GAITHERSBURG, Md., Nov. 10, 2010 (GLOBE NEWSWIRE) -- Cytomedix, Inc. (NYSE Amex:GTF) (the "Company"), a leading developer of biologically active regenerative therapies for wound care, inflammation and angiogenesis, today announced financial results for the three and nine months ended September 30, 2010.
Highlights of the third quarter and recent weeks include the following:
- Achieved record product sales of $1.29 million, a 12% increase from the second quarter of 2010 and up from $44,000 in third quarter 2009 product sales.
- Raised approximately $1.5 million of gross proceeds in a registered direct offering, led by Lincoln Park Capital Fund, LLC ("LPC") with a $500,000 investment.
- Secured committed financing for an additional $11.5 million through two separate purchase agreements with LPC.
- Presented a poster highlighting the use of the Company's AutoloGel™ System to effect rapid healing of chronic wounds at the Symposium on Advanced Wound Care Fall 2010.
- Delivered an oral presentation highlighting the use of the Company's AutoloGel™ System to effect rapid healing of chronic wounds in patients with spinal cord injury at the Academy of Spinal Cord Injury Professionals annual meeting.
- Completed the successful integration of the customer service and order fulfillment operations for the Angel® Whole Blood Separation System ("Angel") product line in the U.S.
- Relocated the Company's headquarters to a 4,100 square foot facility in Gaithersburg, Maryland to accommodate the Company's growing operations and provide space for customer service, warehousing and distribution, device repair and refurbishment, as well as for sales, marketing and administrative staff.
Commenting on the third quarter, Martin P. Rosendale, Chief Executive Officer of Cytomedix, said, "We are especially pleased to have achieved record product sales this past quarter, which underscores the successful transition of the acquired Angel product line and further validates our robust clinically and scientifically based sales and marketing programs for the AutoloGel System. Customer retention for the Angel product line remains high, and with customer service and distribution in the U.S. fully integrated,we are now focused on expanding our sales and marketing initiatives to broaden our customer base and increase the use of this line in orthopedics, blood management and wound healing.
"We remain committed to the development of meaningful clinical data to support and expand the use of the AutoloGel System in wound management and to validate our economic proposition in support of reimbursement. Toward that end, we continue to publish and present positive clinical data that shows our biologically active regenerative therapy meaningfully accelerates and enhances the body's own natural healing processes in a variety of exuding wounds – even those resistant to previous therapies.
"We remain on track to file a 510(k) application with the FDA for the material enhancements to the AutoloGel System late in 2010 or early in 2011. This fundamentally redesigned syringe separation device allows for the rapid preparation of platelet rich plasma ("PRP") in a semi-closed system, improves the ease of use by eliminating a significant number of steps involved in the process and lowers cost of goods. Importantly, this proprietary enhancement, which is suitable for future PRP indications in growing markets such as orthopedics, provides the AutoloGel System with potential additional intellectual property protection, further distinguishing it from any other PRP products and providing barriers to entry against potential competitors.
"We are very pleased with AutoloGel System sales growth, which validates our existing commercial sales strategy. We understand that widespread adoption of our AutoloGel System will be accelerated by favorable reimbursement. We have seen success with reimbursement initiatives for patient pre-authorizations with select private insurers, and are encouraged by the early responses to these programs. Most importantly, we have made considerable progress with the development of the dossier for our planned submission for reconsideration of reimbursement with the Centers for Medicare and Medicaid Services ("CMS") that includes robust clinical and scientific data, as well as compelling economic data. The clinical data package includes the outcomes of 285 wounds treated with the AutoloGel system and recorded in our ongoing patient registry. The initial analysis of this data fully supports previous AutoloGel System clinical studies and reflects the positive outcomes we continue to see in clinical practice. This, combined with the legislative interest and advocacy group support we have developed, strongly enhances our prospects for a favorable response," concluded Mr. Rosendale.
Third Quarter Results
Total revenues for the third quarter of 2010 were $1.30 million, a 141% increase over total revenues of $538,000 for the third quarter of 2009. The increase was largely attributable to sales of the Angel product line, which the Company acquired from Sorin Group USA, Inc. on April 9, 2010, and to higher AutoloGel System sales. Due to the November 2009 expiration of the patent underlying the Company's prior royalty agreements, there were only nominal royalty revenues recorded for the 2010 third quarter, compared with royalty revenue of $494,000 earned during the third quarter of 2009.
