Q2/10 Results, StemCells (STEM)
STEM reported net loss of $4.61 M, or $0.04 per share.Q2/10 net loss was reduced by other income of $2.440 M, which was recorded to reflect a decrease in the estimated fair value of warrant liability. STEM’s loss from operations was $7.05 M which was 7% lower than the loss from operations reported in Q1/10, reflecting the continuing focus on cost control. In addition to this quarter-over-quarter decrease in operating loss, the loss from operations in Q2/10 represents a 5% year-over-year decrease compared to Q2/09.
Q2/10 total revenue was $244 K, which was a 6% increase compared to total revenue in Q1/10. This increase was primarily due to a 51% increase in licensing and grants revenue, which offset lower product sales revenue from STEM’s SC Proven(R) line of specialty cell culture products. R&D expenses in were $4.858 M, a decrease of 4% compared to Q1/10. SG&A were $2.286 M, a 12% decrease compared to Q1/10. Total operating expenses declined 7% on a Q over Q basis and 4% on a year over year basis. For the first 6 months of 2010, cash used in operations totaled $13.746 M. Cash and cash equivalents at 6/30/10 totaled $30.765 M.
Q/2 Highlights:
- In 5/10, we appointed R. Scott Greer to Board of Directors;
- In 5/10, authorized by the FDA to proceed to a 2nd clinical trial in neuronal ceroid lipofusinosis (NCL, referred to as Batten disease), a fatal neurodegenerative disorder in children. This trial is designed to further assess the safety of HuCNS-SC cells in NCL, while also examining the ability of the cells to affect the progression of the disease;
- In 5/10, the co-principal investigator of the Phase I NCL trial, Nathan Selden, MD, PhD, FACS, FAAP gave a feature presentation at the American Association of Neurological Surgeons 2010 Annual Meeting highlighting the positive safety profile of the HuCNS-SC cells and the transplantation procedure shown by the data from both the NCL trial and the ongoing long-term observational study;
- In 6/10, STEM demonstrated that GS2-M(TM) cell culture media formulation enhances the pluripotency of human embryonic stem (ES) and induced pluripotent stem (iPS) cells;
- The GS2-M product has already been shown to enable the derivation and long-term maintenance of mouse iPS cells;
- With this new application of GS2-M, researchers may now be able to significantly advance human pluripotent stem cell research;
- In 6/10, 3 scientists made presentations at the International Society for Stem Cell Research (ISSCR) 8th Annual Meeting highlighting progress advancement of potential commercial applications;
- In 6/10, STEM sold 7 M shares of common stock to an institutional investor at a price of $0.865 per share receiving net proceeds, after deducting offering expenses and fees of $5.7 M. No warrants were issued in this transaction with the institutional investor agreeing to purchase an additional 5 M shares approximately 12 weeks after the initial purchase, at a price to be calculated using the then-current trading price. No warrants were issued in connection with the sale of the additional shares.
