Amarantus BioScience Holdings, Inc. (OTCQB:AMBS), a biotechnology
company focused on developing diagnostics in neurology, and
therapeutic products in the areas of neurology, psychiatry,
ophthalmology and orphan diseases, announced financial results for
the year ended December 31, 2014. The Company also highlighted
recent corporate and clinical development achievements, as well as
upcoming milestones for its Diagnostics division and Therapeutics
division.
"The advancements made throughout the course of 2014 and early
2015 in executing our strategy of assembling clinically de-risked
and significantly undervalued diagnostic and therapeutic
opportunities for the Company's two divisions has yielded a
tremendous platform for growth going forward," said Gerald E.
Commissiong, President & CEO of Amarantus.
RECENT CORPORATE HIGHLIGHTS
- Appointed renowned drug development expert and co-founder of
Amgen, Joseph Rubinfeld, Ph.D., to the Board of Directors;
- Appointed Elise Brownell, Ph.D., to the newly created position
of Senior Vice President of Operations and Program Management;
- Completed two non-convertible debenture transactions which
raised a total of $2.85 million;
- Completed multiple closings of a Series E preferred stock
financing to raise $7.25 million; and
- Modified the terms of the Series E preferred stock to adjust
the conversion price to $0.05 (representing a ~2% discount to
market as of the date of adjustment), delay any further potential
downward adjustment in the conversion price to October 1, 2015, and
inserted a provision for a Mandatory Conversion of the Series E
preferred stock into common shares upon a Qualified Public Offering
of the Company's stock.
DIAGNOSTICS DIVISION OVERVIEW
"We crystalized our corporate development strategy in our
Diagnostics division with the synergistic acquisition of multiple
sclerosis (MS) diagnostics company, Diogenix, Inc. The lead asset
acquired, MSPrecise®, recently completed a clinical validation
study with strong results, paving the way for its potential
introduction into the commercial marketplace in the fourth quarter
of this year. LymPro Test®, our Investigational Use Only (IUO)
Alzheimer's diagnostic blood test that was commercialized in late
2014, garnered its first pharmaceutical customer in the first
quarter of 2015, as the interest in trials of experimental
Alzheimer's therapies is beginning to increase with high-profile
successes renewing hope for the field. We have established a
wholly-owned subsidiary, Amarantus Diagnostics, Inc., to house
MSPrecise and LymPro and are now evaluating CEO candidates to drive
this division forward. We are also currently evaluating strategic
options for Amarantus Diagnostics that will allow it to exercise
the exclusive option agreement with Georgetown University, and
strengthen its position as a leading Alzheimer's diagnostic blood
test company, in addition to its emerging leading position in the
area of MS diagnostics," stated Robert Farrell, CFO of
Amarantus.
Recent Highlights
- Retained an executive search firm to identify a Chief Executive
Officer for the Diagnostics division;
- Retained Ravi Kiron, Ph.D., a co-founder in C2N and the former
Chief Business Officer at Kinemed, Inc., to serve as Senior Vice
President of Business Development;
- Promoted Colin Bier, Ph.D., to Chief Development Officer to
oversee the commercialization of the Company's assays under
CLIA;
- Retained a consulting firm specialized in the sale of tax
credits, to market the $7.5 million of New Jersey tax credits
obtained in the Diogenix acquisition; and
- Established an Alzheimer's disease (AD) Diagnostics Scientific
Advisory Board with three internationally-renowned AD and
neurological disorder specialists, Paula T. Trzepacz, M.D., Jeffrey
L. Cummings, M.D., Sc.D., and Robert A. Stern, Ph.D.
- LymPro Test® for the diagnosis of AD
- Presented positive LymPro data at the 12th International
Conference on Alzheimer's and Parkinson's Diseases and Related
Neurological Disorders;
- Established the Company's first Investigational Use Only (IUO)
Alzheimer's biomarker services collaboration for LymPro Test with
Anavex Life Sciences Corp. to evaluate blood samples from AD
patients;
- Entered into a Letter of Intent with Anavex to plan additional
scope of further biomarker services for its potential Phase 3 AD
clinical trial; and
- Announced the availability of LymPro Test biomarker services
for use by the pharmaceutical industry for IUO.
