SOURCE: Cytori Therapeutics, Inc.

Cytori Therapeutics, Inc.

May 05, 2011 16:05 ET

Cytori Provides Update on Product Pipeline Developments and Reports First Quarter Results

SAN DIEGO, CA--(Marketwire - May 5, 2011) - Cytori Therapeutics, Inc. (NASDAQ: CYTX) provides a quarterly update on its development pipeline and reports financial results for the first quarter of 2011.

Cytori is developing and commercializing unique devices designed to address multiple therapeutic areas, with an initial focus on cardiovascular disease, breast reconstruction and aesthetics. More than 3,000 patients are estimated to have been treated worldwide with the Company's products and there are now 162 revenue-generating units across 29 countries. Some specific accomplishments during the first quarter and year-to-date include:

--  Secured an expedited process with onsite review for obtaining chronic
    myocardial ischemia indications-for-use in Europe;
--  Initiated the ADVANCE pivotal European heart attack study, with the
    first site now enrolling and treating;
--  Reported top-line 12-month results from RESTORE 2 showing sustained
    high levels of patient and physician satisfaction;
--  Expanded efforts to obtain European healthcare system coverage for
    breast reconstruction;
--  Submitted multiple 510(k) applications to the FDA;
--  Initiated preparations for a pre-IDE meeting with the FDA for a  US
    chronic myocardial ischemia clinical trial;
--  Hired an experienced leader as Executive VP of Marketing and Sales,
    Clyde Shores, to lead global commercialization efforts; and
--  Elected Tommy Thompson, former governor and HHS Secretary, to the Board
    of Directors and named Lloyd Dean as Chairman.

"We are building our organization for long-term growth," said Christopher J. Calhoun, chief executive officer of Cytori. "Our cardiovascular disease pipeline is accelerating with a European marketing application under review, a pivotal clinical trial is treating patients, and US cardiac clinical trial preparations are in process. Regulatory claims, clinical data and reimbursement progress are now coming together to support our drive for accelerated sales growth for reconstructive surgery and aesthetics. Upcoming milestones include announcing 18-month APOLLO outcomes and complete RESTORE 2 data, Celution® One approval in Europe, US regulatory clearance and accelerating revenue growth year over year."


Total revenues for the first quarter of 2011 were $2.6 million compared to $4.4 million in the first quarter of 2010, including $1.4 million and $2.3 million in product sales in 2011 and 2010, respectively. During the first quarter of 2011, Cytori recognized $1.2 million in development revenues related to the Olympus-Cytori Joint Venture associated with the achievement of commencing manufacturing for the Celution® One System, as compared to $2.1 million in the first quarter 2010.

Quarterly revenue and gross margin variability is expected at this stage. First quarter 2011 revenues in particular were affected by the events in Japan. Notably, 72% of first quarter 2010 sales came from Japan and included a StemSource® Cell Bank. By comparison, 30% of product sales in the first quarter of 2011 came from Japan and there was no corresponding bank sale. In contrast, both European and US revenues in the first quarter grew substantially year over year. For 2011, the Company's guidance for accelerated revenue growth remains unchanged.

Cytori ended the first quarter of 2011 with 162 revenue generating units compared to 149 reported at year end 2010. The Company shipped 241 consumables, including 131 reorders, during the first quarter of 2011. This compares to 342 consumables shipped, including 261 re-orders in the first quarter of 2010 and 437 consumables shipped, including 350 reorders in the fourth quarter of 2010. In addition, Cytori fulfilled orders for 843 PureGraft™ units in the first quarter.

Total operating expenses before non-cash items of change in fair value of warrants and options liabilities were approximately $9.8 million, compared to $9.6 million in the fourth quarter of 2010 and $7.5 million in the first quarter of 2010. First quarter expenses included costs associated with the initiation of the ADVANCE trial, and cash was used for the purchase of Celution® One devices to be installed at trial centers, a stocking order for the proprietary Celase® reagent, and a substantial pay down of accounts payable.

Cytori ended the quarter with $42.6 million in cash and cash equivalents, plus $1.8 million in accounts receivable. Subsequent to the end of the quarter, Cytori added $1.6 million of cash from the exercise of warrants.

Conference Call Information and Shareholder Letter

Cytori will host a conference call and question and answer session at 5:00 p.m. Eastern Time today to further discuss these results. The audio webcast of the conference call may be accessed under "Webcasts" in the Investor Relations section of Cytori's website ( The webcast will be available live and by replay two hours after the call and archived for one year. More information on our commercial and clinical progress is posted online in the 'May 2011 Shareholder Letter' at

About Cytori

Cytori is a leader in providing patients and physicians around the world with medical technologies that harness the potential of adult regenerative cells from adipose tissue. The Celution® System family of medical devices and instruments is being sold into the European and Asian cosmetic and reconstructive surgery markets but is not yet available in the United States. Our StemSource® product line is sold globally for cell banking and research applications. Our PureGraft™ products are available in North America and Europe for fat grafting procedures.

