Athersys, Inc. (NASDAQ:ATHX) today announced its financial results
for the three months ended September 30, 2015.
Highlights of the third quarter of 2015 and
recent events include:
- Announced signing of a letter of intent with a Japanese company
to collaborate on the development and commercialization of
MultiStem® cell therapy for several indications in Japan, including
ischemic stroke, after termination of the license agreement with
Chugai Pharmaceutical Co., Ltd;
- Advanced discussions with several other companies about
collaborating in the development and commercialization of MultiStem
therapy in multiple areas, including ischemic stroke;
- Advanced planning for progressing MultiStem ischemic stroke
program in Japan and globally, focusing on patients who receive
treatment within 36 hours of stroke;
- Progressed other clinical programs, adding sites to the Phase 2
acute myocardial infarction (“AMI”) trial and completing final
preparations for launch of acute respiratory distress syndrome
(“ARDS”) trial – studies that are partially supported with grant
funding;
- Reported revenues of $0.4 million for quarter ended September
30, 2015 and net loss of $6.5 million for the period, which
includes non-cash income of $0.3 million related to the change in
fair value of our warrant liabilities and non-cash expense of $0.7
million related to stock-based compensation;
- Recorded net loss per share of $0.08 for the quarter ended
September 30, 2015; and
- Ended the quarter with $28.5 million in cash and cash
equivalents.
“Although we have ended our collaboration with
Chugai, we are encouraged by the interest of other potential
business partners in our MultiStem programs and stem cell
technologies,” said Dr. Gil Van Bokkelen, Chairman and CEO of
Athersys, Inc. “As announced previously, we recently signed a
letter of intent with a Japanese company for the development of
MultiStem cell therapy in Japan for several indications, including
stroke, and we remain enthusiastic about accelerated development
opportunities for regenerative medicine products in Japan,
confirmed by recent approvals by the Japanese Pharmaceutical and
Medical Devices Agency. We also have ongoing discussions with
companies with interests in applications outside of Japan.
Clearly, a key focus will be business development over the next
several months.
“We are particularly excited about the potential
for our ischemic stroke program, especially as continued analyses
confirm a robust benefit for serious stroke patients who received
MultiStem treatment within 36 hours following the stroke. We
are planning the next stage of clinical activity, which we intend
to initiate by the middle of next year.
“We have also made progress in our Phase 2 acute
myocardial infarction study and have added sites to help drive
enrollment,” added Dr. Van Bokkelen. “Also, with recent regulatory
and operations progress, we expect to launch our exploratory study
in the ARDS area this quarter. We believe that MultiStem
therapy has the potential to moderate the hyper-inflammation
associated with ARDS and help patients regain lung function,
alleviate the need for ventilator-assisted breathing, and enable
faster recovery.
“We have maintained a good balance sheet to
support our current activities. Additionally, as noted, we
continue to focus on business development activities oriented to
further improving the balance sheet, offsetting development costs,
and bringing partner capabilities to bear for various development
programs,” concluded Dr. Van Bokkelen.
Updated Phase 2 Ischemic Stroke Clinical
Trial Results
The ongoing analyses confirm accelerated
recovery for subjects treated with MultiStem prior to 36 hours
compared to placebo. Further, biomarker analyses demonstrate
a significant reduction in acute post-stroke inflammation for
MultiStem patients. These factors may contribute to lower
average hospitalization for subjects treated with MultiStem prior
to 36 hours compared to placebo.
Additionally, our analyses show that patients
treated with MultiStem prior to 36 hours tend to have better
recovery across multiple functional and clinical outcomes as
evident in Figure 1 below. Patients receiving treatment with
MultiStem within 36 hours have meaningfully better odds of
achieving recovery – whether measured by single outcomes or
considering recovery holistically across multiple outcomes – when
compared with patients not receiving MultiStem treatment.
Considering the five dichotomous outcomes below, in the post-hoc
analyses (subjects treated with MultiStem therapy <36 hours v.
all placebo, excluding subjects receiving prior tPA and mechanical
reperfusion treatment from both groups), 41% of MultiStem patients
successfully achieved each of the five outcomes compared to only
12% of Placebo patients.
Figure 1
Plot showing the odds ratios for a MultiStem-related treatment
effect for the outcomes indicated. Numbers greater than 1 are
in favor of MultiStem. Each horizontal line represents the
95% confidence interval.
