StemCells Announces Fourth Quarter and Year End 2003 Financial Results
PALO ALTO, Calif., Apr 6, 2004 /PRNewswire-FirstCall via COMTEX/ -- StemCells, Inc.
(Nasdaq: STEM) today reported its financial results for the fourth quarter and
the year ended December 31, 2003.
The Company reported a loss of $4,740,000, or $0.13 per share, for the
fourth quarter ended December 31, 2003, compared to a loss of $3,051,000, or
$0.11 per share, for the fourth quarter of 2002, all before dividends and
deemed dividends. For the fiscal year ended December 31, 2003, the Company
reported a loss of $12,291,000, or $0.38 per share, as compared to a loss of
$11,644,000, or $0.46 per share, for the 2002 fiscal year, also before
dividends and deemed dividends. The net loss after dividends and deemed
dividends for the fiscal year 2003 is $14,425,000, or $0.45 per share,
applicable to common shareholders as compared to a net loss of $13,276,000, or
$0.53 per share, for the fiscal year 2002. Total revenue for 2003 was
$273,000, compared with $415,000 in 2002. Revenue for 2003 and 2002 was
primarily from grants and licensing agreements. Cash and cash equivalents were
$13,082,000 at the end of 2003, compared with $4,236,000 at the end of 2002.
The increase in net loss from 2002 to 2003 was primarily attributable to
the revision of a reserve for expenses related to the lease of the Company's
former corporate headquarters in Rhode Island, offset by a decrease in
operating expenses resulting from a cost reduction program initiated in the
last quarter of 2002, the benefits of which flowed through into 2003. The
revision is reflected in the amended annual reports (Form 10-K/A) filed for
the years ended December 31, 2001 and 2002, and our annual report on Form 10-K
for the year ended December 31, 2003. The afore mentioned reports were filed
simultaneously on April 6, 2004.
Because StemCells retained a new accounting firm to audit its financial
statements and because of the new requirements under the Sarbanes-Oxley Act
applicable to the Company, the Company required extra time to complete and
file its annual report for 2003. Accordingly, on March 31, the Company filed a
Form 12b-25 with the SEC notifying the Commission of its request for an
extension of the filing date. Form 10-K has been filed within the 15-day time
period permitted by the Commission's rules.
Martin McGlynn, President and CEO of StemCells, commented, "We are proud
of our many accomplishments in 2003. On the R&D front, the company made great
advances in the development of our stem cell technology to treat diseases of
the Central Nervous System (CNS), liver and pancreas. Specifically, we
reported data in three distinct animal models showing that our human neural
stem cells 1) protect neurons from dying in a mouse model of neurodegenerative
disease, 2) restore motor function in a mouse model of spinal cord injury, and
3) remyelinate nerve axons to restore function in injuries to the spinal cord
and certain diseases, such as multiple sclerosis. The importance of our
findings were further confirmed with the receipt of a Small Business
Innovation Research (SBIR) grant from the National Institute of Neurological
Disorders and Stroke (NINDS) to continue our research efforts in spinal cord
injury with our collaborator Dr. Aileen Anderson, at the Reeve-Irvine Center
at the University of California, Irvine."
Mr. McGlynn continued, "StemCells also publicly announced that we are
targeting the filing of an IND with the FDA in the first quarter of 2005 for
the treatment of Batten Disease, a neurodegenerative lysosomal storage
disorder. Batten's is a genetic disease that is always fatal to afflicted
infants and children. The company held a Pre-IND meeting with the FDA in June
2003. We are currently on track with our projected goal and are working
diligently to complete the necessary preclinical studies to fulfill the FDA's
requirements for this filing. A large part of our efforts in 2004 will be
focused on this endeavor."
"On the financial front, we made significant strides to strengthen and
simplify our capital structure. All our convertible preferred shares were
converted into common shares, thereby improving our stockholders' equity on
the balance sheet and in addition, eliminating any further cumulative dividend
payments on the preferred shares. Despite the difficulties in the financial
markets, we were also able to bring in $17.6 million in new financing from
quality private investors. This accomplishment along with increased
operational efficiencies is readily reflected in the increase in our cash
position to $13.1 million at the end of 2003 versus $4.2 million at the end of
2002. Our new accounting firm has nonetheless included a going concern
qualification in its audit opinion contained in the 2003 annual report. While
we believe that our financial resources are sufficient to support our
operations through the end of 2004, we will continue to work with our
financial advisors to attract the additional capital we need to support our
future activities, including an emphasis in 2004 on our goal to become, by
2005, the first company to transplant neural stem cells into humans."
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StemCells, Inc.
Condensed Consolidated Statement of Operations
(in thousands, except share and
per share amounts)
Year ended
December 31,
2003 2002
(RESTATED)
Revenue from grants and
Licensing agreements $273 $415
Operating Expenses
Research and development 6,144 7,382
General & administrative 3,390 3,358
Wind-down related to
former corporate
headquarters 2,885 1,164
Total operating expenses 12,419 11,904
Loss from operations (12,146) (11,489)
Other income (expense) (145) (155)
Net loss (12,291) (11,644)
Dividend to preferred
shareholders 68 352
Deemed dividend 2,066 1,280
Net loss applicable to
common shareholders ($14,425) ($13,276)
Net loss per share
applicable to common
shareholders; basic
and diluted ($0.45) ($0.53)
Weighted average
shares - basic and
diluted 32,080,233 25,096,252
StemCells Inc.
Condensed Consolidated Balance Sheets
December 31,
2003 2002
(RESTATED)
(in thousands) (a)
Assets
Current assets:
Cash & cash equivalents $13,082 $4,237
Other current assets 325 167
Total current assets 13,407 4,404
Property, plant & equipment, net 3,611 4,338
Other assets, net 2,768 2,587
Total assets $19,786 $11,329
Liabilities and stockholders equity
Current liabilities $2,522 $1,774
Non-current liabilities 6,300 4,962
Convertible preferred stock 2,660
Stockholders' equity 10,964 1,933
Total liabilities, redeemable preferred
stock and stockholders' equity $19,786 $11,329
(a) Derived from audited financial statements included in StemCells'
annual report on form 10-K/A filed with the SEC.
Martin McGlynn, President & CEO of StemCells, Inc.,
+1-650-475-3100, ext 108; or Media, Janet Vasquez, or Investor Relations,
Jane Lin, both of The Investor Relations Group, +1-212-825-3210, for
StemCells, Inc.
http://www.stemcellsinc.com
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