GAITHERSBURG, Md., Nov. 14, 2011 (GLOBE NEWSWIRE) -- Cytomedix, Inc. (OTCBB:CMXI) (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, 2011.
Highlights for the third quarter of 2011 and recent weeks include:
- Achieved revenue growth of 18% to $1.53 million from $1.30 million for the third quarter of 2010.
- Executed a letter agreement granting an undisclosed global pharmaceutical company exclusivity until December 31, 2011 to conduct further due diligence regarding an exclusive license and supply agreement for the AutoloGel™ System for the U.S. chronic wound market, and, in exchange, received a $2 million non-refundable option fee.
- Announced initiation by Centers for Medicare & Medicaid Services ("CMS") of reconsideration review of coverage of autologous platelet rich plasma ("PRP") gel for non healing chronic wounds with proposed decision memo due by May 9, 2012.
- Submitted a 510(k) application to the U.S. Food and Drug Administration ("FDA") for use of the Angel® Whole Blood Separation System for processing a bone marrow aspirate. The expanded indication includes processing a mixture of blood and bone marrow, a rich source of stem cells.
- Announced publication of compelling clinical data from a wound outcomes registry in the International Wound Journal and published data from a comprehensive systematic review and meta-analysis (statistical pooling) of the use of PRP gel in wound healing in ePlasty, the open-access journal of the Journal of Plastic Surgery.
- Launched the Company's Hair Restoration Wound Care Program at the 19th Annual Scientific Meeting of the International Society of Hair Restoration Surgeons.
- Presented two posters highlighting the clinical merits of the Company's AutoloGel™ System in wound management at the 26th Annual Clinical Symposium on Advances in Skin & Wound Care: The Conference for Prevention and Healing.
Management Discussion
Martin P. Rosendale, Chief Executive Officer of Cytomedix, said, "During the third quarter and recent weeks we achieved a number of important milestones that position us for future growth. We posted double-digit revenue growth, published and presented clinical data in support of our AutoloGel product, granted a global pharmaceutical company exclusivity to conduct further due diligence regarding a potential license and partnership agreement for the AutoloGel System in wound care, and, most recently, announced that CMS has formally initiated a coverage review for autologous PRP gel in chronic wounds. Currently, we are assisting in the ongoing diligence process and are hopeful of executing an agreement that can broadly commercialize the AutoloGel System in the underserved chronic wound care market. This represents a strategic opportunity for us to attractively participate in the prospective growth of AutoloGel in wound management.
"We are particularly pleased with growth in sales of our Angel product, which increased 23% versus the prior year and 12% sequentially. This represents the fifth consecutive quarter of sales growth for this product. With a goal to reach cash flow breakeven in 2012, our commercial focus has almost exclusively been on the Angel product line in recent quarters, and those efforts are reflected in Angel's double-digit growth. In addition to sales and marketing efforts in the U.S. and Europe, we plan to grow the Angel product line with enhancements and expanded indications into areas such as sports medicine, pain, aesthetics and regenerative medicine. Toward that end, we filed a 510(k) application with the FDA for a bone marrow aspirate processing indication, which we expect will open new market opportunities and accelerate Angel's revenue growth.
"We are proud of the considerable progress made during the third quarter and are confident we are well positioned to drive growth into 2012 in order to deliver the greatest value for patients, the Company and its shareholders," concluded Mr. Rosendale.
Third Quarter Financial Results
Total revenues for the third quarter of 2011 were $1.53 million, an 18% increase compared with total revenues of $1.30 million for the third quarter of 2010. The increase was largely attributable to higher sales of the Angel System, partially offset by lower AutoloGel System sales.
Sales from the Angel product line were $1.43 million in the third quarter of 2011, up 23% compared with the third quarter of 2010 and up 12% sequentially. AutoloGel System sales of $99,000 decreased 21% compared with the third quarter of 2010 and decreased 10% sequentially.
Gross profit for the third quarter of 2011 rose 7% to $816,000 from $763,000 for the same period in 2010, primarily due to higher Angel product sales, partially offset by lower gross profit on AutoloGel System sales.
Gross margin for the three months ended September 30, 2011 decreased to 53% from 59% for the comparable 2010 period. The decrease was due to additional costs necessary to support production since the Company took over the manufacturing of the Angel product line in 2011.
Third quarter cash margin, excluding $39,000 in patent amortization and $72,000 in depreciation, was 61%. Cash margin is a non-GAAP financial measure, most directly comparable to gross margin, and should not be considered as an alternative thereto. Cytomedix defines cash margin as gross margin exclusive of patent amortization and depreciation expense, and it is a significant performance metric used by management to indicate cash profitability on product sales.
Third quarter 2011 operating expenses of $1.85 million decreased 10% compared with operating expenses of $2.05 million in the prior year's third quarter. This decline was due primarily to decreased legal and accounting costs in 2011 compared with prior-year costs associated with the Company's April 2010 acquisition of the Angel and activAT® product lines and lower audit fees. The Company also realized lower research and development, general and administrative, and salaries expenses, partly offset by higher consulting costs.
