EXHIBIT 99.1
Cytori Reports 2006 Fourth Quarter and Year-End Results;
Reviews 2006 Progress and Provides 2007 Outlook
March 30, 2007, San Diego, Calif. - Cytori Therapeutics (NASDAQ: CYTX; Frankfurt: XMPA) reports financial results for the quarter and year ended December 31, 2006, reviews 2006 progress, and provides 2007 outlook.
“In 2006 we made significant strides toward commercializing the Celution™ System in early 2008,” said Christopher J. Calhoun, chief executive officer for Cytori. “This included the first clinical experience for the Celution™ System as part of a breast reconstruction safety and feasibility study, attaining key regulatory milestones and adding critical design components to tailor the Celution™ System to reconstructive surgery.
“In addition, we laid extensive groundwork to start two cardiovascular disease clinical trials. This included the completion of important preclinical research that helped us design and implement controlled, randomized dose-escalation studies. Our PRECISE chronic heart disease trial began enrollment in January 2007 and our APOLLO acute heart attack trial is expected to receive approval and begin enrolling patients next quarter.”
2007 Outlook
“Our major 2007 initiatives are to prepare for commercialization, execute strategic partnerships and advance our cardiovascular products through clinical development,” added Mr. Calhoun. “We believe the buildup to our 2008 product launch can significantly increase Cytori’s intrinsic value as we get closer to generating regenerative medicine product revenues.”
Cytori anticipates achieving the following milestones in 2007:
| · | Initiate the APOLLO heart attack safety and feasibility trial |
| · | Announce the outcome of the investigator-initiated breast reconstruction safety and feasibility study in Japan using the Celution™ System |
| · | Initiate a multi-center breast reconstruction efficacy trial in Europe in patients who underwent partial-mastectomy |
| · | Expand the Celution™ System distribution network for reconstructive surgery |
| · | Build out internal Celution™ System manufacturing capabilities to meet anticipated product demand in early 2008; |
| · | Pursue commercialization partners for the Celution™ System in select therapeutic areas; and |
| · | Enter a commercialization or out licensing agreement for adipose stem cell banking. |
Financials
Cash, cash equivalents and short term investments were $12.9 million as of December 31, 2006. Subsequent to the end of the year, Cytori raised $20 million from an equity offering and entered into an agreement to raise $6 million as part of a strategic equity agreement with Green Hospital Supply, Inc.
Total development revenues for the quarter and year ended December 31, 2006 were $5.2 million and $6.5 million, respectively, compared to $235,000 and $371,000, respectively for the same period in 2005. The increase in development revenues in the fourth quarter and full year 2006 is due to the recognition of deferred revenue related to the Olympus-Cytori Joint Venture by achieving certain regulatory, preclinical development and Celution™ System development milestones. Product revenues from our non-core biomaterials products for the quarter and year ended December 31, 2006 were $363,000 and $1.5 million, respectively, compared to $858,000 and $5.6 million for 2005.
Research and development expenses for the quarter and year ended December 31, 2006 were $5.2 million and $22.0 million, respectively, compared to $4.9 million and $15.5 million, respectively, for the same periods in 2005. The increase in R&D for the full year 2006 is attributed to additional preclinical studies, preparations for upcoming clinical trials, increased Celution™ System development expenses to attain regulatory approvals, and internal scale-up for manufacturing of devices and consumables for clinical trials.
General and administrative expenses for the quarter and year ended December 31, 2006 were $2.5 million and $12.5 million, respectively, compared to $2.2 million and $10.2 million respectively for the same periods in 2005. Net loss for the quarter and year ended December 31, 2006 was $1.9 million, or $(0.10) per common share, and $25.4 million, or $(1.53) per common share. This compares to a net loss of $14.4 million, or $(0.96) per common share and $26.5 million, or $(1.80) per common share, for the same periods in 2005.
