RANCHO CORDOVA, Calif.,
Aug. 13, 2019 /PRNewswire/
-- Cesca Therapeutics Inc. (Nasdaq: KOOL), a market leader in
automated cell processing and autologous cell therapies for
regenerative medicine, today announced improved financial and
operating results for the second quarter ended June 30, 2019 and provided a corporate
update.
The Company set up a key objective at the beginning of 2019, to
achieve positive cash flow from operations before the end of this
calendar year. Plans to execute and achieve this goal included a
series of new product launches which expanded the revenue base,
accompanied by aggressive measures to reduce costs. Over the second
quarter, we made significant progress in achieving its goal, as the
Company reported revenue of $4.3
million, an increase of 115% as compared to the same period
in the prior year. The increase in revenue along with cost
cutting measures previously implemented, resulted in the Company
being adjusted EBITDA positive for the three months ended
June 30, 2019.
Second Quarter Achievements:
- Completed a strategic agreement with Cordlife Group Limited,
owner of the largest network of cord blood banks in Asia, to provide ThermoGenesis'
next-generation AXP® II system, for rapid processing of
cord blood units, to Cordlife's India processing facility.
- Announced registration and availability of ThermoGenesis'
AXP® II in Thailand and
Canada, extending the Company's
footprint in Southeast Asia and
North America.
- Completed registration of ThermoGenesis' Point-of-Care
PXP® system in Thailand
and Canada.
- Increased adoption of ThermoGenesis' CAR-TXpress™ platform
technology to a total of 20+ institutional customers.
- Introduced ThermoGenesis' enhanced X-MINI® CD3
Selection Kit, broadening the range of research applications and
potential users for the product – allowing customers to select CD3+
cells from either human peripheral blood mononuclear cells or whole
blood.
- Net revenues up 115%; gross profit increased
significantly.
- Regained Nasdaq listing compliance.
"The ThermoGenesis team is committed to improving and broadening
the scope of its fully integrated cellular processing solutions for
the cell-based therapy market and the breadth of our achievements
for the second quarter directly reflect the results of these
ongoing efforts," said Chris Xu,
PhD, Chief Executive Officer of Cesca. "In particular; Health
Canada approval to market the AXP® II, following on the
heels of the agency's approval of the PXP® system
earlier this year, is a testament of the strength and importance of
our technology and allows us to penetrate this important geographic
region. Outside of North America,
we continue to increase our visibility, evidenced by our strategic
agreement with Cordlife in India
and our expansion into Thailand.
An uptick in the number of institutional customers utilizing our
CAR-TXpress platform technology, a key focus area of our potential
future growth, is also highly encouraging. We will continue to seek
partnerships to distribute our key products globally and will stay
focused with our strategy to achieve operational cash flow positive
before the end of the year."
Jeff Cauble, Cesca's Vice
President of Finance and Principal Accounting Officer, added, "We
continue to reap the benefits of an upward trend in product sales,
coupled with a streamlined organization and the reduction of
overhead costs due to last year's reorganization. Revenues during
the second quarter of 2019 increased by 115% as compared to the
same period last year and the Company's gross profit jumped
significantly, to 45%. As a result, adjusted EBITDA, the metric the
Company uses to best approximate operational cash flow, was
positive for the second quarter of 2019."
Financial Results for the Quarter Ended June 30, 2019
Net revenues. Net revenues for the three months
ended June 30, 2019 were $4.3 million compared
to $2.0 million for the second quarter in 2018, an
increase of $2.3 million or 115% year
over year. The increase was driven primarily by AXP and CAR-TXpress
sales. The AXP revenue increase was driven by approximately 550
cases sold to a distributor in China as compared to no cases sold to that
distributor in the quarter ended June
30, 2018. Additionally, approximately 450 more cases
were sold to domestic end users in the current quarter. CAR-TXpress
sales increased due to relaunching the product line in the second
half of 2018.
Gross profit. Gross profit for the three months
ended June 30, 2019 was $2.0 million, or
approximately 45% of net revenue, compared to $363,000, or 18%
of net revenue for the comparable period in 2018. The gross
profit margin increase was primarily due to increased sales, lower
disposable costs through price efficiencies from contract
manufacturers and reduced overhead expenses as a result of the
June 2018 reorganization. Increased
sales of CAR-TXpress also positively affected gross profit.
Sales and marketing expenses. Sales and marketing
expenses for the three months ended June 30,
2019 were $384,000 compared
to $359,000 for the comparable period in 2018. The slight
increase was driven by increased stock compensation expense for new
options granted to ThermoGenesis employees during the current
quarter.
Research and development expenses. Research and
development (R&D) expenses for the three months ended June
30, 2019 were $611,000, compared
to $908,000 for the comparable period in 2018. The
decrease was primarily due to a decline in personnel costs related
to the June 2018 reorganization.
General and administrative expenses. General and
administrative expenses for the three months ended June 30,
2019 were $1.2 million, compared to $2.4
million for the comparable period in 2018. The decrease was
driven by a reduction in personnel costs associated with the
June 2018 reorganization and other
headcount reductions in 2018, as well as severance expenses, a
one-time legal settlement and a loss on the disposal of fixed
assets in the quarter ended June 30,
2018.