Other expense for the third quarter of 2011 was $1.17 million, an increase of $1.05 million compared with $124,000 in the third quarter of 2010, primarily due to a non-cash change in fair value of derivative liabilities associated with embedded conversion options in the convertible notes from the July 2011 debt financings. Upon probable conversion of these notes in 2012, the then existing derivative liability would cease to exist and the balance would transfer to stockholder's equity.
The net loss to common stockholders for the third quarter of 2011 was $2.29 million or $0.04 per share, compared with $1.51 million or $0.04 per share for the third quarter of 2010.
Nine Month Financial Results
Total revenues for the first nine months of 2011 were $4.29 million, up 64% from total revenues of $2.62 million in the first nine months of 2010. This increase was largely attributable to sales of the Angel System, which the Company acquired on April 9, 2010, and higher AutoloGel System sales, partially offset by the loss of royalty revenue due to the expiration of the underlying patent. For the first nine months of 2010, royalty revenue was $123,000, representing final adjustments post patent expiration.
Gross margin on product sales for the first nine months of 2011 increased to 53% from 51% in the same period in 2010, primarily due to higher product costs recognized in 2010. The higher product costs were primarily a result of the cost of logistics provided by Sorin during the transition period and the sale of inventory adjusted to fair value in accordance with purchase accounting rules. Cash margin for the first nine months of 2011, excluding $222,000 in depreciation, $118,000 in amortization and $57,000 in certain non-recurring adjustments in the first quarter of 2011, was 63%. Cash margin is a non-GAAP financial measure as described above.
Operating expenses for the first nine months of 2011 increased 10% to $6.04 million from $5.49 million for the first nine months of 2010.
The net loss to common stockholders for the first nine months of 2011 was $4.67 million or $0.09 per share, compared with a net loss to common stockholders for the first nine months of 2010 of $6.87 million or $0.18 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 financing conducted in conjunction with the closing of the Angel acquisition in April 2010. This was 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, 2011 were $815,000, compared with $639,000 as of December 31, 2010. The Company used $1.11 million to fund operating activities for the third quarter of 2011 and $3.77 million to fund operating activities during the first nine months of 2011.
Andrew Maslan, Cytomedix's Chief Financial Officer, noted, "In the third quarter, we raised gross proceeds of $1.4 million with the closing of two convertible note financings. In addition, in October we received a $2.0 million non-refundable fee in connection with the option agreement with a global pharmaceutical company for an exclusive due diligence period discussed above.
"With the successful transition of the Angel manufacturing process to Cytomedix, we are now in control of the complete product cycle. Moving forward we will focus on efficiencies in the supply chain, quality control, customer service, and logistics. We expect these efficiencies combined with higher product revenue will allow us to reach operational cash flow breakeven in 2012," concluded Mr. Maslan.
During the third quarter, the Company accessed approximately $159,000 under a committed financing arrangement with Lincoln Park Capital. To date in 2011, the Company has received approximately $3.0 million and, within certain parameters, has access to an additional $7.9 million over the next 14 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 November 14, 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, November 15, 2011. Shareholders and other interested parties may participate in the call by dialing 866-543-6403 (domestic) or 617-213-8896 (international) and entering passcode 41099590. 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 22, 2011 by dialing 888-286-8010 (domestic) or 617-801-6888 (international) and entering passcode 18344193. 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 autologous platelet rich plasma ("PRP") gel 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. 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, the likelihood of obtaining a positive reimbursement determination by CMS following the Company's submission, the likelihood and the extent of beneficial effect of such determination on CMS costs and care, viability and effectiveness of the Company's sales approach and overall marketing strategies, 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(TM) System as contemplated, the Company's ability to successfully integrate the Angel(R) and activAT(R) product lines into its existing business, to assume and satisfy certain liabilities related to the Angel(R) and activAT(R) product lines. To the extent that any statements made here are not historical, these statements are essentially forward-looking. The Company uses words and phrases such as "believes", "forecasted," "projects," "is expected," "remain confident," "will" and/or similar expressions to identify forward-looking statements in this press release. Undue reliance should not be placed on forward-looking information. 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. Additional risks that could affect our future operating results are more fully described in our U.S. Securities and Exchange Commission filings, including our Annual Report for the year ended December 31, 2010, filed with the SEC and other subsequent filings. These filings are available at http://www.sec.gov.
