Cytori Reports Fourth Quarter and Full Year 2018 Business and Financial Results
April 01 2019 - 8:05AM
Strategic focus on building a leading oncology company /
Lorem Vascular cell therapy transaction yields $4MM
Cytori Therapeutics (NASDAQ: CYTX) (“Cytori” or the “Company”)
today announced its fourth quarter and year-end 2018 financial
results and provided updates on corporate activities. Also
announced was a transaction to divest certain cell therapy assets
to Lorem Vascular of Melbourne, Australia yielding $4MM in
non-dilutive funding to the Company.
Fourth quarter 2018 net loss was $2.2 million,
or $0.16 per share. Operating cash burn for the fourth quarter of
2018 was approximately $2.5 million. Cytori ended the year with
approximately $5.3 million of cash and cash equivalents.
“This transaction sale accomplishes a number of
important objectives for the company,” said Dr. Marc Hedrick,
Cytori President & Chief Executive Officer. “Most critically it
allows us to further increase the focus on our clinical stage
oncology pipeline while bringing in non-dilutive capital. We also
are able to maintain our most valuable cell therapy assets,
including Japan that has a forthcoming trial readout in our ADRESU
trial.”
Our lead clinical stage asset, Doxorubicin
Hydrochloride Cytori, formerly called ATI-0918, is an important
potential therapy for Breast and Ovarian Cancer, Multiple Myeloma
and Kaposi’s Sarcoma. Our current development program is focused in
Europe where we believe there is a potential market opportunity of
$120 million annually. In Q1 2019, Cytori submitted a letter of
intent to file a Marketing Authorization Application (MAA) to the
European Medicines Agency (EMA) for Doxorubicin Hydrochloride
Cytori. Doxorubicin Hydrochloride Cytori is being developed as a
generic version of Janssen’s Caelyx pegylated liposomal
doxorubicin. The Company continues to evaluate potential
development and commercialization partnering opportunities for
Doxorubicin Hydrochloride Cytori with a focus on Europe and China.
European approval and launch of Doxorubicin Hydrochloride Cytori is
projected to be in late 2020.
Our second clinical stage oncology focused asset
is ATI-1123, a phase II ready, patented, albumin-stabilized
pegylated liposomal docetaxel. In 2018, the Company received an
orphan drug designation from the U.S. FDA for the indication of
small cell lung cancer and is pursuing a 505(b)(2) new drug
application (NDA) pathway in the U.S. which may offer an
accelerated clinical timeline and lower development cost. The
Company is exploring near term development strategies and intends
to advance this program aggressively in 2019.
Cytori’s ADRESU pivotal urinary incontinence
trial using Cytori Cell Therapy has completed enrollment and
anticipates data read out in the second quarter of 2019. If the
data is positive, Cytori intends to seek expedited approval and
reimbursement for the Japanese market for this indication. In Q1
2019, Cytori received approval from the United States Food &
Drug Administration to expand the enrollment criteria for its
RELIEF clinical trial of intravenously delivered Cytori Cell
Therapy for patients with severe burn injuries.
Q4 2018 and Full Year 2018 Financial
Performance
- Q4 2018 and full year operating cash burn was $2.5 million and
$12.0 million, compared to $4.2 million and $18.1 million for the
same periods in 2017, respectively.
- Q4 2018 and full year product revenues were $0.4 million and
$2.7 million, compared to $0.7 million and $2.7 million for the
same periods in 2017, respectively.
- Q4 2018 and full year contract revenues were $0.7 million and
$3.0 million, compared to $0.9 million and $3.7 million for the
same periods in 2017, respectively.
- Cash and debt principal balances at December 31, 2018 were
approximately $5.3 million and $13.0 million, respectively.
- Q4 2018 adjusted net loss was $2.8 million or $0.20 per share,
compared to a net loss of $4.3 million or $1.00 per share for the
same period in 2017. The adjusted net loss excludes a non-cash
beneficial conversion feature (a non gaap measure) related to the
issuance of our Series C convertible preferred shares in the third
quarter of 2018 of $2.5 million, as well as a credit of $0.6
million related to a change in fair value of warrant liability (a
non gaap measure). Q4 2018 net loss allocable to common
stockholders was $2.2 million, or $0.16 per share.
- Full year 2018 adjusted net loss was $14.9 million or $1.71 per
share, compared to $21.0 million or $6.48 per share for the same
period in 2017. The adjusted net loss excludes a non-cash
beneficial conversion feature (a non gaap measure) related to the
issuance of our Series C convertible preferred shares in the third
quarter of 2018 of $2.5 million, as well as a credit of $2.2
million related to a change in fair value of warrant liability (a
non gaap measure). Full year 2018 net loss allocable to common
stockholders was $15.1 million, or $1.74 per share.
