StemCells Announces Third Quarter 2007 Financial Results
PALO ALTO, Calif., November 5, 2007 – StemCells, Inc. (NASDAQ: STEM) today reported its financial results for the third quarter ended September 30, 2007.
The company reported a net loss of $7,154,000, or $0.09 per share, for the third quarter of 2007, compared with a net loss of $4,863,000, or $0.06 per share, for the third quarter of 2006. The increased net loss for the 2007 quarter was primarily attributable to an increase in operating expenses due to the expansion of the company's operations in cell manufacturing and clinical operations preparatory to the company’s plans to initiate clinical studies of its human liver engrafting cell (hLEC) in early 2008, as well as additional clinical trials of its HuCNS-SC ® product candidate for spinal cord injury in mid-2008 and a myelin disorder in the brain by the end of 2008. Net cash used in operating activities for the third quarter of 2007 was $4,903,000, compared with $4,209,000 for the third quarter of 2006.
Cash, cash equivalents and short term investments were in aggregate $43,294,000 at September 30, 2007, compared with $55,441,000 at September 30, 2006.
About StemCells, Inc.
StemCells, Inc. is a clinical-stage biotechnology company focused on the discovery, development and commercialization of cell-based therapeutics to treat diseases of the nervous system, liver and pancreas. The Company’s programs seek to repair or repopulate neural, liver or other tissue that has been damaged or lost as a result of disease or injury. StemCells has pioneered the discovery and development of HuCNS-SC ® cells, its highly purified, expandable population of human neural stem cells. StemCells is currently conducting a Phase I clinical trial of its proprietary HuCNS-SC product candidate as a treatment for neuronal ceroid lipofuscinosis (NCL) and has enrolled five of the six patients planned for the trial. NCL, which is often referred to as Batten disease, is a rare and fatal neurodegenerative disease that affects infants and young children. StemCells owns or has exclusive rights to more than 53 issued or allowed U.S. patents and more than 150 granted or allowed non-U.S. patents. Further information about the Company is available on its web site at: www.stemcellsinc.com.
Apart from statements of historical fact, 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. These 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 such forward-looking statements due to risks and uncertainties to which the Company is subject, including uncertainty as to whether the FDA or other applicable regulatory agencies 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 technologies; 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 cell-based programs will prove safe and clinically effective and not cause tumors or other adverse side effects; uncertainties regarding the Company’s manufacturing capabilities given its increasing pre-clinical and clinical commitments; uncertainties as to whether the Company will achieve revenues from product sales or become profitable; and other factors that are described under the heading “Risk Factors” in Item 1A of Part II of the Company’s Quarterly Report on Form 10-Q.
StemCells, Inc.
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Condensed Consolidated Statement of Operations
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Three months ended Nine months ended
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September 30, September 30,
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(in thousands except
share and per share
amounts) 2007 2006 2007 2006
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Revenue from grants
and licensing
agreements $13 $18 $27 $80
Operating Expenses
Research and
development 5,622 3,523 14,139 9,403
General &
administrative 2,043 1,889 5,717 4,979
Wind-down expenses
related to our
former corporate
headquarters 84 168 439 499
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Total operating
expenses 7,749 5,580 20,295 14,881
Loss from
operations (7,736) (5,562) (20,268) (14,801)
Other income
(expense)
License and
settlement
agreement, net - - 550 103
Realized gain
on marketable
securities - - 718 -
Other income
(expense) 582 699 1,803 1,652
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Total other income
(expense) 582 699 3,071 1,755
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Net loss basic and
diluted ($7,154) ($4,863) ($17,197) ($13,046)
Net loss per share;
basic and diluted ($0.09) ($0.06) ($0.22) ($0.18)
Weighted average
shares - basic and
diluted 80,065,667 77,779,257 79,478,537 73,487,670
StemCells, Inc.
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Condensed Consolidated Balance Sheets
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September 30, December 31,
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2007 2006
(in thousands) (unaudited) (a)
Assets
Current assets:
Cash & cash equivalents $17,529 $51,796
Marketable securities, current portion 25,765 4,133
Other current assets 1,387 1,602
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Total current assets 44,681 57,531
Marketable securities 1,819 3,133
Property, plant & equipment, net 4,112 3,596
Other assets, net 2,517 2,597
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Total assets 53,129 66,857
Liabilities and stockholders' equity
Current liabilities 5,098 4,150
Non-current liabilities 7,337 8,331
Stockholders' equity 40,694 54,376
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Total liabilities and stockholders' equity $53,129 $66,857
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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
SOURCE: StemCells, Inc.
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