CYTOMEDIX CEO ISSUES SHAREHOLDER UPDATE
ROCKVILLE, MD., September
9, 2009 – Cytomedix, Inc. (NYSE
Alternext US:
GTF) announced today that Chief Executive Officer, Martin
Rosendale, issued the following letter to shareholders
providing a general corporate update:
To Our Stockholders:
It is with pleasure and a sense of long-term optimism that I
report to you on the significant progress made at Cytomedix
during the first half of 2009 to expand our presence in the
wound healing market. We demonstrated momentum in all areas
critical to building a sustainable growth business, namely
substantially growing product sales, advancing our
regulatory strategy and strengthening our balance sheet.
Sales of our AutoloGel™ System during the second quarter of
the year increased 165% over last year’s second quarter and
were up 72% compared with the first quarter of 2009. We
continued to present and publish clinical data that support
our clinician-focused education and marketing efforts. In
addition, we advanced our regulatory strategy and recently
filed a 510(k) application with the U.S. Food and Drug
Administration (FDA) for our Platelet Separation System in
orthopedic indications. In tandem, we made progress with our
review of the clinical options for CT-112 and are
establishing a cogent strategy to advance this product
through the regulatory process and into the clinic.
We strengthened our balance sheet with the recently
announced $1.5 million registered direct offering, which
will help support our plans to build Cytomedix into a
leading developer of biologically active regenerative
therapies for wound care, inflammation and angiogenesis.
Financial Results
Financial highlights of the second quarter and first half of
2009, compared with the corresponding prior-year period,
include:
• Total revenues for the second quarter up 33% to $569,000,
for the first half up 5% to $1.11 million
• Royalty revenue for the second quarter up 24% to $496,000,
for the first half down 2% to $993,000
• Product sales for the second quarter up 165% to $73,000
(up 72% over the first quarter), for the first half up 147%
to $115,000
• Gross margin for the second quarter of 79% up from 75%,
for the first half 77% up from 69%
• Net loss attributable to common stockholders for the
second quarter of $891,000 or ($0.03) per share, compared
with a loss of $1.25 million or ($0.04) per share; for the
first half a loss of $1.79 million or ($0.05) per share,
compared with a loss of $2.16 million or ($0.07) per share.
While the impressive percentage increases in product sales
are off a modest base, the underlying momentum resulting
from positive evaluation outcomes at numerous facilities and
supportive feedback from well-regarded key opinion leaders
in the wound care industry is very encouraging.
Cytomedix had cash and cash equivalents of $2.4 million as
of June 30, 2009, which does not include the $1.5 million of
incremental capital mentioned above. We used $1.6 million in
cash to fund operating activities during the first six
months of the year, in keeping with our forecasts.
We believe we have sufficient capital to support our
near-term commercialization strategy for the AutoloGel
System in wound healing. Driving product sales is doubly
important as our base platelet releasate patent loses
exclusivity late this year, and consequently, our royalty
derived cash flows will cease early next year. Early results
from our renewed clinical and scientific commercialization
strategy are very encouraging as evidenced by our financial
results, and we are confident that our strategy will
continue to be successful as we expand its scope and build
on its momentum.
The AutoloGel System
As I have discussed previously, during the first quarter of
this year we shifted our commercial strategy for the
AutoloGel System to emphasize clinical outcomes and
scientific data. Customers appear to be receptive to the
scientific message and are intensely interested in the
actual clinical outcomes.
As our clinical evaluations proceed, we have been collecting
outcomes data to share with potential customers, and also
intend to use this information in our strategic
reimbursement initiatives discussed below. Through June, we
have collected and analyzed data on 65 wounds of differing
types across 50 patients and 11 facilities. Importantly, the
average duration of these wounds before the first treatment
with AutoloGel was 48 weeks. The AutoloGel System produced a
favorable clinical response in 97% of the wounds treated
with a mean reduction in wound volume of 62% in less than
three weeks of treatment on average.
As part of this change, we continue to publish and present
compelling clinical, scientific and economic data in support
of the adoption of the AutoloGel System as an effective
wound healing therapy, including the publication in WOUNDS
of a paper entitled, “Double impact: Synergism in using
Negative Pressure Wound Therapy (NPWT) with alternated
applications of Autologous Platelet Derived Growth Factors
in treating post acute surgical wounds.” This study
demonstrated that the AutoloGel System can be used
effectively in combination with other widely used wound care
therapies such as NPWT. This finding is important as the
ability of the AutoloGel System to be complementary to
existing therapies that physicians are comfortable using can
help accelerate acceptance.
In addition we presented two clinical posters demonstrating
positive outcomes using the AutoloGel System in challenging
chronic wound patients at the 22nd Annual Symposium on
Advanced Wound Care and Wound Healing Society (SAWC/WHS)
Meeting. These results were presented by well-regarded
medical professionals who shared encouraging findings from
their independent research. These types of presentations are
excellent opportunities for us to have our product
championed by key opinion leaders to groups of potential
users.
Our recent 510(k) submission in orthopedic indications
further enhances our existing AutoloGel System and
streamlines the process to produce the gel, thereby making
the clinical process more efficient. Upon clearance we look
forward to bringing these advances to our growing customer
base and to potential orthopedic partners who may be
interested in licensing this advanced technology.
We are making further progress with our reimbursement
initiatives, an area we recognize as being critical to the
long-term and widespread adoption of our technology in wound
healing. Toward that end we continue to build the body of
clinical and scientific data to support a favorable
determination from the Centers for Medicare and Medicaid
Services (CMS). In the interim, we remain focused on the
more than 70% of the market that is either provided in Long
Term Acute Care facilities, is part of a capitated payment
environment, is covered by private payers or is included in
governmental programs such as the Veteran’s Health
Administration.
