Cardium Presents First Quarter 2013 Financial Results And Reports On Recent Developments

SAN DIEGO, May 15, 2013 /PRNewswire/ -- Cardium Therapeutics (NYSE MKT: CXM) today presented its financial results for the first quarter ended March 31, 2013, and reported on highlights and other recent developments including:

  • Awarded ISO 13485 Certification for Excellagen, State of California manufacturing license and state clearances to market and sell Excellagen in the U.S., and advanced other international registrations for Excellagen, including CE Mark registration, which the Company expects to receive approval on or around the end of the second quarter 2013. 
  • Announced sales and distribution agreement with Academy Medical, LLC to market, sell and distribute Excellagen to U.S. government medical providers.  Academy Medical has a growing customer base of over 35 Veterans Administration and military hospitals within the U.S.  Cardium also entered agreements with independent regional distributor groups with sales representatives focused on podiatry, orthopedic physicians, plastic surgeons, hospitals and surgical centers. Including Academy Medical, there are currently over 60 sales representatives selling Excellagen. 
  • Excellagen awarded the American Podiatric Medical Association's Seal of Approval for its contributions to better foot health and mobility.
  • Presentation at the Symposium on Advanced Wound Care Spring 2013 Meeting highlighting Excellagen's capability of promoting rapid granulation and complete healing in three difficult and complex post-surgical wounds, including Mohs surgery and wound dehiscence.
  • Presentation at the 2013 Phacilitate Annual Cell & Gene Therapy Forum in Washington, DC, "Optimizing Phase III Trial Design for Generx® (Ad5FGF-4)" reporting on adaptive coronary collateral growth, the biological processes to be targeted by therapeutic angiogenesis, and discussed the lessons learned during the past decade of the Company's Generx clinical development program.
  • Publication of the paper, "Mechanistic, Technical, and Clinical Perspectives in Therapeutic Stimulation of Coronary Collateral Development by Angiogenic Growth Factors," authored by Gabor M. Rubanyi, M.D., Ph.D., Cardium's Chief Scientific Officer, in the April issue of Molecular Therapy publication.  The publication outlines current scientific knowledge about the mechanistic basis of adaptive coronary collateral growth, the biological processes to be targeted by therapeutic angiogenesis, and the optimization of clinical trial designs, including the Generx ASPIRE Phase 3 / registration study.
  • Expanded To Go Brands® VitaRocks® kids vitamin product line and broadened retail distribution of the newly-designed products into select nationwide Target stores.  Because of the unique manufacturing process of To Go Brands' VitaRocks platform, the Company now has the flexibility to expand the product line into formulas that could include enzymes, electrolytes, amino acids, vitamins and minerals, as well as nutrients, and into other applications including Over-the-Counter (OTC) drugs.

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Financial Report

Product sales for the three months ended March 31, 2013 totaled $599,000, compared to $20,000 for the same period in 2012. The increase in sales during the first quarter 2013 reflects sales from Cardium's To Go Brands health science-based operating unit (representing approximately 92% of total product sales) and sales of Cardium's Excellagen advanced wound care product (8% of total product sales). 

Cardium's research and development costs for the first three months ended March 31, 2013 totaled $762,000, compared to $1.2 million for the three months ended March 31, 2012.  The decrease was the result of decreased expenses related to the development of Excellagen, partially offset by increased costs associated with the Company's ongoing Generx ASPIRE study.  After taking into account a one-time expense totaling $100,000 of product and testing in association with Excellagen, to validate higher level production volumes, and related cost efficiency improvements, research and development expenses in the first quarter 2103 were overall reduced by 46% when compared to the first quarter 2012.  Selling, general and administrative expenses for the three-month period ended March 31, 2013 were $1.7 million, compared to $1.5 million for the same period in 2012.  The increase was primarily due to costs associated with To Go Brands operations. 

For the three months ended March 31, 2013, the Company reported a lower net loss of $2.2 million, or $(0.02) per share, when compared to a net loss of $2.6 million, or $(0.02) per share for the three months ended March 31, 2012.  The decrease in net loss was due to cost reductions and increased sales revenue. 

As of March 31, 2013, the Company had $0.4 million in cash and cash equivalents and working capital was $0.8 million.  Net cash used in operating activities was $2.1 million for the three months ended March 31, 2013, compared to $2.2 million for the three months ended March 31, 2012.  The decrease in net cash used in operating activities was due primarily to an increase in product sales, and decreases in testing and process validation costs for the initial inventory of Cardium's Excellagen wound care product. 

