Quarterly Growth of 43% and Annual Growth of 25% versus Prior Year Driven by PCT Clinical Services Revenues
Conference Call Begins Today at 5:00 pm Eastern Time
BASKING RIDGE, N.J., March 15, 2016 (GLOBE NEWSWIRE) -- Caladrius Biosciences, Inc. (NASDAQ:CLBS) (“Caladrius”), a cell therapy company combining an industry-leading development and manufacturing services provider with a select therapeutic development pipeline, announces financial results for the three and twelve months ended December 31, 2015 respectively.
Financial and Business Highlights
- Executed a global collaboration and license agreement between PCT and Hitachi Chemical Co., Ltd. (Hitachi Chemical) with the sale of 19.9% of PCT for $19.4 million and licensing of the PCT brand and its cell therapy manufacturing know-how to Hitachi Chemical for certain Asian territories for $5.6 million upfront and future royalties.
- Total revenues for the fourth quarter of 2015 increased 43% to $7.6 million compared with $5.3 million in the fourth quarter of 2014, driven by increases in Clinical Services revenue at PCT, the Company’s cell therapy development and manufacturing subsidiary.
- Strategic attention was focused on growing PCT’s leadership position in the emerging cell therapy market and on clinical development of a T regulatory cell therapy for type 1 diabetes.
- CD34 ischemic repair technology (CD34 cell therapy or CLBS10) for acute myocardial infarction and chronic heart failure was out-licensed in select territories outside the U.S. to SPS Cardio LLC.
- Exclusive global rights to cell-derived dermatological technology for topical skin applications were out-licensed to AiVita Biomedical, Inc.
- Completed one year follow-up of the PreSERVE AMI trial, with result supporting the previous observation of dose-dependent signals across multiple endpoints, and announced decision to conclude the study after two year rather than three year follow-up as the important data has been realized and to avoid additional material expenses.
- Raised $26.5 million through a public offering of common stock which introduced a strong contingent of new institutional investors in May 2015.
Management Commentary
“We are delighted by the stellar performance at PCT as evidenced by significant revenue increases during the quarter and over the year as a whole,” stated David J. Mazzo, PhD, Chief Executive Officer of Caladrius Biosciences. “We look forward to continued growth in 2016 and beyond as we capitalize on PCT’s leadership position in cell therapy contract development and manufacturing in concert with our new global partner, Hitachi Chemical.”
“Additionally, we have divested and monetized non-core assets and have focused our clinical activities on CLBS03, our T regulatory cell therapy program targeting treatment of recent onset type 1 diabetes,” he added. “As to the latter, we look forward in the coming weeks to infusing the first patient in our Phase 2 clinical trial being executed in collaboration with Sanford Research, a non-profit research organization that supports an emerging translational research center focused on finding a cure for type 1 diabetes.”
“2016 is off to a strong start and we are excited about the opportunities ahead for Caladrius as we grow our PCT business and advance the Phase 2 clinical study of CLBS03 in type 1 diabetes. We look forward to achieving a number of important, value-creating milestones throughout the year,” concluded Dr. Mazzo.
Fourth Quarter Financial Highlights
Total revenues for the fourth quarter of 2015 increased 43% to $7.6 million compared with $5.3 million for the fourth quarter of 2014, primarily due to higher reported Clinical Services revenues at PCT.
Research and development (R&D) expenses for the fourth quarter of 2015 decreased 69% to $3.2 million compared with $10.2 million for the fourth quarter of 2014. The decrease was primarily related to lower costs associated with the Company’s PreSERVE-AMI Phase 2 clinical trial, which completed enrollment in 2014, and the receipt of a $2.7 million grant to support R&D, offset by costs associated with the Intus Phase 3 clinical trial, which initiated in 2015, as well as minor increases in expenses for a potential critical limb ischemia development program in Japan and with the immune modulation program, including efforts to initiate a Phase 2 study of CLBS03 in type 1 diabetes.
Selling, general and administrative (SG&A) expenses were approximately $5.4 million for the fourth quarter of 2015 compared with $6.5 million for the same period in 2014, primarily due to lower equity-based compensation expenses in the current quarter.
The net loss attributable to Caladrius common stockholders for the three months ended December 31, 2015 was $33.2 million or $0.59 per share, compared to $11.6 million or $0.32 per share for same period in 2014.
Net loss for the fourth quarter of 2015 included the impairment of in-process R&D (IPR&D) valued at $34.3 million related to the Company’s decision to discontinue its Phase 3 study of CLBS20 in metastatic melanoma. This impairment was partially offset by the reversal of a related deferred tax liability of $13.9 million, and the reversal of a related contingent consideration milestone obligation of $13.9 million. Goodwill was also impaired by $18.2 million as of December 31, 2015, based on this Company decision. The net impact for these changes in the fourth quarter was a $24.7 million increase in net loss, which was a non-cash charge.
Full Year Financial Highlights
Total revenues for 2015 of $22.5 million represented an increase of 25% compared with $17.9 million for 2014. R&D expenses in 2015 were $23.9 million compared with $29.2 million in 2014. SG&A expenses for 2015 were $30.0 million compared with $30.8 million for 2014.
The net loss attributable to Caladrius common stockholders for 2015 was $80.9 million or $1.67 per share based on 48.5 million shares outstanding, compared to $54.9 million or $1.68 per share based on 32.8 million shares outstanding for 2014.
Net loss for 2015 included the impairments of IPR&D associated with our CLBS20 and CLBS10 clinical programs, valued at $43.7 million. These impairments were partially offset by the reversals of related deferred tax liabilities of $17.7 million, and the reversals of related contingent considerations obligations of $19.5 million. As previously mentioned, goodwill was also impaired by $18.2 million based on these changes. The net impact for these changes was a $24.7 million increase in 2015 net loss, which was a non-cash charge.
Balance Sheet Highlights
As of December 31, 2015, Caladrius had cash and cash equivalents of $20.3 million. The net cash used in operating activities for the three months ended December 31, 2015 was $8.7 million and for 2015 was $39.3 million. During 2015 the Company invested $3.2 million in capital expenditures primarily related to equipment and improvements for PCT’s Allendale, N.J. and Mountain View, CA manufacturing facilities, in addition to information technology infrastructure and systems.
Financial Guidance
For 2016, Caladrius affirms expectations for total revenues to exceed $30 million, representing an increase of greater than 30% compared with 2015. In order to support this projected growth, Caladrius expects to spend $6 million in capital improvements to increase PCT’s Allendale, N.J. clean room capacity by 60%, and expects to complete the build-out in 2016. Caladrius also estimates that it will incur restructuring charges of approximately $1.0 million in connection with one-time employee termination costs, including severance and other benefits, in the first quarter of 2016. The Company estimates that the previously announced staff reductions will result in more than $4 million in annualized compensation-related savings, and anticipates significant cost savings associated with terminating the CLBS20 study, which had been estimated to cost $35 million through its completion. In addition, with a narrowed focus on research and development initiatives, as well as a re-sizing of the Company’s general and administrative infrastructure, Caladrius expects to lower R&D, SG&A and overall cash burn in 2016 compared with 2015.
Conference Call
As previously announced, Caladrius will host a conference call to discuss these results and provide a company update today at 5:00 pm Eastern time. To participate in the conference call, dial 877-562-4460 (U.S.) or 513-438-4106 (international) and provide conference ID 95709216. To access the live webcast, visit the Investor Relations section of the Company’s website at http:/www.caladrius.com/events. The webcast will be archived on the website for 90 days.
Caladrius Biosciences, Inc. Selected Financial Data (unaudited)
(in thousands, except per share data)
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Statement of Operations Data: | ||||||||||||||||
| Revenues | $ | 7,560 | $ | 5,276 | $ | 22,488 | $ | 17,939 | ||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of revenues | 6,183 | 4,164 | 20,159 | 15,678 | ||||||||||||
| Research and development | 3,179 | 10,170 | 23,899 | 29,194 | ||||||||||||
| Impairment of intangible assets | 52,873 | - | 62,273 | - | ||||||||||||
| Selling, general, and administrative | 5,034 | 6,496 | 30,006 | 30,807 | ||||||||||||
| Total operating costs and expenses | 67,269 | 20,830 | 136,337 | 75,680 | ||||||||||||
| Operating loss | (59,709 | ) | (15,554 | ) | (113,849 | ) | (57,741 | ) | ||||||||
| Other income (expense), net | 13,325 | 3,989 | 17,724 | 2,926 | ||||||||||||
| Interest expense | (477 | ) | (372 | ) | (2,128 | ) | (756 | ) | ||||||||
| Loss before income taxes and noncontrolling interests | (46,862 | ) | (11,937 | ) | (98,254 | ) | (55,570 | ) | ||||||||
| Benefit from income taxes | (13,633 | ) | (246 | ) | (17,244 | ) | (104 | ) | ||||||||
| Net loss | (33,228 | ) | (11,691 | ) | (81,011 | ) | (55,466 | ) | ||||||||
