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Cytori Reports Year End 2008 Results; Reviews 2008 Progress and 2009 Business Objectives
Highlights for 2008 include the following:
- Launch of the Celution(R) System into the cosmetic and reconstructive surgery market in Europe and Asia Pacific
- Initiation of a 70 patient European post-marketing study with the goal to seek reimbursement for partial mastectomy reconstruction
- Realization of increased demand for the Celution(R) System in Asia Pacific for access to clinical grade cells
- Receipt of several important U.S. and International patents and patent allowances in 2008, which extensively cover the Celution(R) System technology and applications of the Celution(R) System output
Total revenues in 2008 were 6.9 million USD. This consisted of 4.5 million USD in Celution(R) System and StemSource(R) product revenues, compared to 792,000 USD in product revenues in 2007. This significant increase in product revenues was largely due to the first year launch of the Celution(R) System and the StemSource(R) Cell Bank. Gross margins on product revenues for 2008 were 59%.
The Company believes that full year sales of the Celution(R) System and StemSource(R) Cell Bank will exceed 10 million USD. Factors contributing to the 2009 sales forecast include Celution(R) System orders already received this year, the recent installation of a StemSource(R) Cell Bank in Japan, 2009 sales expectations from Cytori's marketing and distribution partners and emerging customer consumable reorder trends. Cytori's marketing and distribution partnership with GE Healthcare is active and contributing to 2009 sales. This quarter, Cytori received its opening order for Celution(R) System devices and consumables from GE Healthcare, trained their European sales force, and both companies are broadly collaborating to grow 2009 sales in key European markets.
Cytori reduced its operating expenses in the third and fourth quarters of 2008 mostly due to a decrease in general and administrative and research and development expenses, offset in part by a planned increase in sales and marketing expenses. The Company anticipates continued significant reduction in operating expenses in 2009, as Cytori further shifts its resources toward managing sales and marketing activities, assumed mostly by its distribution partners, and away from research and development. The Company expects this will reduce cash operating losses to approximately 1 million USD per month in the near term.
Net loss for 2008 was 30.0 million USD, or 1.12 USD per share on a basic and diluted basis, as compared to 28.7 million USD, or 1.25 USD per share on a basic and diluted basis for 2007. The increase in net loss is attributable in part to increased sales and marketing expenses, coinciding with the Celution(R) System launch, a non cash increase in the fair value of the option liability during 2008, and a gain on sale of assets in 2007, for which there was no comparable gain in 2008. This was offset in part by a reduction in research and development and general and administrative expenses.
Cytori ended the year with 12.6 million USD in cash and cash equivalents compared to 11.5 million USD as of December 31, 2007. The Company will require additional capital in the near term for its operations, and is currently in discussions regarding potential options to improve its cash position. Cytori's business objectives for 2009 and beyond include the following:
- Exceed global Celution(R) System and StemSource(R) sales target of 10 million USD in 2009
- Expand global distribution network in Europe and Asia-Pacific and related sales impact
- Expand Celution(R) System product claims to include general and plastic surgery procedures
- Expand reconstructive surgery reimbursement in Europe
- Substantial reduction in total operating expenses
- Complete enrollment of RESTORE II in the second quarter of 2009
- Report preliminary RESTORE II results as early as the fourth quarter of 2009 on patients who have been followed for six months at the time of analysis
- Introduce complementary cosmetic and reconstructive surgery products in the U.S. in the third quarter of 2009
- Finalize U.S. regulatory and clinical development and regulatory strategy
- Complete enrollment in cardiovascular studies (PRECISE & APOLLO) and report results in 2010
Cytori will host a conference call at 10:30 a.m. Eastern Time today to discuss these results. The audio webcast of the conference call may be accessed under "Events & Webcasts" in the Investor Relations section of the Cytori's website (www.cytoritx.com). The webcast will be available live and by replay two hours after the call and archived for 90 days. A telephone replay will be available for one week, accessible at +1 (303) 590-3000 (PIN: 111268474#).
Cautionary Statement Regarding Forward-Looking Statements
This press release includes forward-looking statements regarding events, trends and business prospects, which may affect our future operating results and financial position. Such statements, including, but not limited to, those regarding our forecasts for 2009 product revenues, anticipated continued reduction in operating expenses for 2009 and the timing of that reduction, our product revenue drivers, our sales expectations from our marketing and distribution partners, customer consumable reorder trends, anticipated StemSource(R) Cell Bank orders, our ability to introduce complementary cosmetic and reconstructive surgery products in 2009, our reduced reliance on research and development efforts, and the prospects of our ability to access additional capital for our business and the enumerated business objectives for 2009 and beyond, are all subject to risks and uncertainties that could cause our actual results and financial position to differ materially. Some of these risks and uncertainties include, but are not limited to, risks related to our history of operating losses, the need for further financing in the near term, inherent risk and uncertainty in the protection intellectual property rights, regulatory uncertainties regarding the collection and results of, clinical data, dependence on third party performance, as well as other risks and uncertainties described under the "Risk Factors" in Cytori's Securities and Exchange Commission Filings. We assume no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made.
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