San Diego’s Cytori Gains Cash; Loses a Patent
Cytori Therapeutics, (NASDAQ:CYTX) a San Diego company developing therapies from fat, is bulking up its cash position. Since March, the regenerative medicine has company raised more than $15 million through private equity sales. The latest deal—inked with Seaside 88 of Florida in June—gives Cytori an infusion of many thousands of dollars every two weeks for up to six months. The actual amount Cytori receives from Seaside is linked to its stock price.
These moves should ease investor concern about Cytori’s ability to survive the worst recession since the Great Depression. At the end of the first quarter, Cytori warned that its ongoing need for outside financing, coupled with a worldwide credit crunch, raised “substantial doubt as to the company’s ability to continue as a going concern.” By the end of March, Cytori had reduced its headcount to 85 from 126 employees and suspended or eliminated most development projects to conserve cash. The company has an accumulated deficit of $165 million through the first quarter, during which it posted a $6 million loss.
The latest rounds of financings leave Cytori’s coffers far from fat. But they should provide the company with enough cash to fund operations through the end of 2010, according to Zacks Research. That should give Cytori the running room it needs to progress toward FDA approval of its lead product, a device that can isolate and process regenerative cells from a patient’s fat tissue, readying it to be returned to the patient during the same procedure.
The device is approved in Europe, where Cytori is currently conducting a 70-patient study of its use in breast reconstruction following partial mastectomy surgery. Fat is … Next Page »