Selected Key Anticipated
Milestones:
- Doxorubicin Hydrochloride
Cytori: File Market Authorization Application to the European
Medicines Agency in late 2019 or early 2020.
- ATI-1123: Clarify the FDA 505(b)(2)
pathway applicability and announce clinical development plan in mid
2019.
- Cell Therapy Japan: Report ADRESU
urinary incontinence pivotal clinical trial results in Q2
2019.
Management Conference Call
Webcast
Cytori will host a management conference call at
5:30 p.m. Eastern Time today to further discuss its 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: 8766078.
About Cytori
Cytori is developing, manufacturing, and
commercializing nanoparticle-delivered oncology drugs and
autologous adipose-derived regenerative cell (ADRC) therapies
within its Nanomedicine™ and Cell Therapy™ franchises,
respectively. Cytori Nanomedicine™ is focused on the liposomal
encapsulation of anti-neoplastic chemotherapy agents, which may
enable the effective delivery of the agents to target sites while
reducing systemic toxicity. The Cytori Nanomedicine™ product
pipeline consists of Doxorubicin Hydrochloride Cytori, a pegylated
liposomal doxorubicin hydrochloride for breast cancer, ovarian
cancer, multiple myeloma, and Kaposi’s sarcoma, a complex/hybrid
generic drug, and ATI-1123 patented albumin-stabilized pegylated
liposomal docetaxel for multiple solid tumors. Cytori Cell
Therapy™, prepared within several hours with the proprietary
Celution® System and administered to the patient the same day, has
been shown in preclinical and clinical studies to act 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.
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, including, without limitation,
statements regarding anticipated commercial launch of our
Doxorubicin Hydrochloride Cytori drug candidate (and timing
thereof); completion of manufacturing activities necessary to
submit an MAA to the EMA for our Doxorubicin Hydrochloride Cytori
drug candidate; 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 conduct and
completion of the Company-sponsored RELIEF thermal burn trial, as
well as the Company’s anticipated submission of data to the EMA
from the previously completed bioequivalency trial for Doxorubicin
Hydrochloride Cytori. We also face risks that
investigator-initiated trials using our Cytori Cell Therapy fail to
fully enroll or otherwise are conducted in a manner that ultimately
is injurious to our business. We also face the risk that we
will be unable to time successfully manufacture our Doxorubicin
Hydrochloride Cytori drug candidate in time to meet our projected
timeline for submission of an MAA to the EMA, or at all. Some
of these risks also include risks relating to regulatory challenges
the Company faces (including the U.S., EU, China, Japan and its
other key geographies) due to a number of factors including novelty
of the Company’s technology and product offerings, changes in and
/or evolution of regulatory approaches to cellular therapeutics
like the Company’s in its key geographies, and similar matters. It
is possible that the Company could face unexpected revenue
shortfalls, expense increases or other occurrences that adversely
affect our cash burn and cash management strategies. Further
the Company face risks pertaining to dependence on third party
performance and approvals (including performance of
investigator-initiated trials, outcome of BARDA’s review of the
Company’s proposed burn wound trial pursuant to its contract with
BARDA, and outcome of the EMA’s review of our Doxorubicin
Hydrochloride Cytori MAA); performance and acceptance of the
Company’s products in clinical studies/trials and in the
marketplace (including commercial acceptance of the Company’s
products in Japan and other markets where are products are
commercially available, and similar risks); material changes in the
marketplace that could adversely impact revenue projections
(including changes in market perceptions of the Company’s products,
and introduction of competitive products); unexpected costs and
expenses that could adversely impact liquidity and shorten the
Company’s current liquidity projections (which could in turn
require the Company to seek additional debt or equity capital
sooner than currently anticipated); the Company’s reliance on key
personnel; the Company’s ability to identify and develop new
programs or assets to expand the Company’s clinical pipeline; the
right of the U.S. government (BARDA) to cut or terminate further
support of the thermal burn injury program (including any decision
by BARDA not to proceed with our proposed thermal burn trial); the
Company’s abilities to capitalize on its internal restructuring and
achieve break-even or profitability (or to continue to reduce our
operating losses); and other risks and uncertainties described
under the "Risk Factors" in Cytori's Securities and Exchange
Commission Filings, included in the Company’s annual and quarterly
reports.
