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Man CMXI looking good today!
High .50s today! Should have results end of this month.
Oh no you mean this company is just like 99.999 percent of other biotech stocks! Wow the options could have been placed in the .50s oh ya and they could have raised money in the .40s instead of .52. Its trading in the high .50s that good considering all the other stocks that are taking a beating.
Last post to you ignore bye.
Maybe today was the bottom.
Form 4s filled little while ago for a bunch of options to buy shares at .60
Nice area have family that lives near Peoria . I live about 4 hours drive south.
Nice week!
SA Transcript
Cytomedix's CEO Discusses Q4 2013 Results - Earnings Call Transcript
Apr 1 2014, 12:58
about: CMXI
Cytomedix, Inc. (OTCQX:CMXI)
Q4 2013 Results Earnings Conference Call
April 01, 2014, 08:00 AM ET
Executives
Michael Wood - MD, LifeSci Advisors, Investor Relations.
Martin Rosendale - CEO
Steven A. Shallcross - EVP, CFO, Secretary and Treasurer
Dean Tozer - EVP and Chief Commercial Officer
Analysts
Jason Napodano - Zacks Investment Research
Steven E. Freed - GreenWave Financial Markets, LLC
Presentation
Operator
Good day, ladies and gentlemen. And welcome to the Quarter Four 2013 Cytomedix Earnings Conference Call. My name is Carol and I will be your operator for today.
At this time all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of the conference. (Operator Instructions). As a reminder the call is being recorded for replay purposes.
And now I’d like to turn the call over to Mr. Michael Wood, Managing Director of LifeSci Advisors. Please go ahead.
Michael Wood
Good morning. This is Michael Wood with LifeSci Advisors. I would like to thank you for participating in today’s Cytomedix fourth quarter 2013 earnings conference call.
Joining me from the company this morning are Martin Rosendale, Chief Executive Officer; Steve Shallcross, Chief Financial Officer; and Dean Tozer, Chief Commercial Officer. Here is an outline for today’s call. First, Marty will provide an update on the recent Deerfield financing announced last night, AutoloGel launch initiatives as well as research and development activities. He will then hand over the call to Steve who will provide you with a summary of the fourth quarter and full year 2013 financial results. Then Dean Tozer, newly appointed Chief Commercial Officer of the company will join the call. Finally Martin will conclude with an outlook for early 2014 before opening the call to questions.
After the market closed yesterday, Cytomedix announced financial results for the fourth quarter and full year 2013. If you have not yet received this news release or if you would like to be added to the company’s distribution list please call LifeSci Advisors in New York at 646-597-6992 and speak with Paul Arndt.
Before we begin today’s call I would like to caution that comments made during the conference call will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of Cytomedix. Actual results could differ materially from those projected. I encourage you to review the company’s filings with the Securities and Exchange Commission, including without limitation the company’s Forms 10-K, 10-Q, including the most recently filed 10-K which identifies specific risk factors that may cause actual results or events to differ materially from those described in the forward-looking statements.
Furthermore, the content of this conference call contains time sensitive information that is accurate only as of the date of this live broadcast, Tuesday, April 1, 2014. Cytomedix undertakes no obligation to revise or update any statements that reflect events or circumstances after the date of this conference call.
I'd now like to turn the call over to CEO, Martin Rosendale.
Martin Rosendale
Thank you, Michael. Good morning everyone and thank you for joining us. I am Martin Rosendale, Chief Executive Officer of Cytomedix. First of all this morning we are very pleased to announce that we have entered into financing agreements with the Deerfield Management Company and the Anson Group.
Under the terms of the Deerfield financing they are providing us with up to $35 million in funding under a convertible debt financing. This facility provides us with an initial draw of $9 million at closing and we will receive a further $26 million once we have received authorization by our shareholders to increase our authorized capital stock at a special shareholder meeting. The tranche structure of this financing will also allow the company to evaluate the RECOVER-Stroke study data and under specific circumstances related to the study results allow the company to elect to pursue alternative financing options in lieu of taking the second tranche.
Concurrent with the Deerfield financing the Anson Group has agreed to provide an addition $2 million in equity funding. This financing arrangement in total gives us the resources to execute on our plan of building a profitable and successful commercially focused wound care business through 2015. We are happy to have Deerfield as a partner and encouraged by the confidence both Deerfield and Anson have shown in the potential of AutoloGel. Steve will provide more details in his discussion later on.
Regarding AutoloGel our main focus now is the commercial launch of our wound care product under the Coverage with Evidence Development Program. The AutoloGel system is our proprietary point of care device for the production of a platelet-based bioactive therapy for the management of wounds. It's been cleared by the FDA for use in a variety of exuding wounds and we are in the process of launching it now with Medicare coverage and sufficient payment into the estimated $3.4 billion U.S. chronic wound market.
We had to go through a fairly lengthy process to get the appropriate reimbursement coverage but we're pleased with the final decision by CMS in November 2013 regarding payment regulations for the hospital outpatient perspective payment system and the Medicare physician fee schedule. To remind you Coverage with Evidence Development or CED is a program under which CMS agrees to provide reimbursement for certain products and services, such as AutoloGel while at the same time generating additional clinical data to demonstrate the impact on health outcomes.
The reimbursement quota assigned to AutoloGel under the CMS final decision allows for reimbursement at a national average rate of $411 per treatment. The payment decision which came into effect on January 1st this year significantly expands the coverage for AutoloGel and allows providers in the outpatient setting to treat a broad patient population with a variety of wounds.
We believe this outcome provides Cytomedix with a substantial and economically viable business opportunity and we are now in a position to sell AutoloGel into this market at attractive gross margins. For the Medicare physician fee schedule which covers AutoloGel using physician's offices and which represents a separate market from the outpatient setting, the final payment rules were consistent with those initially proposed by CMS in July of last year. The Medicare Administrative Contactors or MACs had been directed to set the payment rates for claims for AutoloGel based on the claims and invoices they are submitted by healthcare providers. This effectively allows the individual contractors to determine the level of reimbursement.
With favorable reimbursement in place and ample financial resources we are now in a position to undertake a major launch in wound clinics. We've begun treating Medicare patients and our current focus is on completing CED requirements. Our launch strategies are focused on key high density markets that we believe will offer the greatest revenue generating options. We have been recruiting for and building out our commercial teams to support market requirements and CED activities. You will see that we also issued a separate press release last night announcing two key strategic management hires.
Dean Tozer, who is coming on board as our Chief Commercial Officer and Jennifer Linsky, who is our Senior Director of National Accounts. You should expect further additions and announcements in the future. Dean has been consulting for Cytomedix for about six months now and we are very excited to have him join us full time. He's an accomplished healthcare executive with a particular expertise in wound healing and a proven track record of launching products into that space.
He has been five years with Advanced BioHealing, where he led the acquisition and relaunch of Dermagraft and was responsible for the reintroduction of that product into the U.S. wound care market. Within just a few years of launch Dermagraft achieved annual U.S. sales of almost a $150 million prior to being acquired by Shire. We feel very fortunate to have Dean join our team. We think he is one of the top people nationwide in wound care and we see him playing a pivotal role in building our AutoloGel business and establishing the brand.
Following Steve's review of the financials Dean will take a few minutes this morning to provide some additional commentary on what he sees as the market opportunity in wound care and our plans for AutoloGel. Jennifer Linsky, our Senior Director of National Accounts has more than 16 years experience in sales and marketing. She also brings to us a very strong background in wound care having recently spent five years at Shire Regenerative Medicine where she launched a successful business development and disease management program aimed at the diabetic foot ulcer market.
Turning now to our Bright Cell technology program, we announced in January that we had completed enrollment of the RECOVER-Stroke trial, a landmark study of ALD-401 cells used to treat ischemic stroke. Based on an interim resizing analysis that we conducted at that time we concluded that the trial is adequately powered based on pre-specified assumptions at an enrollment of 48 patients. Specifically this analysis determined that the trial was adequately powered to demonstrate a clinically appropriate difference in the primary efficacy endpoint. We stopped screening or enrolling any new patients with that announcement and look forward to announcing top line results in May this year.
We announced last year a strategic reorganization of our R&D operations and with this trial now fully enrolled our financial obligations to this study and the program have been substantially reduced. We're continuing to investigate various potential options for maximizing the value of the Bright Cell technology and we will keep you updated once the clinical data is released.
We also announced last year the decision to license our Angel concentrated PRP system to Arthrex, a greater than $1 billion revenue company and an established leader in developing and marketing products for the orthopedic market. We received a $5 million upfront payment at the time and importantly we still retain a commercial interest in Angel through a royalty from Arthrex. Arthrex is now at the advanced stages of preparing a full scale launch of Angel and highlighted the product at the recent American Academy of Orthopedic Surgeons Meeting in New Orleans.
We would encourage investors to visit the Arthrex website where you can see some of the new promotional materials they have prepared. We entered into this partnership with the goal of accelerating growth for this best-in-class product. We remain confident that Arthrex is the right partner and we expect a more substantial and growing royalty contribution as the launch momentum picks up.
Now I'd like to turn the call over to Steve for an overview of the quarter. Steve?
Steven A. Shallcross
Thanks, Marty. I'll first discuss the fourth quarter and full year financial results for 2013, then provide more details on the terms of the financings with Deerfield and Anson that we announced last night.
Total revenues were $3.5 million in the quarter ended December 31, 2013 compared to $2.1 million recognized in the same period last year. The increase was primarily due to an increase in Angel product sales of $0.9 million. Also during the quarter the company recognized $0.3 million of Angel royalties, $0.1 million of Angel license fees, $0.1 million of related transition services revenue. AutoloGel sales for the quarter were $0.2 million.
As we continue into 2014 we expect our pass-through sales of Angel centrifuges and disposable products to mirror Arthrex sales performance with a negative gross margin impact of these sales to be offset by an increase in related royalty revenue.
Overall gross margins decreased to 14% from 48% for the quarter as compared to the same period last year. The decrease was primarily due to the sale of centrifuges and disposable products under the Arthrex agreement signed last year. Although the cost of the company's products has remained constant the contractual selling price of Angel disposable product, Arthrex is significant lower than historical average.
Furthermore the negative impact on gross margins is primarily the result of the generally accepted accounting principle requirement to record revenues and costs of sales related to Angel product sales on a pass-through basis. In the future we expect to realize the economic benefit from the Arthrex license agreement in the form of quarterly royalty revenues. We also expect future reported gross margins to recover as the launch of AutoloGel in the wound care space gathers momentum and these related sales begin to account for a more significant portion of overall revenues. Current and future Arthrex revenue will have no associated cost.
Finally the decrease in margin for the quarter was partially offset by gross margin realized from licensing fee, royalty and other revenues. For a detailed explanation on the profitability of product sales and the impact of the Arthrex agreement I refer you to tables published and our Form 10-K filed with the SEC yesterday.
Total operating expenses in the fourth quarter were $4.3 million compared to $4.6 million in the fourth quarter of 2012. Salaries and wages in the fourth quarter were $1.3 million, compared to $1.5 million reported last year. The decrease was primarily due to lower bonus expenses of $0.3 million. Consulting expenses were $0.6 million compared to $0.5 million reported in the same period last year. The increase was primarily due to higher expenses related to CED protocol development and CMS reimbursement items.
Professional fees were $0.3 million compared to $0.2 million reported in the same period last year. The increase was primarily due to legal costs related to fourth quarter financing activities. R&D expenses were $0.8 million compared to $0.9 million reported in the same period last year. The decrease was primarily due to lower design cost related to Angel products and lower clinical trial expenses.
General and administrative expenses were $1.4 million compared to $1.5 million reported in the same period last year. The decrease is primarily due to lower franchise taxes, stock-based compensation expense and Angel sales commissions. This was partially offset by an increase in recruitment fees and outside administrative service costs.
Other expenses for the quarter were approximately $1.1 million compared to $0.2 million reported in the same period last year. The difference is primarily due to non-cash charges for a change in the fair value of derivative liabilities and a net increase in interest expense and debt issuance fees related to various finance activities in 2013.
We reported net loss to common stockholders of $4.9 million or $0.05 per share for the quarter. This compares to a net loss of $3.8 million or $0.04 per share in the prior year.
