GAITHERSBURG, Md., May 16, 2011 (GLOBE NEWSWIRE) -- Cytomedix, Inc. (OTCBB:CMXI) (the Company), a leading developer of biologically active regenerative therapies for wound care, inflammation and angiogenesis, today reported financial results for the three months ended March 31, 2011.
Highlights of the first quarter and recent weeks include the following:
- Total revenues for the first quarter of 2011 of $1.37 million, up from $179,000 for the same period in 2010.
- Negotiated a $1.3 million reduction of principal under the promissory note payable to Sorin USA arising from the acquisition of the Angel® assets, by facilitating early retirement of the remaining $3.4 million principal balance in late-April 2011 via a $2.1 million payment. The refinancing reduces the Company's debt service payments by 90% or $2.2 million over the next 12 months.
- Completed two productive meetings with the Coverage and Analysis Group within the Centers for Medicare & Medicaid Services (CMS) in support of an anticipated reimbursement reconsideration submission.
- Four poster presentations and one podium presentation highlighting the clinical merits of the Company's AutoloGel™ System in wound management were presented at the 24th Annual Symposium on Advanced Wound Care and Wound Healing Society (SAWC).
- Received Patent No. 7,927,563 "Kit for the Separation of Biological Fluids" from the U.S. Patent and Trademark Office for the Company's newly designed AutoloGel™ Separation System, which enables a safer and more convenient point-of-care procedure for the separation of platelets and plasma from whole blood in a single, specially designed syringe system that maintains a closed environment.
- Recruited industry veteran Gary R. Otto as Director of National Accounts to lead all aspects of the Company's commercial business with major customers such as healthcare networks, group purchasing organizations, U.S. government accounts and managed care organizations.
- Received CE marking certification for the Angel® Whole Blood Separation System (Angel) and the activAT® Autologous Thrombin Processing Kit (activAT), which allows for the sale and distribution of these products in 28 countries across Europe.
Management Discussion
Commenting on the Company's progress, Martin P. Rosendale, Chief Executive Officer of Cytomedix, said, "2011 is off to a strong start with a solid first quarter performance that was highlighted by growing product sales across all product lines, publication and presentation of highly positive data that demonstrates the clinical utility of AutoloGel in wound management, and the continued build-out of our infrastructure to support future growth. Importantly, the early retirement of the remaining debt from the Angel acquisition allows us to strengthen our balance sheet and improve our cash flow over the coming year. This will allow us to focus our efforts on growing sales and expanding the market opportunities for our regenerative platelet rich plasma (PRP) therapies in wound management and surgical applications.
"We are particularly pleased to report continued sales growth of the Angel system, noting that we have achieved sequential growth in each quarter since we acquired the asset in April 2010. During our first year of ownership, we reversed the negative revenue trend existing at the time of the acquisition and are now gaining sales momentum. We are confident we will continue to drive growth with an increasing customer base, product enhancements and geographic expansion. In addition, interest is growing in the Angel system for a number of applications currently under clinical investigation, including bone marrow aspirate, critical limb ischemia and certain cardiovascular indications.
"During the first quarter, we made important and significant progress with our planned submission for reconsideration of reimbursement for AutoloGel with CMS. We held two productive meetings with CMS providing them with the clinical evidence and net health benefit data they requested. The clinical evidence supporting the reimbursement of AutoloGel includes a systematic review of 21 comparative studies, a prospective Cytomedix wound registry of 285 wounds, four additional published and peer-reviewed AutoloGel studies, and one AutoloGel study pending publication. We have confidence in the quality and quantity of evidence demonstrating the AutoloGel System's clinical utility and economic value proposition in wound management. We expect to file the formal reconsideration submission within the next two weeks, following guidance provided by CMS at our last meeting.
"We continue to advance a number of partnership and business development discussions with potential collaborators with the goal to expand the scope and increase the sales of our regenerative therapies in a variety of wound management, surgical and other applications. We believe that such collaborations offer the opportunity for Cytomedix to branch into new areas and to significantly drive future revenue growth," concluded Mr. Rosendale.
First Quarter Results
Total revenues for the first quarter of 2011 were $1.37 million, up sharply from total revenues of $179,000 for the first quarter of 2010. The increase was largely attributable to sales of the Angel product line, which the Company acquired on April 9, 2010, and to higher sales of the AutoloGel System. As a result of the November 2009 expiration of the patent underlying the Company's prior royalty agreements, there were no royalty revenues recorded for the 2011 first quarter, compared with royalty revenue of $115,000 during the first quarter of 2010.
Sales from the Angel product line were $1.28 million in the first quarter of 2011, a 6% increase compared with the fourth quarter of 2010, and importantly, an increase of more than 10% sequentially in the domestic market. AutoloGel System sales of $87,000 increased 38% compared with $63,000 in the first quarter of 2010, and increased 7% compared with the fourth quarter of 2010.
