Fibrocell Science Reports First Quarter 2014 Financial and Operating Results

  Fibrocell Science Reports First Quarter 2014 Financial and Operating Results

- Company to Host Conference Call and Webcast at 5:00 p.m. EDT, Today, May 19,
                                    2014 -

Business Wire

EXTON, Pa. -- May 19, 2014

Fibrocell Science, Inc. (NYSE MKT: FCSC), an autologous cell therapy company
primarily focused on developing first-in-class treatments for rare and serious
skin and connective tissue diseases with high unmet medical needs, today
reported financial results for the first quarter of 2014. The company will
host a conference call and webcast at 5:00 p.m. EDT, today.

“2014 is an important year for Fibrocell and the first quarter has us off to a
strong start,” said David Pernock, chairman and chief executive officer of
Fibrocell. “We began enrollment in our two azficel-T label-extension Phase II
trials in restrictive burn scarring and vocal cord scarring. We initiated
technology transfer with a second-source cell-therapy manufacturer to produce
our genetically-modified autologous fibroblasts for recessive dystrophic
epidermolysis bullosa (RDEB), and as a potential source for autologous
fibroblasts. And, we expanded our strategically important collaboration
agreement with Intrexon Corporation (NYSE: XON) to address the rare connective
tissue disorder Ehlers-Danlos syndrome hypermobility-type, made possible
through our unique technologies.”

First Quarter 2014 Highlights

  *Enrolled 4 patients to-date into our restrictive burn scarring Phase II
    clinical trial and expanded the number of active clinical trial sites
  *Enrolled 4 patients to-date into our vocal cord scarring Phase II clinical
    trial and expanded the number of active clinical trial sites
  *Initiated technology transfer with a second-source, cell-therapy
    manufacturer to produce our genetically-modified fibroblasts for RDEB and
    as a potential source of autologous fibroblasts for restrictive burn
    scarring and vocal cord scarring
  *Further expanded our Intrexon Corporation collaboration to add autologous
    human fibroblasts genetically-modified to express bioactive Tenascin-X
    locally to correct connective tissue disorders, such as with Ehlers-Danlos
    syndrome hypermobility-type

Financial Results

Quarter ended March 31, 2014 compared to quarter ended March 31, 2013
(restated)

For the quarter ended March 31, 2014, Fibrocell reported basic net loss of
$0.35 per share, compared to basic net loss of $0.17 per share for the same
period in 2013. Operating loss for the first quarter of 2014 was $11.0 million
as compared to $5.9 million in the same period in 2013. Revenues for each of
the first quarters of 2014 and 2013 were insignificant. The company used $6.0
million in cash for operations during the first quarter of 2014, as compared
to $5.2 million in the first quarter 2013. As of March 31, 2014 total cash and
cash equivalents were $54.0 million.

Research and development expenses in the quarter ended March 31, 2014 were
$7.4 million, as compared to $1.5 million in the first quarter of 2013. The
increase in R&D expenses was primarily due to the $5.2 million non-cash cost
of the 2014 supplemental stock issuance to Intrexon Corporation in relation to
the second amendment to our Exclusive Channel Collaboration agreement, a $0.5
million increase in spending related to the expansion of our preclinical
development program for RDEB, and a $0.3 million increase in laboratory
expenses. Selling, general and administrative expenses were $2.8 million, an
increase of $0.6 million compared to the quarter ended March 31, 2013 due to
an increase of $0.3 million for facilities and related expenses, as well as an
increase of $0.3 million in compensation and related expense.

Restatement of prior financial statements

As disclosed in a Form 8-K filed by the Company on May 12, 2014, on May 6,
2014 the Audit Committee of the Company’s Board of Directors, in connection
with an internal review initiated by Company management, concluded that,
because of a misapplication of the accounting guidance related to certain of
the Company’s warrants, the Company’s previously issued consolidated financial
statements for all periods beginning with the quarterly period ended September
30, 2011 through December 31, 2013 should no longer be relied upon. As such,
the Company anticipates it will restate its financial statements for the
following periods: (i) the fiscal years ended December 31, 2013, December 31,
2012 and December 31, 2011 (ii) all quarterly periods of 2013 and 2012 and
(iii) the quarterly period ending September 30, 2011 in the Company’s
Amendment No. 2 on Form 10-K/A for the year ended December 31, 2013 (the
“Amended 2013 10-K/A”). However, these restatements result in non-cash,
non-operating expense corrections and will have no impact on the Company’s
current or previously reported cash position, operating expenses, total
operating, investing or financing cash flows, or net operating loss
carryforward. The Company is presently anticipating filing the Amended 2013
10-K/A on or before May 31, 2014. A current report on Form 8-K that further
describes the foregoing restatement of the company’s financial statements was
filed by Fibrocell on May 12, 2014 and is available at www.sec.gov.

Conference Call and Webcast

The conference call may be accessed by dialing 855-877-0343 for domestic
callers and 678-509-8772 for international callers. Please specify to the
operator that you would like to join the “Fibrocell Science First Quarter 2014
Financial Results Call, conference ID#: 47692611.” The conference call will be
webcast live under the investor relations section of Fibrocell’s website at
www.fibrocellscience.com, and will be archived there for 90 days following the
call. Please visit Fibrocell’s website several minutes prior to the start of
the broadcast to ensure adequate time for any software download that may be
necessary.

About Fibrocell Science, Inc.