As reported on April 5, 2013, subsequent to the end of the quarter, the Company raised an additional $2.2 million in net proceeds in a preferred stock financing.  In April 2013, Cardium entered into a securities purchase agreement with one of its institutional investors pursuant to which it agreed to sell to the investor an aggregate of 4,012 shares of newly authorized Series A Convertible Preferred Stock, for a total purchase price of $4.0 million. No warrants are being issued in connection with the offering, other than placement agent warrants. The securities purchase agreement provides for the sale of Series A Convertible Preferred Stock in two closings. Upon consummation of the financing, which was subject to the Company's stock exchange and other approvals, the initial closing under the securities purchase agreement took place in April 2013.  At that closing the Company sold 2,356 shares of Series A Convertible Preferred Stock for net proceeds of $2,160,300.  A second closing for the remaining $1,839,700 is scheduled to take place promptly following shareholder approval of the offering of the Series A Convertible Preferred Stock and a reverse stock split. Additional information regarding the offering and the reverse stock split is further described in the Company's proxy statement filed on April 29, 2013, which is publicly available through the Company's website and in its filings with the Securities and Exchange Commission at www.sec.gov/edgar.

In first quarter 2013, the Company reported that its exchange listing compliance plan submitted on December 6, 2012 had been accepted by the NYSE MKT.  As previously reported, a communication from the staff of the Company's current stock exchange indicated that the Company was considered to be noncompliant with certain listing requirements based on its quarterly report for the period ended September 30, 2012, and provided that the Company should submit a plan to staff of the exchange that would re-establish compliance with the NYSE MKT listing requirement by March 31, 2013.  On December 6, 2012, the Company reported that it had submitted a plan designed to reestablish compliance with the exchange's requirement, and reported on January 16, 2013 that the plan had been accepted by the stock exchange.  The Company reports that in view of the proposed Series A Convertible Preferred Stock financing, the NYSE MKT granted an additional quarterly extension of the listing compliance plan from March 31 to June 30, 2013, although as is normal course, the Company's listing compliance would continue to be evaluated on an ongoing basis.

The Company is seeking stockholder approval of the Series A Convertible Preferred Stock offering and a reverse stock split at its upcoming annual meeting of stockholders.  If the Company obtains stockholder approval, it intends to complete the second closing under the Series A Convertible Preferred Stock financing.  The net proceeds from that closing are expected to support the Company's operations at least through September 2013, providing additional time to commercialize its product portfolio and evaluate options for financing its continued operations.  The Company's principal business objective is to complete an additional strategic licensing agreement to advance sales of the Excellagen product family, enter into a distribution arrangement to advance sales of the To Go Brands nutraceutical business, or another corporate transaction. If the Company is unsuccessful in obtaining stockholder approval, it may be compelled to substantially curtail or to terminate operations, and would likely need to dispose of key assets in an effort to maintain liquidity.

About Excellagen

Excellagen is a novel syringe-based, professional-use, pharmaceutically-formulated 2.6% fibrillar Type I bovine collagen gel that functions as an acellular biological modulator to activate the wound healing process and significantly accelerate the growth of granulation tissue.  Excellagen's FDA-clearance provides for very broad labeling including partial and full-thickness wounds, pressure ulcers, venous ulcers, diabetic ulcers, chronic vascular ulcers, tunneled/undermined wounds, surgical wounds (donor sites/graft, post-Mohs surgery, post-laser surgery, podiatric, wound dehiscence), trauma wounds (abrasions, lacerations, second-degree burns and skin tears) and draining wounds.  Excellagen is intended for professional use following standard debridement procedures in the presence of blood cells and platelets, which are involved with the release of endogenous growth factors.  Excellagen's unique fibrillar Type I bovine collagen gel formulation is topically applied through easy-to-control, pre-filled, single-use syringes and is designed for application at only one-week intervals.  In addition, Excellagen has been engineered to serve as a delivery platform enabling multiple device and therapeutic product extensions to include antimicrobials, small molecule drugs, peptides, conditioned cell media, stem cells and DNA-based biologic products.  Additional information about Excellagen can be viewed at www.excellagen.com

Consistent with the Company's long-term business strategy, Cardium is focused on establishing  strategic partnerships that would cover the marketing and sale of Excellagen into U.S. vertical wound healing market channels, including: (1) podiatry, (2) wound care centers, hospitals, and long-term care facilities, (3) government agency providers (such as the U.S. Department of Veterans Affairs, Bureau of Indian Affairs and military hospitals), (4) dermatology and plastic surgery, and (5) orthopedic surgery.  The Company's commercialization strategy is similar to other companies in the advanced wound care space.  For example, GraftJacket® products developed by Wright Medical are now being marketed and sold by Kinetic Concepts Inc.; TEI Biosciences' products are being sold by Boston Scientific, Medtronic and Stryker; and Cook Medical's Oasis® products are currently being marketed and sold by Healthpoint Biotherapeutics.

