Cytori Reports First Quarter 2016 Business and Financial Results

Genetics Investing

SAN DIEGO–(BUSINESS WIRE)–Cytori Therapeutics (NASDAQ: CYTX) (“Cytori” or the “Company”) today announced its first quarter financial results and provided updates on its corporate activity and clinical development. First quarter 2016 net loss allocable to common stockholders was $5.3 million and $0.03 per share (or $0.41 per share after the effect of a 1:15 reverse stock …

SAN DIEGO–(BUSINESS WIRE)–Cytori Therapeutics (NASDAQ: CYTX) (“Cytori” or the “Company”) today
announced its first quarter financial results and provided updates on
its corporate activity and clinical development.
First quarter 2016 net loss allocable to common stockholders was $5.3
million and $0.03 per share (or $0.41 per share after the effect of a
1:15 reverse stock split announced on May 10, 2016). Cytori continues to
manage its operating cash burn, spending approximately $5.1 million in
the first quarter 2016. Cytori ended the first quarter of 2016 with $9.4
million of cash and cash equivalents.
“The business fundamentals continue to strengthen,” said Dr. Marc H.
Hedrick, President and CEO of Cytori Therapeutics. “The US trial
enrollment for our lead indication is nearly complete, we see positive
trends on revenue and we continue see new opportunities for our
technology that are in alignment with the Company’s core strategic
direction.”
Select Recent Highlights:

  • Investigator presentation of SCLERADEC I 24-month follow-up data
    reported sustained benefit for scleroderma hand dysfunction
  • Broad orphan drug designation and small or medium-size enterprise
    (SME) status granted by European Medicines Agency
  • Launch of compassionate use program for scleroderma in Europe in
    partnership with Idis Managed Access
  • Announcement of STAR enrollment progress consistent with development
    timelines

Q1 2016 Financial Performance

  • Q1 2016 operating cash burn of $5.1 million, compared to $5.0 million
    for the same period in 2015.
  • Cash and debt principal balances at March 31, 2016 of approximately
    $9.4 million and $17.7 million, respectively.
  • Q1 2016 total revenues of $2.9 million, compared to $2.3 million for
    the same period in 2015.
  • Q1 2016 net loss of $5.3 million or $0.41 per share, compared to $6.5
    million, which excludes a non-cash charge of $15.4 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, or $0.92 per share for the same period in 2015.

“Q1 2016 net loss was approximately 20% lower than Q1 2015, despite an
expansion of our investments in research and development,” said Tiago
Girao, VP of Finance and CFO of Cytori Therapeutics. “For the remainder
of 2016, we plan to continue to narrow our quarterly losses and decrease
the need for capital through a number of initiatives. These efforts
consist largely of balancing further improvements in operational
efficiency, working capital management, increased revenue, and an
intense focus on those activities that we believe will contribute to
stockholder value creation.”
Anticipated Near Term Catalysts:

  • Complete enrollment of US STAR phase III trial (anticipated by
    mid-June 2016) for scleroderma hand dysfunction
  • Report of 48-week US pilot/phase IIb ACT-OA trial (94 patients) with
    data analysis in Q3 2016
  • Complete enrollment of investigator-initiated EU phase III
    SCLERADEC-II trial (anticipated in 2016) for scleroderma hand
    dysfunction
  • File IDE and obtain approval for burn wound therapy trial related to
    contract with BARDA (anticipated in 2016)

2016 Reiterated Financial Guidance

  • Operating cash burn within a range of $18 million to $20 million
  • Total revenues (product and contract) within a range of $12 million to
    $14 million

Management Conference Call Webcast
Cytori will host a management conference call at 5:30 p.m. Eastern Time
today to further discuss the Company’s 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: 3175608.
About Cytori
Cytori Therapeutics is a late stage cell therapy company developing
autologous cell therapies from adipose tissue to treat 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. 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 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 the ACT-OA, STAR, SCLERADEC-I, SCLERADEC-II and possible
BARDA wound trial (including risks in the collection and results of
clinical data and final clinical outcomes), as well as achievement of
financial goals (including 2016 operating cash burn and 2016 total
revenues, as well as anticipated narrowing of quarterly losses and
reduced need for capital), dependence on third party performance
(including performance of investigator-initiated trials), performance
and acceptance of our products in the marketplace, unexpected costs and
expenses that could adversely impact liquidity, our reliance on key
personnel, the right of the Federal Government to cut or terminate
further support of the thermal burn injury program (including any
decision not to proceed with a wound trial in 2016), our abilities to
capitalize on our internal restructuring and achieve profitability, and
other risks and uncertainties described under the “Risk Factors” in
Cytori’s Securities and Exchange Commission Filings, included in our
annual and quarterly reports.
There may be events in the future that we are unable to predict, or over
which we have no control, and our business, financial condition, results
of operations and prospects may change in the future. We assume no
responsibility to update or revise any forward-looking statements to
reflect events, trends or circumstances after the date they are made
unless we have an obligation under U.S. Federal securities laws to do so.

