StemCells, Inc. Reports Third Quarter 2012 Financial Results and Provides Business Update

NEWARK, Calif., Nov. 8, 2012 (GLOBE NEWSWIRE) -- StemCells, Inc. (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 third quarter ended September 30, 2012 and provided a business update.

"We remain committed to building shareholder value by generating meaningful preclinical and clinical data in a cash-efficient manner," said Martin McGlynn, President and CEO of StemCells, Inc. "As to meaningful data, we recently published two papers demonstrating the therapeutic potential of our proprietary HuCNS-SC(R) cells for a range of myelination disorders, including the data from our Phase I clinical trial in Pelizaeus-Merzbacher disease showing evidence of new myelination and measurable gains in neurological function; we reported interim data from our spinal cord injury trial showing considerable gains in sensory function in two of three patients compared to pre-transplant baselines; and we reported exciting preclinical data in two animal models relevant to Alzheimer's disease. The data we are generating and reporting illustrate the considerable potential of our HuCNS-SC human neural stem cells to address a broad range of CNS disorders.

"As to cash management, we continue to look for ways to do more with less. This quarter we reported further reductions in operating expenses, continuing a downward trend begun in 2010, while sales of reagents marketed under the SC Proven(R) brand continue to show good growth. During the quarter, we strengthened our balance sheet and now have $27 million in the bank. In addition, we were approved for two disease team awards from the California Institute for Regenerative Medicine (CIRM) for up to $40 million in funding, and are working with CIRM to finalize the terms and conditions associated with this funding."

Third Quarter and Recent Business Highlights

Therapeutic Product Development

Other Business Activities

Third Quarter Financial Results

Revenue from product sales increased 11% to $203,000 in the third quarter of 2012 compared to the same period of 2011 as our SC Proven media and reagents business continued to see increased unit volume. Total revenue in the third quarter of 2012 was $264,000, compared to $224,000 in the same period of 2011.

Our operating expenses decreased 17% to $5,269,000 in the third quarter of 2012 compared to the same quarter of 2011. Research and development expenses were 23% lower, and selling, general and administrative expenses were 6% lower. The significant reduction in operating expenses was primarily attributable to tight cost controls and a number of measures taken previously to reduce infrastructure and overhead costs.

Other expense in the third quarter of 2012 was $11,259,000, compared to other income of $1,829,000 in the third quarter of 2011. This increase in other expense was primarily due to a non-cash expense from an increase in the estimated fair value of warrant liability. Our outstanding warrants are classified as a liability, with changes in the estimated fair value recorded as income or loss.

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StemCells, Inc. Reports Third Quarter 2012 Financial Results and Provides Business Update