Turning briefly to the operating results for the 12 months ended December 31, 2013; total revenues were $11.6 million compared to $10.6 million in the same period last year. The increase was primarily due to the $2 million in higher Angel product sales, the recognition of one-time non-recurring revenue related to the sale of $1.3 million in existing placed Angel centrifuges to Arthrex, made pursuant to the terms and provisions of the Arthrex agreement, and $0.5 million higher royalty revenue. This was offset by a decrease in 2012 license fee revenue of $3 million, AutoloGel sales for the full year of $0.6 million.
Overall gross margin decreased to 27% from 63% for the 12 months ended December 31, 2013 as compared to the same period last year. The decrease was primarily due to the approximately $3.2 million in licensing fee revenue recorded in 2012 that had no associated costs. Sale of products under Arthrex agreement had a contractual selling price significantly lower than historical average and the sale of existing placed Angel assets to Arthrex at book value.
Total operating expenses for 2013 were $21.2 million compared with $19.5 million reported in 2012. The company reported a net loss of $20.2 million or $0.20 per share for the 12 month period ended December 31, 2013 compared to a net loss of $19.8 million or $0.24 per share in the same period last year.
Cash used in operating activities for the 12 months ended December 31, 2013 was $11.4 million. Cash and cash equivalents were approximately $3.3 million at December 31, 2013 and there were approximately 110.8 million shares of common stock issued and outstanding as of March 10, 2014.
Finally I'll give you an overview of the financings we announced last night with Deerfield and Anson. Last night we announced that we entered into a financing agreement with Deerfield Management Company. Under the terms of this agreement Deerfield agreed to provide the company up to $35 million through a senior secured convertible debt facility with a conversion price of $0.52.
The commitment will be funded in two separate tranches. Deerfield has initially provided $9 million at the closing of the transaction and will invest an additional $26 million after shareholder approval to authorize the additional shares of the company's common stock required for the potential conversion of the note, warrants, fees and interest under the agreement. The facility will be due in full on the fifth anniversary of the closing and is structured as a convertible note which bears interest to 5.75% per year. Interest is payable quarterly in arrears and cash or at the company's election after the second draw in registered shares of the company's common stock.
In connection with this facility we will issue seven year warrants to purchase shares of the company's common stock at $0.52 per share. We were subject the certain performance requirements and customary covenants as well.
We also announced last night that the Anson Group has agreed to provide a $2 million of equity investment. Under the terms of the financing agreement Anson agreed to purchase approximately 3.8 million common shares of the company's common stock at $0.52 per share. Anson will also be issued five year warrants to purchase approximately 2.9 million common shares of the company's common stock at an exercise price of $0.52 per share. In addition Anson agreed to execute a lockup agreement that will be subject to sales restrictions under the agreement.
Also concurrent to the Deerfield and Anson financings the company paid approximately $3.8 million to extinguish the secured debt including accrued interest and fees owed to MidCap under the February, 2013 note, therefore fully discharging its obligation. In addition all except one of the holders of the company's outstanding $3 million 10% subordinated convertible notes purchased in the December 2013 private placement converted their notes and accrued interest into approximately 6 million shares of common stock.
Net proceeds from these initial fundings and related activities of approximately $6 million will be used primarily for expanding the commercialization capabilities of the company and specifically the launch of AutoloGel. Please refer to the company’s Form 10-K filed with the SEC yesterday for the complete disclosures related to these financing transactions.
Now I'd like to turn the call over to Dean.
Dean Tozer
Thanks Steve and good morning everyone. Marty asked me to spend a few moments this morning introducing myself, explaining why I choose to join the Cytomedix team and finally review the opportunity I see for our lead commercial product, AutoloGel.
So first let me share a little bit of my background. I started my career in healthcare with DuPont and Searle Pharmaceuticals and during my ten years in the global pharmaceutical industry I held positions in accounting and finance, sales, corporate strategy, international marketing and an international assignment in Japan.
In 1999 while in Japan I made the decision to leave the pharmaceutical industry and move back to the United States. Once back in the U.S., I started my own consulting practice in which I worked with start-up bio-pharmaceutical companies to help them formulate their commercial strategies and plans for launching or improving the sales performance of the commercial stage product.
After six years of successful independent consulting I was asked by a venture firm to assist with diligence on a potential acquisition of a failed wound care product being divested by Smith & Nephew. That product was called Dermagraft and for those of you who are not familiar with Dermagraft it is bio-engineered tissue product used in treatment of diabetic foot ulcers and commonly referred to as a skin substitute or an advanced wound care product.
My role in that diligence effort was to assess whether that product Dermagraft could be re-launched in the U.S. market, if so how could that be done successfully. I am happy to say we did see a commercial pathway for relaunching and I was fortunate to be one of the executives who helped create and lead Advanced BioHealing from 2006 to 2007.
In ABH I led a number of commercial functions within the company. In 2011 we had grown the company to approximately 500 employees with Dermagraft sales approaching a $200 million annual run-rate basis. We were able to create significant shareholder value with the sale of ABH to Shire Pharmaceuticals in 2011 for $750 million. Incidentally we closed that transaction just four hours before we were to price our IPO.
From the acquisition until June of 2013 I was inducted by Shire as VP of Corporate Development for the Regenerative Medicine Division. In October of last year I joined Cytomedix as consultant to help formulate the commercial plan for AutoloGel.
So now why have I joined Cytomedix full time? I think if I distil it down to one word it would be opportunity. I see tremendous opportunity for AutoloGel, much like I saw with Dermagraft in 2006. The first reason is that I believe AutoloGel AutoloGel works. There's compelling clinical data and enough practical experience with the product for me to know that it works. Given that, the need in wound care to treat chronic wounds continues to be overwhelming in the [inaudible]. Even with continued advancements in treatment options the market need for efficacious products like AutoloGel is still great.
Second, AutoloGel has a great clearance from the FDA. There are three primary wound types, diabetic foot ulcers, venous ulcers and pressure ulcers that constitute almost the entire chronic pain care market. AutoloGel is cleared by the FDA for all three of these wound types.
Third, AutoloGel as of January has reimbursement from CMS for treatment of all of these treatment types in Medicare beneficiary population under the CED program. And finally the chronic wound care market in the U.S. is in the period of significant change following the packaging or bundling decision of it for advance wound care product that CMS implemented in January of this year. And for those of you who are not familiar with what that means in the wound care space, packaging in January affected many of the skin substitute products, where they took a pass-through toward the price of the product and the application fee and put them together and reduced that amount -- quite a substantial amount. So as you can imagine that had a significant impact, has had a significant impact on this market.
So the chance to re-launch a great product with a great label that's reimbursed by CMS into a very large changing market place was just too intriguing for me not to grab the opportunity.
So how will we be successful? Obviously it's my first day on the job, so I don’t have every detail yet. With that being said I do know enough about the market and AutoloGel and know most of the elements for success are in place. We have a great product, with tremendous unmet medical need and market undergoing tremendous and great change, change which I believe is very beneficial to AutoloGel.
So now basically it comes down to execution, and execution is all about the talent you have on your team. My primary goal over the next 90 days is to continue to build-out our team of professionals that I know can execute on this opportunity. Obviously I know quite a few people in my -- from my years in the wound care market. I also believe in finding absolute best talent regardless of specific content expertise. So talent is number one, two and three on my list right now.
Second is getting our demand model refined. And what I mean by this is we will need to define exactly how we address the various elements of the customer interaction. We'll need to refine the sales model, the reimbursement support functions, product logistics and various things as such. All the things that make it easy as possible for the healthcare provider to utilize AutoloGel in treating chronic wounds. So hopefully this has given you an overview who I am, how I plan to lead the commercial team at Cytomedix over the next coming months and years.
We have great opportunity ahead of us and we'll be intently focused on successful execution for the benefit of patient, clinicians and shareholders. Back to you Marty.
Martin Rosendale
Thank you and welcome onboard. So in summary this morning today we've established a commercial opportunity for AutoloGel and acquired the financing to execute our commercial plans. To that end we've recruited one of the market's leading commercial executives and we are building up the team necessary to succeed.
With the completion of our landmark study in ischemic stroke we have reduced our R&D cash burn and ensured our ability to capitalize on the study outcome if it is favorable. The Angel system is in the hands of a skilled partner with significant resources, so we are expecting good results from their launch later this month. Overall we're well positioned to focus at AutoloGel and succeed in the wound care marketplace.
So with that Carol I would like to open the call to questions.
Question-and-Answer Session
Operator
Thank you. (Operator Instructions). Please standby for your first question, that comes from the line of Jason Napodano from Zacks.
Jason Napodano - Zacks Investment Research
Good morning, guys.
Martin Rosendale
Good morning, Jason.
Jason Napodano - Zacks Investment Research
So let me kind of start out with a big picture question here, what changes have you noticed in the wound care market over the past three months? Are you noticing any changes with respect to -- I mean obviously CMS had a pretty huge decision last January, so we saw the shakeout there with Dermagraft and Apligraf and Shire divesting. But just wondering in terms of prescribing and when you go to physicians' offices and clinics and outpatient services are you actually seeing a change in how they are using products?
Martin Rosendale
So, Jason this is Martin, I'll start and then I am going to pass the question to Dean. But certainly we're having those changes and we've been conducting, or I should say Dean's been conducting quite a bit of market research that has demonstrated not only has there has been change going on with respect to decisions around advanced wound care products like Apligraf and Dermagraft but there is change to come. And so Dean with that, I'll pass the question to you.
Dean Tozer
Yeah, good morning, Jason. Yeah, I think what I would characterize it is the market's entered a period of reflection or stepping back and saying how long are we going to treat these patients. The CMS decision obviously made a big impact on the skin substitute products and they had a very substantial part of the market that people were using [inaudible] and they will continue to use them.
But I think the decision by CMS has caused the market to do a quiet a bit of a reset where both health providers, the practicing physicians and the administrators have stepped back and are taking a look at what they are doing to treat these patients, what products they are using and our market research as we're gearing up now with the financing to get our full launch going we're doing a lot of market research and we're getting a lot of very positive interest in AutoloGel as an option for those physicians and administrators to use in treating these patients.
So I think it's what's characterized as a period of change and I think that's great change, great opportunity for us.
Jason Napodano - Zacks Investment Research
And are you noticing that with the private payors as well or is this just within Medicare or Medicaid?
Dean Tozer
Yeah, right now with the privates AutoloGel is not at this moment reimbursed by private payors. So right now that's purely an exercise of what I would call us just exploring with payors what the impact is and I haven't seen it as significantly as you would see with the Medicare beneficiaries. Privates tend to be a little bit perhaps behind Medicare in that regard, they tend to be a watch what happens with Medicare. So that's what we're trying to get our arms around is are the privates going to follow some of these decisions by Medicare. But right now I would say the lion's share of the impact is on the Medicare beneficiaries.
Jason Napodano - Zacks Investment Research
Okay, and in terms of where you expect to see the biggest growth coming from in 2014 and forward now that CED is in place, you guys were focusing on physicians, obviously after the July decision in 2013, is that still a focus for you guys or has effort kind of shifted more towards the outpatient centers? And if you are still focusing on or just what you focused on in physicians' offices were you seeing reimbursement within those places or was that process kind of still being worked out?
Martin Rosendale
So Jason, just to begin we made some good progress in the physicians' office, we picked up a couple of significant customers. We've been treating Medicare patients. The bill, the claims have been submitted. As is often the case in these situations the government isn't keeping up with itself in many respects and so the Medicare administrative contractors have kicked back the claims for not understanding the codes, not having the codes placed in the right blanks and there has been no indication that the claims won't get paid in full. And so we're expecting that going forward but we won't have that information probably before another week or two.
With respect to where we expect to see the growth going forward Dean I'll pass it to you again.
Dean Tozer
Yeah, so I think there is kind of two parts to this. One is where we are today. And where we are today is getting CED put in place and we have great folks working on making sure we understand how that's going to work and [how so] outpatient. So today we're spending time generating demand at LTAC and some physician, private physician offices. But as my first kind of statement on what I'd see over the next half year or so, 60 days, my absolute focus is how are we going to drive business at the hospital and outpatient departments.