- MSPrecise® for the diagnosis of MS
- Acquired MS diagnostics company Diogenix, Inc.; and
- Completed integration of Diogenix into Amarantus Diagnostics
corporate infrastructure.
- Georgetown Assays for the diagnosis of AD
- Entered into a one-year, exclusive option agreement with
Georgetown University to license patent rights for blood based
biomarkers for AD and memory loss.
THERAPEUTICS DIVISION OVERVIEW
David A. Lowe, Ph.D., member of the Amarantus Board Directors,
commented, "The Therapeutics division is now positioned for
significant growth. We spent considerable time and resources
revitalizing the eltoprazine development program following our
in-licensing of this product candidate in early 2014. Today, we are
poised to initiate a mid-stage clinical development program of
eltoprazine after the United States Food and Drug Administration
(FDA) recently allowed the Company's Investigational New Drug (IND)
application to proceed into a Phase 2b program for Parkinson's
disease levodopa induced dyskinesia (PD LID). Eltoprazine has a
strong safety profile, having been dosed in over 680 human subjects
for periods of more than two years, at doses several fold higher
than our anticipated dosing regimens going forward. In addition,
eltoprazine already has positive Phase 2a data in PD LID, which was
recently published, positive Phase 2 data in an adult attention
deficit and hyperactivity disorder (adult ADHD) clinical study, as
well as significant proof-of-concept clinical data generated by its
original owner, Solvay Pharmaceuticals, in the area of aggression
associated with AD. We also succeeded in our orphan regulatory
strategy for MANF by receiving an orphan drug designation for the
treatment of retinitis pigmentosa (RP), which now allows the
Company to shepherd MANF's development towards first-in-man
studies."
Recent Highlights
- Eltoprazine: PD-LID, adult ADHD, and Alzheimer's aggression
- Published Phase 2a clinical study results in BRAIN for the
treatment of PD-LID; and
- Opened an IND application with the neurology division of the
FDA to advance eltoprazine into Phase 2b clinical studies.
- MANF: Mesencephalic-astrocyte-derived neurotrophic factor
- Received Orphan Drug Designation (ODD) from the FDA for the
treatment of RP;
- Submitted an application to the FDA for ODD for the treatment
of retinal artery occlusion (RAO); and
- Announced positive preclinical data on the effects of MANF for
the protection from vision loss in animal models of RP and
RAO.
- ESS: Engineered Skin Substitute
- Entered into exclusive option agreement with Lonza Walkersville
to acquire subsidiary Cutanogen Corporation, holder of licensing
rights to intellectual property related to ESS for the potential
treatment of severe burns;
- Dismissed with prejudice the litigation that had previously
encumbered ESS; and
- Amended the Lonza exclusive option agreement allowing for the
extension of the option period through August 31, 2015.
"In November of 2014, the Company extended its orphan drug
strategy beyond MANF by entering into an exclusive option agreement
to acquire Cutanogen Corporation from Lonza Walkersville. Cutanogen
is the licensee of certain intellectual property rights related to
ESS. ESS represents a unique opportunity in the orphan area of
severe burns. The potential acquisition of Cutanogen initially
presented several risks through which the Company successfully
navigated, including the dismissal of the litigation previously
encumbering the asset. We have now effectively paved the way for
the acquisition to take place and, once acquired, expect to be in a
position to initiate a Phase 2 study shortly after the initiation
of the eltoprazine PD LID study," added Joseph Rubinfeld, Ph.D.,
member of the Amarantus Board of Directors.
FULL YEAR 2014 FINANCIAL SUMMARY
Research and development costs for the twelve months ended
December 31, 2014 increased $11,673,000 to $13,762,000 from
$2,089,000 for the twelve months ended December 31, 2013. During
the year ended December 31, 2014, research and development costs
consisted primarily of start-up clinical expenses, and $7,200,000
of in-process research and development associated with intellectual
property, litigation and technology relating to the potential Lonza
transaction. $3,000,000 of the $7,200,000 was a non-cash expense
paid for with shares of the Company's common stock. The increase in
research and development expense in 2014, as compared to 2013, was
primarily due to in-process research and development cost, and to a
lesser extent, LymPro clinical study costs, increases in consulting
and stock based compensation.