AutoloGel™ System sales of $126,000 increased 186% from sales of $44,000 in the third quarter of 2009, and were up 33% sequentially from the second quarter 2010. Sales from the Angel® product line were $1.16 million in the third quarter, an 11% increase from the second quarter of 2010.
Gross profit for the third quarter of 2010 increased 75% to $763,000 from $435,000 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 patents acquired from Sorin and to a 10% commission earned by Sorin for logistics support through July 2010 in the U.S. and for the full quarter in international markets.
Reported gross margin on product sales was 59% for the 2010 third quarter, down from 80% for the 2009 third quarter. Excluding the $44,000 commission earned by Sorin during the quarter for its logistics support during the transition period and the amortization of patents acquired from Sorin of $39,000 in the 2010 third quarter, gross margin was 65%.
Third quarter 2010 operating expenses increased to $2.05 million from $1.00 million in the prior year third quarter, due primarily to higher salaries due to additional employees, higher commissions associated with increased product sales, and lower stock-based compensation. Also, in the three month period in 2009, the Company recorded a $264,000 credit to bonus expense as accrued bonuses were reversed. In addition, during the third quarter of 2010 the Company incurred higher consulting fees associated with regulatory compliance and CMS reimbursement initiatives, increased legal and accounting fees associated with the integration of the Angel product line, 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, along with increased general and administrative expenses.
Other expenses during the third quarter of 2010 were $304,000 and consisted primarily of interest expense. Of this amount, $46,000 reflects cash interest costs while the balance of interest expense reflects amortization of deferred debt issuance costs associated with the warrants issued to certain guarantors of the notes and amortization of the discount on the promissory note to Sorin.
The net loss to common stockholders for the third quarter of 2010 was $1.69 million or $0.04 per share, compared with a net loss to common stockholders of $570,000 or $0.02 per share reported for the third quarter of 2009.
Nine Month Results
Total revenues for the first nine months of 2010 were $2.62 million, up 59% from total revenues of $1.65 million in the first nine months of 2009, largely attributable to sales of the Angel System and higher AutoloGel System sales, offset by the loss of royalty revenue as described above. Product sales of $2.50 million compare with product sales of $159,000 in the first nine months of 2009. For the first nine months of 2010 royalty revenue decreased to $123,000 from $1.49 million for the same period in 2009, due to the patent expiration described above.
Angel product line sales were $2.22 million in the 2010 nine-month period. AutoloGel sales for the first nine months of 2010 increased 79% to $285,000 compared with $159,000 in the same period of 2009. The licensing agreements, which generated the royalty revenues, expired in late November 2009, with only final close-out adjustments being recorded in 2010.
Gross margin on product sales for the first nine months of 2010 decreased to 51% from 73% in the same period in 2009. Cost of sales for nine months ended September 30, 2010 included certain charges of a non-recurring nature. Finished goods inventory acquired from Sorin, written-up to fair value in accordance with purchase accounting rules and subsequently sold to customers in the ordinary course of business, resulted in a charge of $168,000 during the 2010 nine-month period. The 10% commission earned by Sorin for logistics support during the period resulted in a $148,000 charge and the amortization of the intangible asset charged to cost of sales totaled $78,000. Excluding these items, gross margin on product sales for the first nine months of 2010 was 67%.
Operating expenses for the first nine months of 2010 increased 50% to $5.49 million from $3.65 million for the first nine months of 2009.
The net loss to common stockholders for the first nine months of 2010 was $6.62 million or $0.18 per share, compared with a net loss to common stockholders for the first nine months of 2009 of $2.36 million or $0.07 per share. The net loss for the 2010 period 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 September 30, 2010 were $621,000, compared with $2.11 million as of December 31, 2009. The Company used $2.90 million to fund operating activities during the first nine months of 2010.
In October 2010, Cytomedix completed a $1.5 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.
For additional information, please refer to the Company's quarterly report on Form 10-Q, filed with the Securities and Exchange Commission on November 10, 2010.
