Updates on AutoloGel™ Commercialization Efforts
Conference Call Scheduled for Friday, August 15 at 8:00 am Eastern Time
GAITHERSBURG, Md., Aug. 14, 2014 (GLOBE NEWSWIRE) -- Cytomedix, Inc. (OTCQX:CMXI), a pioneer in biodynamic therapies, today reported financial results for the three months ended June 30, 2014.
Second Quarter 2014 and Recent Corporate Highlights
- Completed second tranche of $35 million convertible debt financing with Deerfield Management Company
- Continued implementation of strategic initiatives aimed at accelerating market penetration of AutoloGel™ in the outpatient wound care market
- Further developed two-pronged commercial strategy targeting outpatient wound care centers and Veterans Administration ("VA") Healthcare System
Second Quarter 2014 Financial Summary
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Total revenues were $2.3 million, compared with $2.4 million in the second quarter of 2013
- AutoloGel™ sales increased 9.1% year-over-year to $120,000
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Net loss of $11.3 million, or $0.09 per share compared with a net loss of $5.0 million, or $0.05 per share in the prior year
- Second quarter net loss included non-cash impairment charges totaling $4.7 million relating to in-process research and development and trademarks following the discontinuation of ALD-401
- Cash and cash equivalents of approximately $25.0 million as of June 30, 2014
"During the first half of the year, we set into motion a series of initiatives aimed at positioning Cytomedix for long-term growth in the multi-billion dollar U.S. wound care market. We believe that our lead product, AutoloGel™, presents a compelling value proposition for patients, clinicians and payors alike. The changing reimbursement landscape clearly favors highly-efficacious and high value wound care products such as ours," said Martin Rosendale, Chief Executive Officer of Cytomedix. "Since the beginning of the year, we strengthened our executive team with key appointments in commercialization, reimbursement, sales and marketing which greatly enhance our go-to-market capabilities as we launch AutoloGel™ under the Coverage with Evidence Development (CED) program later this year."
"Our top priority in the near-term remains the successful commercialization and ramp of AutoloGel™, which we believe will be the foundation for long-term, sustainable growth and profitability."
Steven Shallcross, Chief Financial Officer of Cytomedix, added, "During the second quarter, we significantly strengthened our balance sheet with the closing of the second tranche of the Deerfield convertible debt financing. Additionally, we completed our strategic realignment by discontinuing our ALD-401 Bright Cell development program and closing the Durham facility. This strategic realignment is expected to yield annual cost savings of approximately $4 million. It will also allow us to dedicate additional resources to the commercialization of AutoloGel and our future growth in the wound care market."
Financial Results for the Second Quarter Ended June 30, 2014
Total revenues were $2.3 million in the second quarter, compared to $2.4 million in the same period of 2013. The decrease was primarily due to lower Angel product sales of $0.5 million, offset by an increase in royalty revenue of $0.3 million and license fee revenue of $0.1 million. The decrease in product sales was primarily due to a reduction in Angel average selling price under the terms of the Arthrex Agreement. AutoloGel™ sales for the quarter were $0.1 million.
Gross margin decreased to 18.4% in the second quarter of 2014 from 43.9% in the second quarter of 2013. The decrease was primarily due to the sale of Angel products to Arthrex under the licensing agreement signed last year, through which the contractual selling price of Angel products to Arthrex is significantly lower than the historical average selling price. This was partially offset by the gross margin realized from licensing fees and royalty revenues associated with Angel products sold under the Arthrex agreement. The Company expects gross margins to recover over time, as its revenue mix begins to shift following the launch of AutoloGel™ in the wound care market.
Total operating expenses in the second quarter were $10.3 million, compared to $5.7 million in the same period of 2013. The increase in total operating expenses is primarily the result of non-cash impairment charges totaling approximately $4.7 million related to Aldagen in-process research and development and related trademark, as well as accrued severance expenses totaling approximately $0.5 million primarily related to the previously announced discontinuation of the ALD-401 Bright Cell development program and closure of the Company's R&D facility in Durham, North Carolina.
Net loss in the second quarter was $11.3 million, or a loss of $0.09 per share compared to a net loss of $5.0 million, or a $0.05 loss per share in the second quarter of 2013.