Cardium is also advancing forward with the reimbursement process for Excellagen with Centers for Medicare & Medicaid Services (CMS) and private insurance providers.  Already-established standard CPT® procedure reimbursement codes may apply when Excellagen is used with surgical debridement procedures and through the DRG reimbursement system for in-hospital surgical procedures, as well as in long-term care facilities and through their service providers.

About Generx

Generx (Ad5FGF-4) is a disease-modifying regenerative medicine biologic that is being developed to offer a one-time, non-surgical option for the treatment of myocardial ischemia in patients with stable angina due to coronary artery disease, who might otherwise require surgical and mechanical interventions, such as coronary artery by-pass surgery or balloon angioplasty and stents.  Similar to surgical/mechanical revascularization approaches, the goal of Cardium's Generx product candidate is to improve blood flow to the heart muscle – but to do so non-surgically, following a single administration from a standard balloon angioplasty catheter. 

In March 2012, Cardium announced the initiation of the Generx ASPIRE Phase 3 registration study to evaluate the therapeutic effects of its lead product candidate Generx in patients with myocardial ischemia due to coronary artery disease. The ASPIRE study, a 100-patient, randomized and controlled multi-center study is being conducted at up to nine leading cardiology centers in the Russian Federation.  The study is designed to further evaluate the safety and effectiveness of Cardium's Generx DNA-based angiogenic product candidate, which has already been tested in clinical studies involving 650 patients at more than one hundred medical centers in the U.S., Europe and elsewhere.  For additional information about Generx and the ASPIRE clinical study, please visit http://www.cardiumthx.com/generx.html.

About To Go Brands®

Since 2007, To Go Brands has been making healthy, great tasting and anti-oxidant-rich phytonutrients and nutraceutical supplements in an array of easy use formats, including drink mixes, chews, powders and capsules, to empower busy lifestyles in today's fast-paced, tech-driven world.  The Go Active! product line includes High Octane®, Green Tea Energy Fusion™, Acai Natural Energy Boost™, and Neo-Energy®.  The Go Healthy! product line includes Greens to Go®, Extreme Berries to Go®, Healthy Belly®, VitaRocks®, and Neo-Chill™.  Go Trim! products include Smoothie Complete®, Trim Energy Green Coffee Bean™, Trim Energy®, and Neo-Carb Bloc®.  To Go Brands products are sold through mass, food and drug channels at retailers including Target, Whole Foods, Sprouts, Kroger, GNC, RiteAid, Jewel-Osco, Ralph's Supermarkets, Vitamin World, Meijer, Fred Meyer, King Soopers, and the Vitamin Shoppe as well as directly from the company's web-based store.  To learn more about To Go Brands, visit togobrands.com.

The Company recently announced the expansion of its To Go Brands VitaRocks® Kids vitamin product line and the broadened retail distribution of the newly-designed products into select Target stores nationwide.  VitaRocks are inspired by a popping pellet candy that is popular with kids and represents a next-generation, easy-use delivery platform for multivitamins and nutrients, dietary supplements, and potentially over-the-counter (OTC) medicines for children, as well as adults.

The Company's 2013 plans for To Go Brands include (1) completing new packaging and message re-design to update the look of current products; (2) increasing online customer acquisition and retention by introducing super affiliate programs and social media-based coupon offerings (e.g. LivingSocial); (3) expanding and leveraging the VitaRocks children's vitamin product line; and (4) expanding U.S. retail distribution and establishing international distributors to leverage on the success of To Go Brands' lead product, Trim Green Coffee Bean™ dietary supplement.

Cardium's In-House Initiatives

The Company recently announced its partner-enabled internal product development, LifeAgain™, a medical analytics and e-commerce platform that is focused on the development, marketing and direct sales of new and innovative survivable risk, multi-year, non-convertible level term life insurance programs and other insurance products, that are currently non-accessible and unaffordable for certain sub-groups of highly motivated buyers considered "uninsurable" based on traditional underwriting standards by U.S. life insurance companies. 

In addition, the Company announced the potential for a partner-enabled pilot Phase 2b/3 clinical study for Genedexa™ (Ad5PDGF-B), formerly referred to as the Company's Excellarate product candidate.  Genedexa's initial clinical development focus will be for the treatment of chronic, non-healing diabetic foot ulcers.  The Company may use alternative independent private financings and strategic partners to finance the clinical development of Genedexa and commercialize its LifeAgain platform. 

About Cardium         

Cardium is an asset-based health sciences and regenerative medicine company focused on the acquisition and strategic development of innovative products and businesses with the potential to address significant unmet medical needs and having definable pathways to commercialization, partnering or other economic monetizations. Cardium's current portfolio includes the Tissue Repair Company, Cardium Biologics, and the Company's newly-acquired To Go Brands® nutraceutical business. The Company's lead commercial product, Excellagen® topical gel for wound care management, has received FDA clearance for marketing and sale in the United States.  Cardium's lead clinical development product candidate Generx® is a DNA-based angiogenic biologic intended for the treatment of patients with myocardial ischemia due to coronary artery disease. To Go Brands® develops, markets and sells dietary supplements through established regional and national retailers.  In addition, consistent with its capital-efficient business model, Cardium continues to actively evaluate new technologies and business opportunities. For more information, visit www.cardiumthx.com.