Conference Call Information
The management of Cytori Therapeutics will host a conference call today at 10:00 a.m. Eastern Daylight Time (EDT) or 4:00 p.m. Central European Summer Time (CEST). The conference call will be webcast live and may be accessed under "Events & Webcasts" in the Investor Relations 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: 11086131#).
Cytori Therapeutics
Cytori Therapeutics is developing and seeks to commercialize stem and regenerative cell therapies for cardiovascular disease, reconstructive surgery and many other serious chronic, and life threatening conditions. To provide these therapies, physicians remove a small amount of a patient's fat, also known as adipose tissue, and run it through Cytori's Celution™ System. This System quickly separates and concentrates stem and regenerative cells from adipose tissue so they may be quickly administered back to the patient about an hour later. This system will dramatically improve the way in which personalized cell-based therapies can be delivered to patients. www.cytoritx.com
Cautionary Statement Regarding Forward-Looking Statements
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, the need for further financing, regulatory uncertainties, dependence on performance of third parties, and other risks and uncertainties described (under the heading "Risk Factors") in Cytori Therapeutics' Form 10-K annual report for the year ended December 31, 2006. We assume no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made.
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Consolidated Balance Sheets
| | | As of December 31, | |
| | | 2006 | | 2005 | |
| | | | | | |
Assets | | | | | |
| Current assets: | | | | | |
| Cash and cash equivalents | | $ | 8,902,000 | | $ | 8,007,000 | |
| Short-term investments, available-for-sale | | | 3,976,000 | | | 7,838,000 | |
| Accounts receivable, net of allowance for doubtful accounts of $2,000 and $9,000 in 2006 and 2005, respectively | | | 225,000 | | | 816,000 | |
| Inventories, net | | | 164,000 | | | 258,000 | |
| Other current assets | | | 711,000 | | | 621,000 | |
| | | | | | | | |
| Total current assets | | | 13,978,000 | | | 17,540,000 | |
| | | | | | | | |
| Property and equipment held for sale, net | | | 457,000 | | | — | |
| Property and equipment, net | | | 4,242,000 | | | 4,260,000 | |
| Investment in joint venture | | | 76,000 | | | — | |
| Other assets | | | 428,000 | | | 458,000 | |
| Intangibles, net | | | 1,300,000 | | | 1,521,000 | |
| Goodwill | | | 4,387,000 | | | 4,387,000 | |
| | | | | | | | |
| Total assets | | $ | 24,868,000 | | $ | 28,166,000 | |
| | | | | | | | |
Liabilities and Stockholders’ Deficit | | | | | | | |
| Current liabilities: | | | | | | | |
| Accounts payable and accrued expenses | | $ | 5,587,000 | | $ | 6,129,000 | |
| Current portion of long-term obligations | | | 999,000 | | | 952,000 | |
| | | | | | | | |
| Total current liabilities | | | 6,586,000 | | | 7,081,000 | |
| | | | | | | | |
| Deferred revenues, related party | | | 23,906,000 | | | 17,311,000 | |
| Deferred revenues | | | 2,389,000 | | | 2,541,000 | |
| Option liabilities | | | 900,000 | | | 5,331,000 | |
| Long-term deferred rent | | | 741,000 | | | 573,000 | |
| Long-term obligations, less current portion | | | 1,159,000 | | | 1,558,000 | |
| | | | | | | | |
| Total liabilities | | | 35,681,000 | | | 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; 21,612,243 and 18,194,283 shares issued and 18,739,409 and 15,321,449 shares outstanding in 2006 and 2005, respectively | | | 22,000 | | | 18,000 | |