Gross profit for the first quarter of 2011 increased 104% to $720,000 from $353,000 in the prior-year period. This reflects higher product sales offset by lower royalty revenue described above, and by higher costs primarily attributable to amortization of technology acquired from Sorin, depreciation on revenue-generating equipment and certain non-recurring charges associated with the transition of the Angel business to Cytomedix. The 2010 gross profit reflected a credit of $189,000 due to final close out adjustments relating to the prior royalty agreements mentioned above.
Gross margin for the first quarter of 2011 was 53%, down from 76% for the 2010 first quarter. The decrease is primarily due to the amortization of patents and technology acquired from Sorin, depreciation on revenue-generating equipment, higher costs of goods and a higher sales contribution from Angel products, which have historically had lower margins than AutoloGel. As the transfer of manufacturing responsibility is now complete, the Company will seek to streamline its supply chain activities over the coming quarters, and expects a normalized GAAP gross margin in the 60-65% range.
First quarter 2011 operating expenses increased to $2.2 million from $1.4 million in the prior-year first quarter. The increase was primarily due to higher consulting costs relating to regulatory compliance and CMS reimbursement efforts, and the addition of dedicated consultants in the areas of marketing, clinical, and European operations. In addition, during the first quarter of 2011, the Company had higher salaries due to additional employees, and incurred increases in independent agent commissions, fees relating to Angel and activAT manufacturing set-up, and other general administrative expenses.
The net loss to common stockholders for the first quarter of 2011 was $1.5 million or $0.03 per share, compared with a net loss to common stockholders of $1.1 million or $0.03 per share reported for the first quarter of 2010.
Cash and Liquidity
Cash and cash equivalents as of March 31, 2011 were $1.1 million, compared with $639,000 as of December 31, 2010. The Company used $1.3 million to fund operating activities during the 2011 first quarter.
"Over the past year, our operating expenses have increased as we have invested in building our infrastructure in order to integrate the Angel acquisition and to successfully grow sales of our regenerative therapies in wound management and surgical applications. Moving forward, we are focused on driving efficiencies and streamlining our supply chain so as to lower these expenses. Importantly, the early retirement of our debt obligation to Sorin not only provided us an attractive $1.3 million discount on the note balance, but also lowers our debt service obligations over the next 12 months by 90%, or approximately $2.2 million. In combination, we expect that these initiatives will lower our expenses, enhance our margins, and increase our cash flow flexibility," commented Andrew S. Maslan, Cytomedix Chief Financial Officer.
To date in 2011, the Company has drawn down approximately $2.0 million under a committed financing arrangement with Lincoln Park Capital. The Company has access to an additional $8.8 million over the next 17 months under the agreement.
For additional information, please refer to the Company's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May 16, 2011.
Conference Call
Cytomedix management will hold a conference call to discuss these results and answer questions beginning at 10:00 a.m. Eastern time on Tuesday, May 17, 2011. Shareholders and other interested parties may participate in the conference call by dialing 866-202-1971 (domestic) or 617-213-8842 (international) and entering passcode 85026436. The call also will be broadcast live on the Internet at www.streetevents.com, www.fulldisclosure.com and www.cytomedix.com.
A replay of the conference call will be accessible two hours after its completion through May 23, 2011 by dialing 888-286-8010 (domestic) or 617-801-6888 (international) and entering passcode 47899275. The call will also be archived for 90 days at www.streetevents.com, www.fulldisclosure.com and www.cytomedix.com.
About Cytomedix, Inc.
Cytomedix develops, sells and licenses regenerative biological therapies primarily for wound care, inflammation and angiogenesis. The Company markets the AutoloGel™ System, a device for the production of platelet rich plasma ("PRP") gel derived from the patient's own blood for use on a variety of exuding wounds; the Angel® Whole Blood Separation System, a blood processing device and disposable products used for the separation of whole blood into red cells, platelet poor plasma ("PPP") and PRP in surgical settings; and the activAT® Autologous Thrombin Processing Kit, which produces autologous thrombin serum from PPP. The activAT® kit is sold exclusively in Europe and Canada, where it provides a completely autologous, safe alternative to bovine-derived products. The Company is pursuing a multi-faceted strategy to penetrate the chronic wound market with its products, as well as opportunities for the application of AutoloGel™ and PRP technology into other markets such as hair transplantation and orthopedics while actively seeking complementary products for the wound care market. Cytomedix also seeks to monetize other product candidates in its pipeline through strategic partnerships, out-licensing or sale. Most notably is its anti-inflammatory peptide (designated CT-112), which has shown promise in preclinical testing. Additional information regarding Cytomedix is available at www.cytomedix.com.