Fibrocell Science, Inc. (NYSE MKT: FCSC) is an autologous cell therapy company
primarily focused on developing first-in-class treatments for rare and serious
skin and connective tissue diseases with high unmet medical needs. Based on
its proprietary autologous fibroblast technology, Fibrocell is pursuing
breakthrough medical applications of azficel-T for restrictive burn scarring
and vocal cord scarring. The company’s collaboration with Intrexon Corporation
(NYSE:XON), a leader in synthetic biology, includes using genetically-modified
fibroblasts for treating rare and serious skin and connective tissue diseases
for which there are no currently approved products. Fibrocell’s collaboration
with UCLA—focusing on skin-derived stem cells and more efficient ways to
convert skin cells to other cell types—holds potential for future discovery
and development of autologous cellular therapeutics. For additional
information, visit www.fibrocellscience.com.

Safe Harbor Statement

Some of the statements made in this press release are forward-looking
statements. Forward-looking statements include, without limitation, the
ability of Fibrocell to present proof of concept data this year for its RDEB
study, to develop breakthrough therapies for the treatment of skin and
connective tissues diseases, and to file the 2013 Amended 10-K/A. These
forward-looking statements are based upon our current expectations and
projections about future events and generally relate to our plans, objectives
and expectations for the development of our business. Although management
believes that the plans and objectives reflected in or suggested by these
forward-looking statements are reasonable, all forward-looking statements
involve risks and uncertainties and actual future results may be materially
different from the plans, objectives and expectations expressed in this press
release. Factors that could cause or contribute to such differences include:
the review of the Company’s accounting, accounting policies and internal
control over financial reporting; the preparation of and the audit or review,
as applicable, of the amended annual or quarterly reports; and the subsequent
discovery of additional adjustments to the Company’s previously issued
financial statements. Accordingly, investors should not place any reliance on
forward-looking statements as a prediction of actual results. In addition, our
financial results and stock price may suffer as a result of this review and
any subsequent determinations from this process or any actions taken by
governmental or other regulatory bodies as a result of this process. We do not
undertake to update our forward-looking statements, except as required by
applicable securities laws.


Fibrocell Science, Inc.
Selected Financial Information
(unaudited)



Consolidated Statement of Operations:

                                         Three months ended March 31,
($ in thousands, except per share and       2014             2013 (Restated)
share data)
                                                               
Revenue from product sales                  $ 46               $  26
Cost of sales                                793               2,213      
Gross loss                                    (747       )        (2,187     )
Selling, general and administrative           2,815               2,210
expense
Research and development expense             7,438             1,507      
Operating loss                                (11,000    )        (5,904     )
Other income (expense):
Warrant revaluation income (expense)          (3,050     )        1,338
Other income                                  40                  -
Interest income                              1                 -          
Loss from continuing operations               (14,009    )        (4,566     )
before income taxes
Deferred tax benefit                         -                 -          
Loss from continuing operations, net          (14,009    )        (4,566     )
of tax
Loss from discontinued operations,           -                 (4         )
net of tax
Net loss                                    $ (14,009    )     $  (4,570     )
                                                               
                                                               
                                                               
Per share information:
                                                               
Loss from continuing operations, net
of tax
Basic                                       $ (0.35      )     $  (0.17      )
Diluted                                     $ (0.35      )     $  (0.18      )
Net loss
Basic                                       $ (0.35      )     $  (0.17      )
Diluted                                     $ (0.35      )     $  (0.18      )
Weighted average number of basic             40,583,591        26,229,909 
common shares outstanding
Weighted average number of diluted           40,583,591        26,631,980 
common shares outstanding
                                                               
                                                               

                                    
Fibrocell Science, Inc.
Selected Financial Information
(unaudited)
                                    
                                    
                                    
Selected Consolidated Balance Sheet
Data:
                                                        (Restated)
($ in thousands)                          March 31, 2014     December 31, 2013
                                                             
Assets
Current assets:
Cash and cash equivalents                 $   54,001         $    60,033
Accounts receivable, net                      58                  28
Inventory                                     506                 597
Prepaid expenses and other current           885               1,202    
assets
Total current assets                          55,450              61,860
Property and equipment, net                   1,696               1,701
Intangible assets, net                        5,100               5,238
Other assets                                 143               215      
Total assets                              $   62,389        $    69,014   
                                                             
Liabilities and Stockholder’s
Equity
Total current liabilities                 $   2,423          $    3,593
Warrant liability                             18,266              15,216
Other long term liabilities                  586               539      
Total liabilities                             21,275              19,348
Total stockholder’s equity                   41,114            49,666   
Total liabilities and stockholder’s       $   62,389        $    69,014   
equity
                                                             
                                                             
                                                             
Selected Consolidated Statement of
Cash Flows Data:
                                                             
                                          Three months ended March 31,
($ in thousands)                          2014               2013 (Restated)
                                                             
Net cash used in operating                $   (5,953  )      $    (5,059   )
activities
Net cash used in investing                $   (79     )      $    (100     )
activities
Net cash provided by financing            $   -              $    -
activities

Contact:

Corporate:
Fibrocell Science, Inc.
Gregory Weaver, +1 484-713-6000
SVP & Chief Financial Officer
gweaver@fibrocellscience.com
or
Investor Relations:
S.A. Noonan Communications, LLC
Susan Noonan, 212-966-3650
susan@sanoonan.com
 
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