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SEC Filings


10-Q
FIBROCELL SCIENCE, INC. filed this Form 10-Q on 08/09/2018
Entire Document
 

Results of Operations

Comparison of Three and Six Months Ended June 30, 2018 and 2017

Research and Development Expense
    
For each of our research and development programs, we incur both direct and indirect expenses. We track direct research and development expenses by program, which include third party costs such as contract research, consulting and preclinical development costs and clinical trial and manufacturing costs. We do not allocate indirect research and development expenses, which may include regulatory, laboratory (equipment and supplies), personnel, facility, process development and other overhead costs (including depreciation and amortization), to specific programs, as these expenses are to be deployed across all of our product candidates. We expect research and development costs to continue to be significant for the foreseeable future as a result of our pre-clinical studies and clinical trials, as well as our ongoing collaborations with Precigen.
    
Direct research and development costs, by major program, and indirect research and development costs, by major component, were as follows:
 
For the Three Months Ended June 30,
 
For the Six Months
Ended June 30,
 
($ in thousands)
2018
 
2017
 
% Change
 
2018
 
2017
 
% Change
 
Direct costs:
 
 
 
 
 
 
 

 
 

 
 

 
FCX-007
$
203

 
$
1,731

 
(88.3
)%
 
$
136

 
$
2,973

 
(95.4
)%
(1)
FCX-013
76

 
406

 
(81.3
)%
 
340

 
1,065

 
(68.1
)%
(2)
Other
5

 
30

 
(83.3
)%
 
(41
)
 
32

 
(228.1
)%
(3)
Total direct costs
284

 
2,167

 
(86.9
)%
 
435

 
4,070

 
(89.3
)%
 
Indirect costs:
 
 
 
 
 
 
 

 
 

 
 

 
Regulatory costs
16

 
14

 
14.3
 %
 
12

 
61

 
(80.3
)%
(4)
Compensation and related expense
525

 
541

 
(3.0
)%
 
1,052

 
1,007

 
4.5
 %
(5)
Other indirect R&D costs
696

 
635

 
9.6
 %
 
1,364

 
1,192

 
14.4
 %
(6)
Total indirect costs
1,237

 
1,190

 
3.9
 %
 
2,428

 
2,260

 
7.4
 %
 
Total research and development expense
$
1,521

 
$
3,357

 
(54.7
)%
 
$
2,863

 
$
6,330

 
(54.8
)%
 

(1)
Costs for our FCX-007 program decreased approximately $1.5 million, or 88.3%, for the three months ended June 30, 2018 compared to the same period in 2017. The decrease for the three month period ended June 30, 2018 was related to decreased costs from (1) our clinical partner Precigen, as the Phase 1 portion of the clinical trial was substantially completed at the end of 2017 and (2) movement in-house of the manufacturing of the drug product used in our Phase 1/2 clinical trial of FCX-007 previously contracted to a third party manufacturer.

Costs for our FCX-007 program decreased approximately $2.8 million, or 95.4%, for the six months ended June 30, 2018 compared to the same period in 2017. The decrease for the six month period ended June 30, 2018 was related to decreased costs from (1) our clinical partner Precigen, as the Phase 1 portion of the clinical trial was substantially completed at the end of 2017; (2) movement in-house of the manufacturing of the drug product used in our Phase 1/2 clinical trial of FCX-007 previously contracted to a third party manufacturer and (3) a decrease of approximately $0.5 million in an estimate of costs to settle a dispute with one of Precigen’s vendors, for which a settlement has been agreed to and will be paid in the Company’s fiscal third quarter.

Through June 30, 2018, we incurred approximately $24.9 million in direct research and development costs related to this program, life-to-date, which include non-cash expenses of $6.9 million in stock issuance costs associated with the 2012 ECC with Precigen. Other costs include product and assay development, key opinion leader development, pre-clinical studies and manufacturing, the design of the Phase 1/2 clinical trial protocol and recruiting patients. Going forward, research and development investments for this program are expected to support clinical product manufacturing, statistical analyses, report generation and future clinical trial costs.


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