GAITHERSBURG, Md., March 30, 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 and 12 months ended December 31, 2010.
Financial highlights for the fourth quarter of 2010 include the following (all comparisons are with the fourth quarter of 2009):
- Total revenues of $1.29 million, up from $419,000
- Product sales of $1.29 million, up from $67,000
- Gross margin of 56%, down from 75%
- Net loss to common stockholders of $2.14 million or $0.05 per share, compared with a net loss of $484,000 or $0.01 per share
Financial highlights for the 2010 full year include the following (all comparisons are with the 2009 full year and include Angel revenues since the April 9, 2010 acquisition date):
- Total revenues of $3.91 million, up from $2.07 million
- Royalty revenue of $123,000, down from $1.84 million
- Product sales of $3.79 million, up from $226,000
- Gross margin of 59%, down from 78%
- Net loss to common stockholders of $9.04 million or $0.23 per share, compared with a net loss of $3.27 million or $0.09 per share
Non-financial highlights of the fourth quarter and recent weeks include the following:
- Held a pre-submission meeting with the Coverage and Analysis Group at the Centers for Medicare and Medicaid Service (CMS) to review clinical data collected over the past three years and prepare for a reconsideration request. Informal pre-submission meetings streamline the reconsideration process by providing the Company with valuable feedback prior to the final request submission.
- Received Notice of Allowance from the U.S. Patent and Trademark Office for the Company's newly designed AutoloGel™ Separation System, which enables a safer and significantly faster 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 Cytomedix to sell and distribute these products in 28 countries across Europe.
- Announced that Japanese partner Millennia Holdings, Inc. compiled data on 100 wounds treated with the AutoloGel System, and will use these initial data to support regulatory and reimbursement filings in Japan. The positive data support the Company's U.S. findings in both clinical and commercial settings.
- Received ISO 13485 Quality Management Standard for Medical Devices as well as Canadian Medical Device Certification for its Gaithersburg facility, allowing the Company to operate commercially in Europe and Canada.
- Formed a six-member Scientific Advisory Board comprised of recognized leaders in wound care and regenerative medicine.
Management Discussion
Commenting on the Company's progress, Martin P. Rosendale, Chief Executive Officer, said, "2010 was a transformational year for Cytomedix with important achievements in a number of areas critical to building a sustainable business. With the acquisition of the Angel and activAT systems, we now have a growing franchise of biologically active regenerative therapies to treat a number of poorly served medical indications. To support projected growth, we have expanded our infrastructure with the addition of key hires and invested in facilities and process management. We have pursued product enhancements for our AutoloGel System as well as patent protection for our proprietary technology. We continued to build a body of knowledge with the ongoing presentation and publication of data in support of the clinical utility and economic value of AutoloGel in wound management. Importantly, we secured committed financing that will allow us to further build Cytomedix and realize the growth potential of our promising technologies.
"We are particularly pleased with the integration of the acquired Sorin assets and with our high customer retention for the Angel product line, which enabled us to modestly increase Angel sales each quarter during the transition. With our ISO 13485 certification and CE mark complete, we can now assertively implement our European expansion plans. We have completed several new distribution agreements for specific European geographies, and are investigating the use of the Angel system for potential new indications that will broaden utility and make our system even more competitive. We look forward to building our customer base and growing Angel product sales in 2011.
"AutoloGel sales increased 62% in 2010, which highlights the effectiveness of our clinical and scientific sales and marketing strategy and underscores our ability to grow sales in facilities that have capitated payment structures, such as long-term acute care facilities where both clinical outcomes and economics are important. Recognizing that widespread adoption of our AutoloGel System will be significantly enhanced by favorable reimbursement, we have made important advances with our planned submission for reconsideration of reimbursement with the Centers for Medicare and Medicaid Services ("CMS"), including our recent meeting with CMS requesting such a reevaluation. As a result, CMS has agreed to review our clinical scientific and cost utility data in advance of our formal request for reconsideration.
"We remain encouraged by the growing market opportunities for both the Angel and AutoloGel systems, and are focused on expanding our sales and marketing initiatives to broaden our customer base and increase use in orthopedics, blood management and wound healing. To realize this potential, we have continued to recruit experienced independent sales representatives and currently have a group of 20 independent sales representatives in the field to augment our internal sales team. We are looking forward to a positive impact on revenues throughout 2011," concluded Mr. Rosendale.
Fourth Quarter Results
Total revenues for the fourth quarter of 2010 were $1.29 million, a 207% increase compared with total revenues of $419,000 for the fourth quarter of 2009. The increase was largely attributable to sales of the Angel product line, which the Company acquired on April 9, 2010, and to higher AutoloGel System sales. 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 2010 fourth quarter, compared with royalty revenue of $352,000 during the fourth quarter of 2009.