And so that is on the back half of the year is where we will really see the growth, that is what we absolutely expect where we will get things in place and that is where the majority of these patients reside and where the majority of the advanced wound care products are used. So near-term we're focused on getting CED in place, getting the right people on our team and then back half of the year really drive into hospital outpatient as our ultimate demand generating area.
Jason Napodano - Zacks Investment Research
Okay, you guys aren't providing guidance for 2014 but maybe you can give me a sense of patient numbers. You've got four CED programs that were enrolled in 2014, I assume and correct me if I am wrong, but the 280 patients randomized, the clinical trial will probably enroll this year, whereas the other three larger programs will probably take more or like two years. But in 2013 you did $600,000 or so in revenues without CED. So now that you've got the CMS, now you've CED, now you've got changes to the reimbursement from CMS, can you give us a sense of what happens to that $600,000 run rate that you guys did in 2013 without CED, does that stay the same, does that continue to kind of grow a little bit on the same pace?
And then the second question if these registry programs enroll as expected would you expect to see more revenues and more patients in those trials generating business in 2014 than we saw in 2013 with that kind of base line business?
Martin Rosendale
Jason, you have a lot of questions embedded in there so I'll try to touch on all of them. First of all what we call the randomized control trial, it is not [because it] falls under CED, it's also registry base and the reason we refer to it as the RCT is because the controls are randomized. But one thing to keep in mind each one of those patients under CED represents a sale because Medicare covers the cost of the product, and CED is a form of coverage. So it's important that we always keep that in mind.
So your assessment on the enrollment of that trial is accurate with -- our expectation is about a year to get that enrolled. The other study protocols will take a bit longer, they have more patients there is 750 patients in each one of those protocols. But your point as far as sales growth, again without giving specific guidance which we're not prepared to do quite yet, we do expect 2014 to be better than 2013. We do expect to get some significant enrollment in those protocols going forward.
And you can also expect us to have further interaction with CMS, potentially even get approval for additional protocols that will allow us to expand into broader markets and other types of care that again will help us to expand and help us to establish significant amount of growth in the sales of the product over 2014.
Dean, do you want to add anything to that?
Dean Tozer
One thing I would say add is, as Marty said I always want to remind people that CED as reimbursement, it's covered by Medicare. So every patient that we bring into one of our registries or into the randomized trials is revenue. And so our goal is to do both, is to drive CED enrollment because there is a genuine interest on our part to do that one to satisfy CED requirement. But probably more importantly it's revenue. And so it's a protocol trial of registry that in essence CMS is partially paying for to reimbursing a product.
So we're going to be entirely focused on putting those patients into those registries and satisfying the requirements.
Jason Napodano - Zacks Investment Research
Okay and in terms of the kind of the sales staff and what you are directing them to do, can you give us a sense of the size of the staff right now, do you have a goal in mind in terms of a size by the end of the year or any thoughts on what the ultimate size of the sales staff might be to maximize the potential for AutoloGel?
Martin Rosendale
Dean?
Dean Tozer
Yeah, as I said earlier, it's my first day on the job even though I have been consulting for a few months. We are nine people right now in the field, so we've had a small sales team. What I expect is we're going to hold that steady for a while until we get some of these things just totally ironed out with the CED process which I expect to see happening over the next few months.
I don't think that's going to take a tremendous amount of time because we've already done a great deal of work on it. And then on the back half of the year we will start adding some sales professionals. Do I know the exact number? No. Is it going to be 100? No. We are going to this in a measured way to make sure that we get the right people on board, that we generate demand in a predictable way for the near future.
We've got to do it right. You don't get a second chance to launch a product. And so I will say now that we are going to be strategic and thoughtful in how we do this. My goal is that '14 is -- we are starting to build the base, so that we can in '15, '16 and beyond really start to capitalize on the opportunity we have.
But I don't want to rush out of the gate, now that we have money in our hands and just do things potentially get us into a bad place from building a little too quickly at the beginning. So what we're going to do is be measured, we're going to get it, put together properly so that we have the base in place that we can really build on this in the years beyond '14.
Jason Napodano - Zacks Investment Research
Okay, I am going to jump back in queue and thanks for answering the question guys.
Martin Rosendale
Thanks, Jason.
Operator
Thank you for that question. We got no current questions. (Operator Instructions)
Martin Rosendale
Caroline, did we lose our connection?
Operator
No, sorry, I am just waiting to see who the next line is from.
Martin Rosendale
Oh, sorry, it went quiet, so I felt…
Operator
Okay, the next question comes from the line of [Don Akowich] from Maxim Group. Please go ahead.
Unidentified Analyst
Good morning, guys quick question for you, what do you guys see as the long-term anticipated split between sort of your organic sales and what you expect from royalties and licensing?
Martin Rosendale
Good question, Steve do you want to take that?
Steven A. Shallcross
Yeah, I would expect in the near term that the royalty income will be just shy of what one might expect to see in AutoloGel sales. Going forward obviously AutoloGel sales are going to become a much more significant part of our revenue stream and there would be a point in the future where the royalty stream will sort of probably reach a steady state. And we haven't given specific guidance on this so it's a little bit difficult to answer the question.
Unidentified Analyst
Okay. And then which markets did you guys say would provide the highest revenue for AutoloGel from a penetration standpoint?
Martin Rosendale
Dean, do you want to take that?
Dean Tozer
Sure, so the long-term, the area that we see as been the largest opportunity for AutoloGel will be hospital outpatients. So that is what we commonly focus, specialized wound care centers. So that will be the lion's share of the business if we do this correctly, which I expect we will. Long-term there are other opportunities. The great thing about his product has a very broad clearance, has properties that can have it be used in multiple sites of care.
So you could expect that down the road you would see, that the DA may be an option, we are compiling various things right now. We actually sell in LTAC, long-term acute care faculties and there is a lot of interest in the product area as well. So I think there is a lot of possibility to drive revenue, but my feeling is and my guidance is going to be that we will in the near term, and for the next number of years see the lion's share of our business coming out of the hospital outpatient department.
Unidentified Analyst
Got it, okay, great, thank you.
Martin Rosendale
Thank you.
Operator
Thank you for the question. The next question we have comes from the line of Steven Freed from Greenwave Financial Markets. Please go ahead.
Steven E. Freed - GreenWave Financial Markets, LLC
Hi, good morning everyone. I just kind of [wasn't clear if] have I caught everything but is this a new strategy whereby where are no longer looking for let's say a partner medical company with a larger sales force to help sell the product.
Martin Rosendale
So Steven, we don't currently have any discussions like that ongoing for AutoloGel. As we go forward, as we establish our success in the marketplace might those discussions resume, yes, it's certainly possible. But our objective and our reason for bringing talented professionals like Dean and Jennifer and the others that we've hired on board is to establish that success in the marketplace and be prepared to go on and succeed on our own.
Steven E. Freed - GreenWave Financial Markets, LLC
Okay. All right. Thank you.
Martin Rosendale
Thank you.
Operator
Thank you. (Operator Instructions). Thank you, ladies and gentlemen, that's the end of the question and answers. I would now like to turn the call back over to Martin for closing remarks.
Martin Rosendale
Thank you, Caroline. So everyone it's taken us a while to get this financing in place and get the company to the position that we're in today. I realize that during that time we've been relatively silent. I also remember that in 2008 when I joined the company I promised to keep our shareholders informed of our progress going forward. I haven't forgotten that promise and you can expect to hear regular updates from us now going forward. We will have our next earnings call in I believe so even as little as 45 days from now. So you can expect more frequent communication and update from us going forward.
We are all excited about the opportunity before us. Anson has proven to be a good investor and good partner. This is not the first time they have invested in the company. Deerfield, I am very pleased to have Deerfield as a financial partner. They have shown themselves to be beneficial in areas beyond just financing, the staff that they have, the executives that they have, their ability to assess markets, help us with decisions is tremendous. I am looking forward to that partnership going forward.
We're in a good place. We're going to capitalize on it and we've got talented people on board, Dean, as he mentioned one of his main roles going forward is to bring more talented people into the company. So we're looking forward to these opportunities and I personally am looking forward to keeping you informed. Thank you very much for joining us this morning.
Operator
Thank you, Martin. Ladies and gentlemen, that concludes -- sorry that concludes today's conference. You may now disconnect. Have a good day.
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Cytomedix's CEO Discusses Q4 2013 Results - Earnings Call Transcript
Apr 1 2014, 12:58
about: CMXI
Cytomedix, Inc. (OTCQX:CMXI)
Q4 2013 Results Earnings Conference Call
April 01, 2014, 08:00 AM ET
Executives
Michael Wood - MD, LifeSci Advisors, Investor Relations.
Martin Rosendale - CEO
Steven A. Shallcross - EVP, CFO, Secretary and Treasurer
Dean Tozer - EVP and Chief Commercial Officer
Analysts
Jason Napodano - Zacks Investment Research
Steven E. Freed - GreenWave Financial Markets, LLC
Presentation
Operator
Good day, ladies and gentlemen. And welcome to the Quarter Four 2013 Cytomedix Earnings Conference Call. My name is Carol and I will be your operator for today.
At this time all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of the conference. (Operator Instructions). As a reminder the call is being recorded for replay purposes.
And now I’d like to turn the call over to Mr. Michael Wood, Managing Director of LifeSci Advisors. Please go ahead.
Michael Wood
Good morning. This is Michael Wood with LifeSci Advisors. I would like to thank you for participating in today’s Cytomedix fourth quarter 2013 earnings conference call.
Joining me from the company this morning are Martin Rosendale, Chief Executive Officer; Steve Shallcross, Chief Financial Officer; and Dean Tozer, Chief Commercial Officer. Here is an outline for today’s call. First, Marty will provide an update on the recent Deerfield financing announced last night, AutoloGel launch initiatives as well as research and development activities. He will then hand over the call to Steve who will provide you with a summary of the fourth quarter and full year 2013 financial results. Then Dean Tozer, newly appointed Chief Commercial Officer of the company will join the call. Finally Martin will conclude with an outlook for early 2014 before opening the call to questions.
After the market closed yesterday, Cytomedix announced financial results for the fourth quarter and full year 2013. If you have not yet received this news release or if you would like to be added to the company’s distribution list please call LifeSci Advisors in New York at 646-597-6992 and speak with Paul Arndt.
Before we begin today’s call I would like to caution that comments made during the conference call will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of Cytomedix. Actual results could differ materially from those projected. I encourage you to review the company’s filings with the Securities and Exchange Commission, including without limitation the company’s Forms 10-K, 10-Q, including the most recently filed 10-K which identifies specific risk factors that may cause actual results or events to differ materially from those described in the forward-looking statements.
Furthermore, the content of this conference call contains time sensitive information that is accurate only as of the date of this live broadcast, Tuesday, April 1, 2014. Cytomedix undertakes no obligation to revise or update any statements that reflect events or circumstances after the date of this conference call.
I'd now like to turn the call over to CEO, Martin Rosendale.
Martin Rosendale
Thank you, Michael. Good morning everyone and thank you for joining us. I am Martin Rosendale, Chief Executive Officer of Cytomedix. First of all this morning we are very pleased to announce that we have entered into financing agreements with the Deerfield Management Company and the Anson Group.
Under the terms of the Deerfield financing they are providing us with up to $35 million in funding under a convertible debt financing. This facility provides us with an initial draw of $9 million at closing and we will receive a further $26 million once we have received authorization by our shareholders to increase our authorized capital stock at a special shareholder meeting. The tranche structure of this financing will also allow the company to evaluate the RECOVER-Stroke study data and under specific circumstances related to the study results allow the company to elect to pursue alternative financing options in lieu of taking the second tranche.
Concurrent with the Deerfield financing the Anson Group has agreed to provide an addition $2 million in equity funding. This financing arrangement in total gives us the resources to execute on our plan of building a profitable and successful commercially focused wound care business through 2015. We are happy to have Deerfield as a partner and encouraged by the confidence both Deerfield and Anson have shown in the potential of AutoloGel. Steve will provide more details in his discussion later on.
