StemCells Inc. (STEM, Financial) filed Quarterly Report for the period ended 2010-03-31.
Stemcells Inc. has a market cap of $141.9 million; its shares were traded at around $1.19 with and P/S ratio of 142.9. STEM is in the portfolios of Steven Cohen of SAC Capital Advisors.
First quarter ended March 31, 2010 versus first quarter ended March 31, 2009. Licensing and grant revenue for the first quarter of 2010 were approximately $57,000, or 101%, higher as compared to the same period in 2009. This increase was primarily attributable to approximately $72,000 in grant and licensing revenue recognized and consolidated as part of our acquisition of the SCS operations, and an increase of approximately $3,000 in licensing revenue from existing licensing agreements. These increases were offset by a decrease in revenue of approximately $18,000 from an existing grant which we were awarded in October 2008 from the National Institute of Diabetes and Digestive and Kidney Diseases to research and develop a potential cell-based therapeutic for liver disease. In the first quarter of 2010, we recognized approximately $116,000 and $44,000 as revenue from product sales and cost of product sales, respectively, in connection with our acquisition of the SCS operations, compared to none in the same period of 2009.
First quarter ended March 31, 2010 versus first quarter ended March 31, 2009. The increase of approximately $802,000, or 19%, from 2009 to 2010 was primarily attributable to (i) increased R&D operations of approximately $566,000 from our acquisition of the SCS operations; R&D activity associated with the SCS operations is primarily focused on developing cell technologies for non-therapeutic applications, such as use in cell-based assays for drug discovery, (ii) an increase in clinical study expenses of approximately $180,000 attributable to the initiation of our phase I clinical trial to assess the safety and preliminary effectiveness of HuCNS-SC cells as a treatment for PMD, (iii) a net increase in personnel expenses of approximately $101,000 resulting from an increased head count at our California site to support expanded operations in our cell processing and product development programs, and (iv) an increase in other expenses of approximately $32,000. These increased expenses were partially offset by a decrease in stock-based compensation expenses of approximately $77,000.
First quarter ended March 31, 2010 versus first quarter ended March 31, 2009. The increase of approximately $46,000, or 2%, in SG&A expenses from 2009 to 2010 was primarily attributable to (i) increased SG&A expenses of approximately $224,000 at our acquired SCS operations, (ii) an increase in external services of approximately $180,000 mainly due to an increase in consultant, recruiting and investor relations expenses, and (iii) an increase of approximately $31,000 in other expenses. These increased expenses were partially offset by a decrease in legal fees of approximately $333,000, primarily attributable to the legal fees incurred in 2009 for our acquisition of the SCS operations and a decrease in stock-based compensation expense of approximately $56,000.
In 1999, in connection with exiting our former research facility in Rhode Island, we created a reserve for the estimated lease payments and operating expenses related to it. The reserve has been re-evaluated and adjusted based on assumptions relevant to real estate market conditions and the estimated time until we could either fully sublease, assign or sell our remaining interests in the property. The reserve was approximately $4,433,000 at December 31, 2009. Payments net of subtenant income of approximately $315,000 for the first quarter of 2010 were recorded against this reserve. At March 31, 2010, we re-evaluated the estimate and adjusted the reserve to approximately $4,231,000 by recording additional wind-down expenses of approximately $165,000. For the similar period in 2009, payments recorded against the reserve were approximately $331,000, and additional expenses recorded to adjust the reserve were approximately $206,000. Expenses for this facility will fluctuate based on changes in tenant occupancy rates and other operating expenses related to the lease. Even though it is our intent to sublease, assign, sell, or otherwise divest ourselves of our interests in the facility at the earliest possible time, we cannot determine with certainty a fixed date by which such events will occur. In light of this uncertainty, based on estimates, we will periodically re-evaluate and adjust the reserve, as necessary. See Note 7 Wind-down expenses, in the notes to condensed consolidated financial statements of Part I, Item 1 of this Form 10-Q for further information.
On April 1, 2009, as part of our acquisition of the SCS operations, we acquired operations near Melbourne, Australia. In order to reduce operating complexity and expenses, we made the decision to close our site in Australia and consolidate personnel and programs to our Cambridge, U.K. and Palo Alto, California sites. U.S. GAAP requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. In accordance with U.S. GAAP requirements, at June 30, 2009, we established a short-term reserve of approximately $310,000 for the estimated costs to close down and exit our Australia operations. The reserve reflects the estimated cost to terminate our facility lease in Australia (with an original termination date of December 31, 2010), employee termination benefits and other liabilities associated with the wind-down and relocation of our operations in Australia. The facility lease agreement has been terminated and our operations in Australia have been relocated to Cambridge, U.K. and Palo Alto, California. We recorded actual expenses of approximately $6,000 and $236,000 against this reserve in 2010 and 2009 respectively. No further adjustments were made to the reserve balance as we believe that the estimated remaining balance of approximately $70,000 in our reserve at March 31, 2010, will be sufficient to cover any remaining exit costs.