There may be events in the future that the
Company is unable to predict, or over which it has no control, and
its business, financial condition, results of operations and
prospects may change in the future. The Company assumes no
responsibility to update or revise any forward-looking statements
to reflect events, trends or circumstances after the date they are
made unless the Company has an obligation under U.S. Federal
securities laws to do so.
|
CYTORI THERAPEUTICS, INC. |
CONSOLIDATED CONDENSED BALANCE
SHEETS |
(UNAUDITED) |
(in thousands, except share and par value
data) |
|
|
As of December31, |
|
|
2018 |
|
|
2017 |
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
5,261 |
|
|
$ |
9,550 |
|
Accounts
receivable, net of reserves of $185 in 2018 and $167 in 2017 |
|
286 |
|
|
|
145 |
|
Restricted
cash |
|
40 |
|
|
|
675 |
|
Inventories,
net |
|
2,947 |
|
|
|
3,183 |
|
Other
current assets |
|
1,114 |
|
|
|
1,311 |
|
Total
current assets |
|
9,648 |
|
|
|
14,864 |
|
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
2,559 |
|
|
|
3,052 |
|
Other assets |
|
1,905 |
|
|
|
2,570 |
|
Intangibles, net |
|
5,957 |
|
|
|
7,207 |
|
Goodwill |
|
3,922 |
|
|
|
3,922 |
|
Total
assets |
$ |
23,991 |
|
|
$ |
31,615 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts
payable and accrued expenses |
$ |
3,357 |
|
|
$ |
4,790 |
|
Current
portion of long-term obligations, net of discount |
|
14,202 |
|
|
|
13,624 |
|
Total
current liabilities |
|
17,559 |
|
|
|
18,414 |
|
|
|
|
|
|
|
|
|
Deferred revenues |
|
167 |
|
|
|
94 |
|
Long-term deferred rent
and other |
|
124 |
|
|
|
107 |
|
Warrant liability |
|
916 |
|
|
|
— |
|
Total
liabilities |
|
18,766 |
|
|
|
18,615 |
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
Preferred
stock, $0.001 par value; 5,000,000 shares authorized; 30,223 shares
issued; 4,606 and 2,431 shares outstanding in 2018 and 2017,
respectively |
|
— |
|
|
|
— |
|
Common
stock, $0.001 par value; 100,000,000 shares authorized; 14,830,414
and 5,782,573 shares issued and outstanding in 2018 and 2017,
respectively |
|
15 |
|
|
|
6 |
|
Additional
paid-in capital |
|
418,375 |
|
|
|
413,356 |
|
Accumulated
other comprehensive income |
|
1,218 |
|
|
|
1,387 |
|
Accumulated
deficit |
|
(414,383 |
) |
|
|
(401,749 |
) |
Total
stockholders’ equity |
|
5,225 |
|
|
|
13,000 |
|
Total
liabilities and stockholders’ equity |
$ |
23,991 |
|
|
$ |
31,615 |
|
|
|
CYTORI THERAPEUTICS, INC. |
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS |
(UNAUDITED) |
(in thousands, except share and per share
data) |
|
|
For the Years Ended December 31, |
|
|
2018 |
|
|
2017 |
|
Revenues: |
|
|
|
|
|
|
|
Product |
$ |
2,671 |
|
|
$ |
2,689 |
|
License |
|
1,000 |
|
|
|
— |
|
|
|
3,671 |
|
|
|
2,689 |
|
|
|
|
|
|
|
|
|
Cost of product
revenues |
|
1,148 |
|
|
|
1,318 |
|
Amortization of intangible
assets |
|
1,225 |
|
|
|
1,225 |
|
Gross
profit |
|
1,298 |
|
|
|
146 |
|
|
|
|
|
|
|
|
|
Development revenues: |
|
|
|
|
|
|
|
Government
contracts and other |
|
2,983 |
|
|
|
3,722 |
|
|
|
2,983 |
|
|
|
3,722 |
|
Operating expenses: |
|
|
|
|
|
|
|
Research and
development |
|
8,622 |
|
|
|
11,678 |
|
Sales and
marketing |
|
2,018 |
|
|
|
3,593 |
|
General and
administrative |
|
6,339 |
|
|
|
7,594 |
|
In process
research and development acquired from Azaya |
|
— |
|
|
|
1,686 |
|
Total
operating expenses |
|
16,979 |
|
|
|
24,551 |
|
Operating
loss |
|
(12,698 |
) |
|
|
(20,683 |
) |
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
Interest
income |
|
43 |
|
|
|
33 |
|
Interest
expense |
|
(1,922 |
) |
|
|
(2,049 |
) |
Other
income, net |
|
180 |
|
|
|
13 |
|
Change in
