Financial Highlights

For the full year 2023, Celularity reported combined net sales of its advanced biomaterial product and biobanking businesses of $22.8 million, representing a 26.7% increase over the prior year. This figure was slightly above the high end of the company's previously provided guidance range. The strong performance was driven by a 17.3% increase in advanced biomaterial product net sales to $17.3 million and a 5.4% increase in biobanking net sales to $5.4 million.

In the fourth quarter of 2023, Celularity reported combined net sales of $12.1 million, consisting of $10.7 million in advanced biomaterial product net sales and $1.4 million in biobanking net sales. This result was at the high end of the company's guidance range.

Looking ahead, Celularity has provided guidance for the first half of 2024. For the first quarter of 2024, the company expects combined net sales of $14.8 million, significantly exceeding the previously announced guidance range of $10.25 million to $11.5 million. This is expected to be driven by $13.5 million in advanced biomaterial product net sales and $1.3 million in biobanking net sales.

For the second quarter of 2024, Celularity expects combined net sales of $11.0 million to $13.0 million, consisting of $10.0 million to $11.5 million in advanced biomaterial product net sales and $1.0 million to $1.5 million in biobanking net sales.

In total, for the first half of 2024, Celularity expects combined net sales of its advanced biomaterial product and biobanking businesses to be between $25.8 million and $27.8 million.

Business Overview

Celularity is a leading regenerative and cellular medicine company that is developing a diverse portfolio of placental-derived allogeneic cell therapies and advanced biomaterial products. The company's Celularity IMPACT platform capitalizes on the unique benefits of placenta-derived cells to target multiple diseases, providing seamless integration from bio sourcing through manufacturing cryopreserved and packaged allogeneic cells.

The company's advanced biomaterial product portfolio consists of four commercial-stage products and three development pipeline product candidates. The commercial-stage products include Biovance, Biovance 3L, Interfyl, and CentaFlex, which are off-the-shelf placental-derived allogeneic allografts and connective tissue matrices marketed primarily in the U.S. for use in soft tissue repair and reconstructive procedures.

Celularity's advanced biomaterial product development pipeline includes Celularity Tendon Wrap, Celularity Bone Void Filler, and Celularity Placental Matrix, which are intended to treat aging-associated and other degenerative diseases and disorders.

In addition to its biomaterial business, Celularity is developing a pipeline of off-the-shelf placental-derived allogeneic cell therapy product candidates, including T cells engineered with a chimeric antigen receptor (CAR), natural killer (NK) cells, and mesenchymal-like adherent stromal cells (MLASCs), targeting indications across cancer, infectious, and degenerative diseases.

Liquidity and Capital Resources

As of September 30, 2023, Celularity had $0.3 million in cash and cash equivalents and an accumulated deficit of $851.3 million. The company's primary use of capital resources is funding its research and development activities, as well as selling, general, and administrative expenses.

Celularity has historically funded its operations through limited revenues from its biobanking and degenerative disease businesses, as well as equity and debt financings. The company continues to explore licensing and collaboration arrangements for its cellular therapeutics, as well as distribution agreements for its degenerative disease business, to support its operations.

However, Celularity has stated that it expects to incur substantial expenditures in the foreseeable future for the development and potential commercialization of its cellular therapeutic candidates, expansion of its degenerative disease business, and ongoing internal research and development programs. The company has expressed substantial doubt about its ability to continue as a going concern, as it may be unable to secure additional outside capital to fund its obligations when they become due over the next 12 months.

Risks and Challenges

Celularity faces several risks and challenges that could impact its future performance. These include the uncertainty surrounding the regulatory approval and commercialization of its cellular therapeutic candidates, the competitive landscape in the regenerative medicine industry, and the company's ability to maintain and expand its distribution channels for its advanced biomaterial products.

Additionally, Celularity's liquidity position and ability to continue as a going concern are significant concerns, as the company may be unable to secure the necessary capital to fund its operations and development activities. The company's failure to address these liquidity issues could force it to pursue strategic alternatives, including a sale of assets, a sale of the company, or even bankruptcy protection.

Conclusion

Celularity has demonstrated impressive revenue growth in its advanced biomaterial product and biobanking businesses, driven by the increasing demand for its innovative product offerings. The company's strong performance in the fourth quarter of 2023 and its optimistic guidance for the first half of 2024 suggest that Celularity is well-positioned to continue its growth trajectory.

However, the company's long-term success will depend on its ability to navigate the regulatory landscape, maintain its competitive edge, and address its significant liquidity challenges. Investors should closely monitor Celularity's progress in these areas, as the company's ability to execute on its strategic initiatives will be crucial in determining its future prospects.