| CYTOMEDIX, INC. | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (unaudited) | ||
| September 30, | December 31, | |
| 2011 | 2010 | |
| ASSETS | ||
| Current assets | ||
| Cash | $ 815,475 | $ 638,868 |
| Short-term investments, restricted | 52,840 | 52,817 |
| Accounts and other receivables, net | 1,445,247 | 1,207,027 |
| Inventory | 402,490 | 627,984 |
| Prepaid expenses and other current assets | 646,702 | 610,409 |
| Deferred costs, current portion | 136,436 | 357,412 |
| Total current assets | 3,499,190 | 3,494,517 |
| Property and equipment, net | 1,002,987 | 1,324,996 |
| Deferred costs | 351,328 | 191,153 |
| Other intangibles, net | 2,982,750 | 3,182,875 |
| Goodwill | 706,823 | 706,823 |
| Notes and interest receivables, long-term | 503,611 | -- |
| Total assets | $ 9,046,689 | $ 8,900,364 |
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||
| Current liabilities | ||
| Accounts payable and accrued expenses | $ 3,321,414 | $ 3,558,161 |
| Note payable, current portion | -- | 1,520,947 |
| Dividends payable on preferred stock | 101,803 | 92,853 |
| Derivative liabilities, current portion | 207,122 | -- |
| Convertible debt, current portion | 481,154 | -- |
| Total current liabilities | 4,111,493 | 5,171,961 |
| Note payable | 2,100,000 | 1,981,208 |
| Derivative and other liabilities | 2,280,518 | 1,826,447 |
| Total liabilities | 8,492,011 | 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 - 3,300 and 3,315 shares, respectively; liquidation preference of $3,300,000 and $3,315,000, respectively | -- | -- |
| Common stock; $.0001 par value, authorized 100,000,000 shares; 2011 issued and outstanding - 52,755,899 shares; 2010 issued and outstanding - 44,103,743 shares | 5,276 | 4,410 |
| Additional paid-in capital | 52,628,962 | 47,587,964 |
| Accumulated deficit | (52,079,577) | (47,671,643) |
| Total stockholders' equity (deficit) | 554,678 | (79,252) |
| Total liabilities and stockholders' equity | $ 9,046,689 | $ 8,900,364 |
| CYTOMEDIX, INC. | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (unaudited) | ||||
| Three Months Ended | Nine Months Ended | |||
| September 30, | September 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Revenues | ||||
| Sales | $ 1,532,378 | $ 1,290,001 | $ 4,292,285 | $ 2,500,480 |
| Royalties | -- | 7,446 | -- | 122,920 |
| Total revenues | 1,532,378 | 1,297,447 | 4,292,285 | 2,623,400 |
| Cost of revenues | ||||
| Cost of sales | 716,835 | 531,471 | 2,001,446 | 1,231,686 |
| Cost of royalties | -- | 2,978 | -- | (186,402) |
| Total cost of revenues | 716,835 | 534,449 | 2,001,446 | 1,045,284 |
| Gross profit | 815,543 | 762,998 | 2,290,839 | 1,578,116 |
| Operating expenses | ||||
| Salaries and wages | 718,291 | 750,654 | 2,177,764 | 2,037,605 |
| Consulting expenses | 312,696 | 209,279 | 947,929 | 404,780 |
| Professional fees | 136,455 | 283,469 | 586,606 | 870,594 |
| Research, development, trials and studies | 4,063 | 91,264 | 106,116 | 312,162 |
| General and administrative expenses | 676,264 | 719,434 | 2,225,355 | 1,864,615 |
| Total operating expenses | 1,847,769 | 2,054,100 | 6,043,770 | 5,489,756 |
| Income (loss) from operations | (1,032,226) | (1,291,102) | (3,752,931) | (3,911,640) |
| Other income (expense) | ||||
| Interest, net | (385,364) | (274,273) | (757,457) | (549,419) |
| Change in fair value of derivative liabilities | (780,238) | 183,219 | (402,113) | (238,576) |
| Gain on debt restructuring | -- | -- | 576,677 | -- |
| Other | (4,525) | (32,865) | (58,110) | (40,711) |
| Total other income (expenses) | (1,170,127) | (123,919) | (641,003) | (828,706) |
| Income (loss) before provision for income taxes | (2,202,353) | (1,415,021) | (4,393,934) | (4,740,346) |
| Income tax provision | 4,000 | -- | 14,000 | -- |
| Net income (loss) | (2,206,353) | (1,415,021) | (4,407,934) | (4,740,346) |
| Preferred dividends: | ||||
| Series A preferred stock | 2,289 | 2,115 | 6,730 | 6,221 |
| Series B preferred stock | 1,557 | 1,315 | 4,579 | 4,108 |
| Series D preferred stock | 82,755 | 91,250 | 248,505 | 174,500 |
| Amortization of beneficial conversion feature on Series D preferred stock | -- | -- | -- | 1,948,155 |
| Net loss to common stockholders | $ (2,292,954) | $ (1,509,701) | $ (4,667,748) | $ (6,873,330) |
| Loss per common share -- | ||||
| Basic and diluted | $ (0.04) | $ (0.04) | $ (0.09) | $ (0.18) |
| Weighted average shares outstanding -- | ||||
| Basic and diluted | 52,276,521 | 37,694,387 | 49,664,005 | 37,491,771 |