Cytori Announces 2nd Quarter Results; Reports Cardiovascular Clinical Development Plans.SAN DIEGO San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. -- Cytori Therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. , Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CYTX)(Frankfurt:XMPA XMPA X-ray Electron Microprobe Analysis XMPA Extensible Media Protection Architecture ) today announced financial results for the quarter ended June 30, 2006 and outlined plans for its upcoming clinical trials of adipose-derived stem and regenerative re·gen·er·a·tive adj. 1. Of, relating to, or marked by regeneration. 2. Tending to regenerate. re·gen cells (ADRC ADRC Asian Disaster Reduction Center ADRC Agence des Douanes et du Révenu du Canada ADRC Aging and Disability Resource Center ADRC Alzheimer's Disease Research Center ADRC American Dutch Rabbit Club ADRC Adolescent Day Resource Center ADRC Animal Disease Research Center ) for cardiovascular indications in Europe. "Since the end of last quarter we continued preparations for transition into the clinical phase of development for cardiovascular applications, reported results from our key chronic ischemia Ischemia Definition Ischemia is an insufficient supply of blood to an organ, usually due to a blocked artery. Description Myocardial ischemia is an intermediate condition in coronary artery disease during which the heart tissue is preclinical preclinical /pre·clin·i·cal/ (-klin´i-k'l) before a disease becomes clinically recognizable. pre·clin·i·cal adj. 1. study and placed the Celution(TM) System in a breast reconstruction Breast Reconstruction Definition Breast reconstruction is a series of surgical procedures performed to recreate a breast. Reconstructions are commonly done after one or both breasts are removed as a treatment for breast cancer. study marking the first clinical experience for our system," said Christopher J. Calhoun, Chief Executive Officer of Cytori Therapeutics. "To support our ongoing efforts, we entered into agreements to raise $16.8 million from an equity investment led by Olympus Corporation This article refers to a Japanese camera maker. For other meanings, see Olympus (disambiguation). Olympus Corporation (オリンパス株式会社 and included a syndicate of new and existing institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. ." Cytori expects to begin cardiovascular clinical trials in Europe as early as the fourth quarter of 2006 in the following two applications: --Acute Myocardial Infarction myocardial infarction: see under infarction. (Heart Attack): The APOLLO Trial will be a randomized ran·dom·ize tr.v. ran·dom·ized, ran·dom·iz·ing, ran·dom·iz·es To make random in arrangement, especially in order to control the variables in an experiment. , placebo-controlled, double-blind, dose escalation es·ca·late v. es·ca·lat·ed, es·ca·lat·ing, es·ca·lates v.tr. To increase, enlarge, or intensify: escalated the hostilities in the Persian Gulf. v.intr. safety and feasibility study The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. and will enroll up to 48 patients. Professor Patrick W. Serruys of Thoraxcenter, Erasmus University Erasmus University Rotterdam is a university in the Netherlands, located in Rotterdam. The university is named after Desiderius Erasmus Roterodamus, a 15th century humanist and theologian. Medical Center in The Netherlands will be the principal investigator Noun 1. principal investigator - the scientist in charge of an experiment or research project PI scientist - a person with advanced knowledge of one or more sciences . As part of the study, the patient's ADRCs will be extracted and concentrated in about an hour using the Celution(TM) System and then delivered into the ischemic Ischemic An inadequate supply of blood to a part of the body, caused by partial or total blockage of an artery. Mentioned in: Antiangiogenic Therapy, Subarachnoid Hemorrhage, Ventricular Fibrillation ischemic area of the heart via intracoronary delivery. --Chronic Ischemia: The PRECISE Trial will be a randomized, placebo-controlled, double-blind, dose-escalation safety and feasibility study in up to 36 patients with chronic ischemia who are not eligible for coronary artery bypass surgery Coronary artery bypass surgery, also coronary artery bypass graft surgery, and colloquially heart bypass or bypass surgery is a surgical procedure performed to relieve angina and reduce the risk of death from coronary artery disease. or percutaneous coronary intervention Percutaneous coronary intervention (PCI), commonly known as coronary angioplasty or simply angioplasty, is a therapeutic procedure to treat the stenotic (narrowed) coronary arteries of the heart found in coronary heart disease. . Doctor Francisco Fernandez-Aviles, of Gregorio Maranon Hospital in Madrid, Spain will be the co-principal investigator. As