StemCells, Inc. (NASDAQ: STEM) today reported financial results for the second quarter ended June 30, 2009.
Results for the quarter reflect the Company’s acquisition of the operations of Stem Cell Sciences Plc (SCS), a UK-based company focused on cell-based technologies for drug discovery and screening. This acquisition, which closed on April 1, 2009, solidifies StemCells’ leadership position in human neural stem cell technology, broadens its proprietary cell-based technologies, adds expertise and infrastructure for providing cell-based assays for drug discovery and screening, adds a revenue-generating cell culture media business, and establishes a European presence for the Company with operations in Cambridge, U.K. As consideration for the acquired operations, StemCells issued to SCS 2,650,000 shares of common stock and waived certain commitments of SCS to repay $709,000 in principal and accrued interest owed to the Company.
The Company reported a net loss of $7,366,000, or $0.07 per share, for the second quarter ended June 30, 2009, compared with a net loss of $6,715,000, or $0.08 per share, in the second quarter of 2008. Total revenue for the second quarter of 2009 was $265,000, compared to $30,000 for the second quarter of 2008. This significant increase in revenue reflects the consolidation of the acquired SCS operations, and includes $121,000 in product sales from the Company’s SC Proven® portfolio of cell culture media products.
Total operating expenses for the quarter were $7,597,000, a 10% increase compared to the same period in 2008. Operating expenses in the second quarter of 2009 include two non-recurring items: (i) a charge of $310,000 to set up a reserve for costs and expenses associated with the Company’s exit from its Melbourne, Australia site, and (ii) transaction expenses of $172,000 related to the acquisition of the SCS operations. Research and development expenses were 14% higher in the second quarter of 2009 compared with the same period in 2008, primarily due to the consolidation of the SCS operations, while general and administrative expenses were 6% lower in the second quarter compared with the same period in 2008, primarily due to lower external services fees.
Cash, cash equivalents and short-term marketable debt securities totaled $36,760,000 at June 30, 2009. In the second quarter of 2009, the Company raised $8,655,000 in gross proceeds through the sale of 4,937,400 shares of common stock. For the first six months of 2009, the Company’s cash used in operations totaled $12,383,000, which was 1% higher than the same period in 2008. This modest increase reflects the Company’s continuing efforts to control expenses and manage working capital requirements.
Significant recent events include: