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

NEWARK, Calif., Aug. 7, 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 second quarter ended June 30, 2013, and provided a business update.

"The data emerging from our clinical trials, including the two-year Pelizeaus-Merzbacher disease (PMD) data announced last week, continue to build our confidence that we are on the right track," said Martin McGlynn, President and CEO of StemCells, Inc. "Our operational priority right now is to accelerate patient enrollment, complete the ongoing Phase I/II trials and quickly initiate Phase II proof-of-concept trials. To that end, we took a number of important steps in the second quarter. First, we obtained authorization from Health Canada to expand our spinal cord injury trial into Canada and we are working diligently to initiate sites in the coming months. Second, we added the Byers Eye Institute at Stanford as a site in our dry age-related macular degeneration (AMD) trial, and are working to add others. Third, we brought Eliseo Salinas, MD, on board as Executive Vice President and Head of Research and Development, as well as other executives with deep expertise in CNS product development.

"At the same time, we executed a number of creative financing transactions to augment our capital resources and provide us with additional financial flexibility. We remain committed to the strategy of building shareholder value by generating meaningful clinical data in a cash-efficient manner."

Second Quarter and Recent Business Highlights

Second Quarter Financial Results

Total revenue during the second quarter of 2013 was $282,000, compared to $249,000 in the same period of 2012. Revenue from product sales was approximately $250,000 in the second quarter of 2013, an increase of 19% compared to the same period in 2012 due primarily to higher unit volumes.

Total operating expenses in the second quarter of 2013 were $6,425,000, which was 16% higher than the same period in 2012. This increase was driven by higher research and development expenses, which increased 28% compared to the same period in 2012 primarily due to increased costs for preclinical studies of our HuCNS-SC cells and activities to conduct and support our clinical trials. The increase in R&D expenses was partially offset by an 11% decrease in selling, general and administrative expenses compared to the same period of 2012. Loss from operations in the second quarter of 2013 was $6,221,000, a 16% increase compared to the second quarter of 2012.

Other income in the second quarter of 2013 was $353,000, compared to other income of $6,183,000 in the second quarter of 2012. This decrease in other income was primarily related to changes 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 second quarter of 2013, net loss was $5,869,000, or $(0.15) per share, compared with a net income of $834,000, or $0.03 per share, for the second quarter of 2012. Net cash used in operating activities in the second quarter of 2013 was $3,778,000. For the six months ended June 30, 2013, net cash used in operating activities totaled $10,430,000, which was 3% lower than the comparable period in 2012.

At June 30, 2013, our cash, cash equivalents and marketable debt securities totaled $24,179,000. If we include the $3.8 million loan proceeds received from CIRM in July, our pro forma cash, cash equivalents and marketable securities at June 30, 2013, would have been $28.0 million.

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