Filing identity and reporting period
Important discrepancy: The supplied filing is a Form 10-Q for Caladrius Biosciences, Inc., for the quarter ended September 30, 2015. It does not identify Lisata Therapeutics, Inc., and it is not a 2014 Q3 report. Confirm that this is the intended filing before relying on the figures below.
The company combined PCT cell-therapy manufacturing and development services with a clinical-stage cell therapy pipeline. Financial statements are unaudited; comparisons are with the three and nine months ended September 30, 2014.
Financial results and position
| Metric | Three months ended September 30 | Nine months ended September 30 |
|---|---|---|
| Revenue | 2015: $5.9 million; 2014: $4.1 million | 2015: $14.9 million; 2014: $12.7 million |
| Net loss | 2015: $11.4 million; 2014: $17.2 million | 2015: $47.8 million; 2014: $43.8 million |
| Net loss per share | 2015: $0.21; 2014: $0.48 | 2015: $1.04; 2014: $1.37 |
| Operating loss | 2015: $10.4 million; 2014: $16.3 million | 2015: $54.1 million; 2014: $42.2 million |
| Gross profit / margin | 2015: $1.1 million / 18%; 2014: $0.1 million / 3% | 2015: $1.0 million / 6%; 2014: $1.1 million / 9% |
- For the nine months, research and development expense was $20.7 million, including a $9.4 million intangible-asset impairment; selling, general and administrative expense was $25.0 million.
- Cash and cash equivalents were $24.0 million at September 30, 2015, with marketable securities of $5.3 million. Working capital was $18.7 million.
- Nine-month operating cash use was $30.5 million; investing cash use was $0.9 million; financing provided $36.3 million. Cash increased by $4.9 million from year-end 2014.
- Debt at September 30 included $15.0 million of Oxford long-term debt outstanding before scheduled repayments, presented as $2.8 million current and $12.2 million long-term, plus approximately $1.8 million of notes payable. The Oxford loan bears 8.5% interest; principal payments were scheduled to begin April 2016, with maturity in September 2018.
- Total assets were $119.7 million and total liabilities were $64.7 million. Stockholders’ equity was $55.4 million; total equity including noncontrolling interests was $55.0 million.
Material changes and unusual items
- Third-quarter revenue rose 43%, mainly from higher clinical manufacturing activity. Nine-month revenue rose 18%, while nine-month gross margin declined to 6% from 9%.
- Third-quarter net loss narrowed year over year, reflecting lower research and development and selling, general and administrative expenses. Nine-month net loss widened, in part because of the $9.4 million impairment charge and increased operating costs.
- The company decided not to pursue further development of CLBS10 for acute myocardial infarction after the ongoing Phase 2 study. It impaired the related $9.4 million of in-process R&D and reduced related contingent consideration from $5.6 million to zero. The filing says these changes together increased nine-month net loss by approximately $20,000, after the related tax benefit.
- Net proceeds from the June 2015 public offering were approximately $26.5 million. The company also raised $9.4 million gross under an existing Aspire Capital agreement during the first nine months.
- In November 2015, after quarter-end, the company entered a further Aspire Capital agreement for up to $30 million over 24 months, subject to share limits, market-pricing terms and other conditions. It issued 842,696 commitment shares. This is a potential source of capital, not cash already received at September 30.
Outlook, commentary and risks
- Management expected available cash, revenue-generating activities and access to the new Aspire agreement to fund operations through the next 12 months, but warned that additional financing may not be available on acceptable terms. Failure to raise capital could delay or curtail development programs or PCT expansion.
- The Phase 3 Intus study of CLBS20 for metastatic melanoma was expected to cost about $45 million in total, or $28 million net of a $17.7 million CIRM award. Remaining study costs were estimated at approximately $36 million gross, or $22 million net of expected remaining CIRM funding. The award requires dollar-for-dollar company matching; California may be entitled to future payments tied to supported-product sales.
- The company expected to complete Intus enrollment in Q4 2016; an interim analysis after 99 trial events was anticipated around the end of 2017. CLBS03’s Phase 2 type 1 diabetes study was expected to begin enrollment as early as Q1 2016.
- Management cited clinical-trial, enrollment, manufacturing, regulatory, funding and commercialization uncertainties. It also noted that the melanoma treatment landscape was evolving and that early-stage ischemic-repair opportunities would require external funding or partnerships.
- Contractual obligations totaled $26.0 million, including debt, notes payable, purchase obligations and operating leases. The company reported compliance with Oxford loan covenants and no material off-balance-sheet arrangements. Management said disclosure controls were effective.
Most important facts to verify
- Confirm the issuer and period: the supplied document is Caladrius Biosciences’ 2015 Q3 filing, not a Lisata 2014 Q3 filing.
- Review the terms, availability and potential dilution of the November 2015 Aspire Capital facility, including share caps and market-price conditions.
- Assess the company’s cash runway against operating cash burn, Intus study spending, CIRM matching requirements and scheduled debt principal payments.
- Track Intus enrollment, interim-analysis timing and clinical/manufacturing risks, as well as the planned CLBS03 study start.
- Evaluate the effect of the CLBS10 discontinuation and impairment on the remaining pipeline and the assumptions behind contingent-consideration valuations.