fair value of warrants |
|
2,233 |
|
|
|
— |
|
Issuance
cost of warrants |
|
(470 |
) |
|
|
— |
|
Total other
expense |
|
64 |
|
|
|
(2,003 |
) |
Net
loss |
$ |
(12,634 |
) |
|
$ |
(22,686 |
) |
Beneficial
conversion feature for convertible preferred stock |
|
(2,487 |
) |
|
|
(3,977 |
) |
Net loss
allocable to common stockholders |
$ |
(15,121 |
) |
|
$ |
(26,663 |
) |
|
|
|
|
|
|
|
|
Basic and diluted net loss
per share allocable to common stockholders |
$ |
(1.74 |
) |
|
$ |
(8.23 |
) |
Basic and diluted weighted
average shares used in calculating net loss per share allocable to
common stockholders |
|
8,692,551 |
|
|
|
3,238,983 |
|
|
|
|
|
|
|
|
|
Comprehensive loss: |
|
|
|
|
|
|
|
Net loss |
$ |
(12,634 |
) |
|
$ |
(22,686 |
) |
Other comprehensive income
– foreign currency translation adjustments |
|
(169 |
) |
|
|
129 |
|
Comprehensive loss |
$ |
(12,803 |
) |
|
$ |
(22,557 |
) |
|
|
CYTORI THERAPEUTICS, INC. |
CONSOLIDATED CONDENSED STATEMENTS OF CASH
FLOWS |
(UNAUDITED) |
(in thousands) |
|
|
For the Years EndedDecember
31, |
|
|
2018 |
|
|
2017 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
Net loss |
$ |
(12,634 |
) |
|
$ |
(22,686 |
) |
Adjustments to reconcile
net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
Depreciation
and amortization |
|
2,004 |
|
|
|
2,151 |
|
Amortization
of deferred financing costs and debt discount |
|
578 |
|
|
|
707 |
|
In process
research and development acquired from Azaya Therapeutics |
|
— |
|
|
|
1,686 |
|
Change in
fair value of warrants |
|
(2,233 |
) |
|
|
— |
|
Allocation
of issuance cost associated with warrants |
|
470 |
|
|
|
— |
|
Provision
for doubtful accounts |
|
18 |
|
|
|
— |
|
Provision
for excess inventory |
|
463 |
|
|
|
340 |
|
Share-based
compensation expense |
|
355 |
|
|
|
753 |
|
Loss (gain)
on asset disposal |
|
36 |
|
|
|
(42 |
) |
Increases
(decreases) in cash caused by changes in operating assets and
liabilities: |
|
|
|
|
|
|
|
Accounts
receivable |
|
(173 |
) |
|
|
1,129 |
|
Inventories |
|
475 |
|
|
|
251 |
|
Other
current assets |
|
85 |
|
|
|
(593 |
) |
Other
assets |
|
23 |
|
|
|
(94 |
) |
Accounts
payable and accrued expenses |
|
(1,532 |
) |
|
|
(1,817 |
) |
Deferred
revenues |
|
73 |
|
|
|
(3 |
) |
Long-term
deferred rent and other |
|
17 |
|
|
|
90 |
|
Net cash
used in operating activities |
|
(11,975 |
) |
|
|
(18,128 |
) |
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
Purchases of property and
equipment |
|
(133 |
) |
|
|
(295 |
) |
Proceeds from sale of
assets |
|
— |
|
|
|
113 |
|
Purchase of long-lived
assets as part of Azaya Therapeutics' acquisition |
|
— |
|
|
|
(1,201 |
) |
Net cash
used in investing activities |
|
(133 |
) |
|
|
(1,383 |
) |
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
Principal payments on
long-term obligations |
|
— |
|
|
|
(4,720 |
) |
Financed capital
expenditures |
|
(66 |
) |
|
|
— |
|
Proceeds from sale of
common and preferred stock |
|
8,766 |
|
|
|
23,613 |
|
Costs from sale of common
and preferred stock |
|
(1,532 |
) |
|
|
(2,078 |
) |
Net cash
provided by financing activities |
|
7,168 |
|
|
|
16,815 |
|
Effect of
exchange rate changes on cash and cash equivalents |
|
16 |
|
|
|
11 |
|
Net decrease
in cash and cash equivalents |
|
(4,924 |
) |
|
|
(2,685 |
) |
Cash, cash equivalents,
and restricted cash at beginning of period |
|
10,225 |
|
|
|
12,910 |
|
Cash, cash equivalents,
and restricted cash at end of period |
$ |
5,301 |
|
|
$ |
10,225 |
|
|
|
|
|
|
|
|
|
CYTORI THERAPEUTICS CONTACT
Gary Titus
Chief Financial Officer
+1.858.458.0900
ir@cytori.com
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