Aastrom Biosciences, Inc. (ASTM)
Q3 2012 Earnings Call
November 8, 2012 04:30 p.m. ET
Brian Gibson – VP, Finance
Timothy Mayleben – President and CEO
Daniel Orlando – Chief Commercial Officer
Steve Brozak – WBB Securities
Megan Down – McNicoll, Lewis, & Vlak
Boris Peacker – Oppenheimer
Jason Napodano - Zacks
» Aastrom Biosciences, Inc. Q2 2008 Earnings Call Transcript
» Sequenom's CEO Discusses Q3 2012 Results - Earnings Call Transcript
I would now like to turn the conference over to Brian Gibson, Aastrom’s Vice President of Finance.
Thank you, Pablo, and good afternoon everyone. Thank you for joining us to discuss our most recent financial results and the progress of our development programs.
Before we begin, let me remind you that on today’s call, we will be making forward-looking statements covered under the Private Securities Litigation Reform Act of 1995, and all of our projections and forward-looking statements represent our judgment as of today. These statements may involve risks and uncertainties that are described more fully in our filings with the SEC, which are also available on our website. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date.
Joining us on the call today are Aastrom’s President and Chief Executive Officer, Tim Mayleben; and Dan Orlando, Aastrom’s Chief Commercial Officer. Following our prepared remarks we will open the call to your questions. So, let me start with the review of our financial results.
For the third quarter ended September 30, 2012, Aastrom had a net loss attributable to common shareholders of $7.3 or $0.17 per share compared to $1.9 million or $0.05 per share for the third quarter of 2011. The increase in net loss attributable to common shareholders was driven substantially by two large non-cash items. The first of which is a change in the fair value of our outstanding warrants which accounted for $3.3 million of the change in net loss.
As a reminder early in the third quarter, we completed a loan exchange program for the December 2010 warrants which eliminated all but 300,000 of these 10 million warrants from our capital structure. This reduced our warrant liability by over $10 million and will substantially reduce the impact of warrants on our income statement going forward.
The second non-cash item is the accretion of our Series B Convertible Preferred Stock, which increased our net loss by $1.2 million from the prior year. As a reminder the shares were issued in March 2012 and thus did not impact the prior year.
Our operating loss for the third quarter of 2012 which excludes both the impact of the warrants and preferred stock with $8.3 million or $0.19 per share compared to $7.4 million or $0.19 per share a year ago. R&D expenses for the quarter were $6.1 million versus $5.8 million in 2011. The increase in R&D expense was primarily attributable to the Phase-III revised CLI clinical program and the start up for the Phase 2b XL DCM program.
General and administrative expenses for the third quarter increased to $2.1 million from $1.7 million a year ago. The increase is primarily due to non-cash buy back compensation expense and slightly higher legal and consulting cost.
Aastrom ended the third quarter with $21.1 million in cash and cash equivalents. Our cash used for operations was $7.6 million during the third quarter which was in line with our forecast of $7 to $8 million. Looking ahead we expect our cash spent for the fourth quarter to again be in the range of $7 to $8 million as we continue to accelerate enrollment of the Phase-3 revised CLI study and begin enrollment for the Phase-2b XL DCM study.
That completes my review of our financial results and I will now turn the call over to Tim.
Thanks Brian. Since our last call we’ve made good progress on several key fronts. We launched the Phase 2b XL DCM clinical trial in patients with ischemic dilated cardiomyopathy or DCM, we increased the number of patients, clinical investigators and sites participating in our Phase 3 revised clinical study in patients with severe peripheral arterial disease or CLI. We reduced the number of fully diluted shares outstanding through the exchange of nearly 10 million warrants and we announced some important management changes.
First, for the Phase 2b XL DCM study, I want to remind you that we are enrolling a 108 patients with ischemic DCM at 20 US clinical sites. Patients are going to be randomized to receive a single administration of ixmyelocel-T or a placebo via another catheter with the primary efficacy measure being major adverse cardiac events at 12 months.
The secondary end points include imaging to assess heart structure and function as well as test to look for improvements in quality of life and heart failure symptoms. We’ve initiated our first sites and expect to screen our first patients this month, and we expect enrollment will be completed next year with top line results expected in 2014.