CYTORI THERAPEUTICS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
As of March
31, 2016

As of December
31, 2015

Assets
Current assets:
Cash and cash equivalents$9,358,000$14,338,000
Accounts receivable, net of reserves of $795,000 and of $797,000 in
2016 and 2015, respectively
829,0001,052,000
Inventories, net4,462,0004,298,000
Other current assets1,866,0001,555,000
Total current assets16,515,00021,243,000
Property and equipment, net1,523,0001,631,000
Restricted cash and cash equivalents350,000350,000
Other assets1,682,0001,521,000
Intangibles, net8,923,0009,031,000
Goodwill3,922,0003,922,000
Total assets$32,915,000$37,698,000
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses$6,693,000$6,687,000
Current portion of long-term obligations, net of discount1,724,000
Joint venture purchase obligation1,267,0001,750,000
Total current liabilities9,684,0008,437,000
Deferred revenues101,000105,000
Long-term deferred rent and other189,000269,000
Long-term obligations, net of discount, less current portion15,198,00016,681,000
Total liabilities25,172,00025,492,000
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 2016 and 2015
Common stock, $0.001 par value; 75,000,000 shares authorized;
13,310,740 and 13,003,893 shares issued and outstanding in 2016 and
2015, respectively
13,00013,000
Additional paid-in capital369,339,000368,214,000
Accumulated other comprehensive income747,000996,000
Accumulated deficit(362,356,000)(357,017,000)
Total stockholders’ equity7,743,00012,206,000
Total liabilities and stockholders’ equity$32,915,000$37,698,000
CYTORI THERAPEUTICS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
(UNAUDITED)
For the Three Months Ended March 31,
20162015
Product revenues$1,333,000$902,000
Cost of product revenues567,000598,000
Gross profit766,000304,000
Development revenues:
Government contracts and other1,585,0001,444,000
Operating expenses:
Research and development4,127,0003,963,000
Sales and marketing1,035,000839,000
General and administrative2,286,0002,499,000
Change in fair value of warrants15,444,000
Total operating expenses7,448,00022,745,000
Operating loss(5,097,000)(20,997,000)
Other income (expense):
Interest income2,0001,000
Interest expense(657,000)(1,072,000)
Other income, net413,000110,000
Total other expense(242,000)(961,000)
Net loss$(5,339,000)$(21,958,000)
Beneficial conversion feature for
convertible preferred stock(661,000)
Net loss allocable to common stock holders$(5,339,000)$(22,619,000)
Basic and diluted net loss per share allocable to common stockholders$(0.41)$(3.19)
Basic and diluted weighted average shares used in calculating net
loss per share allocable to common stockholders
13,086,376 7,080,590
Comprehensive loss:
Net loss$(5,339,000)$(21,958,000)
Other comprehensive (loss) income– foreign currency translation
adjustments
(249,000)36,000
Comprehensive loss$(5,588,000)$(21,922,000)
CYTORI THERAPEUTICS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Three Months Ended March 31,
20162015
Cash flows from operating activities:
Net loss$(5,339,000)$(21,958,000)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization291,000213,000
Amortization of deferred financing costs and debt discount232,000257,000
Joint venture acquisition obligation accretion17,000203,000
Change in fair value of warrants15,444,000
Stock-based compensation expense317,000459,000
Loss on asset disposal2,000
Increases (decreases) in cash caused by changes in operating assets
and liabilities:
Accounts receivable155,000546,000
Inventories(206,000)100,000
Other current assets(408,000)(470,000)
Other assets(211,000)68,000
Accounts payable and accrued expenses176,000138,000
Deferred revenues(4,000)21,000
Long-term deferred rent(80,000)(51,000)
Net cash used in operating activities(5,058,000)(5,030,000)
Cash flows from investing activities:
Purchases of property and equipment(69,000)(187,000)
Net cash used in investing activities(69,000)(187,000)
Cash flows from financing activities:
Joint venture purchase payments(500,000)(123,000)
Proceeds from sale of common stock, net562,0003,974,000
Dividends paid on preferred stock(72,000)
Net cash provided by financing activities62,0003,779,000
Effect of exchange rate changes on cash and cash equivalents85,00015,000
Net decrease in cash and cash equivalents(4,980,000)(1,423,000)
Cash and cash equivalents at beginning of period14,338,00014,622,000
Cash and cash equivalents at end of period$9,358,000$13,199,000

Supplemental disclosure of cash flows information:

Cash paid during period for:

Interest

$

400,000

$

612,000

Supplemental schedule of non-cash investing and financing
activities:

Conversion of preferred stock into common stock

10,000

Declared dividend related to preferred stock

3,000

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