Interest Expense. Interest expense increased to
$1.2 million for the three months
ended June 30, 2019 as compared to
$0.7 million for the three months
ended June 30, 2018, an increase of
65%. The increase is due to interest expense and the
amortization of the debt discount related to the January 2019 convertible promissory note and
additional interest and amortization of the debt discount related
to the Revolving Credit Agreement with Boyalife.
Net loss. For the three months ended June 30,
2019, the Company reported a comprehensive loss attributable to
common stockholders of $1.3 million, or ($0.47) per
share, based on approximately 2.8 million weighted average basic
and diluted common shares outstanding. This compares to a
comprehensive net loss of $27.0 million, or ($17.49) per share, based on approximately
1.5 million weighted average basic and diluted common shares
outstanding for the three months ended June 30, 2018.
Adjusted EBITDA. In addition to the results
reported under US GAAP, the Company also uses a non-GAAP measure to
evaluate operating performance and to facilitate the comparison of
our historical results and trends. The Company uses the
metric to determine operational cash flow. Adjusted EBITDA
for the three months ended June 30,
2019 was a positive $53,000,
as compared to an adjusted EBITDA loss of $3.0 million for the three months ended
June 30, 2018. The increase in
the current period is due to $1.5
million in additional gross profit as the result of higher
sales, while decreasing overhead costs through price efficiencies
from contract manufacturers. The Company also had decreased
personnel expenses due to the June
2018 reorganization and eliminated one-time charges for
severance, legal and loss of disposal of fixed assets in the prior
year quarter ended June 30,
2019. A reconciliation of adjusted EBITDA is shown
below.
On June 4, 2019, the company
effected a one (1) for ten (10) reverse split of its issued and
outstanding common stock.
At June 30, 2019, the company had
cash and cash equivalents totalling approximately $2.4 million, compared with approximately
$2.4 million at December 31, 2018.
Conference Call and Webcast Information
Cesca will host a conference call today at 1:30pm PDT/4:30pm
EDT. To participate in the conference call, please dial
1-844-889-4331 (domestic), 1-412-380-7406 (international) or
1-866-605-3852 (Canada). To access
a live webcast of the call, please visit:
http://investors.cescatherapeutics.com/events-and-presentations/events.
A replay of the call will be available until September 3 and can be accessed by dialing
1-877-344-7529 (domestic), 1-412-317-0088 (international) or
855-669-9658 (Canada), and
referencing access code 10132960. The webcast will be available for
three months.
About Cesca Therapeutics Inc.
Cesca Therapeutics develops, commercializes and markets a range
of automated technologies for CAR-T and other cell-based therapies.
Its device division, ThermoGenesis develops, commercializes and
markets a full suite of solutions for automated clinical
biobanking, point-of-care applications, and automation for
immuno-oncology. The company has developed an automated,
functionally-closed CAR-TXpress™ platform to streamline the
manufacturing process for the emerging CAR-T immunotherapy market.
For more information about Cesca, please visit:
www.CescaTherapeutics.com. For additional information about
ThermoGenesis, please visit: www.thermogenesis.com.
Forward-Looking Statement
The statements contained herein may include statements of future
expectations and other forward-looking statements that are based on
management's current views and assumptions and involve known and
unknown risks and uncertainties that could cause actual results,
performance or events to differ materially from those expressed or
implied in such statements. A more complete description of risks
that could cause actual events to differ from the outcomes
predicted by Cesca Therapeutics' forward-looking statements is set
forth under the caption "Risk Factors" in Cesca Therapeutics'
annual report on Form 10-K and other reports it files with the
Securities and Exchange Commission from time to time, and you
should consider each of those factors when evaluating the
forward-looking statements.
Company Contact:
Wendy
Samford
916-858-5191
ir@thermogenesis.com
Investor Contact:
Paula
Schwartz, Rx Communications
917-322-2216
pschwartz@rxir.com
Financials
|
Cesca
Therapeutics Inc.
Condensed Consolidated Balance
Sheets
|
|
|
|
|
|
|
|
June 30,
2019
|
|
December
31,
2018
|
|
|
|
|
(Unaudited)
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$2,424,000
|
|
$2,400,000
|
|
|
Accounts
receivable, net
|
|
3,091,000
|
|
1,509,000
|
|
|
Inventories
|
|
3,951,000
|
|
4,493,000
|
|
|
Prepaid
expenses and other current assets
|
|
389,000
|
|
224,000
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
9,855,000
|
|
8,626,000
|
|
|
|
|
|
|
|
|
|
Restricted
cash
|
|
1,000,000
|
|
1,000,000
|
|
|
Equipment,
net
|
|
2,398,000
|
|
2,562,000
|
|
|
Right-of-use
operating lease assets, net
|
|
915,000
|
|
--
|
|
|
Goodwill
|
|
781,000
|
|
781,000
|
|
|
Intangible assets,
net
|
|
1,531,000
|
|
1,591,000
|
|
|
Other
assets
|
|
52,000
|
|
51,000
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$16,532,000
|
|
$14,611,000
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$3,198,000
|
|
$2,423,000
|
|
|
Other
current liabilities
|
|
3,283,000
|
|
3,942,000
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
6,481,000
|
|
6,365,000
|
|
|
|
|
|
|
|
|
|
Long-term
liabilities
|
|
$3,551,000
|
|
$1,515,000
|
|
|
|
|
|
|
|
|
|
Cesca Therapeutics
Inc. stockholders' equity
|
|
5,722,000
|
|
8,442,000
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interests
|
|
778,000
|
|
(1,711,000)
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$16,532,000
|
|
$14,611,000
|
|
|
Cesca Therapeutics
Inc.
