Cesca Therapeutics Inc. (NASDAQ:KOOL), a market leader in automated
cell processing and point-of-care, autologous cell-based therapies,
today announced financial and operating results for the three
months ended September 30, 2017 and provided a corporate update.
Quarter-ended and Recent
Highlights
- In July 2017, Cesca’s wholly-owned subsidiary, ThermoGenesis
Corp., acquired the proprietary cell processing platform technology
and commercial product portfolio from SynGen, Inc., solidifying
ThermoGenesis’ position as a leading developer of automated cell
processing solutions.
- Continued to advance development of ThermoGenesis’ novel
CAR-TXpress™ platform, aimed at addressing the urgent need for
automation of the CAR-T cell manufacturing
process.
- Maintained active discussions with leading developers and
others in the burgeoning CAR-T space, for potential partnership
opportunities.
- Received a Notice of Allowance from the USPTO for a patent
related to the Company’s Buoyancy-Activated Cell Separation, or
X-BACS, cell separation technology. When issued, this will be
Cesca’s second patent in a series relating to its X-BACS
technology. On July 28, 2017, Cesca announced that SynGen had been
awarded U.S. patent No. 9,695,394 covering the X-BACS apparatus.
The X-BACS technology is key to the ongoing development of
CAR-TXpress™.
- Announced plans to convert to a December 31 fiscal year-end and
will issue a Transitional Form 10-K for the six months ended
December 31, 2017.
“The quarter ended September 30, 2017 marked
another important period in the growth of Cesca Therapeutics and
moved us solidly into position as a leading, global developer of
automated cell processing solutions, most notably, for the CAR-T
industry,” stated Dr. Chris Xu, chief executive officer of Cesca.
“The recent approval of the first CAR-T therapies has marked a true
paradigm shift in the treatment of cancer, but the current, manual
method of manufacturing and delivering these complex personalized
therapies presents the biopharmaceutical industry with a tremendous
and critical challenge if the sector is to succeed in its mission.
Once commercialized, Cesca’s novel, CAR-TXpress™ solution is
expected to provide developers with drastically reduced cell
processing times, thereby allowing greater numbers of patients to
be treated with existing cell processing infrastructure. As we
continue to adapt our technology to this exciting new field, we are
actively pursuing collaborations with potential development
partners, including leading pharmaceutical companies, medical
technology companies, academic institutions and distributors. We
believe we are poised to play a key role in the evolution and
growth of this ground-breaking advancement in the treatment of
cancer.”
Financial Results for the Three Months
Ended September 30, 2017
Net revenue. Net revenues for
the three months ended September 30, 2017 were $3.1 million
compared to $3.8 million for the three months ended September 30,
2016. Revenues decreased primarily due to a one-time shipment of
our remaining inventory associated with a discontinued product line
(Res-Q) and AXP disposables, which had lower sales due to a single
end-user customer ordering additional inventory during the quarter
ended September 30, 2016. Offsetting these decreases was an
increase in sales of BioArchive, as the Company sold three devices
during the quarter ended September 30, 2017, as compared to none
during the quarter ended September 30, 2016. For the last two
quarters ended September 30, 2017, the Company sold five BioArchive
devices, as compared to only two devices in the seven previous
quarters combined. The Company expects this trend to
continue, with approximately two to three devices sold per quarter
for at least the next three to four quarters.
Gross profit. Gross profit for
the three months ended September 30, 2017 was $931,000, or 30.3% of
net revenue, compared to $1.4 million, or 36.7% of net revenue for
the comparable period in 2016. The decrease in gross profit margin
was primarily due to an increase in inventory reserves for the MXP
product line, an increase in overhead expenses due to the Company’s
acquisition of SynGen and the mix of products sold.
Sales and marketing expenses.
Sales and marketing expenses for the three months ended September
30, 2017 were $517,000 compared to $481,000 for the three months
ended September 30, 2016. The slight increase is primarily due to
higher personnel costs from the SynGen acquisition.
Research and development
expenses. Research and development expenses for the three
months ended September 30, 2017 were $1.1 million, compared to
$670,000 for the comparable period in 2016. The increase was driven
by the SynGen acquisition and CAR-TXpress development expenses.
General and administrative
expenses. General and administrative expenses for the
three months ended September 30, 2017 were $1.7 million compared to
$2.2 million for the same period in 2016. The decrease is primarily
due to lower legal expenses resulting from the settlement of the
SynGen litigation, and lower severance expenses as compared to the
quarter ended September 30, 2016.