| Additional paid-in capital | | | 103,053,000 | | | 82,196,000 | |
| Accumulated deficit | | | (103,460,000 | ) | | (78,013,000 | ) |
| Treasury stock, at cost | | | (10,414,000 | ) | | (10,414,000 | ) |
| Accumulated other comprehensive income (loss) | | | 1,000 | | | (16,000 | ) |
| Amount due from exercises of stock options | | | (15,000 | ) | | — | |
| | | | | | | | |
| Total stockholders’ deficit | | | (10,813,000 | ) | | (6,229,000 | ) |
| | | | | | | | |
| Total liabilities and stockholders’ deficit | | $ | 24,868,000 | | $ | 28,166,000 | |
Income Statement
| | | For the Years Ended December 31, | |
| | | 2006 | | 2005 | | 2004 | |
| | | | | | | | |
| Product revenues: | | | | | | | |
| Sales to related party | | $ | 1,451,000 | | $ | 5,634,000 | | $ | 4,085,000 | |
| Sales to third parties | | | — | | | — | | | 2,237,000 | |
| | | | | | | | | | | |
| | | | 1,451,000 | | | 5,634,000 | | | 6,322,000 | |
| | | | | | | | | | | |
| Cost of product revenues | | | 1,634,000 | | | 3,154,000 | | | 3,384,000 | |
| | | | | | | | | | | |
| Gross profit (loss) | | | (183,000 | ) | | 2,480,000 | | | 2,938,000 | |
| | | | | | | | | | | |
| Development revenues: | | | | | | | | | | |
| Development, related party | | | 5,905,000 | | | — | | | — | |
| Development | | | 152,000 | | | 51,000 | | | 158,000 | |
| Research grants and other | | | 419,000 | | | 320,000 | | | 338,000 | |
| | | | | | | | | | | |
| | | | 6,476,000 | | | 371,000 | | | 496,000 | |
| Operating expenses: | | | | | | | | | | |
| Research and development | | | 21,977,000 | | | 15,450,000 | | | 10,384,000 | |
| Sales and marketing | | | 2,055,000 | | | 1,547,000 | | | 2,413,000 | |
| General and administrative | | | 12,547,000 | | | 10,208,000 | | | 6,551,000 | |
| Change in fair value of option liabilities | | | (4,431,000 | ) | | 3,645,000 | | | — | |
| Restructuring charge | | | — | | | — | | | 107,000 | |
| Equipment impairment charge | | | — | | | — | | | 42,000 | |
| | | | | | | | | | | |
| Total operating expenses | | | 32,148,000 | | | 30,850,000 | | | 19,497,000 | |
| | | | | | | | | | | |
| Operating loss | | | (25,855,000 | ) | | (27,999,000 | ) | | (16,063,000 | ) |
| | | | | | | | | | | |
| Other income (expense): | | | | | | | | | | |
| Gain on sale of assets | | | — | | | 5,526,000 | | | — | |
| Gain on sale of assets, related party | | | — | | | — | | | 13,883,000 | |
| Interest income | | | 708,000 | | | 299,000 | | | 252,000 | |
| Interest expense | | | (199,000 | ) | | (137,000 | ) | | (177,000 | ) |
| Other income (expense), net | | | (27,000 | ) | | (55,000 | ) | | 15,000 | |
| Equity loss from investment in joint venture | | | (74,000 | ) | | (4,172,000 | ) | | — | |
| | | | | | | | | | | |
| Total other income, net | | | 408,000 | | | 1,461,000 | | | 13,973,000 | |
| | | | | | | | | | | |
| Net loss | | | (25,447,000 | ) | | (26,538,000 | ) | | (2,090,000 | ) |
| | | | | | | | | | | |
| Other comprehensive income (loss) - unrealized holding income (loss) | | | 17,000 | | | 16,000 | | | (58,000 | ) |
| | | | | | | | | | | |
| Comprehensive loss | | $ | (25,430,000 | ) | $ | (26,522,000 | ) | $ | (2,148,000 | ) |
| | | | | | | | | | | |
| Basic and diluted net loss per common share | | $ | (1.53 | ) | $ | (1.80 | ) | $ | (0.15 | ) |
| | | | | | | | | | | |
| Basic and diluted weighted average common shares | | | 16,603,550 | | | 14,704,281 | | | 13,932,390 | |
