Cytori Therapeutics, a cell therapy company in San Diego, announced an updated strategy and plan to restructure its operations and reduce costs.
The company has been experiencing an annual net loss for the last five years ranging from $21.5 million in 2009 to $30.67 million in 2013. In a quarterly report filed in August, the company reported an $11.8 million net loss compared with $3.2 million net loss in the same quarter of 2013.
Cytori’s new plans include limiting its activities to expanding the United States clinical pipeline, building on current governmental and corporate partnerships and ensuring that its commercial efforts are cash-flow positive immediately.
To accomplish this, Cytori has restructured senior management and the global commercial and development teams, consolidated operations and reduced duplicative activities and unnecessary expenses.
“Besides significant changes in strategy and expense reductions, we are also working in partnership with our lenders, with whom we have an outstanding relationship, to strengthen our financial position for the next 12 to 24 months,” said Marc Hedrick, Cytori’s president and CEO. “In this regard, our lenders have recently provided us a temporary waiver of the liquidity threshold that requires us to maintain certain minimum cash balances, and we are in discussions with them for the overall restructuring of the loan. I will provide more details on our restructuring and long term financial plan in forthcoming releases and on our Q3 conference call.”
As a part of the restructuring effort, Clyde Shores, Cytori’s executive vice president of marketing and sales, resigned and a number of other employees have left or will be leaving the company after a brief transition period. After the transition, Cytori will have reduced the number of full-time employees from a peak of 119 earlier this year to 77 employees, resulting in a one-time restructuring charge of about $500,000.
The consolidation and cost reduction initiatives over the past several months are expected to lower Cytori’s operating expenses by more than $8 million on an annualized basis.
Despite the impact of the cost reduction efforts, Cytori continues to anticipate modest overall revenue growth in 2014.
The company expects overall revenue growth in 2015 and 2016 will likely continue to be modest. Cytori is trading on the Nasdaq under the ticker symbol CYTX at 78 cents per share Sept. 23, down 10 percent from the previous day.