Regarding AutoloGel our main focus now is the commercial launch of our wound care product under the Coverage with Evidence Development Program. The AutoloGel system is our proprietary point of care device for the production of a platelet-based bioactive therapy for the management of wounds. It's been cleared by the FDA for use in a variety of exuding wounds and we are in the process of launching it now with Medicare coverage and sufficient payment into the estimated $3.4 billion U.S. chronic wound market.
We had to go through a fairly lengthy process to get the appropriate reimbursement coverage but we're pleased with the final decision by CMS in November 2013 regarding payment regulations for the hospital outpatient perspective payment system and the Medicare physician fee schedule. To remind you Coverage with Evidence Development or CED is a program under which CMS agrees to provide reimbursement for certain products and services, such as AutoloGel while at the same time generating additional clinical data to demonstrate the impact on health outcomes.
The reimbursement quota assigned to AutoloGel under the CMS final decision allows for reimbursement at a national average rate of $411 per treatment. The payment decision which came into effect on January 1st this year significantly expands the coverage for AutoloGel and allows providers in the outpatient setting to treat a broad patient population with a variety of wounds.
We believe this outcome provides Cytomedix with a substantial and economically viable business opportunity and we are now in a position to sell AutoloGel into this market at attractive gross margins. For the Medicare physician fee schedule which covers AutoloGel using physician's offices and which represents a separate market from the outpatient setting, the final payment rules were consistent with those initially proposed by CMS in July of last year. The Medicare Administrative Contactors or MACs had been directed to set the payment rates for claims for AutoloGel based on the claims and invoices they are submitted by healthcare providers. This effectively allows the individual contractors to determine the level of reimbursement.
With favorable reimbursement in place and ample financial resources we are now in a position to undertake a major launch in wound clinics. We've begun treating Medicare patients and our current focus is on completing CED requirements. Our launch strategies are focused on key high density markets that we believe will offer the greatest revenue generating options. We have been recruiting for and building out our commercial teams to support market requirements and CED activities. You will see that we also issued a separate press release last night announcing two key strategic management hires.
Dean Tozer, who is coming on board as our Chief Commercial Officer and Jennifer Linsky, who is our Senior Director of National Accounts. You should expect further additions and announcements in the future. Dean has been consulting for Cytomedix for about six months now and we are very excited to have him join us full time. He's an accomplished healthcare executive with a particular expertise in wound healing and a proven track record of launching products into that space.
He has been five years with Advanced BioHealing, where he led the acquisition and relaunch of Dermagraft and was responsible for the reintroduction of that product into the U.S. wound care market. Within just a few years of launch Dermagraft achieved annual U.S. sales of almost a $150 million prior to being acquired by Shire. We feel very fortunate to have Dean join our team. We think he is one of the top people nationwide in wound care and we see him playing a pivotal role in building our AutoloGel business and establishing the brand.
Following Steve's review of the financials Dean will take a few minutes this morning to provide some additional commentary on what he sees as the market opportunity in wound care and our plans for AutoloGel. Jennifer Linsky, our Senior Director of National Accounts has more than 16 years experience in sales and marketing. She also brings to us a very strong background in wound care having recently spent five years at Shire Regenerative Medicine where she launched a successful business development and disease management program aimed at the diabetic foot ulcer market.
Turning now to our Bright Cell technology program, we announced in January that we had completed enrollment of the RECOVER-Stroke trial, a landmark study of ALD-401 cells used to treat ischemic stroke. Based on an interim resizing analysis that we conducted at that time we concluded that the trial is adequately powered based on pre-specified assumptions at an enrollment of 48 patients. Specifically this analysis determined that the trial was adequately powered to demonstrate a clinically appropriate difference in the primary efficacy endpoint. We stopped screening or enrolling any new patients with that announcement and look forward to announcing top line results in May this year.
We announced last year a strategic reorganization of our R&D operations and with this trial now fully enrolled our financial obligations to this study and the program have been substantially reduced. We're continuing to investigate various potential options for maximizing the value of the Bright Cell technology and we will keep you updated once the clinical data is released.
We also announced last year the decision to license our Angel concentrated PRP system to Arthrex, a greater than $1 billion revenue company and an established leader in developing and marketing products for the orthopedic market. We received a $5 million upfront payment at the time and importantly we still retain a commercial interest in Angel through a royalty from Arthrex. Arthrex is now at the advanced stages of preparing a full scale launch of Angel and highlighted the product at the recent American Academy of Orthopedic Surgeons Meeting in New Orleans.
We would encourage investors to visit the Arthrex website where you can see some of the new promotional materials they have prepared. We entered into this partnership with the goal of accelerating growth for this best-in-class product. We remain confident that Arthrex is the right partner and we expect a more substantial and growing royalty contribution as the launch momentum picks up.
Now I'd like to turn the call over to Steve for an overview of the quarter. Steve?
Steven A. Shallcross
Thanks, Marty. I'll first discuss the fourth quarter and full year financial results for 2013, then provide more details on the terms of the financings with Deerfield and Anson that we announced last night.
Total revenues were $3.5 million in the quarter ended December 31, 2013 compared to $2.1 million recognized in the same period last year. The increase was primarily due to an increase in Angel product sales of $0.9 million. Also during the quarter the company recognized $0.3 million of Angel royalties, $0.1 million of Angel license fees, $0.1 million of related transition services revenue. AutoloGel sales for the quarter were $0.2 million.
As we continue into 2014 we expect our pass-through sales of Angel centrifuges and disposable products to mirror Arthrex sales performance with a negative gross margin impact of these sales to be offset by an increase in related royalty revenue.
Overall gross margins decreased to 14% from 48% for the quarter as compared to the same period last year. The decrease was primarily due to the sale of centrifuges and disposable products under the Arthrex agreement signed last year. Although the cost of the company's products has remained constant the contractual selling price of Angel disposable product, Arthrex is significant lower than historical average.
Furthermore the negative impact on gross margins is primarily the result of the generally accepted accounting principle requirement to record revenues and costs of sales related to Angel product sales on a pass-through basis. In the future we expect to realize the economic benefit from the Arthrex license agreement in the form of quarterly royalty revenues. We also expect future reported gross margins to recover as the launch of AutoloGel in the wound care space gathers momentum and these related sales begin to account for a more significant portion of overall revenues. Current and future Arthrex revenue will have no associated cost.
Finally the decrease in margin for the quarter was partially offset by gross margin realized from licensing fee, royalty and other revenues. For a detailed explanation on the profitability of product sales and the impact of the Arthrex agreement I refer you to tables published and our Form 10-K filed with the SEC yesterday.
Total operating expenses in the fourth quarter were $4.3 million compared to $4.6 million in the fourth quarter of 2012. Salaries and wages in the fourth quarter were $1.3 million, compared to $1.5 million reported last year. The decrease was primarily due to lower bonus expenses of $0.3 million. Consulting expenses were $0.6 million compared to $0.5 million reported in the same period last year. The increase was primarily due to higher expenses related to CED protocol development and CMS reimbursement items.
Professional fees were $0.3 million compared to $0.2 million reported in the same period last year. The increase was primarily due to legal costs related to fourth quarter financing activities. R&D expenses were $0.8 million compared to $0.9 million reported in the same period last year. The decrease was primarily due to lower design cost related to Angel products and lower clinical trial expenses.
General and administrative expenses were $1.4 million compared to $1.5 million reported in the same period last year. The decrease is primarily due to lower franchise taxes, stock-based compensation expense and Angel sales commissions. This was partially offset by an increase in recruitment fees and outside administrative service costs.
Other expenses for the quarter were approximately $1.1 million compared to $0.2 million reported in the same period last year. The difference is primarily due to non-cash charges for a change in the fair value of derivative liabilities and a net increase in interest expense and debt issuance fees related to various finance activities in 2013.
We reported net loss to common stockholders of $4.9 million or $0.05 per share for the quarter. This compares to a net loss of $3.8 million or $0.04 per share in the prior year.
Turning briefly to the operating results for the 12 months ended December 31, 2013; total revenues were $11.6 million compared to $10.6 million in the same period last year. The increase was primarily due to the $2 million in higher Angel product sales, the recognition of one-time non-recurring revenue related to the sale of $1.3 million in existing placed Angel centrifuges to Arthrex, made pursuant to the terms and provisions of the Arthrex agreement, and $0.5 million higher royalty revenue. This was offset by a decrease in 2012 license fee revenue of $3 million, AutoloGel sales for the full year of $0.6 million.
Overall gross margin decreased to 27% from 63% for the 12 months ended December 31, 2013 as compared to the same period last year. The decrease was primarily due to the approximately $3.2 million in licensing fee revenue recorded in 2012 that had no associated costs. Sale of products under Arthrex agreement had a contractual selling price significantly lower than historical average and the sale of existing placed Angel assets to Arthrex at book value.
Total operating expenses for 2013 were $21.2 million compared with $19.5 million reported in 2012. The company reported a net loss of $20.2 million or $0.20 per share for the 12 month period ended December 31, 2013 compared to a net loss of $19.8 million or $0.24 per share in the same period last year.
Cash used in operating activities for the 12 months ended December 31, 2013 was $11.4 million. Cash and cash equivalents were approximately $3.3 million at December 31, 2013 and there were approximately 110.8 million shares of common stock issued and outstanding as of March 10, 2014.
Finally I'll give you an overview of the financings we announced last night with Deerfield and Anson. Last night we announced that we entered into a financing agreement with Deerfield Management Company. Under the terms of this agreement Deerfield agreed to provide the company up to $35 million through a senior secured convertible debt facility with a conversion price of $0.52.
The commitment will be funded in two separate tranches. Deerfield has initially provided $9 million at the closing of the transaction and will invest an additional $26 million after shareholder approval to authorize the additional shares of the company's common stock required for the potential conversion of the note, warrants, fees and interest under the agreement. The facility will be due in full on the fifth anniversary of the closing and is structured as a convertible note which bears interest to 5.75% per year. Interest is payable quarterly in arrears and cash or at the company's election after the second draw in registered shares of the company's common stock.
In connection with this facility we will issue seven year warrants to purchase shares of the company's common stock at $0.52 per share. We were subject the certain performance requirements and customary covenants as well.
We also announced last night that the Anson Group has agreed to provide a $2 million of equity investment. Under the terms of the financing agreement Anson agreed to purchase approximately 3.8 million common shares of the company's common stock at $0.52 per share. Anson will also be issued five year warrants to purchase approximately 2.9 million common shares of the company's common stock at an exercise price of $0.52 per share. In addition Anson agreed to execute a lockup agreement that will be subject to sales restrictions under the agreement.
Also concurrent to the Deerfield and Anson financings the company paid approximately $3.8 million to extinguish the secured debt including accrued interest and fees owed to MidCap under the February, 2013 note, therefore fully discharging its obligation. In addition all except one of the holders of the company's outstanding $3 million 10% subordinated convertible notes purchased in the December 2013 private placement converted their notes and accrued interest into approximately 6 million shares of common stock.
Net proceeds from these initial fundings and related activities of approximately $6 million will be used primarily for expanding the commercialization capabilities of the company and specifically the launch of AutoloGel. Please refer to the company’s Form 10-K filed with the SEC yesterday for the complete disclosures related to these financing transactions.
Now I'd like to turn the call over to Dean.
Dean Tozer
Thanks Steve and good morning everyone. Marty asked me to spend a few moments this morning introducing myself, explaining why I choose to join the Cytomedix team and finally review the opportunity I see for our lead commercial product, AutoloGel.
So first let me share a little bit of my background. I started my career in healthcare with DuPont and Searle Pharmaceuticals and during my ten years in the global pharmaceutical industry I held positions in accounting and finance, sales, corporate strategy, international marketing and an international assignment in Japan.
In 1999 while in Japan I made the decision to leave the pharmaceutical industry and move back to the United States. Once back in the U.S., I started my own consulting practice in which I worked with start-up bio-pharmaceutical companies to help them formulate their commercial strategies and plans for launching or improving the sales performance of the commercial stage product.
After six years of successful independent consulting I was asked by a venture firm to assist with diligence on a potential acquisition of a failed wound care product being divested by Smith & Nephew. That product was called Dermagraft and for those of you who are not familiar with Dermagraft it is bio-engineered tissue product used in treatment of diabetic foot ulcers and commonly referred to as a skin substitute or an advanced wound care product.
