StemCells Announces First Quarter 2006 Financial Results
PALO ALTO, Calif.--(BUSINESS WIRE)--April 28, 2006--StemCells, Inc. (NASDAQ: STEM) today reported its financial results for the first quarter ended March 31, 2006.
The Company reported a net loss of approximately $4,193,000, or $0.06 per share, for the first quarter ended March 31, 2006, compared to a net loss of $3,449,000, or $0.06 per share, for the first quarter of 2005. The increase in net loss in 2006 compared to 2005 was primarily attributable to increased research and development expenses resulting from increased head count and expanded operations in cell processing and clinical development. In addition, the Company adopted Statement of Financial Accounting Standards 123R effective January 1, 2006 and recognized approximately $388,000 in compensation expense related to qualified stock option grants in the first quarter of 2006; no such expense was recognized in 2005.
Total revenue for the first quarter of 2006 was approximately $42,000, compared with approximately $35,000 in 2005. Revenue for the first quarter of 2006 and 2005 was primarily from grants and licensing agreements. Net cash used in operating activities for the first quarter of 2006 was approximately $4,263,000 compared with approximately $4,091,000 in the same period in 2005. Cash and cash equivalents were approximately $30,876,000 as of March 31, 2006.
On April 6, 2006, the Company closed a $35,840,000 registered direct placement of 11.75 million shares of common stock to a limited number of institutional investors at $3.05 per share. Net proceeds to the Company, after placement agency fees and other expenses, were approximately $33,189,000. The Company's pro forma cash balance (as if the financing had occurred on March 31, 2006) would have been approximately $64,065,000.
About StemCells, Inc.
StemCells, Inc. is a clinical stage biotechnology company focused on the discovery, development and commercialization of stem cell-based therapies to treat diseases of the nervous system, liver and pancreas. The Company's stem cell programs seek to repair or repopulate neural or other tissue that has been damaged or lost as a result of disease or injury. StemCells is the first company to directly identify and isolate human neural stem cells from normal brain tissue. These stem cells are expandable into cell banks for therapeutic use, which demonstrates the potential of using normal, non-genetically modified cells as cell-based therapies. The Company recently initiated a Phase I clinical trial of its proprietary human neural stem cells (HuCNS-SC(TM)) for the treatment of infantile and late infantile neuronal ceroid lipofuscinosis (NCL) and expects to dose the first patient in this trial in the second quarter of 2006. NCL, which is often referred to as Batten disease, is a rare and fatal neurodegenerative condition afflicting infants and children. StemCells has approximately 40 U.S. and 100 non-U.S. patents. Further information about the Company is available on its web site at: www.stemcellsinc.com.
Apart from statements of historical facts, the text of this press release constitutes forward-looking statements regarding, among other things, the future business operations of StemCells, Inc. (the "Company") and its ability to conduct clinical trials as well as its research and product development efforts. The forward-looking statements speak only as of the date of this news release. StemCells does not undertake to update any of these forward-looking statements to reflect events or circumstances that occur after the date hereof. Such statements reflect management's current views and are based on certain assumptions that may or may not ultimately prove valid. The Company's actual results may vary materially from those contemplated in the forward-looking statements due to risks and uncertainties to which the Company is subject, including uncertainty whether results obtained in the animal models of Infantile NCL, spinal cord injury, or other diseases and conditions will be able to be translated into treatment for humans; uncertainty as to whether the FDA or other applicable regulators or review boards will permit the Company to continue clinical testing in NCL or in future clinical trials of proposed therapies for other diseases or conditions despite the novel and unproven nature of the Company's technology; uncertainties regarding the timing and duration of any clinical trials; uncertainties regarding the Company's ability to obtain the increased capital resources needed to continue its current research and development operations and to conduct the research, preclinical development and clinical trials necessary for regulatory approvals; uncertainty regarding the validity and enforceability of the Company's patents; uncertainty as to whether HuCNS-SC and any products that may be generated in the future in the Company's stem cell programs will prove safe and clinically effective and not cause tumors or other side effects; uncertainty as to whether the Company will achieve revenues from product sales or become profitable; the Company's likely increase in the use of cash in 2006 and future periods as compared to the Company's historical use of cash; and other factors that are described under the heading "Risk Factors" in Item 1A of the Company's Annual Report on Form 10-K.
StemCells, Inc.
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Condensed Consolidated Statement of Operations
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(in thousands, except share and per share amounts)
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Three months ended
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March 31,
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2006 2005
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Revenue from grants and licensing agreements $41 $35
Operating Expenses
Research and development 2,692 1,619
General & administrative 1,677 1,505
Wind-down expenses related to our former
corporate headquarters 156 521
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Total operating expenses 4,525 3,645
Loss from operations (4,484) (3,610)
Other income (expense)
License and settlement agreement, net - -
Other income (expense) 291 161
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Total other income (expense) 291 161
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Net loss applicable to common shareholders;
basic and diluted ($4,193) ($3,449)
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Net loss per share applicable to common
shareholders; basic and diluted ($0.06) ($0.06)
Weighted average shares - basic and diluted 65,443,062 62,406,725
StemCells, Inc.
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Condensed Consolidated Balance Sheets
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March December
31, 31,
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2006 2005
(in thousands) (a)
Assets
Current assets:
Cash & cash equivalents $30,876 $34,541
Other current assets 910 589
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Total current assets 31,786 35,130
Marketable securities 2,421 3,721
Property, plant & equipment, net 3,258 3,283
Other assets, net 2,679 2,705
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Total assets 40,144 44,839
Liabilities and stockholders' equity
Current liabilities 3,153 3,548
Non-current liabilities 8,778 8,915
Stockholders' equity 28,213 32,376
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Total liabilities and stockholders' equity $40,144 $44,839
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(a) Derived from audited financial statements included in StemCells'
annual report on form 10-K filed with the SEC.
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CONTACT: StemCells, Inc.
Rodney Young
Chief Financial Officer
650-475-3100, Ext. 105
irpr@stemcellsinc.com
or
Schwartz Communications, Inc.
781-684-0770
stemcells@schwartz-pr.com
SOURCE: StemCells, Inc.
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