part of the study, cells will be processed using the Celution(TM) System and delivered using a NOGA NOGA Northern Ohio Golf Association NOGA National Oil and Gas Assessment (R) mapping and delivery system. Select milestones that the Company has achieved during and subsequent to the end of the second quarter include the following: --The first three patients were successfully treated without complications in an investigator-initiated clinical study that is evaluating ADRCs, isolated with the Celution(TM) System, for use in breast reconstruction following partial mastectomy mastectomy (măstĕk`təmē), surgical removal of breast tissue, usually done as treatment for breast cancer. There are many types of mastectomy. In general, the farther the cancer has spread, the more tissue is taken. --Reported positive data from Cytori's preclinical study demonstrating that ADRCs processed via the Celution(TM) System and injected in·ject·ed adj. 1. Of or relating to a substance introduced into the body. 2. Of or relating to a blood vessel that is visibly distended with blood. injected 1. introduced by injection. 2. congested. into ischemic areas of a heart imparted a statistically significant improvement in ejection fraction ejection fraction n. The blood present in the ventricle at the end of diastole and expelled during the contraction of the heart. Ejection fraction and ventricular ven·tric·u·lar adj. Of or relating to a ventricle or ventriculus. ventricular pertaining to a ventricle. ventricular assist device wall thickness --Formed a cardiovascular clinical advisory board comprised of pre-eminent pre·em·i·nent or pre-em·i·nent adj. Superior to or notable above all others; outstanding. See Synonyms at dominant, noted. [Middle English, from Latin prae cardiologists and imaging specialists to assist in the design and execution of these planned clinical studies --Entered a strategic marketing agreement with Cambrex Bio Science to provide adipose-derived stem cell stem cell In living organisms, an undifferentiated cell that can produce other cells that eventually make up specialized tissues and organs. There are two major types of stem cells, embryonic and adult. products globally to support research into the discovery of new therapies and applications --Entered into agreements to raise approximately $16.8 million from the sale of 2,918,255 shares at $5.75 per share Financials Cash, cash equivalents and short term investments were $9.3 million as of June 30, 2006. Subsequent to the end of the second quarter, Cytori entered into agreements to raise $16.8 million through the sale of 2,918,255 shares at $5.75 per share. Total product and development revenues for the three and six months ended June 30, 2006 were $516,000 and $1.8 million, respectively, compared to $1.5 million and $3.3 million for the same periods in 2005. Research and development expenses for the three and six months ended June 30, 2006 were $6.0 million and $11.2 million, respectively, compared to $3.5 million and $6.6 million for the three and six months ended June 30, 2005, respectively. General and administrative expenses for the three and six months ended June 30, 2006 were $3.6 million and $6.8 million, respectively, compared to $2.3 million and $4.4 million for the same periods in 2005, respectively. Net loss for the three and six months ended June 30, 2006 was $7.3 million and $14.8 million, or $0.47 and $0.95 loss per common share, respectively, compared to a net loss of $5.4 million and $9.9 million, or $0.37 and $0.70 loss per common share, for the same periods in 2005, respectively. The increase in R&D for the first half is attributed to additional pre clinical studies as part of preparations for upcoming clinical trials; increased Celution System development expenses to attain regulatory approvals; internal scale-up for manufacturing of devices and consumables for clinical trials and expenses related to transitioning commercial generation development efforts to our Joint Venture. "For the remainder of the year, we will significantly reduce our total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. through decreased allocation of resources allocation of resources Apportionment of productive assets among different uses. The issue of resource allocation arises as societies seek to balance limited resources (capital, labour, land) against the various and often unlimited wants of their members. to our non-core biomaterials operations as well as reductions in certain product development costs resulting from the sharing of responsibilities under the Joint Venture," said Mark Saad, Chief Financial Officer of Cytori Therapeutics. "In addition, we completed the build-out of our new research facility which resulted in approximately $2 million of non-recurring capital expenditures during the first half. These