My role in that diligence effort was to assess whether that product Dermagraft could be re-launched in the U.S. market, if so how could that be done successfully. I am happy to say we did see a commercial pathway for relaunching and I was fortunate to be one of the executives who helped create and lead Advanced BioHealing from 2006 to 2007.
In ABH I led a number of commercial functions within the company. In 2011 we had grown the company to approximately 500 employees with Dermagraft sales approaching a $200 million annual run-rate basis. We were able to create significant shareholder value with the sale of ABH to Shire Pharmaceuticals in 2011 for $750 million. Incidentally we closed that transaction just four hours before we were to price our IPO.
From the acquisition until June of 2013 I was inducted by Shire as VP of Corporate Development for the Regenerative Medicine Division. In October of last year I joined Cytomedix as consultant to help formulate the commercial plan for AutoloGel.
So now why have I joined Cytomedix full time? I think if I distil it down to one word it would be opportunity. I see tremendous opportunity for AutoloGel, much like I saw with Dermagraft in 2006. The first reason is that I believe AutoloGel AutoloGel works. There's compelling clinical data and enough practical experience with the product for me to know that it works. Given that, the need in wound care to treat chronic wounds continues to be overwhelming in the [inaudible]. Even with continued advancements in treatment options the market need for efficacious products like AutoloGel is still great.
Second, AutoloGel has a great clearance from the FDA. There are three primary wound types, diabetic foot ulcers, venous ulcers and pressure ulcers that constitute almost the entire chronic pain care market. AutoloGel is cleared by the FDA for all three of these wound types.
Third, AutoloGel as of January has reimbursement from CMS for treatment of all of these treatment types in Medicare beneficiary population under the CED program. And finally the chronic wound care market in the U.S. is in the period of significant change following the packaging or bundling decision of it for advance wound care product that CMS implemented in January of this year. And for those of you who are not familiar with what that means in the wound care space, packaging in January affected many of the skin substitute products, where they took a pass-through toward the price of the product and the application fee and put them together and reduced that amount -- quite a substantial amount. So as you can imagine that had a significant impact, has had a significant impact on this market.
So the chance to re-launch a great product with a great label that's reimbursed by CMS into a very large changing market place was just too intriguing for me not to grab the opportunity.
So how will we be successful? Obviously it's my first day on the job, so I don’t have every detail yet. With that being said I do know enough about the market and AutoloGel and know most of the elements for success are in place. We have a great product, with tremendous unmet medical need and market undergoing tremendous and great change, change which I believe is very beneficial to AutoloGel.
So now basically it comes down to execution, and execution is all about the talent you have on your team. My primary goal over the next 90 days is to continue to build-out our team of professionals that I know can execute on this opportunity. Obviously I know quite a few people in my -- from my years in the wound care market. I also believe in finding absolute best talent regardless of specific content expertise. So talent is number one, two and three on my list right now.
Second is getting our demand model refined. And what I mean by this is we will need to define exactly how we address the various elements of the customer interaction. We'll need to refine the sales model, the reimbursement support functions, product logistics and various things as such. All the things that make it easy as possible for the healthcare provider to utilize AutoloGel in treating chronic wounds. So hopefully this has given you an overview who I am, how I plan to lead the commercial team at Cytomedix over the next coming months and years.
We have great opportunity ahead of us and we'll be intently focused on successful execution for the benefit of patient, clinicians and shareholders. Back to you Marty.
Martin Rosendale
Thank you and welcome onboard. So in summary this morning today we've established a commercial opportunity for AutoloGel and acquired the financing to execute our commercial plans. To that end we've recruited one of the market's leading commercial executives and we are building up the team necessary to succeed.
With the completion of our landmark study in ischemic stroke we have reduced our R&D cash burn and ensured our ability to capitalize on the study outcome if it is favorable. The Angel system is in the hands of a skilled partner with significant resources, so we are expecting good results from their launch later this month. Overall we're well positioned to focus at AutoloGel and succeed in the wound care marketplace.
So with that Carol I would like to open the call to questions.
Question-and-Answer Session
Operator
Thank you. (Operator Instructions). Please standby for your first question, that comes from the line of Jason Napodano from Zacks.
Jason Napodano - Zacks Investment Research
Good morning, guys.
Martin Rosendale
Good morning, Jason.
Jason Napodano - Zacks Investment Research
So let me kind of start out with a big picture question here, what changes have you noticed in the wound care market over the past three months? Are you noticing any changes with respect to -- I mean obviously CMS had a pretty huge decision last January, so we saw the shakeout there with Dermagraft and Apligraf and Shire divesting. But just wondering in terms of prescribing and when you go to physicians' offices and clinics and outpatient services are you actually seeing a change in how they are using products?
Martin Rosendale
So, Jason this is Martin, I'll start and then I am going to pass the question to Dean. But certainly we're having those changes and we've been conducting, or I should say Dean's been conducting quite a bit of market research that has demonstrated not only has there has been change going on with respect to decisions around advanced wound care products like Apligraf and Dermagraft but there is change to come. And so Dean with that, I'll pass the question to you.
Dean Tozer
Yeah, good morning, Jason. Yeah, I think what I would characterize it is the market's entered a period of reflection or stepping back and saying how long are we going to treat these patients. The CMS decision obviously made a big impact on the skin substitute products and they had a very substantial part of the market that people were using [inaudible] and they will continue to use them.
But I think the decision by CMS has caused the market to do a quiet a bit of a reset where both health providers, the practicing physicians and the administrators have stepped back and are taking a look at what they are doing to treat these patients, what products they are using and our market research as we're gearing up now with the financing to get our full launch going we're doing a lot of market research and we're getting a lot of very positive interest in AutoloGel as an option for those physicians and administrators to use in treating these patients.
So I think it's what's characterized as a period of change and I think that's great change, great opportunity for us.
Jason Napodano - Zacks Investment Research
And are you noticing that with the private payors as well or is this just within Medicare or Medicaid?
Dean Tozer
Yeah, right now with the privates AutoloGel is not at this moment reimbursed by private payors. So right now that's purely an exercise of what I would call us just exploring with payors what the impact is and I haven't seen it as significantly as you would see with the Medicare beneficiaries. Privates tend to be a little bit perhaps behind Medicare in that regard, they tend to be a watch what happens with Medicare. So that's what we're trying to get our arms around is are the privates going to follow some of these decisions by Medicare. But right now I would say the lion's share of the impact is on the Medicare beneficiaries.
Jason Napodano - Zacks Investment Research
Okay, and in terms of where you expect to see the biggest growth coming from in 2014 and forward now that CED is in place, you guys were focusing on physicians, obviously after the July decision in 2013, is that still a focus for you guys or has effort kind of shifted more towards the outpatient centers? And if you are still focusing on or just what you focused on in physicians' offices were you seeing reimbursement within those places or was that process kind of still being worked out?
Martin Rosendale
So Jason, just to begin we made some good progress in the physicians' office, we picked up a couple of significant customers. We've been treating Medicare patients. The bill, the claims have been submitted. As is often the case in these situations the government isn't keeping up with itself in many respects and so the Medicare administrative contractors have kicked back the claims for not understanding the codes, not having the codes placed in the right blanks and there has been no indication that the claims won't get paid in full. And so we're expecting that going forward but we won't have that information probably before another week or two.
With respect to where we expect to see the growth going forward Dean I'll pass it to you again.
Dean Tozer
Yeah, so I think there is kind of two parts to this. One is where we are today. And where we are today is getting CED put in place and we have great folks working on making sure we understand how that's going to work and [how so] outpatient. So today we're spending time generating demand at LTAC and some physician, private physician offices. But as my first kind of statement on what I'd see over the next half year or so, 60 days, my absolute focus is how are we going to drive business at the hospital and outpatient departments.
And so that is on the back half of the year is where we will really see the growth, that is what we absolutely expect where we will get things in place and that is where the majority of these patients reside and where the majority of the advanced wound care products are used. So near-term we're focused on getting CED in place, getting the right people on our team and then back half of the year really drive into hospital outpatient as our ultimate demand generating area.
Jason Napodano - Zacks Investment Research
Okay, you guys aren't providing guidance for 2014 but maybe you can give me a sense of patient numbers. You've got four CED programs that were enrolled in 2014, I assume and correct me if I am wrong, but the 280 patients randomized, the clinical trial will probably enroll this year, whereas the other three larger programs will probably take more or like two years. But in 2013 you did $600,000 or so in revenues without CED. So now that you've got the CMS, now you've CED, now you've got changes to the reimbursement from CMS, can you give us a sense of what happens to that $600,000 run rate that you guys did in 2013 without CED, does that stay the same, does that continue to kind of grow a little bit on the same pace?
And then the second question if these registry programs enroll as expected would you expect to see more revenues and more patients in those trials generating business in 2014 than we saw in 2013 with that kind of base line business?
Martin Rosendale
Jason, you have a lot of questions embedded in there so I'll try to touch on all of them. First of all what we call the randomized control trial, it is not [because it] falls under CED, it's also registry base and the reason we refer to it as the RCT is because the controls are randomized. But one thing to keep in mind each one of those patients under CED represents a sale because Medicare covers the cost of the product, and CED is a form of coverage. So it's important that we always keep that in mind.
So your assessment on the enrollment of that trial is accurate with -- our expectation is about a year to get that enrolled. The other study protocols will take a bit longer, they have more patients there is 750 patients in each one of those protocols. But your point as far as sales growth, again without giving specific guidance which we're not prepared to do quite yet, we do expect 2014 to be better than 2013. We do expect to get some significant enrollment in those protocols going forward.
And you can also expect us to have further interaction with CMS, potentially even get approval for additional protocols that will allow us to expand into broader markets and other types of care that again will help us to expand and help us to establish significant amount of growth in the sales of the product over 2014.
Dean, do you want to add anything to that?
Dean Tozer
One thing I would say add is, as Marty said I always want to remind people that CED as reimbursement, it's covered by Medicare. So every patient that we bring into one of our registries or into the randomized trials is revenue. And so our goal is to do both, is to drive CED enrollment because there is a genuine interest on our part to do that one to satisfy CED requirement. But probably more importantly it's revenue. And so it's a protocol trial of registry that in essence CMS is partially paying for to reimbursing a product.
So we're going to be entirely focused on putting those patients into those registries and satisfying the requirements.
Jason Napodano - Zacks Investment Research
Okay and in terms of the kind of the sales staff and what you are directing them to do, can you give us a sense of the size of the staff right now, do you have a goal in mind in terms of a size by the end of the year or any thoughts on what the ultimate size of the sales staff might be to maximize the potential for AutoloGel?
Martin Rosendale
Dean?
Dean Tozer
Yeah, as I said earlier, it's my first day on the job even though I have been consulting for a few months. We are nine people right now in the field, so we've had a small sales team. What I expect is we're going to hold that steady for a while until we get some of these things just totally ironed out with the CED process which I expect to see happening over the next few months.
I don't think that's going to take a tremendous amount of time because we've already done a great deal of work on it. And then on the back half of the year we will start adding some sales professionals. Do I know the exact number? No. Is it going to be 100? No. We are going to this in a measured way to make sure that we get the right people on board, that we generate demand in a predictable way for the near future.
We've got to do it right. You don't get a second chance to launch a product. And so I will say now that we are going to be strategic and thoughtful in how we do this. My goal is that '14 is -- we are starting to build the base, so that we can in '15, '16 and beyond really start to capitalize on the opportunity we have.
But I don't want to rush out of the gate, now that we have money in our hands and just do things potentially get us into a bad place from building a little too quickly at the beginning. So what we're going to do is be measured, we're going to get it, put together properly so that we have the base in place that we can really build on this in the years beyond '14.
Jason Napodano - Zacks Investment Research
Okay, I am going to jump back in queue and thanks for answering the question guys.
Martin Rosendale
Thanks, Jason.
Operator
Thank you for that question. We got no current questions. (Operator Instructions)
Martin Rosendale
Caroline, did we lose our connection?
Operator
No, sorry, I am just waiting to see who the next line is from.
