StemCells Announces 2008 First Quarter Results
PALO ALTO, Calif., May 6, 2008 , – StemCells, Inc. (NASDAQ: STEM) today reported its financial results for the first quarter ended March 31, 2008.
The Company reported a net loss of $6,545,000, or $0.08 per share, for the first quarter ended March 31, 2008, compared to a net loss of $4,620,000, or $0.06 per share, for the first quarter of 2007. The increase in net loss from 2007 to 2008 was primarily attributable to higher other income in 2007, which included a realized gain of $718,000 from the sale of approximately 5.3 million shares of ReNeuron Group plc (“ReNeuron”) and $550,000 from the receipt of additional ReNeuron shares in connection with a license and settlement agreement. The increase in net loss from 2007 to 2008 was also due to increased operating expenses associated with increases in our operations in cell processing and our product development programs. Total revenue, from licensing agreements, for first quarter of 2008 was $17,000, compared to $6,000 in the first quarter of 2007.
Cash and highly liquid investments (unrestricted cash, cash equivalents, and current and non-current marketable debt securities) were $30,280,000 at March 31 2008, compared with $50,922,000 at March 31, 2007. Cash used for operating activities in the first quarter of 2008 was approximately $7,291,000, compared to approximately $5,252,000 in the first quarter of 2007.
Significant recent events include:
- In April 2008, the U.S. Patent and Trademark Office (PTO) issued U.S. Patent Number 7,361,505 with broad claims covering human neural stem cells derived from any tissue source, including embryonic, fetal, juvenile, or adult tissue. The '505 patent is exclusively licensed to StemCells.
- Also in April 2008, the PTO upheld two of the Company’s other neural stem cell patents, (U.S. Patent Number 5,851,832 and U.S. Patent Number 6,497,872), as amended, in reexamination proceedings commenced in 2007. The patents are two of four patents which are the basis of the Company’s patent infringement suit against Neuralstem, Inc.
- On March 4, 2008 the Company announced that it had terminated discussions to acquire Progenitor Cell Therapy, LLC ("PCT"), a provider of cGMP-quality cell processing services headquartered in Hackensack, NJ. In connection with such possible acquisition, the Company had made a short-term secured loan of $1.0 million to PCT, which was prepaid in April 2008.
- In January 2008, the Company completed enrollment and dosing of a six-patient Phase I clinical trial of its proprietary HuCNS-SC ® product candidate (purified human neural stem cells) as a treatment for infantile and late infantile neuronal ceroid lipofuscinosis (NCL, also often referred to as Batten disease) at Oregon Health & Science University (OHSU) Doernbecher Children’s Hospital.
- In January 2008, the Company entered into a research collaboration with the OHSU Casey Eye Institute to evaluate the Company’s HuCNS-SC cells as a potential treatment for retinal degeneration, a leading cause of blindness.
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 the Company’s HuCNS-SC ® product candidate 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 Annual Report on Form 10-K.
StemCells, Inc.
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Unaudited 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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2008 2007
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Revenue from licensing agreements $17 $6
Operating Expenses
Research & development 4,500 4,019
General & administrative 2,254 2,265
Wind-down expenses related to our
former corporate headquarters 160 222
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Total operating expenses 6,914 6,506
Loss from operations (6,897) (6,500)
Other income (expense)
License and settlement agreement,
net - 550
Realized gain on sale of
marketable securities - 718
Interest income 384 654
Other income (expense) (32) (42)
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Total other income (expense) 352 1,880
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Net loss ($6,545) ($4,620)
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Net loss per share - basic and
diluted ($0.08) ($0.06)
Weighted average shares - basic and
diluted 80,703,962 78,566,195
StemCells, Inc.
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Unaudited Condensed Consolidated Balance Sheets
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March 31, December 31,
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2008 2007
(in thousands) (a)
Assets
Current assets:
Cash & cash equivalents $12,610 $9,759
Marketable securities 16,748 26,697
Other current assets 2,049 2,297
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Total current assets 31,407 38,753
Marketable securities 1,999 3,151
Property, plant & equipment, net 3,700 3,905
Other assets, net 2,484 2,473
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Total assets $39,590 $48,282
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Liabilities and stockholders' equity
Current liabilities $4,222 $6,138
Non-current liabilities 6,552 6,932
Stockholders' equity 28,816 35,212
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Total liabilities and stockholders' equity $39,590 $48,282
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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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