Cautionary Statement Regarding Forward-Looking Statements

This press release includes forward-looking statements regarding events, trends and business prospects, which may affect our future operating results and financial position. Such statements, including, but not limited to, those regarding our belief in our ability to continue to accelerate sales and revenue growth, continue progress in development of our cardiovascular disease pipeline, continue progress in achieving expanded indications-for-use in Europe of Celution® System in chronic myocardial ischemia, achieve product reimbursement for breast reconstruction in Europe, address multiple therapeutic areas with our device, our efforts to commence a U.S. chronic myocardial ischemia clinical study, the future launch of the Celution® One system in Europe, and our efforts to strengthen our global sales and marketing team, are all subject to risks and uncertainties that could cause our actual results and financial position to differ materially. Some of these risks and uncertainties include, but are not limited to, risks related to our history of operating losses, the need for further financing and our ability to access the necessary additional capital for our business, the quality and effectiveness of our products, the effectiveness of our regulatory and sales and marketing programs, the quality and acceptance of our clinical data, dependence on third party performance and the risk of natural disasters and other occurrences that may disrupt the normal business cycles in areas of our global operations, as well as other risks and uncertainties described under the "Risk Factors" section in Cytori's Securities and Exchange Commission Filings on Form 10-K and Form 10-Q. 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 Sheet

                                                   As of         As of
                                                 March 31,    December 31,
                                                   2011          2010
                                              -------------  -------------
Current assets:
   Cash and cash equivalents                  $  42,647,000  $  52,668,000
   Accounts receivable, net of reserves of
    $378,000 and $306,000 in 2011 and 2010,
    respectively                                  1,774,000      2,073,000
   Inventories, net                               3,552,000      3,378,000
   Other current assets                             964,000        834,000
                                              -------------  -------------

    Total current assets                         48,937,000     58,953,000

Property and equipment, net                       1,773,000      1,684,000
Restricted cash and cash equivalents                350,000        350,000
Investment in joint venture                         413,000        459,000
Other assets                                      1,488,000        566,000
Intangibles, net                                    358,000        413,000
Goodwill                                          3,922,000      3,922,000
                                              -------------  -------------

    Total assets                              $  57,241,000  $  66,347,000
                                              =============  =============

Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable and accrued expenses      $   5,916,000  $   6,770,000
   Current portion of long-term obligations       8,724,000      6,453,000
                                              -------------  -------------

    Total current liabilities                    14,640,000     13,223,000

Deferred revenues, related party                  4,281,000      5,512,000
Deferred revenues                                 4,919,000      4,929,000
Warrant liability                                 8,458,000      4,987,000
Option liability                                    880,000      1,170,000
Long-term deferred rent                             386,000        398,000
Long-term obligations, net of discount, less
 current portion                                 11,321,000     13,255,000
                                              -------------  -------------

    Total liabilities                            44,885,000     43,474,000

Commitments and contingencies
Stockholders' equity:
   Preferred stock, $0.001 par value;
    5,000,000 shares authorized; -0- shares
    issued and outstanding in 2011 and 2010               -              -
   Common stock, $0.001 par value; 95,000,000
    shares authorized; 52,134,367 and
    51,955,265 shares issued and 52,134,367
    and 51,955,265 shares outstanding in 2011
    and 2010, respectively                           52,000         52,000
   Additional paid-in capital                   234,374,000    232,819,000
   Accumulated deficit                         (222,070,000)  (209,998,000)
                                              -------------  -------------

    Total stockholders' equity                   12,356,000     22,873,000
                                              -------------  -------------

    Total liabilities and stockholders'
     equity                                   $  57,241,000  $  66,347,000
                                              =============  =============

  Consolidated Condensed Statements of Operations and Comprehensive Loss

                                               For the Three Months Ended
                                                        March 31,
                                                  2011           2010
                                              -------------  -------------
Product revenues:
    Related party                             $           -  $           -
    Third party                                   1,362,000      2,266,000
                                              -------------  -------------
                                                  1,362,000      2,266,000
                                              -------------  -------------

Cost of product revenues                            842,000        930,000
                                              -------------  -------------

       Gross profit                                 520,000      1,336,000
                                              -------------  -------------

Development revenues:
   Development, related party                     1,231,000      2,122,000
   Research grants and other                          4,000         21,000
                                              -------------  -------------
                                                  1,235,000      2,143,000
                                              -------------  -------------
Operating expenses:
   Research and development                       3,047,000      2,245,000
   Sales and marketing                            3,226,000      1,999,000
   General and administrative                     3,544,000      3,218,000
   Change in fair value of warrants               3,471,000     (2,167,000)
   Change in fair value of option liability        (290,000)       260,000
                                              -------------  -------------

       Total operating expenses                  12,998,000      5,555,000
                                              -------------  -------------

       Operating loss                           (11,243,000)    (2,076,000)
                                              -------------  -------------

Other income (expense):
   Interest income                                    2,000          1,000
   Interest expense                                (738,000)      (276,000)
   Other expense, net                               (47,000)       (75,000)
   Equity loss from investment in joint
    venture                                         (46,000)       (21,000)
                                              -------------  -------------

       Total other income (expense)                (829,000)      (371,000)
                                              -------------  -------------

       Net loss                               $ (12,072,000) $  (2,447,000)
                                              =============  =============

Basic and diluted net loss per common share   $       (0.23) $       (0.06)
                                              =============  =============

Basic and diluted weighted average common
 shares                                          51,994,708     42,281,381
                                              =============  =============

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