FY09 Results, Cytori Therapeutics (NASDAQ: CYTX)
Reported a lower FY09 net loss of $23.216 M or $0.65 per share with higher revenues versus a net loss of $30.036 M, or $1.12 per share for FY08.
Bottom Line: There is a continual pick-up in consumeable re-orders as doctors and practices become more confident and familiar with using the product.
- This steady annuity sales base is trending and expanding,
- The key focus is the definitive CLARITY re the PMA submission and the request for a preliminary IDE meeting,
- The FDA provided a response on its regulatory path, for which they have requested a Pre Market Approval (PMA) application for “soft tissue filling” claims,
- CYTX has requested a pre-IDE meeting with the FDA to determine the exact scale, scope, design, timing and any other requirements of a U.S. study and to discuss the specific marketing claims. CYTX intends to utilize data from their multi-center European RESTORE 2 trial to address safety and feasibility and anticipate a US pivotal / approval study,
- An advantage to the PMA process is that this will add yet another meaningful barrier to entry for potential competitors as well as provide data for marketing and reimbursement,
- Ultimately, the approval of Celution® will be a major addition to CYTX’s current line of cosmetic and reconstructive surgery products.
The Q4 loss expanded while posting higher than expected expenses. Q/4/09 revenues were $2.9 M, which consisted of $1.6 M in development revenue and $1.3 M in product revenues compared to $2.2 M in total revenues in Q4/08. Gross profit was $513 K in Q4/09 compared to $181,000 for Q4/08. Net cash used in operating activities for Q4/09 was $6.1 M compared to $7.3 M in Q4/08.
Revenues for FY09 were $14.7 M, which consisted of $8.9 M in development revenues, related to the achievement of 3 clinical milestones under their Olympus partnership; $5.8 M in product revenues compared to total revenues of $6.9 M for 2008 which consisted of $2.3 M in development revenues and $4.5 M in product revenues in 2008. Gross profit was lower in FY09 was $2.4 M compared to $2.7 M for 2008. Operating expenses for FY09 were $32.9 M compared to $34.8 M in 2008.
- $9.2 M of total expenses in FY09 was non-cash with $6.3 M in non-cash expenses related to the increase in fair value of warrants and stock based compensation offset by a reduction in the fair value of the option liability. In comparison, approximately $4.8 M of total expenses was non-cash in 2008,
- In 2009, there was a significant reduction in operating expenses driven by $6.5 M of reductions in R&D and G&A offset in part by a $2.0 increase in sales and marketing expenses. Net cash expended in FY09 was $23.8 M as compared with $33.4 M in FY08.
- Grew system and consumable sales, predominantly into the cosmetic surgery market and increased number of systems in the field that will further support consumable cartridge sales growth,
- In FY/09, CYTX doubled (+) the cumulative number of revenue base systems, which includes systems sold directly to physicians, distributors or units placed that are generating consumable sales,
- In FY09, the cumulative number of revenue base systems was 101, compared to 85 at the end of Q3/09, and 42 at the end of 2008. In addition, a total of 337 consumables were shipped in Q409 compared to 314 consumables shipped in Q3/009 and 179 consumables shipped in Q4/08. Of these, 258 consumables were re-orders in Q4/09, compared to 185 re-orders in Q3/09; equating a positive (%) trend of existing customer reorders contributing to consumable revenues,
- Reported interim results from a post-marketing breast reconstruction study intended to support cosmetic and reconstructive surgery sales efforts in Europe and Asia,
- Completion of enrollment in 3 sponsored clinical trials. The largest of these studies is RESTORE 2, which treated 71 patients. Preliminary results from the RESTORE 2 breast reconstruction study demonstrated a high degree of patient and physician satisfaction at 6 months in the first 32 patients who underwent just a single procedure. This is consistent with the findings in the RESTORE 1 study as well as our pre-clinical data and understanding of the core mechanisms of action of these stem and regenerative cells,
- Completion of enrollment in 2 cardiovascular disease trials. Both studies met key end-points of safety and feasibility. The 2 studies combined enrolled 41 patients. The APOLLO trial treated patients with acute myocardial infarction or heart attack. The PRECISE trial included patients suffering from chronic myocardial ischemia,
- These trials demonstrated that physicians were able to safely extract a meaningful volume of adipose tissue, separate and concentrate the stem and regenerative cells using the Celution® System and deliver these cells into the heart during the same interventional procedure,
- Expanded autologous fat graft product line with development of the PureGraft™ System (which received FDA clearance early 2010),
- Completed enrollment in 2 cardiovascular disease safety and feasibility trials with results in 5/10.
CYTX raised $14.3 M from scheduled closings with Seaside 88, LP and the exercise by 3rd parties of the warrants trading under the symbol CYTXW.
CYTX ended FY09 with $12.9 M in cash and cash equivalents plus $1.6 M in accounts receivable; ased on its anticipated gross profits, cash operating requirements and proceeds from Seaside 88, they should have sufficient funds through the first half of 2011.
CYTX closed on 3/11/10 at $7.50 with a market cap of $290.65 M.