AutoloGel System sales of $81,000 increased 21% from sales of $67,000 in the fourth quarter of 2009. Sales from the Angel product line were $1.21 million in the fourth quarter of 2010, a 4% increase from the third quarter of 2010.
Gross profit for the fourth quarter of 2010 increased 129% to $720,000 from $315,000 for the same period in 2009. This reflects higher product sales offset by the decrease in 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.
Gross margin percentage for the fourth quarter of 2010 was 56%, down from 75% for the 2009 fourth quarter. Excluding $5,000 in commission earned by Sorin during the quarter for international logistics support during the transition period, $39,000 in amortization of acquired technology, $75,000 in depreciation and $70,000 for final contract adjustments, gross margin for the fourth quarter of 2010 was 71%.
Fourth quarter 2010 operating expenses increased to $2.21 million from $1.41 million in the prior year quarter, due primarily to salaries for additional employees and higher commissions associated with increased product sales, partially offset by lower stock-based compensation expense. In addition, during the fourth quarter of 2010 the Company incurred higher consulting fees associated with business development, marketing, and regulatory compliance, increased research and development expenses associated with development of the enhanced AutoloGel device and the Company's TAPS post-market surveillance study for the AutoloGel System, increased costs associated with the manufacturing set-up for the Angel product line, along with increased general and administrative expenses.
The net loss to common stockholders for the fourth quarter of 2010 was $2.14 million or $0.05 per share, compared with a net loss to common stockholders of $484,000 or $0.01 per share reported for the fourth quarter of 2009.
Full Year Results
Total revenues for 2010 were $3.91 million, up 89% from total revenues of $2.07 for 2009, largely attributable to sales of the Angel System and higher AutoloGel System sales, partially offset by the loss of royalty revenue as described below. Product sales for 2010 of $3.79 million compare with product sales of $226,000 in 2009. Royalty revenue decreased to $122,000 in 2010 from $1.84 million in 2009. The licensing agreements, which generated the royalty revenues, expired in late November 2009, with only final close-out adjustments being recorded in early 2010.
Angel product line sales from the date of the acquisition on April 9, 2010 through December 31, 2010 were $3.42 million. AutoloGel sales for 2010 increased 62% to $366,000 compared with $226,000 in 2009.
Gross margin percentage for 2010 decreased to 59% from 78% in 2009. Cost of sales in 2010 included certain non-recurring or non-cash charges including $153,000 in Sorin commissions, $118,000 in amortization of acquired technology, $186,000 in depreciation, $168,000 in charges relating to the write-up of inventory under purchase accounting rules, and $70,000 for final contract adjustments. Excluding these charges, gross margin on product sales for 2010 was 71%.
Operating expenses for 2010 increased 52% to $7.70 million from $5.06 million in 2009.
The net loss to common stockholders for 2010 was $9.04 million or $0.23 per share, compared with a net loss to common stockholders for 2009 of $3.27 million or $0.09 per share. The net loss for 2010 includes a charge of $1.95 million, which represents the amortization of a beneficial conversion feature on the Series D preferred stock issued in association with the fundraise conducted in conjunction with the closing of the Sorin acquisition in April 2010. This is a non-recurring, non-cash book charge with no net effect on total shareholders' equity.
Cash and Liquidity
Cash and cash equivalents as of December 31, 2010 were $639,000, compared with $2.11 million as of December 31, 2009. The Company used $3.54 million to fund operating activities during 2010.
In October 2010, Cytomedix completed a $1.50 million (gross) capital raise, of which approximately $900,000 was immediately used to fund the first installment payment plus interest to Sorin under the promissory note arising as a result of the Angel and activAT acquisition.
The Company has an additional $11.50 million in committed financing through two separate purchase agreements with Lincoln Park Capital, an institutional investor. To date in 2011, the Company has drawn down approximately $1.60 million on this agreement and, consequently, has sufficient cash on hand to fund the April 9, 2011 installment payment to Sorin associated with the Angel and activAT acquisition.
For additional information, please refer to the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 30, 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 Thursday, March 31, 2011. Shareholders and other interested parties may participate in the conference call by dialing 866-788-0546 (domestic) or 857-350-1684 (international) and entering passcode 59649956. 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 April 7, 2011 by dialing 888-286-8010 (domestic) or 617-801-6888 (international) and entering passcode 24549804. 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.
