8, at 4:30 PM Eastern Time (1:30 PM Pacific Time) to discuss our financial results and recent business activities. Interested parties are invited to listen to the call over the Internet via the Investors section of our 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 our 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 data for the first patient cohort. The Company is also conducting 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.
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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 timing and prospects associated with detecting potential clinical benefit from the use of the Company's HuCNS-SC cells; the prospect for continued clinical development of the Company's HuCNS-SC cells in CNS disorders; the prospect for growth in the Company's product sales;; the Company's ability to apply for, and possibly secure funding from, the California Institute of Regenerative Medicine; and the adequacy of our existing supply of HuCNS-SC cells to complete our ongoing and planned clinical trials; 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 the Company's HuCNS-SC cells for the treatment of spinal cord injury, AMD, PMD or any other condition; uncertainties about whether myelination formed by donor cells, if any, will have any biologic effect; uncertainties about whether preliminary data in any Phase I clinical study will prove to be reproducible or biologically meaningful in any future clinical study; risks whether the FDA or other applicable regulatory agencies will permit the Company to continue clinical testing or conduct future clinical trials; uncertainties about the design of future clinical trials and whether the Company will receive the necessary support of a clinical trial site and its institutional review board to pursue future clinical trials; uncertainties regarding the potential for the Company to grow its SC Proven business and to advance the development and commercialization of stem cell-based assays for drug discovery and development; uncertainties regarding the Company's ability to obtain the increased capital resources needed to continue its current and planned research and development operations, including such operations of the Company for non-therapeutic applications, and to conduct the research, preclinical development and clinical trials necessary for regulatory approvals; 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; uncertainties as to whether the Company will become profitable; 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||Nine months ended|
|September 30||September 30|
|Revenue from licensing agreements, grants and other||$ 61||$ 41||$ 472||$ 163|
|Revenue from product sales||203||182||685||516|
|Cost of product sales||72||60||208||167|
|Research and development||3,478||4,524||11,166||15,104|
|Selling, general and administrative||1,636||1,733||5,336||5,912|
|Total operating expenses||5,269||6,326||16,702||21,275|
|Loss from operations||(5,077)||(6,163)||(15,753)||(20,763)|
|Other income (expense):|
|Change in fair value of warrant liability||(11,239)||1,697||(9,975)||6,500|
|Realized gain on sale of marketable securities||--||--||--||84|
|Interest income (expense), net||(10)||(13)||(30)||(45)|
|Other income (expense), net||(11)||145||25||107|
|Total other income (expense), net||(11,260)||1,829||(9,980)||6,646|
|Net loss||$ (16,337)||$ (4,334)||$ (25,733)||$ (14,117)|
|Basic and diluted net loss per share||$ (0.54)||$ (0.31)||$ (0.99)||$ (1.02)|
|Weighted average number of common shares outstanding, basic and diluted||30,168,478||14,009,341||25,992,764||13,831,749|
|Unaudited Condensed Consolidated Balance Sheets|
|September 30, 2012||December 31, 2011|
|Cash & cash equivalents||$ 15,713||$ 13,311|
|Other current assets||1,499||796|
|Total current assets||23,244||17,388|
|Property, plant and equipment, net||1,536||2,055|
|Goodwill and other intangible assets, net||3,844||3,906|
|Other assets, non-current||1,033||1,856|
|Total assets||$ 29,657||$ 25,205|
|LIABILITIES AND STOCKHOLDERS' EQUITY:|
|Fair value of warrant liability||14,483||6,042|
|Other non-current liabilities||1,897||2,785|
|Total liabilities and stockholders' equity||$ 29,657||$ 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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