Fibrocell Science, Inc. Reports First Quarter 2011 Financial Results and Provides Business Update

EXTON, Pa.--([ BUSINESS WIRE ])--Fibrocell Science, Inc. (OTCBB: FCSC), a biotechnology company focused on the development of autologous cell therapies for aesthetic, medical and scientific applications, announced today a financial and business update for the first quarter ended March 31, 2011.

"In the first quarter, we continued to work closely with the FDA during the final review stage of azficel-T, proposed brand name laViv�, our personalized cell-based aesthetic treatment for severe nasolabial folds and wrinkles. We look forward to the upcoming Prescription Drug User Fee Act date on June 22, 2011."

Revenue was constant for the first quarter of 2011 and 2010 at $0.2 million. Net loss for the first quarter of 2011 was $17.1 million, compared to net loss of $4.7 million for the first quarter of 2010. The increase in the net loss for the first quarter 2011 is due primarily to the revaluation of the warrant liability and derivative liability associated with the outstanding warrants and preferred stock, respectively, that the Company has issued in its financing transactions.

David Pernock, Fibrocell Science Chairman and CEO, commented, aIn the first quarter, we continued to work closely with the FDA during the final review stage of azficel-T, proposed brand name laViv�, our personalized cell-based aesthetic treatment for severe nasolabial folds and wrinkles. We look forward to the upcoming Prescription Drug User Fee Act date on June 22, 2011.

aLooking forward, we plan to apply our autologous fibroblast technology to address unmet medical needs, such as the treatment of acne scars, restrictive burn scars and vocal cord scars. In the longer term, we believe that our scientific collaboration with University of California, Los Angeles positions us well for advancing our research efforts,a concluded Mr. Pernock.

James Byrne, Assistant Professor at the University of California, Los Angeles, added, "Our scientific collaboration with Fibrocell is based on two unique approaches. One approach involves using cells directly derived and purified from a patient's skin without requiring reprogramming. The other approach involves reprogramming purified adult human cells into a large library of induced pluripotent stem cell (iPSC) lines, screening them to identify fully reprogrammed iPSCs and then differentiating them into cells that we hope would be accepted by the immune system post autologous transplantation into patients."

About Fibrocell Science Technology

Fibroblasts are cells that contribute to the formation of connective tissue fibers, and regenerative fibroblast cells may have potential in use for broad aesthetic, medical and scientific applications.

Fibrocell Sciencea�s lead therapy, azficel-T, is an investigational autologous cell therapy. In the Fibrocell Science patented process, a patient's own natural fibroblasts are extracted, multiplied and re-injected as personalized therapy to regenerate skin. Azficel-T is currently under review by the U.S. Food & Drug Administration (FDA) for the treatment of moderate to severe nasolabial fold wrinkles. Also, the Company recently submitted a clinical study report to the FDA for a Phase II/III trial of azficel-T in acne scarring.

About Fibrocell Science, Inc.

Fibrocell Science, Inc. (OTCBB: FCSC) is a biotechnology company focused on the development of autologous cell therapies for aesthetic, medical and scientific applications. Fibrocell Science is committed to advancing the scientific, medical and commercial potential of autologous skin and tissue, as well its innovative cellular processing technology and manufacturing excellence. For additional information, please visit [ www.fibrocellscience.com ].

Forward-Looking Statements

All statements in this press release that are not based on historical fact are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of the Company's control, that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth under Item 1A "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2010. The Company operates in a highly competitive and rapidly changing environment, thus new or unforeseen risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. The Company disclaims any intention to, and undertakes no obligation to, update or revise any forward-looking statements. Readers are also urged to carefully review and consider the other various disclosures in the Company's public filings with the SEC.


Fibrocell Science, Inc.
(A Development Stage Company)
Condensed Consolidated Balance Sheets
(unaudited)

	March 31,	December 31,
	2011	2010
Assets
Current assets:
Cash and cash equivalents	$3,310,138	$867,738
Accounts receivable, net	172,339	229,891
Inventory, net	299,201	258,939
Prepaid expenses and other current assets	335,965	559,082
Total current assets	4,117,643	1,915,650
Property and equipment, net of accumulated depreciation of $10,558 and $8,085, respectively	36,607	21,589
Other assets	250	250
Intangible assets	6,340,656	6,340,656
Total assets	$10,495,156	$8,278,145