Safe Harbor Statement
Statements contained in this communication 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's actual results may differ materially due to a number of factors, many of which are beyond Cytomedix's ability to predict or control, including among others, viability and effectiveness of the Company's sales approach and overall marketing strategies, the outcome of development or regulatory review of CT-112, 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, the Company's ability to successfully integrate the Angel® and activAT® product lines into its existing business, to assume and satisfy certain liabilities related to the Angel® and activAT® product lines, or its ability to service the deferred payments related to the acquisition of the Angel® and activAT® product lines. 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.
| CYTOMEDIX, INC. | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (Unaudited) | ||
|
March 31, 2011 |
December 31, 2010 |
|
| ASSETS | ||
| Current assets | ||
| Cash | $ 1,050,447 | $ 638,868 |
| Short-term investments, restricted | 52,817 | 52,817 |
| Accounts receivable, net | 1,467,293 | 1,207,027 |
| Inventory | 340,474 | 627,984 |
| Prepaid expenses and other current assets | 568,941 | 610,409 |
| Deferred costs, current portion | 327,633 | 357,412 |
| Total current assets | 3,807,605 | 3,494,517 |
| Property and equipment, net | 1,226,436 | 1,324,996 |
| Deferred costs | -- | 191,153 |
| Other intangibles, net | 3,116,167 | 3,182,875 |
| Goodwill | 706,823 | 706,823 |
| Total assets | $ 8,857,031 | $ 8,900,364 |
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||
| Current liabilities | ||
| Accounts payable and accrued expenses | $ 3,644,928 | $ 3,558,161 |
| Note payable, current portion | 541,506 | 1,520,947 |
| Dividends payable on preferred stock | 94,309 | 92,853 |
| Total current liabilities | 4,280,743 | 5,171,961 |
| Note payable | 2,960,649 | 1,981,208 |
| Derivative and other liabilities | 19,000 | 1,826,447 |
| Total liabilities | 7,260,392 | 8,979,616 |
| Commitments and contingencies | ||
| Stockholders' equity (deficit) | ||
| Series A Convertible preferred stock; $.0001 par value, authorized 5,000,000 shares; 2011 and 2010 issued and outstanding - 97,663 shares, liquidation preference of $97,663 | 10 | 10 |
| Series B Convertible preferred stock; $.0001 par value, authorized 5,000,000 shares; 2011 and 2010 issued and outstanding - 65,784 shares, liquidation preference of $65,784 | 7 | 7 |
| Series D Convertible preferred stock; $.0001 par value, authorized 2,000,000 shares; 2011 and 2010 issued and outstanding - 3,315 shares, liquidation preference of $3,315,000 | -- | -- |
| Common stock; $.0001 par value, authorized 100,000,000 shares; 2011 issued and outstanding - 48,313,894 shares; 2010 issued and outstanding - 44,103,743 shares | 4,831 | 4,410 |
| Additional paid-in capital | 50,673,654 | 47,587,964 |
| Accumulated deficit | (49,081,863) | (47,671,643) |
| Total stockholders' equity (deficit) | 1,596,639 | (79,252) |
| Total liabilities and stockholders' equity | $ 8,857,031 | $ 8,900,364 |
| CYTOMEDIX, INC. | ||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
| (Unaudited) | ||
| Three Months Ended March 31, | ||
| 2011 | 2010 | |
| Revenues | ||
| Sales | $ 1,365,613 | $ 63,260 |
| Royalties | -- | 115,474 |
| Total revenues | 1,365,613 | 178,734 |
| Cost of revenues | ||
| Cost of sales | 645,384 | 14,937 |
| Cost of royalties | -- | (189,380) |
| Total cost of revenues | 645,384 | (174,443) |
| Gross profit | 720,229 | 353,177 |
| Operating expenses | ||
| Salaries and wages | 726,063 | 622,201 |
| Consulting expenses | 336,482 | 76,097 |
| Professional fees | 236,921 | 185,407 |
| Research, development, trials and studies | 59,946 | 64,491 |
| General and administrative expenses | 843,544 | 465,687 |
| Total operating expenses | 2,202,956 | 1,413,883 |
| Income (loss) from operations | (1,482,727) | (1,060,706) |
| Other income (expense) | ||
| Interest, net | (250,381) | (501) |
| Change in fair value of derivative liabilities | 378,125 | (2,056) |
| Other | (50,237) | (4,703) |
| Total other income (expenses) | 77,507 | (7,260) |
| Income (loss) before provision for income taxes | (1,405,220) | (1,067,966) |
| Income tax provision | 5,000 | -- |
| Net income (loss) | (1,410,220) | (1,067,966) |
| Preferred dividends: | ||
| Series A preferred stock | 2,199 | 2,033 |
| Series B preferred stock | 1,496 | 1,383 |
| Series D preferred stock | 82,875 | -- |
| Net loss to common stockholders | $ (1,496,790) | $ (1,071,382) |
| Loss per common share -- | ||
| Basic and diluted | $ (0.03) | $ (0.03) |
| Weighted average shares outstanding -- | ||
| Basic and diluted | 46,059,041 | 37,273,628 |