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

NEWARK, Calif., Aug. 7, 2013 (GLOBE NEWSWIRE) -- StemCells, Inc. (Nasdaq: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

  • In April 2013, we added the Byers Eye Institute at Stanford, located in Palo Alto, Calif., as a second site for our Phase I/II clinical trial of our proprietary HuCNS-SC® cells in dry AMD.  
  • In April 2013, we entered into an agreement with the California Institute for Regenerative Medicine (CIRM) under which CIRM will provide up to approximately $19.3 million to help fund preclinical development and IND-enabling activities of our proprietary HuCNS-SC cells for Alzheimer's disease. The funding, which will be in the form of a forgivable loan, was awarded under CIRM's Disease Team Therapy Development Award program (RFA 10-05) in September 2012. The goal of the research will be to file an Investigational New Drug application with the U.S. Food and Drug Administration within four years.  
  • In April 2013, we closed a $10 million loan from Silicon Valley Bank. The loan has a three-year term and the loan funds will be used for general corporate purposes.  
  • In June 2013, Health Canada authorized us to expand our Phase I/II clinical trial for chronic spinal cord injury into Canada. The Phase I/II trial, currently underway in Zurich, Switzerland, is designed to evaluate the safety and preliminary efficacy of our proprietary HuCNS-SC cells as a treatment for chronic spinal cord injury. We are actively working to open one or more trial sites in Canada and begin screening patients.  
  • In June 2013, we entered into an agreement with Lincoln Park Capital (LPC) under which we have the right to sell up to $30.0 million of common stock to LPC. Proceeds from any sales of stock under this agreement will be used for general corporate purposes. Under the terms of the agreement, we immediately sold 1,645,639 in shares of our common stock to LPC at $1.823 per share and received gross proceeds of $3.0 million.  
  • In June 2013, we strengthened our product development capabilities by adding Eliseo Salinas, MD, as Executive Vice President and Head of Research and Development, and by hiring several other executives with broad central nervous system (CNS) drug development experience and expertise. Prior to joining StemCells, Dr. Salinas served as Executive Vice President, Head of Development and Chief Medical Officer of Elan Pharmaceuticals, and previously held senior management positions at Shire plc, Adolor Corporation and Wyeth-Ayerst Research. In addition, we appointed Ann Tsukamoto, PhD, as Executive Vice President, Scientific and Strategic Alliances, responsible for alliances and building on our existing stem cell technology platform.  
  • In July 2013, we formally launched our Alzheimer's disease program, which is being supported by CIRM, and received approximately $3.8 million as the initial disbursement of loan funds.  
  • In August 2013, we presented data which show that, two years after transplantation of our proprietary HuCNS-SC cells into patients with PMD, the evidence of myelination by magnetic resonance imaging (MRI) is more pronounced compared to one year post-transplantation, the gains in neurological function reported after one year were maintained, and there were no safety concerns. The neurological and MRI changes suggest a departure from the natural history of the disease and may represent signals of a clinical effect.

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.   

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