Martin Rosendale
Oh, sorry, it went quiet, so I felt…
Operator
Okay, the next question comes from the line of [Don Akowich] from Maxim Group. Please go ahead.
Unidentified Analyst
Good morning, guys quick question for you, what do you guys see as the long-term anticipated split between sort of your organic sales and what you expect from royalties and licensing?
Martin Rosendale
Good question, Steve do you want to take that?
Steven A. Shallcross
Yeah, I would expect in the near term that the royalty income will be just shy of what one might expect to see in AutoloGel sales. Going forward obviously AutoloGel sales are going to become a much more significant part of our revenue stream and there would be a point in the future where the royalty stream will sort of probably reach a steady state. And we haven't given specific guidance on this so it's a little bit difficult to answer the question.
Unidentified Analyst
Okay. And then which markets did you guys say would provide the highest revenue for AutoloGel from a penetration standpoint?
Martin Rosendale
Dean, do you want to take that?
Dean Tozer
Sure, so the long-term, the area that we see as been the largest opportunity for AutoloGel will be hospital outpatients. So that is what we commonly focus, specialized wound care centers. So that will be the lion's share of the business if we do this correctly, which I expect we will. Long-term there are other opportunities. The great thing about his product has a very broad clearance, has properties that can have it be used in multiple sites of care.
So you could expect that down the road you would see, that the DA may be an option, we are compiling various things right now. We actually sell in LTAC, long-term acute care faculties and there is a lot of interest in the product area as well. So I think there is a lot of possibility to drive revenue, but my feeling is and my guidance is going to be that we will in the near term, and for the next number of years see the lion's share of our business coming out of the hospital outpatient department.
Unidentified Analyst
Got it, okay, great, thank you.
Martin Rosendale
Thank you.
Operator
Thank you for the question. The next question we have comes from the line of Steven Freed from Greenwave Financial Markets. Please go ahead.
Steven E. Freed - GreenWave Financial Markets, LLC
Hi, good morning everyone. I just kind of [wasn't clear if] have I caught everything but is this a new strategy whereby where are no longer looking for let's say a partner medical company with a larger sales force to help sell the product.
Martin Rosendale
So Steven, we don't currently have any discussions like that ongoing for AutoloGel. As we go forward, as we establish our success in the marketplace might those discussions resume, yes, it's certainly possible. But our objective and our reason for bringing talented professionals like Dean and Jennifer and the others that we've hired on board is to establish that success in the marketplace and be prepared to go on and succeed on our own.
Steven E. Freed - GreenWave Financial Markets, LLC
Okay. All right. Thank you.
Martin Rosendale
Thank you.
Operator
Thank you. (Operator Instructions). Thank you, ladies and gentlemen, that's the end of the question and answers. I would now like to turn the call back over to Martin for closing remarks.
Martin Rosendale
Thank you, Caroline. So everyone it's taken us a while to get this financing in place and get the company to the position that we're in today. I realize that during that time we've been relatively silent. I also remember that in 2008 when I joined the company I promised to keep our shareholders informed of our progress going forward. I haven't forgotten that promise and you can expect to hear regular updates from us now going forward. We will have our next earnings call in I believe so even as little as 45 days from now. So you can expect more frequent communication and update from us going forward.
We are all excited about the opportunity before us. Anson has proven to be a good investor and good partner. This is not the first time they have invested in the company. Deerfield, I am very pleased to have Deerfield as a financial partner. They have shown themselves to be beneficial in areas beyond just financing, the staff that they have, the executives that they have, their ability to assess markets, help us with decisions is tremendous. I am looking forward to that partnership going forward.
We're in a good place. We're going to capitalize on it and we've got talented people on board, Dean, as he mentioned one of his main roles going forward is to bring more talented people into the company. So we're looking forward to these opportunities and I personally am looking forward to keeping you informed. Thank you very much for joining us this morning.
Operator
Thank you, Martin. Ladies and gentlemen, that concludes -- sorry that concludes today's conference. You may now disconnect. Have a good day.
"Seeking Alpha predicted stock returns"
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Really didn't know if they would run it up or down. Turn out neither! Plan on reading confrence call transcripts tonight.
Will be interesting to see how this trades tomorrow.
I have not bought shares still expecting a raise. Think the financial will be good in March but i don't think they are proffitable yet. Then they have results in May. I think the future looks bright for them but in the short term they need money could be wrong though.
You have your opinion and I have mine. No hurry to buy. Hope they do wait until March hard to keep the lights on without money. I might not buy shares at all depending what the stock price does because lots of stocks with upcoming catalyst in the next 3 to 4 months.
They have about enough cash until approx March. They have to get money some how. They are not profitable yet. I will wait to buy shares until they get money somehow to continue to fund their operations.............
Unless you think its going to fall out of the sky???????
With the high volume and share price tanking raise might be coming.
Raise should be coming soon looking to buy in .30 to .40 range.
Yes they jv half interst in block 2 for I think 30 million I sold my shares shortly after. Suppose to drill block 1 and 2 sometime around 3 or 4 quarter 2014 I will be looking for a reentry around that time.
Hope it happens
Ur link goes to IBIO not IGXT
tpn.v taipf .pk
Halted on Friday expecting news on Tuesday
Trading has been halted since Friday expecting news on Tuesday possible farm out
IGXT .645
Lots of upcoming catalyst also they filed the NDA.
http://finance.yahoo.com/news/intelgenx-submits-drug-application-anti-100500113.html
IGXT .58
Company plans to file NDA next week according to the Roth webcast. Webcast was very good in my opinion also spoke of many near term catalyst.
http://www.rothcp.com/default.aspx
Um maybe wait and see
IGXT Looking good! I liked the webcast was hoping to get lot more shares in the. 50 to. 51 range.
IGXT .50
52 wk range .445 to .75
OS 49,890,000
Market cap 24,940,000
Total cash 2,770,000
Upcoming catalysts
NDA Rizatriptan film – indicated for Migraine 1Q 2013
Rizatriptan film – indicated for Migraine
IntelGenx’ rizatriptan film is a new product opportunity co-developed in partnership with RedHill Biopharma and formulated using VersaFilm™, IntelGenx proprietary thin film technology. Rizatriptan is a selective 5-HT1B/1D receptor agonist indicated for the treatment of migraine. Compared to other triptan-based medications, rizatriptan demonstrates the highest efficacy and exhibits the shortest Tmax providing a quick onset of action for migraine sufferers. Rizatriptan is also indicated for the treatment of migraine attacks in children and elderly who could both benefit from the ease of administration of the film formulation. The rizatriptan film demonstrated bioequivalence in a successful pivotal clinical trial compared to the reference listed drug Maxalt MLT®. IntelGenx is now planning submission in Q1 2013 for regulatory approval by the FDA. Maxalt-MLT® is Merck & Co.’s leading branded anti-migraine product. According to Merck's most recent annual report, sales of Maxalt® grew 16% to $639 million in 2011. IntelGenx and RedHill are currently looking for a partnership or alliance opportunity to commercialize the rizatriptan film.
Also another article from Feb 5 2013
http://seekingalpha.com/article/1157681-intelgenx-ceo-provides-insight-into-the-company-s-catalysts
Anatolia Energy Upgraded to Strong Buy as the Search for Oil in Turkey Heightens
AEE.V CURRENT PRICE: $0.055
AEE.V TARGET PRICE: $0.90
UPSIDE POTENTIAL: 1,536%
SHARES OUTSTANDING: 131,058,930
January 31, 2013 - Calgary, Alberta - Anatolia Energy Corp. (TSXV:AEE) has been upgraded to a strong buy thanks to its prospective oil and gas assets in Turkey, large oil discoveries in very close proximity to some of those assets, key strategic relationships within the country and strong cash position. The company has net cash of over $5M and $1.5M in inventory as of September 30, 2012 which compares very favourably to their market cap of $7.2M, providing investors with the security that the company has very little downside from its current stock price.
To understand the importance of AEE's assets, one must understand the sudden rise in interest in developing oil and gas in Turkey along with AEE's role within that initiative. Referring to the article Financial Press: Right Time, Right Place comes the following excerpt:
"With one of the fastest-growing economies in the world, Turkey is determined to become self-sufficient in oil and gas by 2023 and is drafting new laws to spur exploration.
Turkey currently imports a staggering 92 percent of its domestic oil needs and 98 percent of its natural gas. Average daily oil production of 44,000 barrels meets only eight percent of overall consumption needs and the cost of its energy imports is putting severe restraints on its economic ambitions.
"Our aim is to make Turkey one of the 10 largest economies in the world by 2023," Energy Minister Taner Yildiz recently told Bloomberg News. "Finding energy," he said, would "enable Turkey to achieve its goal."
The incentives of a stable political regime, rich resource prospects and generous terms are now luring some of the biggest international oil companies, including Shell, which has recently committed to a multi-million drilling program, and Exxon, which is reportedly close to signing a joint venture with TPAO (Turkish Petroleum Corporation) .
The Shell prospects are just a stone's throw away from those of Anatolia Energy, which has a joint venture agreement with Calik Enerji, a highly experienced Turkish company with a proven exploration team.
It's long been suspected that Turkey's Anatolia Basin, composed largely of Silurian Dadas shale, is a potentially huge source of hydrocarbons. But it's only within the past decade that new technology has made possible the efficient extraction of such resources."
Not only is there a desire to drill in Turkey, there has recently been a discovery of reserves of high quality oil in the Magrip field in the Turkish province of Siirt Kurtalan, which is located in the Anatolia region. The picture below shows the location of Anatolia's assets and their close proximity to this discovery. The Sinan Project is located right on the doorstep of the discovery, with the Bismil Project also located very close by in the same province. When referring to the map below note the location of "Batman" right beside Sinan to gain a point of reference.
Now refer to the image below of the map of the Magrip region where the discovery was made. Note the central point and the how the roadway leading into Batman is just south of it.
This confirms that AEE's Sinan Project is located extremely close to the Magrip discovery. As most Canadian investors are unfamiliar with granular Turkish geography it is not surprising that this extremely important development has not had a large effect on AEE's stock price just yet. The Magrip discovery is well-timed because the company recently announced Spudding of their Giremir-1 Well on the Sinan Licence in Turkey. Their 50% joint venture partner Calik will be drilling the initial exploration well on the Sinan Licence to a depth of 1,250 meters and results should be known within a few weeks. From the news release:
"Giremir-1 is expected to be drilled to a depth of approximately 1,250 meters for a total cost of US$1.4 million. The deepest horizon to be drilled will be the Upper Sinan Formation. Although its hydrocarbon potential is unknown in this area, the Paleocene age reservoir produces oil in 5 fields in southeastern Turkey; most notably at the Selmo Field which is located approximately 47 kilometres northeast of the Giremir well."
The bonus to Calik funding the initial well is that AEE ends up with a potentially hugely positive news event in a short time frame without an outlay of its own cash. Should they find hydrocarbons in the region, expect the stock price to rise even faster than it did in early May 2012 when it raced from as low as 12 cents on April 23 to a high of 33 cents on May 7 after the company announced their Dadas Shale core results.
With the current robust state of Turkey's oil and gas exploration, it is no surprise that larger oil and gas firms like Shell have renewed interest in the area. They just started their Shale Gas exploration program in Southeast Turkey in September, close to several of AEE's assets. This heightened interest in Turkish shale gas assets certainly makes AEE a strong target for a takeover given their early success with Dadas and the findings in the Magrip region. Reviewing Anatolia's corporate presentation shows how close Exxon and Shell's projects are to AEE's property.
Another key driver for Anatolia's future success is the extremely favourable economic conditions for oil and gas exploration in Turkey. They will get Brent Crude prices for their oil and are subject to only a 12.5% government royalty and 20% corporate tax rate meaning margins inclusive of operating and transportation costs should be in the 55-60% range as estimated in their presentation.
Based on the news of the discovery in Magrip, large oil and gas player interest right on AEE's doorstep, their results from Dadas and the favourable economic environment in which they operate, AEE makes a very attractive investment both in the short term and long term for investors interested in oil and gas exploration plays. TSX News initiates a strong buy on AEE with a target of 90 cents.
