Cytori Therapeutics (NASDAQ:CYTX) (Frankfurt:XMPA) reports
financial results for the quarter and year ended December 31, 2006,
reviews 2006 progress, and provides 2007 outlook.
"In 2006 we made significant strides toward commercializing the
Celution(TM) System in early 2008," said Christopher J. Calhoun, chief
executive officer for Cytori. "This included the first clinical
experience for the Celution(TM) System as part of a breast
reconstruction safety and feasibility study, attaining key regulatory
milestones and adding critical design components to tailor the
Celution(TM) System to reconstructive surgery.
"In addition, we laid extensive groundwork to start two
cardiovascular disease clinical trials. This included the completion
of important preclinical research that helped us design and implement
controlled, randomized dose-escalation studies. Our PRECISE chronic
heart disease trial began enrollment in January 2007 and our APOLLO
acute heart attack trial is expected to receive approval and begin
enrolling patients next quarter."
2007 Outlook
"Our major 2007 initiatives are to prepare for commercialization,
execute strategic partnerships and advance our cardiovascular products
through clinical development," added Mr. Calhoun. "We believe the
buildup to our 2008 product launch can significantly increase Cytori's
intrinsic value as we get closer to generating regenerative medicine
product revenues."
Cytori anticipates achieving the following milestones in 2007:
-- Initiate the APOLLO heart attack safety and feasibility trial;
-- Announce the outcome of the investigator-initiated breast
reconstruction safety and feasibility study in Japan;
-- Initiate a multi-center breast reconstruction efficacy trial
in Europe in patients who underwent partial-mastectomy;
-- Expand the Celution(TM) System distribution network for
reconstructive surgery;
-- Build out internal Celution(TM) System manufacturing
capabilities to meet anticipated product demand in early 2008;
-- Pursue commercialization partners for the Celution(TM) System
in select therapeutic areas; and
-- Enter a commercialization agreement for adipose stem cell
banking.
Financials
Cash, cash equivalents and short-term investments were $12.9
million as of December 31, 2006. Subsequent to the end of the year,
Cytori raised $20 million from an equity offering and entered into an
agreement to raise $6 million as part of a strategic equity agreement
with Green Hospital Supply, Inc.
Total development revenues for the quarter and year ended December
31, 2006 were $5.2 million and $6.5 million, respectively, compared to
$235,000 and $371,000, respectively, for the same period in 2005. The
increase in development revenues in the fourth quarter and full year
2006 is due to the recognition of deferred revenue related to the
Olympus-Cytori Joint Venture by achieving certain regulatory,
preclinical development and Celution(TM) System development
milestones. Product revenues from our non-core biomaterials products
for the quarter and year ended December 31, 2006 were $363,000 and
$1.5 million, respectively, compared to $858,000 and $5.6 million for
the same periods in 2005.
Research and development expenses for the quarter and year ended
December 31, 2006 were $5.2 million and $22.0 million, respectively,
compared to $4.9 million and $15.5 million, respectively, for the same
periods in 2005. The increase in R&D for the full year 2006 is
attributed to additional preclinical studies, preparations for
upcoming clinical trials, increased Celution(TM) System development
expenses to attain regulatory approvals, and internal scale-up for
manufacturing of devices and consumables for clinical trials.
General and administrative expenses for the quarter and year ended
December 31, 2006 were $2.5 million and $12.5 million, respectively,
compared to $2.2 million and $10.2 million, respectively, for the same
periods in 2005. Net loss for the quarter and year ended December 31,
2006 was $1.9 million, or $(0.10) per common share, and $25.4 million,
or $(1.53) per common share. This compares to a net loss of $14.4
million, or $(0.96) per common share, and $26.5 million, or $(1.80)
per common share, respectively, for the same periods in 2005.
Conference Call Information
The management of Cytori Therapeutics will host a conference call
today at 10:00 a.m. Eastern Daylight Time (EDT) or 4:00 p.m. Central
European Summer Time (CEST). The conference call will be webcast live
and may be accessed under "Events & Webcasts" in the Investor
Relations section of the Company's website at http://www.cytoritx.com.
The archived version of the webcast will be available two hours after
the call on the Company's website and accessible for 14 days. A
telephone replay will be available for one week. To access the replay,
please call +1 (303) 590-3000 (PIN: 11086131#).
Cytori Therapeutics
Cytori Therapeutics is developing and seeks to commercialize stem
and regenerative cell therapies for cardiovascular disease,
reconstructive surgery and many other serious chronic and life
threatening conditions. To provide these therapies, physicians remove
a small amount of a patient's fat, also known as adipose tissue, and
run it through Cytori's Celution(TM) System. This System quickly
separates and concentrates stem and regenerative cells from adipose
tissue so they may be quickly administered back to the patient about
an hour later. This system will dramatically improve the way in which
personalized cell-based therapies can be delivered to patients.
www.cytoritx.com
Cautionary Statement Regarding Forward-Looking Statements
This press release includes forward-looking statements regarding
events, trends and prospects of our business, which may affect our
future operating results and financial position. Such statements are
subject to risks and uncertainties that could cause our actual results
and financial position to differ materially. Some of these risks and
uncertainties include our history of operating losses, the need for
further financing, regulatory uncertainties, dependence on performance
of third parties, and other risks and uncertainties described (under
the heading "Risk Factors") in Cytori Therapeutics' Form 10-K annual
report for the year ended December 31, 2006. We assume no
responsibility to update or revise any forward-looking statements to
reflect events, trends or circumstances after the date they are made.
