SOURCE: Cytomedix, Inc.

Cytomedix, Inc.

August 14, 2012 17:14 ET

Cytomedix Reports Second Quarter 2012 Financial Results and Provides Corporate Update

Record Quarterly Product Sales Increase 30%; Conference Call Moved to Wednesday, August 15th at 9:00 a.m. Eastern Time

GAITHERSBURG, MD--(Marketwire - Aug 14, 2012) - Cytomedix, Inc. (OTCBB: CMXI) (the "Company"), a regenerative therapies company commercializing and developing innovative platelet and adult stem cell technologies, today reported financial results for the three and six months ended June 30, 2012.

Separately, the Company announced that it accepted the early termination of the previously announced exclusivity period granted to a top 20 global pharmaceutical company and ceased negotiations for a distribution agreement for the Company's AutoloGel™ System in wound care, which would have expired August 30, 2012. The $4.50 million received by Cytomedix to date for this exclusivity was non-refundable. The Company is now free to re-engage with other interested parties experienced in wound care to pursue potential partnerships and commercial agreements for the product. 

Financial Highlights for the Second Quarter (all comparisons are with the 2011 second quarter)

  • Total revenues increased 164% to $3.69 million from $1.39 million
  • Product sales increased 30% to $1.81 million from $1.39 million
  • Licensing revenue of $1.82 million was recorded as partial and final recognition of the $4.50 million non-refundable exclusivity payments received from a potential AutoloGel System distribution partner
  • Net loss to common stockholders of $7.46 million or $0.09 per share included $1.84 million in Aldagen operating expenses and approximately $5.04 million in various non-cash charges to other expense, including a $4.34 million charge for a change in the fair value of the contingent Aldagen consideration; this compares with a net loss to common stockholders of $0.88 million or $0.02 per share in the 2011 period, which included a $0.58 million gain on debt restructuring
  • Shareholder's equity at quarter end was in excess of $42 million

Clinical and Corporate Highlights of the Second Quarter and Recent Weeks

  • Announced Centers for Medicare & Medicaid Services ("CMS") coverage through its Coverage with Evidence Development ("CED") program for autologous platelet rich plasma ("PRP") in chronic wound care, reversing Medicare's nearly 20 year non-coverage decision
  • Initiated a Phase I clinical trial of ALD-451 in collaboration with Duke University Medical Center to demonstrate the safety of ALD-451 in malignant glioma patients who suffer from treatment-related neuro-cognitive deficits; this study is being funded by the Robertson Clinical & Translational Cell Therapy Program
  • Expanded the Phase II RECOVER-Stroke study of ALD-401 in post-acute ischemic stroke to multiple centers in the U.S. following clearance of the sequential safety assessment of the first 10 patients by the Data Safety Monitoring Board ("DSMB")
  • Published positive AutoloGel wound healing data in the peer-reviewed journal Ostomy Wound Management demonstrating AutoloGel's ability to heal complex, severe diabetic and ischemic wounds in patients with poor healing prognosis and probable limb amputation
  • Presented multiple poster presentations highlighting the clinical merits of the Company's AutoloGel System in wound management at the 2012 Wound, Ostomy and Continence Nurses Conference and the Symposium on Advanced Care Spring 2012

Management Discussion

Martin P. Rosendale, Chief Executive Officer of Cytomedix, said, "During the second quarter we continued to make significant strides in advancing our position as a fully integrated regenerative medicine company as we achieved a number of key milestones that position us for future growth. In addition, our commercial products posted record quarterly sales and we made important advances with our products and pipeline.

"The agreement to end the exclusivity period and cease negotiations for an AutoloGel distribution agreement is not a reflection of the clinical or commercial value of AutoloGel in wound care, but rather is a result of a unique set of circumstances with the potential partner that precluded arriving at a favorable outcome. I want to emphasize that the decision is in no way tied to the final CMS determination for CED. Moreover, we received $4.50 million in non-dilutive financing for providing the exclusivity period and are now in a position to reengage in discussions with other interested potential partners. We are encouraged by the interest in PRP in wound care since the CMS final decision was published. With the early release of the exclusivity period, we will accelerate discussions with potential experienced wound care partners.

"We were very pleased that CMS reversed its long-standing non-coverage decision for autologous PRP and has now agreed to coverage through its CED program. This provides for an appropriate research study with practical study designs we are confident will demonstrate that patients treated with AutoloGel consistently experience clinically significant health outcomes. Importantly, payment for the product under CED is expected to be sufficient to cover the anticipated cost of collecting the evidence. We have already begun our interaction with CMS following the release of the final decision memo and look forward to further defining the specifics of the protocols for the research studies and clinical questions to be answered through the CED program."