Click here for further reading on Turkey’s Oil Potential: Onshore and Offshore
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http://tsxnews.blogspot.ca/2013/01/anatolia-energy-upgraded-to-strong-buy.html
Jan 30, 2013 (ACCESSWIRE-TNW via COMTEX) -- That's Tim Marchant's take on his company's encouraging shale oil play in southeastern Turkey.
Marchant, executive chairman of junior explorer Anatolia Energy , is a veteran oil executive with 30 years' experience in global exploration, development and production.
In his last job, as Vice-President of BP International, he oversaw projects in nine Middle Eastern countries. Few Canadians have his extensive knowledge of the region's potential for hydrocarbons.
And, in Marchant's considered opinion, Turkey is hot.
With one of the fastest-growing economies in the world, Turkey is determined to become self-sufficient in oil and gas by 2023 and is drafting new laws to spur exploration.
Turkey currently imports a staggering 92 percent of its domestic oil needs and 98 percent of its natural gas. Average daily oil production of 44,000 barrels meets only eight percent of overall consumption needs and the cost of its energy imports is putting severe restraints on its economic ambitions.
"Our aim is to make Turkey one of the 10 largest economies in the world by 2023," Energy Minister Taner Yildiz recently told Bloomberg News. "Finding energy," he said, would "enable Turkey to achieve its goal."
The incentives of a stable political regime, rich resource prospects and generous terms are now luring some of the biggest international oil companies, including Shell, which has recently committed to a multi-million drilling program, and Exxon, which is reportedly close to signing a joint venture with TPAO (Turkish Petroleum Corporation) .
The Shell prospects are just a stone's throw away from those of Anatolia Energy, which has a joint venture agreement with Calik Enerji, a highly experienced Turkish company with a proven exploration team.
It's long been suspected that Turkey's Anatolia Basin, composed largely of Silurian Dadas shale, is a potentially huge source of hydrocarbons. But it's only within the past decade that new technology has made possible the efficient extraction of such resources.
Newly developed techniques of fracture stimulation, now in everyday use in North America, have "fundamentally changed" the nature of the game, says Marchant.
Anatolia, which has scoured the world for conventional and unconventional oil and gas assets, was among the first international explorer to renew an interest in Turkey. It has identified four major exploration trends, including the Silurian Dadas shale oil trend, over its licences and has identified 21 prospects.
The company's focus at present is on its Bismil and Sinan Licences. Drilling at the Giremir-1 well, its initial exploration on the Sinan Licence, began in mid January.
Meanwhile, the company is gearing up for fracture stimulation tests of the Silurian Dadas Shale on the Bismil Licence. The tests are due to be carried out this year with the aim of flowing hydrocarbons from the shale.
Marchant anticipates strong results. Core samples of the shale taken last summer and analyzed by an independent third party back in Calgary "determined that this is a potentially very rich shale oil deposit," he says.
The assessment, by resource evaluator Ryder Scott, assigned a P50 gross best estimate of 94 million barrels (47 MMBbl net) of recoverable oil in the company's Dadas Shale prospective acreage in the Bismil and Sinan Licences — a substantial increase over a previous resource report.
Marchant says the estimates are "pretty conservative," based on a potential recovery rate of only three-and-a-half percent, compared to a norm of between six and 10 percent in North America,
Bob Spring, Chief Executive Officer of Anatolia, says the Ryder Scott report "provides further validation of the significant Dadas Shale potential on our Turkish licences. We continue to be excited with the prospectivity of the Dadas Shale and we will remain focused on further advancing the development of this resource."
As Anatolia prepares for its fracture stimulation tests, it has been hugely encouraged by the success of another company active in the Basin, TransAtlantic Petroleum Ltd.
Marchant says TransAtlantic has proven that the fracture stimulation technique works effectively in the Basin, stimulating the output of good quality light crude oil from both the overlying and underlying sandstone.
"What TransAtlantic has shown is that by drilling horizontally into the sandstone, and doing the same fracture stimulation test, they got better results than just doing a normal vertical well. The technique works on both formations.
"What this means is that the geologic concept that we were testing has been proved up," says Marchant. "That's very encouraging for Anatolia. It really feels like this whole play is coming together."
Assuming that Anatolia's own initial fracture stimulation tests are successful, Marchant says the next step is "full field development, which would involve drilling a number of horizontal wells — long horizontal sections — and then fracture stimulating those sections, the way things are now developed in western Canada, for example."
He says Anatolia has sufficient funds to keep going through 2013, but that the long-term development of the shale prospects would require "a strategic decision a few years down the line. It obviously will require significant capital expenditures.
"We would look at a number of possibilities," he says. "For the moment, we are very much focused on proving up what we believe to be a very large and significant resource for Turkey."
Legal Disclaimer/Disclosure: A fee has been paid for the production and distribution of this Report. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. No information in this article should be construed as individualized investment advice. A licensed financial advisor should be consulted prior to making any investment decision. Financial Press makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of the author's only and are subject to change without notice. Financial Press assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this article and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this article.
Copyright 2013 ACCESSWIRE-TNW
http://www.marketwatch.com/story/financial-press-right-time-right-place-2013-01-30
Anatolia Energy Announces Spudding of the Giremir-1 Well on the Sinan Licence in Turkey
CALGARY, Jan. 15, 2013 /CNW/ - Anatolia Energy Corp. (the "Company") (TSX-V: AEE) is pleased to announce that its partner, Çalik Enerji San. ve Tic. AS. ("Calik"), has commenced drilling at Giremir-1, the initial exploration well on the Sinan Licence in Turkey, where Anatolia can earn a 50% interest.
The Giremir-1 commitment well will satisfy the drilling requirements on the Sinan Licence pursuant to its Joint Venture agreement with Calik and as required by the General Directorate of Petroleum Affairs ("GDPA"), Turkey's energy regulatory body. Drilling of Giremir-1 satisfies the work commitment of the Sinan Licence during its initial four year exploration period and satisfies the district drilling obligation which includes the Bismil Licences.
Giremir-1 is expected to be drilled to a depth of approximately 1,250 meters for a total cost of US$1.4 million. The deepest horizon to be drilled will be the Upper Sinan Formation. Although its hydrocarbon potential is unknown in this area, the Paleocene age reservoir produces oil in 5 fields in southeastern Turkey; most notably at the Selmo Field which is located approximately 47 kilometres northeast of the Giremir well.
The Sinan and Bismil Licences encompass 17,833 (8,917 net) and 245,699 gross (122,850 net) acres, respectively, and are well-located within the Dadas Shale Oil trend as well as the Cretaceous and Ordovician conventional oil plays. Activity focused on the Dadas Shale continues to gain momentum with numerous drilling and testing operations currently on-going in the area, including the drilling of the first well of the Shell and Turkish Petroleum ("TPAO") joint venture approximately 20 km from the Company's Sinan Licence border. Under the terms of the TPAO-Shell agreement announced in November 2011, Shell is expected to drill five wells into the Dadas Shale formation.
Upcoming Dadas Shale Activity
Anatolia continues to work towards the optimal design of a fracture stimulation test of the Silurian Dadas Shale on the Bismil Licence. The tests are due to be carried out in 2013 with the aim of flowing hydrocarbons from the shale. A large volume of physical and geochemical data extracted from the shale cores has led management to anticipate a positive fracture response from the shale. The Bismil and Sinan Licences in Turkey provide the Company with exposure to 263,532 gross acres (131,766 net) of Dadas Shale and/or conventional oil prospective acreage. The Company's independent third party resource evaluator, Ryder Scott, has allocated 94 MMBbls (47 MMBbls net) of unrisked prospective resources related to the Dadas Shale on the Bismil and Sinan Licences (June 11, 2012 news release).
Amending JV Terms
The Company and Calik recently amended the Joint Venture agreement for Sinan, Antep and Besni such that the final payment to trust of $6.5 million due March 31, 2013 has been extended to August 1, 2013 to better reflect the timing of the respective work programs. In addition, the parties agreed to amend the JV Supplemental agreement with an option to earn an additional 25% at Bismil (Dadas Shale) such that the payments to trust have been amended to $1.5 million on August 1, 2013 and $10 million on March 31, 2014 to better reflect the timing of the respective work programs.
About Anatolia Energy Corp.
Anatolia is an international oil and gas company engaged in the exploration and development of oil and gas assets in Turkey. Anatolia has the right, pursuant to its joint venture agreements with Çalik Enerji San. ve Tic. AS., the wholly-owned oil and gas subsidiary of the large Turkish conglomerate Çalik Holding A.S., to earn working interests between 25% and 50% in two development licences and working interests of 50% in nine exploration licences covering 1,162,856 gross acres of land in Turkey's proven Southeastern oil basin. Anatolia is focused on four play types in Turkey namely the Silurian Dadas shale oil trend, Paleozoic Bedinan sand trend, Cretaceous Mardin strike slip trend and Garzan reef trend. The Dadas formation in southeast Turkey is an extension of the prolific Silurian source rocks of the Middle East.
Cautionary Statements
Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. There is no certainty that it will be commercially viable to produce any portion of the prospective resources.
Certain information included in this press release constitutes forward-looking information under applicable securities legislation. Such forward-looking information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this press release may include, but is not limited to, information with respect to: ultimate economic viability of the Dadas Shale, operational decisions and the timing thereof, and timing for drilling and exploration plans on the properties of Anatolia. Forward-looking information is based on a number of factors and assumptions which have been used to develop such information but which may prove to be incorrect. Although Anatolia believes that the expectations reflected in such forward-looking information is reasonable, undue reliance should not be placed on forward-looking information because Anatolia can give no assurance that such expectations will prove to be correct. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used. Anatolia undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change, unless required by law. For further information on the Company and the risks associated with its business, please see the Company's AIF dated June 4, 2012, which is available on SEDAR. The reader is cautioned not to place undue reliance on this forward-looking information.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE: Anatolia Energy Corp.
Peter Argiris, VP Business Development
Anatolia Energy Corp.
403.802.0770 ext. 225
Canada Newswire
January 15, 2013 - 1:38 PM EST
Unwired Planet Strengthens Mobile Intellectual Property Portfolio with the Contribution of Complementary IP from the Industry...
Date : 01/10/2013 @ 4:05PM
Source : Business Wire
Stock : Unwired Planet, Inc. (MM) (UPIP)
Quote : 1.31 0.05 (3.97%) @ 5:12PM
Unwired Planet Strengthens Mobile Intellectual Property Portfolio with the Contribution of Complementary IP from the Industry...
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Unwired Planet, Inc. (MM) (NASDAQ:UPIP)
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Today : Thursday 10 January 2013
Click Here for more Unwired Planet, Inc. (MM) Charts.
Unwired Planet, Inc. (NASDAQ: UPIP) (“Unwired Planet” or the “Company”), the inventor of the mobile Internet, today announced that it has entered into a patent purchase agreement with Ericsson (NASDAQ:ERIC) whereby Ericsson will transfer to Unwired Planet 2,185 issued US and international patents and patent applications.
The transferred patents significantly broaden Unwired Planet’s Mobile Internet-focused portfolio and include 753 United States issued patents related to 2G, 3G and LTE technologies. Under the terms of the transaction, Ericsson will also contribute 100 additional patent assets annually to Unwired Planet commencing in 2014 through 2018. Unwired Planet will compensate Ericsson with certain ongoing rights in future revenues generated from the enlarged patent portfolio. Unwired Planet will also grant Ericsson a license to the Company’s enlarged patent portfolio.
The combined portfolio reflects decades of significant investment in research and development and the companies’ respective roles as pioneers in the development of technology critical to Telecommunications Infrastructure and the Mobile Internet. The contributed Ericsson portfolio includes patented inventions relating to global telecommunication technologies, such as GSM, GPRS, EDGE, WCDMA and LTE, as well as many other patented inventions that are widely implemented in many popular wireless devices and mobile industries.
Following the transaction, Unwired Planet will execute a strategy as a long-term industry platform for the realization of intellectual property value across the global telecoms and mobile handset markets.