Net loss attributable to common
stockholders. For the three months ended September 30,
2017, the Company reported a net loss attributable to common
stockholders of $2.4 million, or ($0.24) per share, based on
approximately 10.0 million basic and diluted common shares
outstanding. This compares to a net loss of $22.4 million, or
($3.71) per share, based on approximately 6.1 million weighted
average common shares outstanding for the three months ended
September 30, 2016.
Adjusted EBITDA. In addition to
the results reported in accordance with U.S. GAAP, Cesca also uses
a non-GAAP measure, adjusted EBITDA, to evaluate operating
performance and to facilitate comparisons with historical results
and trends. For the three months ended September 30, 2017, Cesca
reported an adjusted EBITDA loss of $2.1 million compared to $1.4
million for the three months ended September 30, 2016. The
increase in the adjusted EBITDA loss was due primarily to
additional headcount and project expenses added during the quarter
ended September 30, 2017 as a result of the Company’s SynGen
acquisition, which the Company acquired on July 7, 2017.
Conference Call and Webcast
InformationCesca will host a conference call and audio
webcast today at 4:30 p.m. EST (1:30 p.m. PST). Participants may
access the call by dialing 1-800-860-2442 within the U.S. or
1-412-858-4600 outside the U.S. and referencing “Cesca.” To access
a live webcast of the call, please
visit: http://services.choruscall.com/links/kool171114.html. A
replay of the call can be accessed approximately one hour after
completion of the call and will be available until October 19,
2017. To listen to the replay, dial 1-877-344-7529 within the U.S.
or 1-412-317-0088 outside the U.S. and reference access code
10114186.
About Cesca Therapeutics
Inc. Cesca is a leading regenerative medicine company
that develops, commercializes and markets a range of automated
technologies for cell-based therapeutics. Its device division,
ThermoGenesis, provides a full suite of solutions for automated
clinical biobanking, point-of-care applications, and automation for
immuno-oncology. Cesca is also leveraging its proprietary
AutoXpress® technology platform to develop autologous stem
cell-based therapies that address significant unmet needs in the
vascular, cardiology and orthopedic markets.
Forward-Looking Statement
The statements contained herein may include
statements of future expectations and other forward-looking
statements that are based on management’s current views and
assumptions and involve known and unknown risks and uncertainties
that could cause actual results, performance or events to differ
materially from those expressed or implied in such statements. A
more complete description of risks that could cause actual events
to differ from the outcomes predicted by Cesca Therapeutics’
forward-looking statements is set forth under the caption "Risk
Factors" in Cesca Therapeutics’ annual report on Form 10-K and
other reports it files with the Securities and Exchange Commission
from time to time, and you should consider each of those factors
when evaluating the forward-looking statements.
Company Contact: Cesca Therapeutics Inc. Wendy
Samford916-858-5191ir@cescatherapeutics.com
Investor Contact:Rx CommunicationsPaula
Schwartz917-322-2216pschwartz@rxir.com
Financials
|
Cesca Therapeutics Inc. |
|
|
Condensed Consolidated Balance
Sheets |
|
|
|
|
|
|
|
|
September 30, 2017 |
|
|
June 30, 2017 |
|
|
|
|
|
(Unaudited) |
|
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|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
|
$2,464,000 |
|
|
|
$3,623,000 |
|
|
Accounts
receivable, net |
|
|
3,404,000 |
|
|
|
3,701,000 |
|
|
Inventories |
|
|
4,157,000 |
|
|
|
3,617,000 |
|
|
Prepaid
expenses and other current assets |
|
|
282,000 |
|
|
237,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
current assets |
|
|
10,307,000 |
|
|
|
11,178,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Equipment, net |
|
|
2,971,000 |
|
|
|
2,330,000 |
|
|
Goodwill |
|
|
13,794,000 |
|
|
|
13,195,000 |
|
|
Intangible assets,
net |
|
|
21,809,000 |
|
|
|
20,165,000 |
|
|
Other assets |
|
|
61,000 |
|
|
64,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
|
|
$48,942,000 |
|
|
$46,932,000 |
|
|
|
|
|
|
|
|
|
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|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
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|
Current
liabilities: |
|
|
|
|
|
|
|
|
|
Accounts
payable |
|
|
$2,038,000 |
|
|
|
$1,601,000 |
|
|
Other
current liabilities |
|
|
2,957,000 |
|
|
2,919,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
current liabilities |
|
|
4,995,000 |
|
|
|
4,520,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
liabilities |
|
|
13,114,000 |
|
|
|
11,575,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Cesca Therapeutics Inc.