Commenting on clinical progress with the Company's ALDH bright cell technology, Mr. Rosendale said, "Our Phase II RECOVER-Stroke trial has expanded to new sites and we look forward to our next milestone, which will be the DSMB safety assessment following the treatment of the initial 30 patients. We reasonably expect this to occur during the fourth quarter and continue to maintain that the ALDH bright cell population offers a novel and differentiated cell population with significant clinical upside. In addition we were pleased to report the initiation of a Phase I collaboration with the Duke University Medical Center with funding from the Robertson Clinical & Translational Cell Therapy Program. We expect to announce and initiate another sponsor-funded Phase II clinical study by year end in a peripheral arterial disease indication. These studies are intended to leverage our positive clinical experiences in critical limb ischemia and stroke.

"The first half of the year was marked by significant progress in areas that are important to our strategic plan. We expect the second half of the year to be equally productive as we work toward achieving a number of value-creating clinical and corporate milestones," concluded Mr. Rosendale.

Second Quarter Financial Results 

Total revenues for the three months ended June 30, 2012 increased 164% to $3.69 million compared with total revenues of $1.39 million for the comparable period in 2011. The increase was largely attributable to the recognition of $1.82 million in license revenue from the $4.50 million in total non-refundable exclusivity fees received in connection with the potential agreement with a global pharmaceutical company, as well as from higher sales of the Angel® and AutoloGel Systems. 

Total product sales increased 30% to $1.81 million. Sales from the Angel product line increased 27% to $1.63 million from $1.29 million in the 2011 second quarter. Despite limited sales promotion, the Company again posted record quarterly AutoloGel System sales of $170,000, an increase of 55% compared with the 2011 second quarter. 

Gross profit for the second quarter of 2012 increased 258% to $2.71 million from $755,000 for the same period in 2011, primarily due to the aforementioned license revenue that had no related cost of revenue. Gross profit on product sales increased 11% to $839,000.

Gross margin on product sales for the three months ended June 30, 2012 was 46% compared with 54% for the comparable 2011 period, due solely to increased sales of lower-margin Angel machines to international distributors. These machine sales are expected to drive future growth in disposable sales to non-US customers.

Second quarter 2012 cash margin on product sales, excluding $137,000 in patent amortization and depreciation expense, was 54%. Cash margin on disposable products in the second quarter of 2012 was 62%, in line with historical norms. 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.

Operating expenses for the second quarter 2012 increased to $5.05 million from $2.00 million in the second quarter 2011. This increase was primarily attributable to Aldagen operating expenses of $1.8 million mentioned above, bonus expense, increased headcount and higher costs related to reimbursement, regulatory and marketing initiatives.

Other expense for the second quarter of 2012 of $5.10 million compared with other income of $452,000 for the second quarter of 2011. The change was primarily due to a $4.34 million non-cash expense related to the increase in the fair value of the contingent consideration mainly due to the change in the Company's stock price, approximately $200,000 of non-cash interest costs, and a $471,000 non-cash charge due to the settlement of a contingency. The latter expense was a result of a contingency reached during the quarter that will result in 325,000 common shares issued over a period of 15 months to certain pre-bankruptcy preferred shareholders as outlined in the Company's plan of reorganization in 2002. In addition, there was a gain of $577,000 recognized in 2011 related to the Company's renegotiation of the note payable due to Sorin.

The net loss to common stockholders for second quarter of 2012 was $7.46 million or $0.09 per share, compared with a net loss to common stockholders of $878,000 or $0.02 per share for the same period in 2011.

Year-to-Date Results

Total revenues for the first six months of 2012 were $6.70 million, up 143% from total revenues of $2.76 million for the first six months of 2011. Total product sales of $3.50 million were up 27% from $2.76 million. Gross margin on product sales for the first half of 2012 declined to 48% from 53% in the same period in 2011. Operating expenses for the first six months of 2012 increased to $9.94 million from $4.20 million for the first six months of 2011.

The net loss to common stockholders for the first half of 2012 was $12.19 million or $0.17 per share, compared with a net loss to common stockholders for the first half of 2011 of $2.37 million or $0.05 per share.

Cash and Liquidity

Cash and cash equivalents as of June 30, 2012 were $8.55 million, compared with $2.25 million as of December 31, 2011. The Company used $3.77 million in cash to fund operating activities during the second quarter of 2012 including a $0.50 million increase in inventory-related items.

Andrew Maslan, Cytomedix's Chief Financial Officer, commented, "During the second quarter we realized $4.43 million from financing activities. Our cash usage was higher than experienced in this year's first quarter as a consequence of a full quarter of Aldagen-related expenses including the operation's clinical development costs, expanded operational expenses, and the build-up of Angel inventory as we prepare for anticipated growth in sales.