We have initiated a strategy to penetrate these and other
capitated programs, and have embarked on a program for
patient pre-authorizations with various private insurers. We
are encouraged by early responses to these initiatives.
Efforts to reform the U.S. healthcare system include calls
for studies to provide comparative data on both the efficacy
and the cost-effectiveness of various treatments. We believe
that the AutoloGel System can benefit from such initiatives
as pharmacoeconomic data published in the December 2008
edition of the peer-reviewed, multidisciplinary scientific
journal Advances in Skin and Wound Care presented a
cost-effectiveness analysis comparing the AutoloGel System
to alternative technologies for managing non-healing
diabetic foot ulcers. The author concluded that the use of
the AutoloGel System may result in improved quality of life
and lower cost of care over a five-year period versus other
technologies for non-healing diabetic foot ulcers. These
findings suggest that the AutoloGel System may be an
attractive means for insurers and healthcare providers to
address the cost burden and health effects of a variety of
chronic wound conditions.
We continue to use data and publications such as these,
along with our legislative, patient and clinician advocacy
efforts, as the cornerstone of our strategic initiatives to
garner support for favorable reimbursement.
CT-112
Cytomedix’s long-range goal is to become a leading developer
of advanced biological therapies to treat complex clinical
problems. Toward that end, we continue to innovate and
expand our product pipeline, which includes our lead
development candidate CT-112. This compound is an
octapeptide sequence derived from human platelet factor 4
(PF4 or CXCL4) that was identified through investigation of
α chemokines that affect the movement of inflammatory cells
into sites of tissue injury. Initial preclinical data
support multiple routes of administration and multiple
indications for such a powerful anti-inflammatory.
CT-112 was shown to be potentially useful as a therapeutic
for a number of autoimmune diseases, such as rheumatoid
arthritis, graft-versus-host disease, chronic obstructive
pulmonary disease, reperfusion injury and atherosclerosis.
Market assessments found that these fields are crowded with
new therapies under investigation, and that the requisite
clinical trials are lengthy and involve large numbers of
patients .
As I reported in my last letter, we engaged the Frankel
Group to conduct a review of potential therapeutic
indications for CT-112, which revealed a number of
underserved conditions that provide optimal market
opportunity along with a well-defined regulatory pathway.
These included Pyoderma gangrenosum (PG), coated stents and
atopic dermatitis. Based on the findings of this review, our
next steps will be to complete additional animal studies to
provide proof-of-concept data in support of the utility of
CT-112 in coated stents. This will provide us with the
platform to engage in dialogue with a number of potential
collaborators with an aim toward partnering or licensing
CT-112 in this indication.
Once we have secured a partner, we plan to use the proceeds
from such an agreement to further develop CT-112 in
indications where we believe we can successfully advance the
compound on our own. PG is a likely first target as it has
potential for orphan status, which provides for extended
patent protection and potential funding from FDA’s Office of
Orphan Drugs, among other benefits.
In Closing
The first half of 2009 got off to a strong start and the
balance of the year continues to look promising. We
substantially increased product sales and raised capital to
build on the momentum of our renewed commercial strategy for
the AutoloGel System in wound healing. We are optimistic
about the near and intermediate term growth opportunities as
Cytomedix continues to expand the clinical and scientific
body of knowledge in support of the AutoloGel System as an
efficacious and cost-effective therapeutic. We are equally
enthusiastic about the longer term future for Cytomedix as
our success will allow us to advance our pipeline of
promising regenerative therapies for wound care,
inflammation and angiogenesis.
I extend thanks to our talented and dedicated staff, whose
commitment is the cornerstone to maintaining the quality of
our products and a high level of innovation, and I thank
you, our loyal shareholders, for your continued support and
encouragement.
I look forward to keeping you apprised of our progress.
Sincerely,
Martin P. Rosendale
Chief Executive OfficerABOUT CYTOMEDIX
Cytomedix is a biotechnology company that develops, sells,
and licenses regenerative biological therapies, including
the AutoloGel™ System, a device for the production of
platelet rich plasma ("PRP'') gel derived from the patient's
own blood. The AutoloGel™ System is cleared by the Food and
Drug Administration ("FDA'') for use on a variety of exuding
wounds. Additional information regarding Cytomedix is
available at: http://www.cytomedix.com
SAFE HARBOR STATEMENT
Statements contained in this press release not relating to
historical facts are forward-looking statements that are
intended to fall within the safe harbor rule for such
statements under the Private Securities Litigation Reform
Act of 1995. The information contained in the
forward-looking statements is inherently uncertain, and
Cytomedix's actual results may differ materially due to a
number of factors, many of which are beyond Cytomedix's
ability to predict or control, including among others, the
outcome of development or regulatory review of CT-112,
commercial success or acceptance by the medical community,
competitive responses, viability and effectiveness of the
Company's sales approach and overall marketing strategies,
and Cytomedix's ability to execute on its strategy to market
the AutoloGel™ System as contemplated. These
forward-looking statements are subject to known and unknown
risks and uncertainties that could cause actual events to
differ from the forward-looking statements. More information
about some of these risks and uncertainties may be found in
the reports filed with the Securities and Exchange
Commission by Cytomedix, Inc. Cytomedix operates in a highly
competitive and rapidly changing business and regulatory
environment, thus new or unforeseen risks may arise.
Accordingly, investors should not place any reliance on
forward-looking statements as a prediction of actual
results. Except as is expressly required by the federal
securities laws, Cytomedix undertakes no obligation to
update or revise any forward-looking statements, whether as
a result of new information, changed circumstances or future
events or for any other reason.
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