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CYTOMEDIX, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
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| December 31, | December 31, | |
| 2010 | 2009 | |
| ASSETS | ||
| Current assets | ||
| Cash | $ 638,868 | $ 2,107,499 |
| Short-term investments, restricted | 52,817 | 52,672 |
| Accounts and royalties receivable, net | 1,207,027 | 180,560 |
| Inventory | 627,984 | 25,986 |
| Prepaid expenses and other current assets | 610,409 | 140,745 |
| Deferred costs, current portion | 357,412 | 10,935 |
| Total current assets | 3,494,517 | 2,518,397 |
| Property and equipment, net | 1,324,996 | 84,623 |
| Deferred costs | 191,153 | 42,063 |
| Other intangibles, net | 3,182,875 | -- |
| Goodwill | 706,823 | -- |
| Total assets | $ 8,900,364 | $ 2,645,083 |
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||
| Current liabilities | ||
| Accounts payable and accrued expenses | $ 3,558,161 | $ 1,037,894 |
| Note payable, current portion | 1,520,947 | -- |
| Dividends payable on preferred stock | 92,853 | 7,285 |
| Derivative liabilities, current portion | -- | 391 |
| Total current liabilities | 5,171,961 | 1,045,570 |
| Note payable | 1,981,208 | -- |
| Derivative and other liabilities | 1,826,447 | 623,462 |
| Total liabilities | 8,979,616 | 1,669,032 |
| Commitments and contingencies | ||
| Stockholders' equity (deficit) | ||
| Series A Convertible preferred stock; $.0001 par value, authorized 5,000,000 | ||
| shares; 2010 and 2009 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; 2010 and 2009 issued and outstanding -- 65,784 shares, | ||
| liquidation preference of $65,784 | 7 | 7 |
| Series C Convertible preferred stock; $.0001 par value, authorized 1,000,000 | ||
| shares; 2010 and 2009 issued and outstanding -- 0.0 shares | -- | -- |
| Series D Convertible preferred stock; $.0001 par value, authorized 2,000,000 | ||
| shares; 2010 issued and outstanding -- 3,315 shares, | ||
| liquidation preference of $3,315,000 | -- | -- |
| Common stock; $.0001 par value, authorized 100,000,000 shares; | ||
| 2010 issued and outstanding -- 44,103,743 shares; | ||
| 2009 issued and outstanding -- 37,273,628 shares | 4,410 | 3,727 |
| Additional paid-in capital | 47,587,964 | 41,827,199 |
| Accumulated deficit | (47,671,643) | (40,854,892) |
| Total stockholders' equity (deficit) | (79,252) | 976,051 |
| Total liabilities and stockholders' equity (deficit) | $ 8,900,364 | $ 2,645,083 |
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CYTOMEDIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
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| Year Ended | ||
| December 31, | ||
| 2010 | 2009 | |
| Revenues | ||
| Sales | $ 3,787,935 | $ 226,212 |
| Royalties | 123,098 | 1,839,972 |
| Total revenues | 3,911,033 | 2,066,184 |
| Cost of revenues | ||
| Cost of sales | 1,799,352 | 58,690 |
| Cost of royalties | (186,402) | 400,115 |
| Total cost of revenues | 1,612,950 | 458,805 |
| Gross profit | 2,298,083 | 1,607,379 |
| Operating expenses | ||
| Salaries and wages | 2,750,014 | 2,183,082 |
| Consulting expenses | 793,591 | 235,929 |
| Professional fees | 1,106,626 | 709,479 |
| Research, development, trials and studies | 415,633 | 227,490 |
| General and administrative expenses | 2,635,145 | 1,700,863 |
| Total operating expenses | 7,701,009 | 5,056,843 |
| Loss from operations | (5,402,926) | (3,449,464) |
| Other income (expense) | ||
| Interest, net | (798,671) | 9,764 |
| Change in fair value of derivative liabilities | (572,313) | 190,888 |
| Other | (28,841) | (10,405) |
| Total other income (expenses) | (1,399,825) | 190,247 |
| Loss before provision for income taxes | (6,802,751) | (3,259,217) |
| Income tax provision | 14,000 | -- |
| Net loss | (6,816,751) | (3,259,217) |
| Preferred dividends: | ||
| Series A preferred stock | 8,379 | 7,738 |
| Series B preferred stock | 5,698 | 7,213 |
| Series D preferred stock | 260,991 | -- |
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Amortization of beneficial conversion feature on Series D preferred stock |
1,948,155 | -- |
| Net loss to common stockholders | $ (9,039,974) | $ (3,274,168) |
| Loss per common share -- | ||
| Basic and diluted | $ (0.23) | $ (0.09) |
| Weighted average shares outstanding -- | ||
| Basic and diluted | 38,668,698 | 35,116,049 |