"Importantly, we are pleased to report a significant increase in shareholders' equity to over $42 million from just over $3 million at year-end 2011. Our equity balance is now substantially in excess of any required listing minimums and is an important consideration in any potential decision to pursue an up-listing of our shares to a national securities exchange," added Mr. Maslan.

For additional information please see the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, filed with the U.S. Securities and Exchange Commission on August 14, 2012.

Conference Call

Cytomedix management will hold a conference call to discuss these results and answer questions beginning at 9:00 a.m. Eastern time on Wednesday, August 15, 2012. Shareholders and other interested parties may participate in the call by dialing 800-798-2801 (domestic) or 617-614-6205 (international) and entering passcode 39362501. The call will also be broadcast live on the Internet at, and

A replay of the conference call will be available beginning two hours after its completion through August 22, 2012 by dialing 888-286-8010 (domestic) or 617-801-6888 (international) and entering passcode 15244694. The call will also be archived for 90 days at, and

About Cytomedix, Inc.

Cytomedix, Inc. is a fully integrated regenerative medicine company commercializing innovative platelet separation systems and developing adult stem cell products that enhance the body's natural healing processes. The Company's advanced autologous technologies offer clinicians a new treatment paradigm for wound and tissue repair. The Company's patient-derived PRP systems are marketed by Cytomedix in the U.S. and distributed internationally. The Company's commercial products include the AutoloGel™ System, cleared by the FDA for wound care, and the Angel® Whole Blood Separation System. The Company is developing novel regenerative therapies using its proprietary ALDH Bright Cell ("ALDH") technology to isolate a unique, biologically active population of a patient's own stem cells. A Phase 2 trial evaluating the use of ALDH for the treatment of ischemic stroke is underway. For additional information please visit

Non-GAAP financial measures

The non-GAAP financial measures discussed in the text of this press release and accompanying non-GAAP supplemental information are financial measures used by our management to evaluate our operating performance and to calculate our cash profitability. These non-GAAP measures are not in accordance with, or an alternative for, U.S. generally accepted accounting principles ("GAAP") and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles and management exercises judgment in determining which items should be excluded in the calculation of non-GAAP measures. While we believe that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP, we believe that non-GAAP measures are valuable in analyzing our cash profitability. Management analyzes current and future results on a GAAP basis as well as a non-GAAP basis and also provides GAAP and non-GAAP measures in our earnings release. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. The non-GAAP financial measures are meant to supplement, and be viewed in conjunction with, GAAP financial measures. We believe that the presentation of non-GAAP measures, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to our financial condition and results of operations. Investors are advised to carefully review and consider this information as well as the GAAP financial results that are disclosed in our SEC filings.

Safe Harbor Statement

Statements contained in this press release 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' actual results may differ materially due to a number of factors, many of which are beyond Cytomedix' ability to predict or control, including among many others, risks and uncertainties related to the Company's ability to successfully integrate the Aldagen acquisition, to successfully manage contemplated clinical trials, to manage and address the capital needs, human resource, management, compliance and other challenges of a larger, more complex and integrated business enterprise, 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 list its securities on a national stock exchange, 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™ System as contemplated. 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, 2011 and other subsequent filings. These filings are available at