“Ericsson and Unwired Planet teamed in the late 1990’s at the dawn of the mobile Internet to define an industry and develop technology at the cutting edge of mobile communications. Our mobile heritage reflects decades of pioneering new technology, supported by billions of dollars in research and development. Our inventions have delivered massive social value and this transaction with Ericsson reflects our commitment to protecting and realizing value from this innovation,” said Mike Mulica, Chief Executive Officer of Unwired Planet. “We look forward to leveraging a strong, multi-dimensional patent portfolio and furthering discussions with key industry players who are interested in licensing these inventions to protect and further build their product strategies.”
“In 1997, Ericsson and Unwired Planet introduced the Wireless Application Protocol that brought Internet access to mobile devices,” said Kasim Alfalahi, Chief Intellectual Property Officer, Ericsson. “Following this transaction, Unwired Planet’s portfolio will reflect decades of invention at the forefront of mobile infrastructure, handset technologies and over-the-top services. We are pleased to have concluded this business deal with Unwired Planet as an alternative channel for IP licensing.”
Further details of the transaction are included in a Form 8-K to be filed by Unwired Planet with the United States Securities and Exchange Commission.
Conference Call Information
Unwired Planet has scheduled a conference call for 5:00 p.m. EST today to discuss the patent purchase agreement. Interested parties may access the conference call over the Internet through Unwired Planet’s website at www.unwiredplanet.com or by telephone at (877) 941-2068 or (480)-629-9712 (international). A replay of the conference call will be available for three weeks (until January 31), beginning at 6:00 pm EST on January 10 by calling (800) 406-7325. The replay can be accessed internationally by calling (303) 590-3030, access code: 4590216.
About Unwired Planet
Unwired Planet, Inc. (NASDAQ: UPIP) is the inventor of the mobile Internet and established many of the foundational patented technologies that allow mobile devices to connect to the Internet. The company’s 202 issued US and foreign patents and 75 pending applications are considered foundational to mobile communications, and span smart devices, cloud technologies and unified messaging. Unwired Planet’s portfolio includes patents related to key mobile application technologies, including mobile browsers, mobile advertising, push technology, maps and location based services, mobile application stores, social networking, mobile gaming and mobile search. Unwired Planet is headquartered in Reno, Nevada.
Safe Harbor for Forward-Looking Statements
This release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact contained in this release are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only current predictions and are subject to known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. These forward-looking statements are subject to a number of risks, including, but not limited to the ability of the parties to the patent purchase agreement to consummate the proposed transaction in light of the various closing conditions set forth in the transaction documents (including those conditions related to HSR approval), the expiration of encumbrances on the patent portfolio, the potential value and synergies created by the transaction, including the future market for smartphones and 3G/4G mobile phone shipments and the ability of the Company to realize and monetize the value of the Company’s intellectual property as well as those risk factors discussed in filings with the SEC, including but not limited to the Company’s Annual Report on Form 10-K filed on September 7, 2012, and any subsequently filed reports on Forms 10-Q and 8-K or amendments thereto. The Company undertakes no duty to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this release.
Not much longer to see if we get the six month review or ten. The warrents expiring today was another positive. The licensing i thought was good.
Hope everyone has a MERRY CHRISTMAS.
Have not been following it to close the shares i have currently under water. They had a bad ruling several months ago. Between that tax loss selling hoping that this is the bottom. They have approx 60 million in cash. Burn rates suppose to go way down per their cc. These types of stocks have been pretty hot. I think could see a run like VRNG had. Plan on talking to the company to find out more information after first of the year.
Good luck and have a merry christmas
Titan Pharmaceuticals Licenses Exclusive Probuphine(R) Commercialization Rights in U.S. and Canada to Braeburn Pharmaceuticals
Date : 12/17/2012 @ 7:00AM
Source : MarketWire
Stock : Titan Pharma (TTNP)
Quote : 1.24 0.13 (11.71%) @ 1:51PM
Titan Pharmaceuticals Licenses Exclusive Probuphine(R) Commercialization Rights in U.S. and Canada to Braeburn Pharmaceuticals
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Titan Pharma (OTCBB:TTNP)
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Today : Monday 17 December 2012
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Titan Pharmaceuticals, Inc. (OTCBB: TTNP) today announced the signing of a license agreement with Braeburn Pharmaceuticals Sprl, wholly owned by Apple Tree Partners IV, L.P., a partnership affiliated with Apple Tree Partners. The license grants Braeburn exclusive commercialization rights in the United States and Canada to the investigational product Probuphine®, a novel, subdermal implant and the first long-acting product designed to deliver six months of the drug buprenorphine hydrochloride following a single treatment. On October 29, 2012, Titan announced the submission of a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) for Probuphine for the maintenance treatment of opioid dependence in adult patients.
Titan has received a non-refundable $15.75 million up-front payment and will receive up to $50 million upon the approval of Probuphine by the FDA for the treatment of opioid dependence. Additionally, Titan will be eligible to receive up to $130 million upon achievement of sales milestones and up to $35 million in regulatory milestones for additional contemplated indications, including chronic pain. Titan will receive tiered, double digit percentage royalties on net sales of Probuphine within a range that is customary for products at this stage. In addition to the potential milestone payments, Apple Tree Partners IV has allocated in excess of $75 million to launch, commercialize and continue the development of Probuphine.
Apple Tree Partners, founded in 1999, creates life sciences companies. Through two predecessor partnerships, Apple Tree founded and built Aileron Therapeutics, Gloucester Pharmaceuticals (acquired by Celgene), HeartWare International and Tokai Pharmaceuticals. The firm intends to use the entirety of its recently closed partnership, Apple Tree Partners IV, to build Apple Tree Consolidated Sprl, a holding company that will create and own complementary life sciences businesses (pharmaceuticals, medical devices, and technology-enabled healthcare services). Braeburn Pharmaceuticals will become a division of Apple Tree Consolidated.
Braeburn Pharmaceuticals is led by a strong, highly experienced team that includes Rose Crane, former Company Group Chair OTC, Specialty and Nutritionals at Johnson & Johnson, and President, Primary Care at Bristol Myers Squibb, and Garry Neil, M.D., former Group President Pharmaceutical R&D at Johnson & Johnson.
"We believe this agreement with Braeburn Pharmaceuticals offers a tremendous opportunity to accelerate the commercialization of Probuphine and provides Titan with the financial resources to further advance our technology and pipeline," said Sunil Bhonsle, president of Titan. "While a broad range of pharmaceutical companies expressed interest in Probuphine, we found that the innovative model of the new company established by Apple Tree not only provides us with a value-driven transaction for Titan shareholders, but also brings to the process a seasoned team of industry veterans with proven track records of launching and commercializing important therapies, including controlled substances. The North American Probuphine franchise will be launched and developed by a top notch commercialization team, maximizing the potential for its rapid acceptance in the medical and patient community and a successful commercial launch for both companies."
"The Board of Titan is extremely pleased with this strategic partnering outcome and the path forward for Probuphine," said Marc Rubin, M.D., executive chairman of Titan Pharmaceuticals. "It is our ultimate goal to rapidly and efficiently advance Probuphine to the market and the patients and clinicians who can benefit from safe and effective treatments for opioid addiction. Braeburn Pharmaceuticals has been formed with that same goal and we look forward to working with their team to achieve it."
Under the terms of the agreement, Titan will remain responsible for any expenses associated with the support of the current NDA review process. Upon completion of the FDA review process, Braeburn Pharmaceuticals will assume all responsibility for commercialization and further clinical development of Probuphine in the U.S. and Canada. The Titan team is already interacting routinely with the Braeburn team and will continue to assist through product launch as needed. Titan and Braeburn Pharmaceuticals will also have a joint development committee to oversee the overall strategic objectives and plans relating to the development of Probuphine, including regulatory strategy with respect to any Phase IV clinical trials, communications with regulatory authorities and clinical programs for chronic pain and any other potential indications.
"The leadership team of Braeburn Pharmaceuticals combines the entrepreneurial success of Apple Tree Partners with a proven track record in pharmaceutical development and commercialization," said Ms. Crane, partner at Apple Tree Partners and head of pharmaceutical commercialization at Apple Tree Consolidated. "We are excited by the Probuphine opportunity and look forward to working with the Titan team to drive the successful commercial launch following FDA approval."
"Probuphine is an exciting new product with the potential to change the lives of patients suffering from opiate dependence," said Dr. Neil, partner at Apple Tree Partners and head of pharmaceutical research and development at Apple Tree Consolidated.
Titan Conference Call
Members of the Titan and Braeburn Pharmaceuticals management teams will host a conference call to discuss the deal today at 4:05 pm ET. Participating on the call will be Mr. Bhonsle, Dr. Rubin, Katherine Beebe, Ph.D., executive vice president and chief development officer of Titan, Ms. Crane and Dr. Neil. The live webcast of the call may be accessed by visiting the Titan website at www.titanpharm.com. The call can also be accessed by dialing 888-221-3887, Participant Code: 7422088 five minutes prior to the start time. A replay of the call will be available on the Titan website approximately two hours after completion of the call and will be archived for two weeks.
About Opioid Addiction
It is estimated that there are 2.3 million opioid addicts in the U.S. Approximately 20 percent of this potential patient population is addicted to illicit opioids, such as heroin, and the other 80 percent to prescription drugs, such as oxycontin, methadone, and codeine. Until recently, medication-assisted therapies for opioid addiction had been sanctioned to a limited number of facilities in the U.S. Today, physicians can be certified to prescribe certain opioid addiction medications in an office setting, which has greatly expanded patient access to opioid addiction pharmaceutical therapies. As a result, it is estimated that there are approximately 750,000 people in the U.S. receiving medicinal treatment for opioid addiction.
About Probuphine®
Probuphine is an investigational subcutaneous implant capable of delivering continuous and persistent, around the clock blood levels of buprenorphine for six months following a single treatment, enhancing patient compliance and retention. The NDA for Probuphine was submitted to the FDA in October 2012 including a request for Priority Review. Buprenorphine, an approved agent for the treatment of opioid dependence, is currently available in the form of daily dosed sublingual tablets and film formulations, with reported 2011 sales of $1.3 billion in the United States. The efficacy and safety of Probuphine has been studied in several clinical trials, including a 163-patient, placebo-controlled study that demonstrated clinically meaningful and statistically significant treatment benefits with Probuphine over a 24-week period (published in the Journal of the American Medical Association (JAMA)), and a confirmatory study of 287 patients that showed statistically significant efficacy versus placebo and non-inferiority with a currently marketed sublingual formulation of buprenorphine.
Probuphine was developed using ProNeura™, Titan's continuous drug delivery system that consists of a small, solid rod made from a mixture of ethylene-vinyl acetate (EVA) and a drug substance. The resulting construct is a solid matrix that is placed subcutaneously, normally in the upper arm in a simple office procedure, and removed in a similar manner at the end of the treatment period. The drug substance is released slowly, at continuous levels, through the process of diffusion. This results in a constant rate of release similar to intravenous administration.
About Apple Tree
For more information please visit the company's website at: www.appletreepartners.com.
About Titan Pharmaceuticals
For information concerning Titan Pharmaceuticals, Inc., please visit the company's website at www.titanpharm.com.
Safe Harbor Statement
The press release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements include, but are not limited to, any statements relating to the Company's development program and any other statements that are not historical facts. Such statements involve risks and uncertainties, including, but not limited to, those risks and uncertainties relating to difficulties or delays in development, testing, regulatory approval, production and marketing of the Company's drug candidates, adverse side effects or inadequate therapeutic efficacy of the Company's drug candidates that could slow or prevent product development or commercialization, the uncertainty of patent protection for the Company's intellectual property or trade secrets, the Company's ability to establish corporate partnerships to support the development and commercialization of its products and the Company's ability to obtain additional financing. Such statements are based on management's current expectations, but actual results may differ materially due to various factors, including those risks and uncertainties mentioned or referred to in this press release
Contact:
For Media:
Pure Communications
Susan Heins
(864) 286-9597
sjheins@purecommunicationsinc.com
For Investors:
Titan Pharmaceuticals, Inc.
Sunil Bhonsle
President
650-244-4990
Nice week for TTNP close 1.11
TTNP closed out today at 1.05. Lots more suppose to happen before the end of the year. Link back for CC and a good article about Titan.
TTNP has been moving up steadily. Dips are being bought looking forward to the end of the year.
Nice close for the week.
Thanks will take a look. Marked the board.