Cash and cash equivalents as of June 30, 2014 totaled approximately $25.0 million, compared with approximately $3.3 million as of December 31, 2013. The increase in cash and cash equivalents during the first six months of 2014 was primarily attributable to the Company's $35 million convertible debt financing with Deerfield Management.
| Conference Call and Webcast: |
| Friday, August 15, 2014 @ 8am Eastern/5am Pacific |
| Domestic: 877-407-4018 |
| International: 201-689-8471 |
| Passcode: 13588963 |
| Webcast: www.cytomedix.com |
| Replays – Available through August 22, 2014 |
| Domestic: 877-870-5176 |
| International: 858-384-5517 |
| Passcode: 19588963 |
About AutoloGel
The AutoloGel™ System utilizes a proprietary unique technology that enables the rapid isolation and activation of platelet rich plasma (PRP) from a patient's own blood. The PRP is subsequently processed to produce a bioactive gel for application to the wound bed, re-establishing a balance needed for natural healing to occur. In normal healing, platelets migrate from the blood into the wound site where they serve as the primary source of growth factors for effective wound healing. In chronic wounds, blood supply may be impaired and the delivery of platelets is impeded, disallowing adequate concentrations of growth factors.
The AutoloGel™ System is used at the point-of-care and is the only PRP system cleared by the U.S. Food and Drug Administration for use on exuding wounds, such as leg ulcers, pressure ulcers and diabetic ulcers, and for the management of mechanically or surgically-debrided wounds. Cytomedix's clinical studies have shown that AutoloGel™ rapidly and more effectively improved healing compared with control-treated wounds.
This has been demonstrated in a variety of clinical studies including a systematic review of 21 comparison studies and a number of other observational and case series publications as well.
About Cytomedix
Cytomedix, Inc. is a biomedical company that pioneers leading-edge biodynamic therapies for wound care. Cytomedix's flagship product, AutoloGel is a biodynamic hematogel that harnesses a patient's innate regenerative abilities for the management of a variety of wounds. For additional information please visit cytomedix.com.
Safe Harbor Statement -- Statements contained in this press release not relating to historical facts are forward-looking statements that are intended to fall within the safe harbor rule for such statements under the Private Securities Litigation Reform Act of 1995. The information contained in the forward-looking statements is inherently uncertain, and Cytomedix' actual results may differ materially due to a number of factors, many of which are beyond Cytomedix' ability to predict or control, including among many others, risks and uncertainties related to the Company's ability to successfully execute its AutoloGel and Angel sales strategies, the Company's ability to launch AutoloGel as expected and reap financial and commercial benefits of such launch, to achieve AutoloGel expected reimbursement rates in 2014 and thereafter, the Company's ability to comply with the debt covenants and restrictions under the existing loan facilities, the Company's ability to realize expected benefits from the Arthrex licensing arrangement, the Company's ability to collect the data necessary for the grant of the unconditional coverage, the Company's ability to continue in its efforts to expand in the wound care market, its ability to successfully negotiate with physician offices as anticipated and to realize the anticipated sales growth from such treatments, the likelihood of a favorable CMS determination relating to the reimbursement rates for AutoloGel™, to meet its stroke trial enrollment rates, to successfully realize sales of the Angel Technology resulting in the royalty stream to the Company, the Company's ability to successfully integrate the Aldagen acquisition, the Company's ability to expand patient populations as contemplated, its ability to provide Medicare patients with access as expected, the Company's expectations of favorable future dialogue with potential strategic partners, and its ability to successfully manage contemplated clinical trials, to manage and address the capital needs, human resource, management, compliance and other challenges of a larger, more complex and integrated business enterprise, viability and effectiveness of the Company's sales approach and overall marketing strategies, commercial success or acceptance by the medical community, competitive responses, the Company's ability to raise additional capital and to continue as a going concern, and Cytomedix's ability to execute on its strategy to market the AutoloGel™ System as contemplated.
To the extent that any statements made here are not historical, these statements are essentially forward-looking. The Company uses words and phrases such as "believes", "forecasted," "projects," "is expected," "remain confident," "will" and/or similar expressions to identify forward-looking statements in this press release. Undue reliance should not be placed on forward-looking information. These forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual events to differ from the forward-looking statements. More information about some of these risks and uncertainties may be found in the reports filed with the Securities and Exchange Commission by Cytomedix, Inc. Cytomedix operates in a highly competitive and rapidly changing business and regulatory environment, thus new or unforeseen risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. Except as is expressly required by the federal securities laws, Cytomedix undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, changed circumstances or future events or for any other reason. Additional risks that could affect our future operating results are more fully described in our U.S. Securities and Exchange Commission filings, including our Annual Report for the year ended December 31, 2013 and other subsequent public filings. These filings are available at www.sec.gov.
