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Fibrocell Science Posts Second Quarter and First Half Results

August 14, 2014

Fibrocell Science announced financial results for the second quarter and first half of 2014.

In an August 11 release, the company noted that it hosted a conference call and webcast on August 11 at 8:30 a.m. EDT.

"We are pleased with the feedback from our pre-IND meeting last week for Recessive Dystrophic Epidermolysis Bullosa (RDEB)," said David Pernock, chairman and chief executive officer of Fibrocell. "We are excited to move forward with our animal studies at Stanford University which will lead to an IND submission in early 2015."

Second Quarter 2014 Highlights

-Enrolled 7 patients to-date into our restrictive burn scarring Phase II clinical trial, resulting in one-third of trial enrollment completed

-Enrolled 9 patients to-date into our vocal cord scarring Phase II clinical trial, resulting in 45 percent of trial enrollment completed

-Began technology transfer, process development and manufacturing of genetically-modified cell therapies for Recessive Dystrophic Epidermolysis Bullosa (RDEB) with Progenitor Cell Therapy, a subsidiary of NeoStem, Inc.

-Orphan Drug designation was granted by the U.S. Food and Drug Administration for genetically-modified autologous human fibroblasts to treat Dystrophic Epidermolysis Bullosa (DEB), a category of rare and severe genetic skin diseases that includes RDEB

-Entered into an exclusive license agreement with The Regents of the University of California, through which Fibrocell acquired the rights to commercially apply patented discoveries and technologies resulting from the ongoing scientific collaboration between the University of California at Los Angeles (UCLA) and Fibrocell Science

Financial Results

Quarter ended June 30 compared to quarter ended June 30, 2013

For the quarter ended June 30, Fibrocell reported basic net loss of $0.06 per share, compared to basic net loss of $0.63 per share for the same period in 2013. Revenues for each of the second quarters of 2014 and 2013 were insignificant. The company used $4.5 million in cash for operations during the second quarter of 2014, as compared to $5.4 million in the second quarter 2013. As of June 30, total cash and cash equivalents were $49.5 million.

Research and development expenses in the quarter ended June 30, were $2.6 million, as compared to $1.5 million in the second quarter of 2013. The $1.1 million increase in R&D expenses was due to a $0.1 million increase in research and development costs in connection with our collaboration with Intrexon, increased costs of $0.2 million related to enrollment of our phase II clinical trials, increased manufacturing and laboratory costs of $0.5 million, and an increase of $0.3 million in other spending.

Selling, general and administrative expenses were $3.5 million, an increase of $1.2 million compared to the quarter ended June 30, 2013. This increase was due to an increase in compensation and related expense of $0.7 million, an increase of $0.4 million in professional expenses and an increase of $0.1 million in legal expenses.

Both the increase in professional fees and in legal expenses related to the costs of our warrant restatement project in the second quarter of 2014. As a result, operating loss for the second quarter of 2014 was $6.6 million as compared to $5.8 million in the same period in 2013.

Six months ended June 30 compared to six months ended June 30, 2013

For the six months ended June 30, Fibrocell reported basic net loss of $0.40 per share, compared to basic net loss of $0.73 per share for the same period in 2013. Revenues for the six months of 2014 and 2013 were insignificant. The company used $10.2 million in cash for operations during the first six months of 2014, as compared to $10.4 million for the comparable period in 2013.

Research and development expenses for the six months ended June 30, were $10.1 million, as compared to $3.0 million for the same period in 2013. The increase is due primarily to stock issuance costs of approximately $5.2 million and a $0.8 million increase in research and development costs incurred in the six months ended June 30, both in connection with our collaboration with Intrexon.

In addition, there was a $0.9 million increase in manufacturing and laboratory costs and an increase of $0.2 million in other spending. Selling, general and administrative expenses were $6.3 million, an increase of $1.8 million compared to the six months ended June 30, 2013, primarily due to an increase in compensation and related expense of $1.0 million, an increase in professional fees of $0.6 million and in legal costs of $0.1 million primarily due to the costs of our warrant restatement project in the second quarter of 2014.

Marketing expense decreased $0.2 million as our strategic focus has shifted away from our commercial product LAVIV. Facilities and related expense and other increased $0.3 million due to an increase in office costs. As a result, operating loss for the first half of 2014 was $17.6 million as compared to $11.7 million in the same period in 2013.

Cash and cash equivalents totaled $49.5 million as of June 30, compared to $60.0 million on December 31, 2013. Cash was used primarily to fund core business initiatives.

Fibrocell Science is an autologous cell therapy company focused on developing treatments for rare and serious skin and connective tissue diseases with high unmet medical needs.

More information:

www.fibrocellscience.com

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