NEXL getting slaughtered on mediocre financials, and plan for reverse-split...
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Thursday March 30, 8:30 am Eastern Time
Nexell Therapeutics Announces Year End 1999 Results and Plan for Reverse Stock Split
IRVINE, Calif.--(BW HealthWire)--March 30, 2000--Nexell Therapeutics Inc. (Nasdaq:NEXL - news), one of the world's leading suppliers of therapeutic and diagnostic products based on stem cell technology, announced today that it has filed financial results for the year ended December 31, 1999, with the Securities and Exchange Commission on Form 10-K. The Company also announced that it will seek shareholder approval at its Annual Meeting on June 14, 2000, for a one-for-four reverse stock split of its common stock.
Revenue Increased to $15 Million in 1999
For the year ended December 31, 1999, total revenues were $15.0 million, compared to $13.4 million in 1998. These results reflect the initial launch of the Isolex© 300i Cell Selection System in the United States, offset by charges of $4.4 million to repurchase inventory from Baxter during the second and third quarters as part of the transition of sales and distribution responsibilities to Nexell.
``Considering that we were entering new markets while substantially rebuilding our sales teams in the U.S. and Europe, we were satisfied with our sales performance last year,' said L. William McIntosh, President and COO of Nexell. ``While the revenue increase was modest, it reflects growing momentum in the United States and the early results of our turnaround effort in Europe. We continue to place instruments in both markets this quarter and expect this expanded installed base to begin generating more substantial revenue growth from the use of reagents and disposable sets as we move out into the year.'
Year End Financial Summary
Gross profit on sales was $5.3 million in both 1999 and 1998 but the margin on sales was 3 percentage points lower in 1999 due to charges recorded in 1999 related to the restructuring of the Baxter business relationship to transfer sales and distribution responsibilities to Nexell.
Operating expenses in 1999 were $40.8 million, a decrease of $3.7 million from the previous year due primarily to the discontinuation of all Innovir Laboratories operations and rationalization of other research programs to focus on ex vivo cell therapy.
The net loss applicable to Common Stock for the full year 1999 was $40.1 million or $0.56 per share, $1.1 million higher than in 1998. The reduction of operating expenses was offset by the minority interest in the net loss of consolidated subsidiaries being fully utilized in 1998. This had reduced the reported 1998 net loss by $4.2 million.
Cash and cash equivalents at December 31, 1999, were $28.7 million versus $33.1 million at December 31, 1998, reflecting the current cash burn rate offset by the proceeds of the November 1999 private placement financing. Weighted average shares outstanding for the year ended December 31, 1999, were 71.4 million versus 67.3 million for the comparable 1998 period.
Fourth Quarter Revenue Increases to $5 Million
Nexell reported fourth quarter 1999 revenue of $5.6 million, a $3.4 million increase in revenue over the third quarter. The third quarter revenue figure reflected the impact of the repurchase of inventory previously sold to Baxter. Excluding the impact of this repurchase, fourth quarter sales were consistent with the prior quarter. However, fourth quarter 1999 revenue reflects a 31 percent increase over the same period in 1998, prior to the approval of the Isolex© 300i Cell Selection System in the U.S. and before Nexell assumed direct sales responsibilities.
Operating expenses for the fourth quarter were $11.1 million, compared to $7.7 million for the same period in 1998. The increase was primarily due to a $2.2 million increase in selling and marketing expenses related to the initial launch of the Isolex© 300i in the U.S. and costs related to the assumption of direct sales and distribution responsibilities from Baxter. As a result, the net loss applicable to Common Stock for the fourth quarter of 1999 increased to $9.9 million, or $0.14 per share versus a net loss of $6.3 million, or $0.09 per share in the fourth quarter of 1998.
Reverse Split Proposal
Nexell will ask shareholders to approve a one-for-four reverse stock split to be effected as soon as possible after the Annual Meeting on June 14, 2000. The split is intended to rationalize the size of the Nexell capital structure, reducing shares outstanding from 73 million to about 18 million and public float from 54 million shares to approximately 13 million shares. The split would result in a corresponding adjustment to the conversion and exchange ratios of Nexell's outstanding preferred stock, warrants, and stock options.
Nexell Therapeutics Inc.
Located in Irvine, California, Nexell Therapeutics Inc. (Nasdaq:NEXL - news) is a cell therapy company whose mission is to put the healing power of the cell into the hands of physicians. Nexell is developing and marketing innovative ex vivo cell therapies and in vitro diagnostics for cancer, autoimmune, metabolic and genetic diseases. Nexell's lead product, the Isolex© 300i Magnetic Cell Selection System, is the only FDA approved device commercially available for the selection of hematopoietic stem cells and the removal of tumor cells from autologous peripheral blood as a component of aggressive cancer treatment. In addition, Nexell markets the Cytonex(TM) ICC Staining Kit and an extensive line of cell therapy preparation, storage and expansion products including the Cryocyte(TM), SteriCell© and Lifecell© brands. |