Liabilities, Redeemable Preferred Stock, Shareholders' Deficit and Noncontrolling Interest
Current liabilities:
Current debt	$32,771	$56,911
Accounts payable	540,929	1,096,125
Accrued expenses	751,422	789,482
Deferred revenue	14,000	a"
Total current liabilities	1,339,122	1,942,518
Long-term debt	7,564,289	7,290,881
Deferred tax liability	2,500,000	2,500,000
Warrant liability	19,220,324	8,171,518
Derivative liability	8,820,108	2,120,360
Other long-term liabilities	227,205	255,606
Total liabilities	39,671,048	22,280,883

Commitments and contingencies

Preferred stock series A, $0.001 par value; 9,000 shares authorized; 3,250 shares issued and 2,886 and 2,886 shares outstanding, respectively	1,338,312	1,280,150
Preferred stock series B, $0.001 par value; 9,000 shares authorized; 4,640 shares issued and 2,693 and 4,640 shares outstanding, respectively	a"	a"
Preferred stock series B, $0.001 par value; subscription receivable	a"	-210,000
Preferred stock series D, $0.001 par value; 8,000 shares authorized; 7,779 and 1,645 shares issued and outstanding, respectively	a"	a"

Fibrocell Science, Inc. shareholders' deficit:
Successor common stock, $0.001 par value; 250,000,000 shares authorized; 24,559,097 and 20,375,500 shares issued and outstanding, respectively	24,559	20,376
Additional paid-in capital	4,055,108	2,437,893
Accumulated deficit during development stage	-35,063,900	-17,981,530
Total Fibrocell Science, Inc. shareholders' deficit	-30,984,233	-15,523,261
Noncontrolling interest	470,029	450,373
Total deficit and noncontrolling interest	-30,514,204	-15,072,888
Total liabilities, preferred stock, shareholdersa� deficit and noncontrolling interest	$10,495,156	$8,278,145

Fibrocell Science, Inc.
(A Development Stage Company)
Condensed Consolidated Statements of Operations
(unaudited)

	Successor	Successor	Successor	Predecessor
	For the three months ended March 31, 2011	For the three months ended March 31, 2010	Cumulative period from September 1, 2009 (date of inception) to March 31, 2011	Cumulative period from December 28, 1995 (date of inception) to August 31, 2009
Revenue
Product sales	$208,636	$209,070	$1,474,946	$4,818,994
License fees	a"	a"	a"	260,000
Total revenue	208,636	209,070	1,474,946	5,078,994
Cost of sales	97,858	100,519	782,554	2,279,335
Gross profit	110,778	108,551	692,392	2,799,659
Selling, general and administrative expenses	2,354,383	2,019,913	11,578,320	84,805,520
Research and development expenses	1,616,529	1,192,610	8,926,044	56,269,869
Operating loss	-3,860,134	-3,103,972	-19,811,972	-138,275,730
Other income (expense)
Interest income	a"	a"	1	6,989,539
Reorganization items, net	a"	3,303	-69,174	73,538,984
Other income	a"	a"	244,479	316,338
Warrant expense	-6,296,330	-1,417,244	-7,080,646	a"
Derivative revaluation expense	-6,620,726	a"	-6,620,726	a"
Interest expense	-273,408	-197,730	-1,565,781	-18,790,218
Loss from continuing operations before income taxes	-17,050,598	-4,715,643	-34,903,819	-76,221,087
Income tax benefit	a"	a"	a"	190,754
Loss from continuing operations	-17,050,598	-4,715,643	-34,903,819	-76,030,333
Loss from discontinued operations	-12,116	-17,044	-73,034	-41,091,311
Net loss	-17,062,714	-4,732,687	-34,976,853	-117,121,644
Deemed dividend associated with beneficial conversion	a"	a"	a"	-11,423,824
Preferred stock dividends	a"	a"	a"	-1,589,861
Net (income)/loss attributable to noncontrolling interest	-19,656	-15,138	-87,047	1,799,523
Net loss attributable to Fibrocell Science, Inc. common shareholders	-$17,082,370	-$4,747,825	-$35,063,900	-$128,335,806

Per share information:
Loss from continuing operations-basic and diluted	-$0.80	-$0.30	-$1.91	-$4.30
Loss from discontinued operations-basic and diluted	a"	a"	a"	-2.32
Income (loss) attributable to noncontrolling interest	a"	a"	-0.01	0.10
Deemed dividend associated with beneficial conversion of preferred stock	a"	a"	a"	-0.65
Preferred stock dividends	a"	a"	a"	-0.09
Net loss attributable to common shareholders per common sharea"basic and diluted	-$0.80	-$0.30	-$1.92	-$7.26
Weighted average number of basic and diluted common shares outstanding	21,230,249	15,806,989	18,237,924	17,678,219

Contributing Sources

Market Wire

N@N

Fibrocell Science, Inc. Reports First Quarter 2011 Financial Results and Provides Business Update