StemCells, Inc. Reports First Quarter 2013 Financial Results and Provides Business Update

NEWARK, Calif., May 9, 2013 (GLOBE NEWSWIRE) -- StemCells, Inc. (STEM), a leading stem cell company developing and commercializing novel cell-based therapeutics and tools for use in stem cell-based research and drug discovery, today reported financial results for the first quarter ended March 31, 2013 and provided a business update.

"In the first quarter, we reported the most recent data from our spinal cord injury trial, which showed that the multi-segmental gains in sensory function observed at the six-month time point in two of three patients had persisted through the twelve-month assessment, and that one of the two had converted from a complete injury to an incomplete injury classification," said Martin McGlynn, President and CEO of StemCells, Inc. "This exciting development follows the publication, last fall, of the data from our Phase I PMD trial showing evidence of new myelin formation on the nerve axons of all four patients in the trial and gains in neurological function in three of the four patients. Our encouraging data to date tells us that we are on the right track, and we are now focused on accelerating enrolment in our ongoing trials. We have taken concrete steps to this end in our spinal cord injury trial, and the recent addition of the Byers Eye Institute at Stanford should also result in faster enrolment in our dry AMD trial.

"At the same time, we recognize the need to be as cash-efficient as possible, and the results this quarter indicate how we are prioritizing spending. In addition, we are pleased to have reached agreement with the California Institute for Regenerative Medicine (CIRM) for $19.3 million in funding in the form of a forgivable loan to support our IND-enabling activities for Alzheimer's disease, and with Silicon Valley Bank for a $10 million loan on very competitive terms. These agreements will bolster our resources and give us additional financial flexibility as we execute our strategy."

First Quarter and Recent Business Highlights

First Quarter Financial Results

Total revenue during the first quarter of 2013 was $284,000, compared to $644,000 in the same period of 2012. The first quarter of 2012 included a one-time fee from a license agreement with genOway, under which we granted genOway a worldwide, exclusive license to our IRES technology for use in the development and commercialization of genetically engineered mice. Revenue from product sales in the first quarter were $208,000, compared to $271,000 in the first quarter of 2012. This 23% decline was primarily attributable to lower unit volumes in the first quarter of 2013. The order book for April was strong, however, getting us off to a positive start for the second quarter.

Total operating expenses in the first quarter of 2013 were $6,475,000, a 10% increase compared to the same period in 2012. This increase was driven by a 16% increase in research and development expenses, while selling, general and administrative expenses declined by 2% compared to the same period of 2012. The increase in research and development expenses was primarily attributable to higher external services expenses related to preclinical studies of our HuCNS-SC cells and expenses related to quality control, process development and manufacturing activities to support our ongoing clinical trials. Loss from operations in the first quarter of 2013 was $6,258,000, a 17% increase compared to the $5,326,000 loss from operations in the first quarter of 2012.

Other expense in the first quarter of 2013 was $159,000, compared to other expense of $4,903,000 in the first quarter of 2012. This decrease in other expense was primarily due to a decrease in the estimated fair value of our warrant liability, with increases in the warrant liability shown as an expense and decreases shown as income.

For the first quarter of 2013, net loss was $6,417,000, or $(0.17) per share, compared with a net loss of $10,229,000, or $(0.45) per share, for the first quarter of 2012. Net cash used in operating activities in the first quarter of 2013 was $6,652,000.

At March 31, 2013, our cash, cash equivalents and marketable debt securities totaled $17,049,000. In April, we received $9.9 million in net proceeds from a loan we entered into with Silicon Valley Bank. Including the loan proceeds, our pro forma cash balance at March 31, 2013, was $27.0 million.

Continued here:
StemCells, Inc. Reports First Quarter 2013 Financial Results and Provides Business Update