factors, combined with other adjustments, will result in reducing our ongoing cash burn to approximately $2 million per month before any potential benefit from the biomaterials operations." Conference Call Information The management of Cytori Therapeutics will host a conference call today at 4:30 p.m. Eastern Daylight Time (EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ) or 10:30 p.m. Central European Summer Time Central European Summer Time (CEST) is one of the names of UTC+2 time zone, 2 hours ahead of Coordinated Universal Time. It is used as a summer daylight saving time in most European and some North African countries. During the winter, Central European Time (UTC+1) is used. (CEST). The conference call will be webcast live and may be accessed under "Events & Webcasts" in the Investor Relations Investor relations The process by which the corporation communicates with its investors. 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: 11067643#). About Cytori Therapeutics Cytori Therapeutics, Inc. (NASDAQ:CYTX)(Frankfurt:XMPA) is discovering and developing proprietary cell-based therapeutics utilizing adult stem and regenerative cells derived from adipose tissue adipose tissue (ăd`əpōs'): see connective tissue. adipose tissue or fatty tissue Connective tissue consisting mainly of fat cells, specialized to synthesize and contain large globules of fat, within a , also known as fat. The Company is targeting cardiovascular disease Cardiovascular disease Disease that affects the heart and blood vessels. Mentioned in: Lipoproteins Test cardiovascular disease , gastrointestinal disorders Noun 1. gastrointestinal disorder - illness caused by poisonous or contaminated food food poisoning illness, sickness, unwellness, malady - impairment of normal physiological function affecting part or all of an organism and new approaches for aesthetic and reconstructive surgery reconstructive surgery n. Plastic surgery. reconstructive surgery, n surgery to rebuild a structure for functional or esthetic reasons. . To facilitate processing and delivery of adipose adipose /ad·i·pose/ (ad´i-pos) 1. fatty. 2. the fat present in the cells of adipose tissue. ad·i·pose adj. Of, relating to, or composed of animal fat; fatty. stem and regenerative cells, Cytori has developed its proprietary Celution(TM) System to isolate and concentrate a patient's own stem and regenerative cells in about an hour. This system will dramatically improve the speed in which personalized per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. cell-based therapies can be delivered to patients. Cautionary Statement Regarding Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. and expected continuing losses, the need for further financing, our ability to develop and commercialize regenerative cell-based therapies, our dependence on third parties, our ability to obtain, defend and enforce our intellectual property, and other risks and uncertainties described (under the heading "Risk Factors") in Cytori Therapeutics' Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. annual report for the year ended December 31, 2005 and subsequent SEC filings. We assume no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made.
Consolidated Condensed Balance Sheets (Unaudited)
As of As of
June December
30, 31,
2006 2005
------------ ------------
Assets
Current assets:
Cash and cash equivalents $2,379,000 $8,007,000
Short-term investments, available-for-sale 6,964,000 7,838,000
Accounts receivable, net of allowance for
doubtful accounts of $4,000 and $9,000 in
2006 and 2005, respectively 344,000 816,000
Inventories, net 202,000 258,000
Other current assets 791,000 621,000
------------ ------------
Total current assets 10,680,000 17,540,000
Property and equipment, net 5,351,000 4,260,000
Investment in joint venture 84,000 --
Other assets 521,000 458,000
Intangibles, net 1,411,000 1,521,000
Goodwill 4,387,000 4,387,000
------------ ------------
Total assets $22,434,000 $28,166,000
============ ============
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable and accrued expenses $4,272,000 $6,129,000
Current portion of long-term obligations 928,000 952,000
------------ ------------
Total current liabilities 5,200,000 7,081,000
Deferred revenues, related party 29,128,000 17,311,000
Deferred revenues 2,393,000 2,541,000
Option liabilities 2,191,000 5,331,000
Long-term deferred rent 897,000 573,000
Long-term obligations, less current portion 1,122,000 1,558,000
------------ ------------
Total liabilities 40,931,000 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; 18,498,004 and
18,194,283 shares issued and 15,625,170
and 15,321,449 shares outstanding in 2006
and 2005, respectively 18,000 18,000
Additional paid-in capital 84,720,000 82,196,000
Accumulated deficit (92,781,000) (78,013,000)