stockholders' equity |
|
|
31,070,000 |
|
|
|
30,837,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interests |
|
|
(237,000) |
|
|
-- |
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders’ equity |
|
|
$48,942,000 |
|
|
$46,932,000 |
|
|
|
|
|
|
|
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|
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|
Cesca Therapeutics Inc. |
|
Condensed Consolidated Statements of
Operations |
|
(Unaudited) |
|
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|
|
Three Months Ended September 30, |
|
|
|
2017 |
|
|
2016 |
|
|
Net revenues |
$3,069,000 |
|
|
$3,767,000 |
|
|
|
|
|
|
|
Cost of revenues |
|
2,138,000 |
|
|
|
2,385,000 |
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
931,000 |
|
|
|
1,382,000 |
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
Sales and
marketing |
|
517,000 |
|
|
|
481,000 |
|
|
|
|
|
|
|
|
|
|
|
Research
and development |
|
1,063,000 |
|
|
|
670,000 |
|
|
|
|
|
|
|
|
|
|
|
General
and administration |
|
1,701,000 |
|
|
|
2,179,000 |
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses |
|
3,281,000 |
|
|
|
3,330,000 |
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
(2,350,000) |
|
|
|
(1,948,000) |
|
|
|
|
|
|
|
|
|
|
|
Fair value change of
derivative instruments |
|
(13,000) |
|
|
|
(326,000) |
|
|
Amortization of debt
discount |
|
-- |
|
|
|
(9,851,000) |
|
|
Interest expense |
|
(198,000) |
|
|
|
(10,535,000) |
|
|
Other income and
(expenses) |
|
(26,000) |
|
|
|
215,000 |
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$(2,587,000) |
|
|
$(22,445,000) |
|
|
|
|
|
|
|
|
|
|
|
Loss attributable to
noncontrolling interests |
|
(237,000) |
|
|
|
-- |
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to common stockholders |
$(2,350,000) |
|
|
$(22,445,000) |
|
|
|
|
|
|
|
|
|
|
|
Cesca Therapeutics Inc. |
Condensed Consolidated Statements of Cash
Flows |
(Unaudited) |
|
|
|
Three Months EndedSeptember 30, |
|
|
|
2017 |
|
|
|
2016 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
Net cash
used in operating activities |
|
(1,450,000) |
|
|
|
(2,009,000) |
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
Cash paid
for business acquisition |
|
(1,000,000) |
|
|
|
-- |
|
Capital
expenditures |
|
(140,000) |
|
|
|
(154,000) |
|
|
|
(1,140,000) |
|
|
|
(154,000) |
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
Payments
on capital lease obligations |
|
(17,000) |
|
|
|
(23,000) |
|
Proceeds
from issuance of common stock, net |
|
-- |
|
|
|
2,091,000 |
|
Proceeds
from long-term debt-related party |
|
1,500,000 |
|
|
|
-- |
|
Cash paid
for taxes on vested restricted stock |
|
(52,000) |
|
|
|
(134,000) |
|
|
|
|
|
|
|
|
|
Net cash
provided by financing activities |
|
1,431,000 |
|
|
|
1,934,000 |
|
|
|
|
|
|
|
|
|
Effects of foreign
currency rate changes on cash and cash equivalents |
|
-- |
|
|
|
2,000 |
|
Net decrease in cash
and cash equivalents |
|
(1,159,000) |
|
|
|
(227,000) |
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period |
|
3,623,000 |
|
|
|
5,835,000 |
|
Cash and cash
equivalents at end of period |
|
$2,464,000 |
|
|
|
$5,608,000 |
|
|
|
|
|
|
|
|
|
|
Cesca Therapeutics Inc. |
|
Adjusted EBITDA |
|
(Unaudited) |
|
|
|
|
|
Three Months Ended September 30, |
|
|
|
|
2017 |
|
|
2016 |
|
|
Loss from
operations |
|
$(2,350,000) |
|
|
$(1,948,000) |
|
|
|
|
|
|
|
|
|
|
|
|
Add (subtract): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
160,000 |
|
|
|
261,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
|
132,000 |
|
|
|
298,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
loss |
|
$(2,058,000) |
|
|
$(1,389,000) |
|
|
|
|
|
|
|
|
|
|
|
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