G&A expenses for the twelve months ended December 31, 2014
increased $3,970,000 to $7,592,000 from $3,622,000 for the twelve
months ended December 31, 2013 primarily due to increased key hires
the company made to advance its programs, patent related legal
costs, development program-related outside services and stock based
compensation.
Other income (expense) for the twelve months ended December 31,
2014 decreased $3,498,000, to $5,923,000 from $9,421,000 for the
twelve months ended December 31, 2013. Primary reasons for this
decrease include: (1) interest expense for the twelve months ended
December 31, 2014 decreased $1,818,000, to $813,000 from $2,631,000
for the twelve months ended December 31, 2013 due to conversion of
debt to common stock, primarily during the first half of 2014, (2)
loss on the issuance of common stock improved $92,000 from $260,000
in 2014 compared to $352,000 in 2013; (3) in 2014 the Company
incurred no loss on issuance of debt, as compared with a loss of
$6,709,000 in 2013; (4) in 2014 the Company incurred $1,250,000
loss on the extinguishment of convertible debt compared to none in
2013; (5) in 2014 the Company incurred $3,867,000 loss on the
issuance of warrants and none in 2013; and (6) income from the
change in fair value of warrants and derivatives liabilities
increased $46,000 from $317,000 for 2014, as compared with $271,000
in 2013. Net loss for the twelve months ended December 31, 2014 was
$28,152,000 compared to a net loss of $15,170,000 for the twelve
months ended December 31, 2013.
As of December 31, 2014, the Company had total current assets of
$412,000 consisting of $214,000 in cash and cash equivalents and
$198,000 in prepaid expenses and other current assets. Also, from
the second closing of the Series E Convertible Preferred Stock
(Series E) offering the Company had $1,450,000 of outstanding
Series E stock subscriptions as of December 31, 2014. Additionally,
the Company continues to have access to over $14 million in
additional funding available from an equity financing facility with
Lincoln Park Capital.
The Company is preparing to list its common shares on a national
stock exchange in 2015.
2015 EXPECTED NEAR-TERM MILESTONES
"In a few short months from today, pending the acquisition of
Cutanogen, the Company's Therapeutics division expects to have two
ongoing mid-stage clinical studies in the areas of PD LID and
severe burns, as well as a preclinical orphan ophthalmology program
maturing towards the clinic. Management and the Board of Directors
believes this scenario has the potential to be truly transformative
for the Company and its shareholders. Moreover, during that same
timeframe, we expect to make progress in executing on one of the
strategic alternatives for the Diagnostics Division in order to
generate further value for our shareholders," said Gerald. E.
Commissiong, President and CEO of Amarantus. "While we have focused
primarily on executing on our strategic initiatives to assemble and
incubate undervalued, clinical assets towards feasibility
milestones in each of these distinct divisions, going forward, we
will be focused on executing on clinical, regulatory, commercial
and corporate milestones to maximize their value."
- Initiate a Phase 2b clinical study of eltoprazine in PD-LID in
2Q 2015;
- Complete the acquisition of Cutanogen and then initiate a Phase
2 study mid-year 2015; and
- Receive responses on our ODD applications for MANF in RAO from
the FDA, and from the European Commissiong for MANF for the
treatment of RP and RAO;
- Continue to explore strategic options for our Diagnostics
division, including a potential spin-off, to derive the full value
of the Company's premier neuro-diagnostics business; and
- Pursue an up-listing to a national stock exchange listing to
position the Company for an appreciation in value.
"We have laid the groundwork for numerous opportunities to
propel the Company forward with the goals of addressing unmet
medical needs for patients that are so deserving of viable
treatment options, and ultimately unlocking significant value for
our loyal shareholders," concluded Mr. Commissiong. "Moving
forward, our management team and board are committed to delivering
on meaningful milestones on the clinical, regulatory and
operational fronts by successfully executing on our business plan.
Given this, we believe we have positioned Amarantus for an exciting
2015."