Treasury stock, at cost (10,414,000) (10,414,000)
Accumulated other comprehensive loss (40,000) (16,000)
------------ ------------
Total stockholders' deficit (18,497,000) (6,229,000)
------------ ------------
Total liabilities and stockholders'
deficit $22,434,000 $28,166,000
=========================
Consolidated Condensed Statements of Operations
and Comprehensive Loss (Unaudited)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
-------------------------------------------------
2006 2005 2006 2005
-------------------------------------------------
Product revenues,
related party $453,000 $1,477,000 $955,000 $3,232,000
Cost of product
revenues 504,000 738,000 958,000 1,483,000
-------------------------------------------------
Gross (loss)
profit (51,000) 739,000 (3,000) 1,749,000
-------------------------------------------------
Development revenues:
Development 6,000 -- 831,000 9,000
Research grant and
other 57,000 64,000 63,000 89,000
-------------------------------------------------
63,000 64,000 894,000 98,000
-------------------------------------------------
Operating expenses:
Research and
development 6,021,000 3,465,000 11,197,000 6,581,000
Sales and marketing 473,000 337,000 974,000 728,000
General and
administrative 3,608,000 2,292,000 6,824,000 4,358,000
Change in fair
value of option
liabilities (2,665,000) 60,000 (3,140,000) 60,000
-------------------------------------------------
Total operating
expenses 7,437,000 6,154,000 15,855,000 11,727,000
-------------------------------------------------
Operating loss (7,425,000) (5,351,000) (14,964,000) (9,880,000)
-------------------------------------------------
Other income
(expense):
Interest income 183,000 54,000 379,000 109,000
Interest expense (53,000) (36,000) (111,000) (76,000)
Other expense, net (1,000) (26,000) (6,000) (39,000)
Equity loss from
investment in
joint venture (17,000) -- (66,000) --
-------------------------------------------------
Total other
income (expense) 112,000 (8,000) 196,000 (6,000)
-------------------------------------------------
Net loss (7,313,000) (5,359,000) (14,768,000) (9,886,000)
-------------------------------------------------
Other comprehensive
(loss) income-
unrealized holding
(loss) income (10,000) 14,000 (24,000) 14,000
-------------------------------------------------
Comprehensive
loss $(7,323,000)$(5,345,000)$(14,792,000)$(9,872,000)
=================================================
Basic and diluted net
loss per common
share $(0.47) $(0.37) $(.95) $(0.70)
=================================================
Basic and diluted
weighted average
common shares 15,592,293 14,379,849 15,510,586 14,168,234
=================================================
Consolidated Condensed Statements of Cash Flows (Unaudited)
For the Six Months Ended
June 30,
--------------------------
2006 2005
------------- ------------
Cash flows from operating activities:
Net loss $(14,768,000) $(9,886,000)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 1,124,000 861,000
Inventory provision 70,000 --
Reduction in allowance for doubtful
accounts (5,000) (3,000)
Change in fair value of option
liabilities (3,140,000) 60,000
Stock-based compensation expense 1,873,000 63,000
Equity loss from investment in joint
venture 66,000 --
Increases (decreases) in cash caused by
changes in operating assets and
liabilities:
Accounts receivable 477,000 375,000
Inventories (14,000) (153,000)
Other current assets (170,000) 83,000
Other assets (63,000) (157,000)
Accounts payable and accrued expenses (2,144,000) 160,000
Deferred revenues, related party 11,817,000 7,811,000
Deferred revenues (148,000) (9,000)
Long-term deferred rent 324,000 --
------------- ------------
Net cash used in operating
activities (4,701,000) (795,000)
------------- ------------
Cash flows from investing activities:
Proceeds from sale and maturity of short-
term investments 33,222,000 22,089,000
Purchases of short-term investments (32,372,000) (23,242,000)
Purchases of property and equipment (1,818,000) (546,000)
Investment in joint venture (150,000) --
------------- ------------
Net cash used in investing
activities (1,118,000) (1,699,000)
------------- ------------
Cash flows from financing activities:
Principal payments on long-term obligations (460,000) (474,000)
Proceeds from exercise of employee stock
options 651,000 15,000
Proceeds from sale of common stock -- 3,003,000
Proceeds from issuance of options -- 186,000
------------- ------------
Net cash provided by financing
activities 191,000 2,730,000
------------- ------------
Net (decrease) increase in cash and
cash equivalents (5,628,000) 236,000
Cash and cash equivalents at beginning of
period 8,007,000 2,840,000
------------- ------------
Cash and cash equivalents at end of period $2,379,000 $3,076,000
============= ============
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