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Consolidated Balance Sheets
As of December 31,
--------------------------------
2006 2005
---------------- ---------------
Assets
Current assets:
Cash and cash equivalents $ 8,902,000 $ 8,007,000
Short-term investments, available-
for-sale 3,976,000 7,838,000
Accounts receivable, net of
allowance for doubtful accounts of
$2,000 and $9,000 in 2006 and
2005, respectively 225,000 816,000
Inventories, net 164,000 258,000
Other current assets 711,000 621,000
---------------- ---------------
Total current assets 13,978,000 17,540,000
Property and equipment held for sale,
net 457,000 --
Property and equipment, net 4,242,000 4,260,000
Investment in joint venture 76,000 --
Other assets 428,000 458,000
Intangibles, net 1,300,000 1,521,000
Goodwill 4,387,000 4,387,000
---------------- ---------------
Total assets $ 24,868,000 $ 28,166,000
================ ===============
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable and accrued
expenses $ 5,587,000 $ 6,129,000
Current portion of long-term
obligations 999,000 952,000
---------------- ---------------
Total current liabilities 6,586,000 7,081,000
Deferred revenues, related party 23,906,000 17,311,000
Deferred revenues 2,389,000 2,541,000
Option liabilities 900,000 5,331,000
Long-term deferred rent 741,000 573,000
Long-term obligations, less current
portion 1,159,000 1,558,000
---------------- ---------------
Total liabilities 35,681,000 34,395,000
Commitments and contingencies
Stockholders' deficit:
Preferred stock, $0.001 par value;
5,000,000 shares authorized; -0-
shares issued and outstanding in
2006 and 2005 -- --
Common stock, $0.001 par value;
95,000,000 shares authorized;
21,612,243 and 18,194,283 shares
issued and 18,739,409 and
15,321,449 shares outstanding in
2006 and 2005, respectively 22,000 18,000
Additional paid-in capital 103,053,000 82,196,000
Accumulated deficit (103,460,000) (78,013,000)
Treasury stock, at cost (10,414,000) (10,414,000)
Accumulated other comprehensive
income (loss) 1,000 (16,000)
Amount due from exercises of stock
options (15,000) --
---------------- ---------------
Total stockholders' deficit (10,813,000) (6,229,000)
---------------- ---------------
Total liabilities and
stockholders' deficit $ 24,868,000 $ 28,166,000
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Income Statement
For the Years Ended December 31,
----------------------------------------
2006 2005 2004
------------- ------------- ------------
Product revenues:
Sales to related party $ 1,451,000 $ 5,634,000 $ 4,085,000
Sales to third parties -- -- 2,237,000
------------- ------------- ------------
1,451,000 5,634,000 6,322,000
Cost of product revenues 1,634,000 3,154,000 3,384,000
------------- ------------- ------------
Gross profit (loss) (183,000) 2,480,000 2,938,000
------------- ------------- ------------
Development revenues:
Development, related party 5,905,000 -- --
Development 152,000 51,000 158,000
Research grants and other 419,000 320,000 338,000
------------- ------------- ------------
6,476,000 371,000 496,000
------------- ------------- ------------
Operating expenses:
Research and development 21,977,000 15,450,000 10,384,000
Sales and marketing 2,055,000 1,547,000 2,413,000
General and administrative 12,547,000 10,208,000 6,551,000
Change in fair value of
option liabilities (4,431,000) 3,645,000 --
Restructuring charge -- -- 107,000
Equipment impairment charge -- -- 42,000
------------- ------------- ------------
Total operating expenses 32,148,000 30,850,000 19,497,000
------------- ------------- ------------
Operating loss (25,855,000) (27,999,000) (16,063,000)
------------- ------------- ------------
Other income (expense):
Gain on sale of assets -- 5,526,000 --
Gain on sale of assets,
related party -- -- 13,883,000
Interest income 708,000 299,000 252,000
Interest expense (199,000) (137,000) (177,000)
Other income (expense), net (27,000) (55,000) 15,000
Equity loss from investment
in joint venture (74,000) (4,172,000) --
------------- ------------- ------------
Total other income, net 408,000 1,461,000 13,973,000
------------- ------------- ------------
Net loss (25,447,000) (26,538,000) (2,090,000)
------------- ------------- ------------
Other comprehensive income
(loss) -- unrealized holding
income (loss) 17,000 16,000 (58,000)
------------- ------------- ------------
Comprehensive loss $(25,430,000) $(26,522,000) $(2,148,000)
============= ============= ============
Basic and diluted net loss
per common share $ (1.53) $ (1.80) $ (0.15)
============= ============= ============
Basic and diluted weighted
average common shares 16,603,550 14,704,281 13,932,390
============= ============= ============
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