| Less - loss attributable to noncontrolling interests | (31 | ) | (78 | ) | (125 | ) | (593 | ) | ||||||||
| Net loss attributable to Caladrius Biosciences, Inc. common stockholders | $ | (33,197 | ) | $ | (11,612 | ) | $ | (80,886 | ) | $ | (54,873 | ) | ||||
| Basic and diluted loss per share attributable to Caladrius Biosciences, Inc. common shareholders | $ | (0.59 | ) | $ | (0.32 | ) | $ | (1.67 | ) | $ | (1.68 | ) | ||||
| Weighted average common shares outstanding | 56,091 | 35,999 | 48,508 | 32,756 | ||||||||||||
| December 31, 2015 | December 31, 2014 | ||||||
| Balance Sheet Data: | |||||||
| Cash, cash equivalents, and marketable securities | $ | 20,318 | $ | 26,254 | |||
| Total assets | 57,205 | 126,275 | |||||
| Total liabilities | 33,921 | 68,202 | |||||
| Total equity | 23,284 | 58,074 | |||||
About Caladrius Biosciences
Caladrius Biosciences, Inc., through its subsidiary, PCT, is a leading development and manufacturing partner to the cell therapy industry. PCT works with its clients to overcome the fundamental challenges of cell therapy manufacturing by providing a wide range of innovative services including product and process development, GMP manufacturing, engineering and automation, cell and tissue processing, logistics, storage and distribution, as well as expert consulting and regulatory support. PCT and Hitachi Chemical Co. have entered into a strategic global collaboration to accelerate the creation of a global commercial cell therapy development and manufacturing enterprise with deep engineering expertise. Around the core expertise of PCT, Caladrius strategically develops select product candidates, which currently includes an innovative therapy for type 1 diabetes based on a proprietary platform technology for immunomodulation. For more information, visit www.caladrius.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect management’s current expectations, as of the date of this press release, and involve certain risks and uncertainties. All statements other than statements of historical fact contained in this press release are forward-looking statements, including statements regarding the benefits of our collaboration with Hitachi Chemical, the continued growth of the Company, the infusion of the first patient and further execution of a Phase 2 study of CLBS03 in type 1 diabetes, the achievement of value-creating milestones throughout 2016 and the achievement of the revenue and expense targets presented as financial guidance for 2016. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors. Factors that could cause future results to materially differ from the recent results or those projected in forward-looking statements include the “Risk Factors” described in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 15, 2016, and in the Company’s other periodic filings with the SEC, including: risks related to: (i) our expected continued losses and negative cash flows; (ii) our anticipated need for substantial additional financing; (iii) the significant costs and management resources required to comply with the requirements of being a public company; (iv) the possibility that a significant market for cell therapy may not emerge; (v) the potential variability in PCT’s revenues; (vi) PCT’s limited manufacturing capacity; (vii) the need to improve manufacturing efficiency at PCT; (viii) the limited marketing staff and budget at PCT; (ix) the logistics associated with the distribution of materials produced by PCT; (x) government regulation; (xi) our intellectual property; (xii) cybersecurity; (xiii) the development, approval and commercialization of our products; (xiv) enrolling patients in and completing, clinical trials; (xv) the variability of autologous cell therapy; (xvi) our access to reagents we use in the clinical development of our cell therapy product candidates; (xvii) the validation and establishment of manufacturing controls; (xviii) the failure to obtain regulatory approvals outside the United States; (xix) our failure to realize benefits relating to “fast track” and “orphan drug” designations; (xx) the failure of our clinical trials to demonstrate the safety and efficacy of our product candidates; (xxi) our current lack of sufficient manufacturing capabilities to produce our product candidates at commercial scale; (xxii) our lack of revenue from product sales; (xxiii) the commercial potential and profitability of our products; (xxiv) our failure to realize benefits from collaborations, strategic alliances or licensing arrangements; (xxv) the novelty and expense of the technology used in our cell therapy business; (xxvi) the possibility that our competitors will develop and market more effective, safer or less expensive products than our product candidates; (xxvii) product liability claims and litigation, including exposure from the use of our products; (xxviii) our potential inability to retain or hire key employees; and (xxix) risks related to our capital stock. The Company’s further development is highly dependent on, among other things, future medical and research developments and market acceptance, which are outside of its control.