Condensed Consolidated Statements of
Operations
(Unaudited)
|
|
|
|
|
Three Months
Ended
June 30,
|
|
|
2019
|
|
2018
|
|
|
Net
revenues
|
$4,305,000
|
|
$2,004,000
|
|
|
|
|
|
|
|
Cost of
revenues
|
2,354,000
|
|
1,641,000
|
|
|
|
|
|
|
|
Gross profit
|
1,951,000
|
|
363,000
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
Sales
and marketing
|
384,000
|
|
359,000
|
|
|
|
|
|
|
|
Research
and development
|
611,000
|
|
908,000
|
|
|
|
|
|
|
|
General
and administration
|
1,218,000
|
|
2,399,000
|
|
|
Impairment charges
|
--
|
|
27,202,000
|
|
|
|
|
|
|
|
Total operating
expenses
|
2,213,000
|
|
30,868,000
|
|
|
|
|
|
|
|
Loss from
operations
|
(262,000)
|
|
(30,505,000)
|
|
|
|
|
|
|
|
Fair value change of
derivative instruments
|
--
|
|
308,000
|
|
|
Interest
expense
|
(1,211,000)
|
|
(733,000)
|
|
|
Other
expenses
|
(2,000)
|
|
(32,000)
|
|
|
|
|
|
|
|
Total other
expense
|
(1,213,000)
|
|
(457,000)
|
|
|
|
|
|
|
|
Loss before benefit
for income taxes
|
(1,475,000)
|
|
(30,962,000)
|
|
|
Benefit for income
taxes
|
--
|
|
3,451,000
|
|
|
|
|
|
|
|
Net loss
|
(1,475,000)
|
|
(27,511,000)
|
|
|
|
|
|
|
|
Loss attributable to
noncontrolling interests
|
(178,000)
|
|
(503,000)
|
|
|
|
|
|
|
|
Net loss attributable
to common stockholders
|
$(1,297,000)
|
|
$(27,008,000)
|
|
|
|
|
|
|
|
Cesca Therapeutics
Inc.
Condensed Consolidated Statements of Cash
Flows
(Unaudited)
|
|
|
Six Months
Ended
June 30,
|
|
2019
|
|
2018
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net cash
used in operating activities
|
$(2,911,000)
|
|
$(6,102,000)
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Capital expenditures
|
(142,000)
|
|
(850,000)
|
|
Cash flows from
financing activities:
|
|
|
|
|
Payments on capital lease obligations
|
(15,000)
|
|
(19,000)
|
|
Proceeds from long-term related party debt
|
800,000
|
|
500,000
|
|
Proceeds from line of credit
|
1,513,000
|
|
--
|
|
Proceeds from exercise of pre-funded warrants
|
23,000
|
|
--
|
|
Proceeds from issuance of common stock, net
|
756,000
|
|
6,032,000
|
|
|
|
|
|
Net
cash provided by financing activities
|
3,077,000
|
|
6,513,000
|
|
|
|
|
|
Effects of foreign
currency rate changes on cash and cash equivalents
|
--
|
|
(3,000)
|
|
Net decrease in cash,
cash equivalents and restricted cash
|
24,000
|
|
(442,000)
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
3,400,000
|
|
3,513,000
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$3,424,000
|
|
$3,071,000
|
|
|
|
|
|
Cesca Therapeutics
Inc.
Adjusted EBITDA
(Unaudited)
|
|
|
|
Three Months Ended
June 30,
|
|
|
2019
|
|
2018
|
|
Net loss
|
|
$(1,475,000)
|
|
$(27,511,000)
|
|
|
|
|
|
|
Deduct:
|
|
|
|
|
|
Interest expense
|
|
(1,211,000)
|
|
(733,000)
|
|
Fair value change of derivative instruments and other
|
|
(2,000)
|
|
276,000
|
|
Benefit
for income taxes
|
|
--
|
|
3,451,000
|
|
Loss from
operations
|
|
$(262,000)
|
|
$(30,505,000)
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
Depreciation and amortization
|
|
190,000
|
|
174,000
|
|
Stock-based compensation expense
|
|
125,000
|
|
163,000
|
|
Impairment of intangible asset
|
|
--
|
|
27,202,000
|
|
Adjusted
EBITDA
|
|
$53,000
|
|
$(2,966,000)
|
View original
content:http://www.prnewswire.com/news-releases/cesca-therapeutics-announces-improved-second-quarter-2019-financial-results-and-provides-corporate-update-300901056.html
SOURCE Cesca Therapeutics Inc.