Forward-Looking Statements  

Except for statements of historical fact, the matters discussed in this press release are forward looking and reflect numerous assumptions and involve a variety of risks and uncertainties, many of which are beyond our control and may cause actual results to differ materially from expectations. For example, there is no assurance that planned product development efforts and clinical studies can be performed in an efficient and effective manner; that results or trends observed in one clinical study or procedure will be reproduced in subsequent studies or in actual use; that new clinical studies will be successful or will lead to approvals or clearances from health regulatory authorities, or that approvals in one jurisdiction will help to support studies or approvals elsewhere; that certain elements of the preferred stock financing will be approved by stockholders; that the Company will satisfy the requirements of its compliance plan and will otherwise continue to satisfy the listing requirements of its exchange or that its shares can continue to be listed on a national exchange; that we can raise sufficient capital from partnering, monetization or other fundraising transactions to maintain our stock exchange listing or adequately fund ongoing operations; that the Company can attract suitable commercialization partners for our products or that we or partners can successfully commercialize them; that our product or product candidates will not be unfavorably compared to competitive products that may be regarded as safer, more effective, easier to use or less expensive or blocked by third party proprietary rights or other means; that the products and product candidates referred to in this report or in our other reports will be successfully commercialized and their use reimbursed, or will enhance our market value; that our To Go Brands business can be successfully integrated and expanded; that new product opportunities or commercialization efforts will be successfully established; that third parties on whom we depend will perform as anticipated; that the preferred stock offering can be completed as proposed or that the Company will not be adversely affected by risks and uncertainties that could impact our operations, business or other matters, as described in more detail in our filings with the Securities and Exchange Commission. We undertake no obligation to release publicly the results of any revisions to these forward-looking statements to reflect events or circumstances arising after the date hereof.

Copyright 2013 Cardium Therapeutics, Inc.  All rights reserved.
For Terms of Use Privacy Policy, please visit www.cardiumthx.com.

Cardium Therapeutics®, Generx®, Cardionovo®, Tissue Repair™, Excellagen®, Excellarate™, LifeAgain™, Genedexa™, Neo-Apps®, MedPodium®, Neo-Energy®, Neo-Chill™ and Neo-Carb Bloc® are trademarks of Cardium Therapeutics, Inc. or Tissue Repair Company.  To Go Brands®,  High Octane®, Green Tea Energy Fusion™, Acai Natural Energy Boost™, Greens to Go®, Extreme Berries to Go®, Healthy Belly®, VitaRocks®, Smoothie Complete®, Trim Green Coffee Bean™, and Trim Energy®, are trademarks of To Go Brands, Inc.  Other trademarks belong to their respective owners.

- Continued -



Cardium Therapeutics, Inc.

 

Selected Condensed Consolidated Results of Operations







Three months ended March 31,





2013


2012










Product sales


$      599,205


$      20,478



Cost of goods sold


(350,241)


(5,455)



Gross profit


248,964


15,023



   Operating expenses







Research and development


(762,442)


(1,164,599)



Selling, general and administrative


(1,748,184)


(1,509,761)



Loss from operations


(2,261,662)


(2,659,337)



Interest income (expense), net


(693)


1,144



Change in fair value of derivative liabilities


-


64,157



Net loss


$   (2,262,355)


$   (2,594,036)










Net loss per common  share – basic and diluted


 

$      (0.02)


 

$      (0.02)










Weighted average common shares outstanding  – basic and diluted


 

127,550,773


 

109,279,152












Selected Condensed Consolidated Balance Sheet Data



 

March 31,  

2013


 

 

 

December 31,  

2012

Cash and cash equivalents


$     365,023


$     2,328,074

 

Restricted cash


-


 

50,000

Accounts receivable


194,740


328,953

Inventory


1,091,157


1,174,323

Prepaid expenses and other current

   assets


 

376,639


 

407,389

Property and equipment, net


81,587


97,582

Intangible assets


2,581,100


2,653,010

Other long-term assets


771,400


769,547

Total assets


$     5,461,646


$     7,808,878

 

Accounts payable and accrued liabilities


 

$     1,219,675


 

$     1,392,718

Long-term liabilities


32,042


50,370

Total liabilities


1,251,717


1,443,088

Stockholder's equity


4,209,929


6,365,790

Total liabilities and stockholder's equity


$     5,461,646


$     7,808,878

 

 

SOURCE Cardium Therapeutics



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