  June 30,   December 31,  
  2012   2011  
Current assets        
  Cash (including $4.7 million of cash in 2012 dedicated for clinical trials and related matters) $ 8,544,617   $ 2,246,050  
  Short-term investments, restricted   53,176     52,840  
  Accounts and other receivable, net   1,944,003     1,480,463  
  Inventory   899,195     548,159  
  Prepaid expenses and other current assets   791,716     695,567  
  Deferred costs, current portion   136,436     136,436  
Total current assets   12,369,143     5,159,515  
Property and equipment, net   2,135,085     978,893  
Deferred costs   249,001     317,219  
Intangible assets, net   34,318,454     2,916,042  
Goodwill   1,323,649     706,823  
Total assets $ 50,395,332   $ 10,078,492  
Current liabilities            
  Accounts payable and accrued expenses $ 3,193,289   $ 1,849,133  
  Deferred revenues, current portion   --     654,721  
  Dividends payable on preferred stock   --     105,533  
  Derivative liabilities, current portion   --     528,467  
Total current liabilities   3,193,289     3,137,854  
Note payable   2,100,000     2,100,000  
Derivative and other liabilities   2,230,520     1,559,055  
    -     -  
Total liabilities   7,523,809     6,796,909  
Commitments and contingencies            
Stockholders' equity            
  Series A Convertible preferred stock; $.0001 par value, authorized 5,000,000 shares;            
    2012 issued and outstanding - 0 shares;            
    2011 issued and outstanding - 97,663 shares;            
    2012 liquidation preference of $0;            
    2011 liquidation preference of $97,663   --     10  
  Series B Convertible preferred stock; $.0001 par value, authorized 5,000,000 shares;            
    2012 issued and outstanding - 0 shares;            
    2011 issued and outstanding - 65,784 shares;            
    2012 liquidation preference of $0;            
    2011 liquidation preference of $65,784   --     7  
  Series D Convertible preferred stock; $.0001 par value, authorized 2,000,000 shares;            
    2012 issued and outstanding - 0 shares;            
    2011 issued and outstanding - 3,300 shares;            
    2012 liquidation preference of $0;            
    2011 liquidation preference of $3,300,000   --     --  
  Series E Convertible preferred stock; $.0001 par value, authorized 250,000            
    2012 issued and outstanding - 0 shares;            
    2011 issued and outstanding - 0 shares;            
    2012 liquidation preference of $0;            
    2011 liquidation preference of $0   --     --  
  Common stock; $.0001 par value, authorized 160,000,000 shares;            
    2012 issued and outstanding - 90,688,450 shares;            
    2011 issued and outstanding - 55,536,292 shares   9,068     5,554  
  Common stock issuable   471,250     --  
  Additional paid-in capital   105,752,831     54,458,170  
  Accumulated deficit   (63,361,626 )   (51,182,158 )
Total stockholders' equity   42,871,523     3,281,583  
Total liabilities and stockholders' equity $ 50,395,332   $ 10,078,492  
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2012     2011     2012     2011  
  Product Sales   $ 1,813,972     $ 1,394,294     $ 3,500,364     $ 2,759,907  
  License Fees     1,824,360       --       3,154,722       --  
  Royalties     47,021       --       47,021       --  
Total revenues     3,685,353       1,394,294       6,702,107       2,759,907  
Cost of revenues                                
  Cost of sales     974,910       639,227       1,823,346       1,284,611  
  Cost of royalties     5,116       --       5,116       --  
Total cost of revenues     980,026       639,227       1,828,462       1,284,611  
Gross profit     2,705,327       755,067       4,873,645       1,475,296  
Operating expenses                                
  Salaries and wages     1,779,095       733,410       3,841,223       1,459,473  
  Consulting expenses     454,296       298,751       1,283,343       635,233  
  Professional fees     203,464       213,230       666,501       450,151  
  Research, development, trials and studies     1,091,258       42,107       1,448,566       102,053  
  General and administrative expenses     1,525,724       705,547       2,701,951       1,549,091  
Total operating expenses     5,053,837       1,993,045       9,941,584       4,196,001  
Loss from operations     (2,348,510 )     (1,237,978 )     (5,067,939 )     (2,720,705 )
Other income (expense)                                
  Interest, net     (267,987 )     (121,712 )     (535,132 )     (372,093 )
  Change in fair value of derivative liabilities     (26,207 )     --       (246,521 )     378,125  
  Change in fair value of contingent consideration     (4,334,932 )     --       (4,334,932 )     --  
  Gain on debt restructuring     --       576,677       --       576,677  
  Inducement expense     (1,223 )     --       (1,513,371 )     --  
  Settlement of contingency     (471,250 )     --       (471,250 )     --  
  Other     (1,105 )     (3,348 )     (1,105 )     (53,585 )
Total other income (expenses)     (5,102,704 )     451,617       (7,102,311 )     529,124  
Loss before provision for income taxes     (7,451,214 )     (786,361 )     (12,170,250 )     (2,191,581 )
Income tax provision     4,609       5,000       9,218       10,000  
Net loss     (7,455,823 )     (791,361 )     (12,179,468 )     (2,201,581 )
Preferred dividends:                                
  Series A preferred stock     --       2,242       --       4,441  
  Series B preferred stock     --       1,526       --       3,022  
  Series D preferred stock     --       82,875       13,562       165,750  
Net loss to common stockholders   $ (7,455,823 )   $ (878,004 )   $ (12,193,030 )   $ (2,374,794 )
Loss per common share --                                
  Basic and diluted   $ (0.09 )   $ (0.02 )   $ (0.17 )   $ (0.05 )
Weighted average shares outstanding --                                
  Basic and diluted     80,891,576       50,588,129       72,077,137       48,336,096  

Contact Information

  • Contacts:
    Cytomedix, Inc.
    Martin Rosendale
    Chief Executive Officer
    Andrew Maslan
    Chief Financial Officer
    David Jorden
    Executive Chairman
    (240) 499-2680

    Investor Inquiries
    Anne Marie Fields
    (212) 838-3777

    Bruce Voss
    (310) 691-7100

    Media Inquiries
    Michelle Linn
    Linnden Communications
    (508) 362-3087