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Stemcells Inc. has a market cap of $141.9 million; its shares were traded at around $1.19 with and P/S ratio of 142.9. STEM is in the portfolios of Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:
On April 1, 2009, as part of our acquisition of the SCS operations, we acquired operations near Melbourne, Australia. In order to reduce operating complexity and expenses, we made the decision to close our site in Australia and consolidate personnel and programs to our Cambridge, U.K. and Palo Alto, California sites. U.S. GAAP requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. In accordance with U.S. GAAP requirements, at June 30, 2009, we established a short-term reserve of approximately $310,000 for the estimated costs to close down and exit our Australia operations. The reserve reflects the estimated cost for an early termination of our facility lease in Australia (with an original termination date of December 31, 2010), employee termination benefits and other liabilities associated with the wind-down and relocation of our operations in Australia. The facility lease agreement has been terminated and our operations in Australia have been relocated to Cambridge, U.K. and Palo Alto, California. We recorded actual expenses of approximately $6,000 and $236,000 against this reserve in 2010 and 2009 respectively. As of March 31, 2010, we believe that the estimated remaining balance of approximately $70,000 in our reserve will be sufficient to cover any remaining exit costs.First quarter ended March 31, 2010 versus first quarter ended March 31, 2009. Licensing and grant revenue for the first quarter of 2010 were approximately $57,000, or 101%, higher as compared to the same period in 2009. This increase was primarily attributable to approximately $72,000 in grant and licensing revenue recognized and consolidated as part of our acquisition of the SCS operations, and an increase of approximately $3,000 in licensing revenue from existing licensing agreements. These increases were offset by a decrease in revenue of approximately $18,000 from an existing grant which we were awarded in October 2008 from the National Institute of Diabetes and Digestive and Kidney Diseases to research and develop a potential cell-based therapeutic for liver disease. In the first quarter of 2010, we recognized approximately $116,000 and $44,000 as revenue from product sales and cost of product sales, respectively, in connection with our acquisition of the SCS operations, compared to none in the same period of 2009.
First quarter ended March 31, 2010 versus first quarter ended March 31, 2009. The increase of approximately $802,000, or 19%, from 2009 to 2010 was primarily attributable to (i) increased R&D operations of approximately $566,000 from our acquisition of the SCS operations; R&D activity associated with the SCS operations is primarily focused on developing cell technologies for non-therapeutic applications, such as use in cell-based assays for drug discovery, (ii) an increase in clinical study expenses of approximately $180,000 attributable to the initiation of our phase I clinical trial to assess the safety and preliminary effectiveness of HuCNS-SC cells as a treatment for PMD, (iii) a net increase in personnel expenses of approximately $101,000 resulting from an increased head count at our California site to support expanded operations in our cell processing and product development programs, and (iv) an increase in other expenses of approximately $32,000. These increased expenses were partially offset by a decrease in stock-based compensation expenses of approximately $77,000.
First quarter ended March 31, 2010 versus first quarter ended March 31, 2009. The increase of approximately $46,000, or 2%, in SG&A expenses from 2009 to 2010 was primarily attributable to (i) increased SG&A expenses of approximately $224,000 at our acquired SCS operations, (ii) an increase in external services of approximately $180,000 mainly due to an increase in consultant, recruiting and investor relations expenses, and (iii) an increase of approximately $31,000 in other expenses. These increased expenses were partially offset by a decrease in legal fees of approximately $333,000, primarily attributable to the legal fees incurred in 2009 for our acquisition of the SCS operations and a decrease in stock-based compensation expense of approximately $56,000.
In 1999, in connection with exiting our former research facility in Rhode Island, we created a reserve for the estimated lease payments and operating expenses related to it. The reserve has been re-evaluated and adjusted based on assumptions relevant to real estate market conditions and the estimated time until we could either fully sublease, assign or sell our remaining interests in the property. The reserve was approximately $4,433,000 at December 31, 2009. Payments net of subtenant income of approximately $315,000 for the first quarter of 2010 were recorded against this reserve. At March 31, 2010, we re-evaluated the estimate and adjusted the reserve to approximately $4,231,000 by recording additional wind-down expenses of approximately $165,000. For the similar period in 2009, payments recorded against the reserve were approximately $331,000, and additional expenses recorded to adjust the reserve were approximately $206,000. Expenses for this facility will fluctuate based on changes in tenant occupancy rates and other operating expenses related to the lease. Even though it is our intent to sublease, assign, sell, or otherwise divest ourselves of our interests in the facility at the earliest possible time, we cannot determine with certainty a fixed date by which such events will occur. In light of this uncertainty, based on estimates, we will periodically re-evaluate and adjust the reserve, as necessary. See Note 7 Wind-down expenses, in the notes to condensed consolidated financial statements of Part I, Item 1 of this Form 10-Q for further information.
On April 1, 2009, as part of our acquisition of the SCS operations, we acquired operations near Melbourne, Australia. In order to reduce operating complexity and expenses, we made the decision to close our site in Australia and consolidate personnel and programs to our Cambridge, U.K. and Palo Alto, California sites. U.S. GAAP requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. In accordance with U.S. GAAP requirements, at June 30, 2009, we established a short-term reserve of approximately $310,000 for the estimated costs to close down and exit our Australia operations. The reserve reflects the estimated cost to terminate our facility lease in Australia (with an original termination date of December 31, 2010), employee termination benefits and other liabilities associated with the wind-down and relocation of our operations in Australia. The facility lease agreement has been terminated and our operations in Australia have been relocated to Cambridge, U.K. and Palo Alto, California. We recorded actual expenses of approximately $6,000 and $236,000 against this reserve in 2010 and 2009 respectively. No further adjustments were made to the reserve balance as we believe that the estimated remaining balance of approximately $70,000 in our reserve at March 31, 2010, will be sufficient to cover any remaining exit costs.
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