| Cytomedix, Inc. | ||||
| Condensed Consolidated Statements of Operations | ||||
| (Unaudited) | ||||
| Three Months Ended | Six Months Ended | |||
| June 30, | June 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Revenues | ||||
| Product sales | $ 1,851,033 | $ 2,362,774 | $ 3,274,251 | $ 4,615,903 |
| License fees | 100,595 | -- | 201,189 | -- |
| Royalties | 374,476 | 61,124 | 696,593 | 125,296 |
| Total revenues | 2,326,104 | 2,423,898 | 4,172,033 | 4,741,199 |
| Cost of revenues | ||||
| Cost of sales | 1,853,047 | 1,354,705 | 3,261,868 | 2,622,015 |
| Cost of royalties | 44,446 | 3,940 | 88,690 | 9,074 |
| Total cost of revenues | 1,897,493 | 1,358,645 | 3,350,558 | 2,631,089 |
| Gross profit | 428,611 | 1,065,253 | 821,475 | 2,110,110 |
| Operating expenses | ||||
| Salaries and wages | 2,587,909 | 2,045,176 | 4,269,995 | 4,043,372 |
| Consulting expenses | 333,299 | 647,117 | 1,169,631 | 1,180,629 |
| Professional fees | 392,937 | 316,506 | 632,029 | 441,854 |
| Research, development, trials and studies | 957,637 | 1,225,354 | 1,911,320 | 2,127,039 |
| General and administrative expenses | 1,295,490 | 1,492,831 | 2,627,321 | 3,982,157 |
| Impairment of IPR&D and trademarks | 4,683,829 | -- | 4,683,829 | -- |
| Total operating expenses | 10,251,101 | 5,726,984 | 15,294,125 | 11,775,051 |
| Loss from operations | (9,822,490) | (4,661,731) | (14,472,650) | (9,664,941) |
| Other income (expense) | ||||
| Interest, net | (589,703) | (426,284) | (1,768,873) | (945,313) |
| Change in fair value of derivative liabilities | (902,561) | 51,467 | (701,499) | 244,560 |
| Other | (1,239) | 4,788 | (1,239) | 255 |
| Total other income (expenses) | (1,493,503) | (370,029) | (2,471,611) | (700,498) |
| Loss before provision for income taxes | (11,315,993) | (5,031,760) | (16,944,261) | (10,365,439) |
| Income tax provision | 4,645 | 4,890 | 9,290 | 9,780 |
| Net loss to common stockholders | $ (11,320,638) | $ (5,036,650) | $ (16,953,551) | $ (10,375,219) |
| Loss per common share -- | ||||
| Basic and diluted | $ (0.09) | $ (0.05) | $ (0.15) | $ (0.10) |
| Weighted average shares outstanding -- | ||||
| Basic and diluted | 121,638,826 | 104,616,535 | 116,459,607 | 101,876,216 |
| Cytomedix, Inc. | ||
| Condensed Consolidated Balance Sheets | ||
| (Unaudited) | ||
| June 30, | December 31, | |
| 2014 | 2013 | |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | $ 24,973,748 | $ 3,286,713 |
| Short-term investments, restricted | 53,356 | 53,257 |
| Accounts and other receivable, net | 1,479,719 | 3,926,681 |
| Inventory | 591,629 | 1,111,507 |
| Prepaid expenses and other current assets | 2,395,929 | 1,258,282 |
| Deferred costs, current portion | 1,074,249 | 316,551 |
| Total current assets | 30,568,630 | 9,952,991 |
| Property and equipment, net | 706,442 | 919,469 |
| Deferred costs | 4,028,431 | 482,349 |
| Intangible assets, net | 28,901,958 | 33,768,954 |
| Goodwill | 1,128,517 | 1,128,517 |
| Total assets | $ 65,333,978 | $ 46,252,280 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities | ||
| Accounts payable and accrued expenses | $ 8,379,231 | $ 8,018,672 |
| Deferred revenues, current portion | 402,377 | 740,990 |
| Note payable, current portion | -- | 1,800,000 |
| Total current liabilities | 8,781,608 | 10,559,662 |
| Notes payable | -- | 3,620,593 |
| Convertible debt, net of discount | 194,444 | 202,658 |
| Deferred revenues | 1,240,550 | 1,441,852 |
| Derivative liabilities | 38,649,243 | 3,248,595 |
| Other liabilities | 351,567 | 366,926 |
| Total liabilities | 49,217,412 | 19,440,286 |
| Commitments and contingencies | ||
| Conditionally redeemable common stock (909,091 issued and outstanding) | 500,000 | 500,000 |
| Stockholders' equity | ||
| Common stock; $.0001 par value, authorized 425,000,000 shares; | ||
| 2014 issued and outstanding - 121,700,423 shares; | ||
| 2013 issued and outstanding - 107,164,855 shares | 12,079 | 10,626 |
| Common stock issuable | 392,950 | 432,100 |
| Additional paid-in capital | 123,393,664 | 117,097,844 |
| Accumulated deficit | (108,182,127) | (91,228,576) |
| Total stockholders' equity | 15,616,566 | 26,311,994 |
| Total liabilities and stockholders' equity | $ 65,333,978 | $ 46,252,280 |