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, November 11, 2010. Shareholders and other interested parties may participate in the call by dialing 866-770-7146 (domestic) or 617-213-8068 (international) and entering passcode 88250623. The call will also 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 available beginning two hours after its completion through November 18, 2010 by dialing 888-286-8010 (domestic) or 617-801-6888 (international) and entering passcode 33593909. 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) that 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) | ||
|
September 30, 2010 |
December 31, 2009 |
|
| ASSETS | ||
| Current assets | ||
| Cash | $ 620,744 | $ 2,107,499 |
| Short-term investments, restricted | 52,795 | 52,672 |
| Accounts and royalties receivable, net | 1,622,924 | 180,560 |
| Inventory | 779,801 | 25,986 |
| Prepaid expenses and other current assets | 262,583 | 140,745 |
| Deferred costs, current portion | 327,630 | -- |
| Total current assets | 3,666,477 | 2,507,462 |
| Property and equipment, net | 1,303,146 | 84,623 |
| Deferred costs | 163,815 | -- |
| Other intangibles, net | 3,249,583 | -- |
| Goodwill | 706,823 | -- |
| Total assets | $ 9,089,844 | $ 2,592,085 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities | ||
| Accounts payable and accrued expenses | $ 3,678,889 | $ 1,037,894 |
| Note payable, current portion | 1,048,209 | -- |
| Dividends payable on preferred stock | 93,864 | 7,285 |
| Total current liabilities | 4,820,962 | 1,045,179 |
| Note payable | 2,960,649 | -- |
| Total liabilities | 7,781,611 | 1,045,179 |
| Commitments and contingencies | ||
| Stockholders' equity | ||
| 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 -- 3,650 shares, liquidation preference of $3,650,000 | -- | -- |
| Common stock; $.0001 par value, authorized 100,000,000 shares; 2010 issued and outstanding -- 37,722,928 shares; 2009 issued and outstanding -- 37,273,628 shares | 3,772 | 3,727 |
| Additional paid-in capital | 48,327,457 | 44,074,575 |
| Accumulated deficit | (47,023,013) | (42,531,413) |
| Total stockholders' equity | 1,308,233 | 1,546,906 |
| Total liabilities and stockholders' equity | $ 9,089,844 | $ 2,592,085 |
| CYTOMEDIX, INC. | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (Unaudited) | ||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
| 2010 | 2009 | 2010 | 2009 | |
| Revenues | ||||
| Sales | $ 1,290,001 | $ 43,935 | $ 2,500,480 | $ 159,238 |
| Royalties | 7,446 | 494,378 | 122,920 | 1,487,518 |
| Total revenues | 1,297,447 | 538,313 | 2,623,400 | 1,646,756 |
| Cost of revenues | ||||
| Cost of sales | 531,471 | 9,052 | 1,231,686 | 43,690 |
| Cost of royalties | 2,978 | 94,469 | (186,402) | 310,791 |
| Total cost of revenues | 534,449 | 103,521 | 1,045,284 | 354,481 |
| Gross profit | 762,998 | 434,792 | 1,578,116 | 1,292,275 |
| Operating expenses | ||||
| Salaries and wages | 750,654 | 348,610 | 2,037,605 | 1,623,688 |
| Consulting expenses | 209,279 | 80,203 | 404,780 | 132,987 |
| Professional fees | 283,469 | 146,930 | 870,594 | 452,954 |
| Research, development, trials and studies | 91,264 | 188 | 312,162 | 179,304 |
| General and administrative expenses | 719,434 | 426,295 | 1,864,615 | 1,258,931 |
| Total operating expenses | 2,054,100 | 1,002,226 | 5,489,756 | 3,647,864 |
| Loss from operations | (1,291,102) | (567,434) | (3,911,640) | (2,355,589) |
| Other (expenses) income | ||||
| Interest, net | (274,273) | (309) | (549,419) | 10,216 |
| Other, net | (30,131) | 1,116 | (30,541) | 1,116 |
| Total other income (expenses) | (304,404) | 807 | (579,960) | 11,332 |
| Loss before provision for income taxes | (1,595,506) | (566,627) | (4,491,600) | (2,344,257) |
| Income tax provision | -- | -- | -- | -- |
| Net loss | (1,595,506) | (566,627) | (4,491,600) | (2,344,257) |
| Preferred dividends: | ||||
| Series A preferred stock | 2,115 | 1,952 | 6,221 | 5,745 |
| Series B preferred stock | 1,315 | 1,846 | 4,108 | 5,719 |
| Series D preferred stock | 91,250 | -- | 174,500 | -- |
| Amortization of beneficial conversion feature on Series D preferred stock | -- | -- | 1,948,155 | -- |
| Net loss to common stockholders | $ (1,690,186) | $ (570,425) | $ (6,624,584) | $ (2,355,721) |
| Loss per common share ---- | ||||
| Basic and diluted | $ (0.04) | $ (0.02) | $ (0.18) | $ (0.07) |
| Weighted average shares outstanding ---- | ||||
| Basic and diluted | 37,694,387 | 35,229,556 | 37,491,771 | 34,389,575 |