Filing identity and reporting period
Important mismatch: The supplied filing is Caladrius Biosciences, Inc.’s Form 10-K for the fiscal year ended December 31, 2018, filed March 14, 2019. It is not identified as a Lisata Therapeutics filing, and it does not report a standalone 2017 Q4 period. The summary below reflects the filing provided.
Caladrius was a development-stage biopharmaceutical company focused on cell therapies. Its PCT manufacturing-services business had been sold in May 2017 and is reported as discontinued operations.
Financial results and liquidity
Amounts below are in U.S. dollars; financial statement figures are generally in millions unless stated otherwise.
| Metric | FY 2018 | FY 2017 |
|---|---|---|
| Revenue from continuing operations | No product revenue reported; the filing says the current business had not generated revenue | No product revenue reported |
| Operating expenses | $17.0 million | $27.6 million |
| Operating loss | $17.0 million | $27.6 million |
| Net loss from continuing operations attributable to common stockholders | $16.2 million | $16.0 million |
| Net income (loss) attributable to common stockholders, including discontinued operations | $(16.2) million | $23.0 million |
| Net cash used in operating activities—continuing operations | $20.0 million | $20.2 million |
| Cash, cash equivalents and marketable securities | $43.1 million | $55.1 million, including restricted cash |
| Working capital | $38.5 million | Not stated in the supplied text |
| Total liabilities | $7.1 million | $13.2 million |
2017 reported net income primarily reflected a $51.7 million gain on the PCT sale; discontinued operations contributed $38.4 million of income after tax. The potential $5.0 million sale milestone was not achieved. The filing reports no material debt at year-end 2018; the Oxford Finance debt had been repaid in 2017, and the 2017 notes payable were repaid by year-end 2018. Gross margin is not meaningful for the continuing development business.
Changes and business developments
- Operating expenses fell 38% year over year. Research and development expense declined to $7.6 million from $15.8 million, mainly because CLBS03 enrollment and manufacturing activity had ended in 2017 and 2018 work shifted toward follow-up; CIRM grant recognition also offset $2.6 million of 2018 T1D trial expense.
- Ischemic-repair R&D expense increased by approximately $4.9 million, reflecting the CLBS12 Phase 2 trial in Japan, the CLBS14-CMD Phase 2 study, and NORDA program planning.
- General and administrative expense declined 20% to $9.4 million, primarily due to lower headcount and corporate activity.
- Cash and securities decreased from $55.1 million at year-end 2017 (including $5.0 million restricted cash) to $43.1 million at year-end 2018. Operating cash use remained about $20 million.
- The balance sheet reports $10.3 million cash and cash equivalents plus $32.8 million marketable securities at year-end 2018. The cash flow statement’s ending cash figure is $10.3 million; these measures differ because marketable securities are separately classified.
Outlook, risks and notable items
- Management stated that year-end cash and securities were expected to fund operations for at least 12 months after issuance of the financial statements. It also said substantial additional financing would be needed for continued development; there is no assurance that funding will be available on acceptable terms.
- In March 2019, after fiscal year-end, the company entered into a financing arrangement allowing sales of up to $26 million of common stock to Lincoln Park, subject to conditions, and agreed to issue 181,510 commitment shares. The existing H.C. Wainwright ATM arrangement was increased to up to $25 million; $1.0 million net proceeds had been raised under it by year-end 2018. These facilities can dilute shareholders.
- CLBS12 was in a Phase 2 open-label CLI trial in Japan and could be eligible for conditional approval if successful; early observations involved only a small number of subjects. CLBS14-CMD was in Phase 2, with early open-label observations described as encouraging but not conclusive. The company targeted fall 2019 to start a planned registration trial for CLBS14-NORDA, subject to finalizing the protocol with FDA.
- After year-end, on February 13, 2019, Caladrius reported that CLBS03 was well tolerated but its Phase 2a T1D study did not meet its primary endpoint. Further development was pending analysis of trial data, including follow-up.
- Key risks include ongoing losses and cash burn, dependence on additional financing or partners, clinical and regulatory failure or delay, patient-enrollment challenges, reliance on external manufacturers and suppliers without qualified alternatives, and uncertain market acceptance, reimbursement and intellectual-property protection.
- Management reported effective disclosure controls and internal control over financial reporting. The independent auditor issued an unqualified opinion on the financial statements but did not audit or opine on internal-control effectiveness. The company reported no off-balance-sheet arrangements and did not believe ordinary-course legal proceedings would have a material effect.
Important facts for investors to verify
- Confirm the issuer and period: the supplied document is Caladrius Biosciences’ FY 2018 10-K, not a Lisata Therapeutics 2017 Q4 filing.
- Review the actual cash runway, cash-burn assumptions, and any financing raised or shares issued after March 2019; the stated 12-month runway is management’s estimate.
- Check the full clinical data and subsequent development decisions for CLBS03, CLBS12, CLBS14-CMD and CLBS14-NORDA; early trial observations are not definitive outcomes.
- Assess dilution and financing terms under the ATM and Lincoln Park arrangements, along with potential future capital needs.
- Reconcile cash and cash equivalents with marketable securities and restricted cash when comparing liquidity across periods.