CONFERENCE CALL AND WEBCAST DETAILS
Amarantus Management will host a quarterly business update call
on April 9, 2015. The business update may be accessed by telephone
by dialing Toll-Free (US & Canada): 877-705-2969 or
International: 201-689-8868; or by webcast on the News and Events
page of the Investor Relations section of the Amarantus corporate
web site under the IR Calendar at www.amarantus.com.
Webcast participants are encouraged to go to the web site 15
minutes prior to the start of the call to register, download and
install any necessary software.
Amarantus Bioscience
Holdings, Inc. |
Consolidated Balance
Sheets |
(in thousands, except share and
per share data) |
|
|
|
|
December 31,
2014 |
December 31,
2013 |
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$214 |
$1,033 |
Deferred Funding fees, net |
— |
109 |
Prepaid expenses and other current
assets |
198 |
106 |
Total current assets |
412 |
1,248 |
Restricted cash |
204 |
— |
Property and equipment, net |
145 |
— |
Intangible assets, net |
1,497 |
611 |
Total assets |
$2,258 |
$1,859 |
|
|
|
Liabilities and Stockholders' Equity
(Deficit) |
|
|
|
|
|
Current liabilities: |
|
|
Accounts payable |
$ 3,353 |
$ 972 |
Accounts payable - Regenicin |
2,550 |
— |
Related party liabilities and accrued
interest |
252 |
248 |
Accrued expenses |
149 |
292 |
Accrued interest |
25 |
112 |
8% senior convertible debentures, net of
discount |
— |
932 |
Convertible promissory notes |
— |
124 |
Derivative liability |
— |
5,859 |
Total current liabilities |
6,329 |
8,539 |
Total liabilities |
6,329 |
8,539 |
Commitments and contingencies |
|
|
|
|
|
Series D convertible preferred stock ($1,000
stated value; 1,300 shares designated; 1,299.327 and -0- shares
issued and outstanding as of December 31, 2013 |
— |
839 |
|
|
|
Stockholders' equity (deficit): |
|
|
Convertible preferred stock, $0.001 par
value, 10,000,000 shares authorized: |
|
|
Series A, $0.001 par value, 250,000
shares designated, -0- shares issued and outstanding as of December
31, 2014 and December 31, 2013 |
— |
— |
Series B, $0.001 par value, 3,000,000
shares designated, -0- shares issued and outstanding as of December
31, 2014 and December 31, 2013 |
— |
— |
Series C, $0.001 par value, 750,000
shares designated, 750,000 shares issued and outstanding as of
December 31, 2014 and December 31, 2013 |
1 |
1 |
Series D, $1,000 stated value; 1,300
shares designated; 1,299.327 issued and outstanding as of December
31, 2014; aggregate liquidation preference of $1,299 as of December
31, 2014 |
1,169 |
— |
Series E, $1,000 stated value; 6,000
shares designated, 4,500 issued and outstanding as of December 31
2014; aggregate liquidation preference of $4,500 as of
December 31, 2014 |
4,050 |
— |
Common stock, $0.001 par value —
2,000,000,000 and 1,000,000,000 shares authorized as of December
31, 2014 and December 31, 2013, respectively; 842,190,750 and
574,171,945 shares issued and outstanding at December 31, 2014
and December 31, 2013, respectively |
842 |
574 |
Additional paid-in capital |
45,050 |
18,938 |
Accumulated deficit |
(55,183) |
(27,032) |
Total stockholders' equity (deficit) |
(4,071) |
(7,519) |
Total liabilities and stockholders'
equity (deficit) |
$2,258 |
$1,859 |
|
|
|
|
|
|
Amarantus Bioscience
Holdings, Inc. |
Consolidated Statements
of Operations |
(in thousands, except share and
per share data) |
|
|
|
|
Year Ended December 31,
2014 |
Year Ended December 31,
2013 |
Net Sales |
— |
— |
Operating Expense: |
|
|
Research and development |
13,762 |
2,089 |
General and administrative |
7,592 |
3,622 |
Total operating expenses |
21,354 |
5,711 |
Loss from operations |
(21,354) |
(5,711) |
Other income (expense): |
|
|
Interest expense |
(813) |
(2,631) |
Loss on issuance of common stock |
(260) |
(352) |
Loss on issuance of debt |
— |
(6,709) |
Loss on extinguishment of convertible
debt |
(1,250) |
— |
Loss on issuance of warrants |
(3,867) |
— |
Other expense |
(50) |
— |
Change in fair value of warrants and
derivative liabilities |
317 |
271 |
Total other expense |
(5,923) |
(9,421) |
Net loss |
$(27,277) |
$(15,132) |
Preferred stock dividend |
875 |
38 |
Net loss attributable to common
stockholders |
$(28,152) |
$(15,170) |
Basic and diluted net loss per common
share |
$(0.04) |
$(0.03) |
Basic and diluted weighted average common
shares outstanding |
788,933,978 |
450,931,510 |
About Amarantus BioScience Holdings, Inc.
