Aastrom Biosciences Inc. (ASTM) filed Quarterly Report for the period ended 2009-09-30.
Aastrom Biosciences Inc. develops autologous cell products for the repair or regeneration of multiple human tissues based on its proprietary Tissue Repair Cell technology. Aastrom's TRC-based products are a unique cell mixture containing stem and progenitor cell populations produced from a small amount of bone marrow taken from the patient. TRC-based products have been used in over two hundred fourty patients and are currently in clinical trials for bone regeneration and vascular regeneration applications. Aastrom has reported positive interim clinical trial results for TRCs suggesting both the clinical safety and the ability of TRCs to promote healing in bone regeneration applications. The Company is also developing programs for TRC-based therapies to address cardiac & neural regeneration indications. TRCs have received Orphan Drug Designation from the FDA for use in the treatment of osteonecrosis of the femoral head and the treatment of dilated cardiomyopathy a severe c Aastrom Biosciences Inc. has a market cap of $53.8 million; its shares were traded at around $0.32 with and P/S ratio of 296. Aastrom Biosciences Inc. had an annual average earning growth of 7.3% over the past 5 years.
Highlight of Business Operations:
Costs and expenses include an increase in research and development expenses to $2,911,000 for the quarter ended September 30, 2009 from $2,726,000 for the quarter ended September 30, 2008. This increase reflects continued expansion of our clinical development activities including the costs associated with recruitment and treatment of patients in our IMPACT-DCM clinical trial. Research and development expenses also included a non-cash charge relating to share-based compensation expense of $186,000 for the quarter ended September 30, 2009 compared to $162,000 for the quarter ended September 30, 2008.
Selling, general and administrative expenses decreased for the quarter ended September 30, 2009 to $946,000 from $1,316,000 for the quarter ended September 30, 2008. This decrease is primarily due to an offset to the stock compensation expense for the quarter ended September 30, 2009 for a reversal of $279,000 of previously recognized expense for certain options held by George W. Dunbar that will be forfeited when he steps down as Chief Executive Officer, President and Chief Financial Officer on December 14, 2009. This expense was reversed in the quarter ended September 30, 2009 as these options are no longer expected to vest due to the management transition that was announced on September 3, 2009. Selling, general and administrative expenses for the quarters ended September 30, 2009 and 2008 also include a non-cash charge of $140,000 and $201,000, respectively, relating to share-based compensation expense.
Our net loss was $3,801,000, or $.02 per common share for the quarter ended September 30, 2009 compared to $3,913,000, or $.03 per common share for the quarter ended September 30, 2008. The changes in net loss are primarily due to the fluctuations in spending of research and development expenses and the increase in the weighted average shares outstanding. We expect to report additional significant net losses until such time as substantial TRC-based product sales commence.
Our combined cash and cash equivalents totaled $17,357,000 at September 30, 2009, an increase of $357,000 from June 30, 2009. During the quarter ended September 30, 2009, the primary source of cash and cash equivalents was from equity transactions, of which net proceeds of $4,300,000 were raised principally through sales of our equity securities pursuant to the June 2009 agreement with Fusion Capital. The primary uses of cash and cash equivalents during the quarter ended September 30, 2009 included $3,840,000 to finance our operations and working capital requirements, and $54,000 in capital equipment additions.
As of the commencement date, July 1, 2009, we have the right over a 25-month period to sell shares of our common stock to Fusion Capital from time to time in amounts between $100,000 and $4 million, depending on certain conditions as set forth in the agreement, up to an aggregate of $30.0 million. The number of shares that could be issued to Fusion Capital during each sale is determined based on a stock price (“Purchase Price”) that is the lower of the (a) the lowest sale price of common stock on the purchase date or (b) the arithmetic average of the three lowest closing sale prices of common stock during the twelve consecutive business days (ten days in certain circumstances) ending on the business day immediately preceding the purchase date (to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction). We control the timing and amount of any sales of shares to Fusion Capital.
Assuming the stock price remains at the same average price as November 2009 prices to date, additional proceeds related to the Fusion Capital transaction would not be able to be raised without shareholder approval. If the stock price increases to at least $0.36 per share, we would be able to raise an additional $8.1 million of cash proceeds per our agreement with Fusion Capital (through the issuance of the remaining 24,671,957 shares of our common stock, which includes 2,008,929 shares related to the commitment fee) assuming the average Purchase Price of future purchases was $0.36 per share.
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