Amarantus BioScience Holdings (AMBS) is a biotechnology company
developing treatments and diagnostics for diseases in the areas of
neurology, psychiatry, ophthalmology and regenerative medicine.
AMBS' Therapeutics division has development rights to Eltoprazine,
a Phase 2b ready small molecule indicated for Parkinson's disease
Levodopa-induced dyskinesia, adult ADHD and Alzheimer's Aggression,
and owns the intellectual property rights to a therapeutic protein
known as mesencephalic-astrocyte-derived neurotrophic factor
("MANF") and is developing MANF-based products as treatments for
brain and ophthalmic disorders.. AMBS' Diagnostics division owns
the rights to MSPrecise®, a proprietary next-generation DNA
sequencing (NGS) assay for the identification of patients with
relapsing-remitting multiple sclerosis (RRMS) at first clinical
presentation, has an exclusive worldwide license to the Lymphocyte
Proliferation test, (LymPro Test®), which was developed by Prof.
Thomas Arendt, Ph.D., from the University of Leipzig, for
Alzheimer's disease and owns intellectual property for the
diagnosis of Parkinson's disease (NuroPro). AMBS also owns the
discovery of neurotrophic factors (PhenoGuard™) that led to MANF's
discovery.
In November 2014, AMBS entered into an exclusive option
agreement that now runs through August 2015 with Lonza
Walkersville, Inc., a subsidiary of Lonza Group Ltd., to acquire
Cutanogen Corporation, a subsidiary of Lonza Walkersville, to
develop Engineered Skin Substitute, an autologous skin replacement
product for the treatment of Stage 3 and Stage 4 intractable severe
burns. In January 2015, AMBS executed a one-year exclusive
option agreement with Georgetown University to enter into a license
for the patent rights related to certain blood based biomarkers for
memory loss and Alzheimer's disease jointly owned by Georgetown
University and University of Rochester.
For further information please visit www.Amarantus.com, or
connect with the Company on Facebook, LinkedIn, Twitter and
Google+.
Forward-Looking Statements
Certain statements, other than purely historical information,
including estimates, projections, statements relating to our
business plans, objectives, and expected operating results, and the
assumptions upon which those statements are based, are
forward-looking statements. These forward-looking statements
generally are identified by the words "believes," "project,"
"expects," "anticipates," "estimates," "intends," "strategy,"
"plan," "may," "will," "would," "will be," "will continue," "will
likely result," and similar expressions. Forward-looking statements
are based on current expectations and assumptions that are subject
to risks and uncertainties which may cause actual results to differ
materially from the forward-looking statements. Our ability to
predict results or the actual effect of future plans or strategies
is inherently uncertain. Factors which could have a material
adverse effect on our operations and future prospects on a
consolidated basis include, but are not limited to: changes in
economic conditions, legislative/regulatory changes, availability
of capital, interest rates, competition, and generally accepted
accounting principles. These risks and uncertainties should also be
considered in evaluating forward-looking statements and undue
reliance should not be placed on such statements.
CONTACT: Investor and Media Contact:
Jenene Thomas
Jenene Thomas Communications, LLC
Investor Relations and Corporate Communications Advisor
T: (US) 908.938.1475
E: jenene@jenenethomascommunications.com
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