A photo of Figure 1 accompanying this announcement is available
at
http://www.globenewswire.com/NewsRoom/AttachmentNg/5702bb3f-fc38-470a-b484-466a252b4066
Figure 1 includes three pre-specified secondary
endpoints – modified Rankin Score ≤ 2 (disability measure), NIH
stroke scale (NIHSS) delta ≥75% (neurological deficit), and Barthel
Index ≥ 95% (activities of daily living) at 90 days following the
stroke – and the pre-specified primary endpoint using the
“generalized estimating equation (GEE)” method to calculate an
integrated assessment of treatment effect between the groups using
these three outcomes. An exploratory endpoint, “Global
recovery,” a combined dichotomous endpoint based on the
simultaneous achievement of the three component endpoints above
(mRS≤2, NIHSS delta≥75%, and BI≥95%) is included. Excellent
outcome, a combined dichotomous endpoint measuring achievement of
mRS≤1, NIHSS≤1, and BI≥95% and a pre-specified secondary outcome,
is also shown. Finally, two important safety outcomes
are represented – survival without life threatening adverse events
and secondary infections – and all five components are evaluated
together using the approaches above.
Third Quarter Financial
Results
For the three months ended September 30, 2015,
total revenues were $0.4 million compared to $0.3 million in the
comparable period in 2014, reflecting an increase in grant
revenues. Grant revenues may fluctuate from period to period due to
the timing of grant-related activities and the award and expiration
of grants, while contract revenues will be driven by license,
royalty and milestone payments from existing and new business
collaborations. We will retain the $10 million up-front cash
payment from Chugai Pharmaceutical Co. Ltd. (“Chugai”) received in
2015, which will be recognized in full as revenue in October 2015
in connection with the recently announced termination of the
collaboration.
Research and development expenses were $5.1
million for the third quarter of 2015 compared to $5.8 million for
the third quarter of 2014. The decrease was driven by lower
clinical and preclinical development costs, sponsored research
costs, personnel costs, research supplies and travel costs. General
and administrative expenses increased to $1.9 million in the third
quarter of 2015 compared to $1.7 million in the same period of 2014
due to increased professional fees and consulting costs. The
non-cash income from the change in the fair value of our warrant
liabilities was $0.3 million in the third quarter of 2015 and $2.5
million in the comparable prior-year period.
Net loss for the three months ended September
30, 2015 was $6.5 million, which included non-cash income of $0.3
million from the warrant valuation and non-cash expense of $0.7
million from stock-based compensation, compared to net loss of $4.7
million for the three months ended September 30, 2014, which
included non-cash income of $2.5 million from the warrant valuation
and non-cash expense of $0.7 million from stock-based
compensation.
As of September 30, 2015, we had $28.5 million
in cash and cash equivalents, compared to $26.1 million at December
31, 2014. Cash used in operating activities during the third
quarter of 2015 was $3.7 million (including the receipt of $2.0
million that was temporarily withheld by Japanese taxing
authorities related to Chugai) compared to $6.2 million cash used
in the third quarter of 2014.
Conference Call
As previously announced, Gil Van Bokkelen,
Chairman and Chief Executive Officer, and William (B.J.) Lehmann,
President and Chief Operating Officer, will host a conference call
today to review the results as follows:
Date |
November 5, 2015 |
Time |
4:30 p.m. (Eastern Time) |
Telephone access: U.S. and Canada |
800-273-1254 |
Telephone access: International |
973-638-3440 |
Access code |
22710391 |
Live webcast |
www.athersys.com, under the Investors section |
A replay will be available for on-demand
listening shortly after the completion of the call until 11:59 PM
(Eastern Time) on November 19, 2015 by dialing 800-585-8367 or
855-859-2056 (U.S. and Canada), or 404-537-3406, and entering
access code 22710391. The archived webcast will be available for
one year at the aforementioned URL.
About Athersys
Athersys is a clinical stage biotechnology
company engaged in the discovery and development of therapeutic
product candidates designed to extend and enhance the quality of
human life. The Company is developing its MultiStem® cell therapy
product, a patented, adult-derived "off-the-shelf" stem cell
product platform for disease indications in the cardiovascular,
neurological, inflammatory and immune disease areas. The Company
currently has several clinical stage programs involving MultiStem,
including for treating inflammatory bowel disease, ischemic stroke,
damage caused by myocardial infarction, and for the prevention of
graft-versus-host disease. Athersys has also developed a diverse
portfolio that includes other technologies and product development
opportunities, and has forged strategic partnerships and
collaborations with leading pharmaceutical and biotechnology
companies, as well as world-renowned research institutions in the
United States and Europe to further develop its platform and
products. More information is available at www.athersys.com.
The Athersys, Inc. logo is available at:
http://www.globenewswire.com/newsroom/prs/?pkgid=4548.
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 that involve risks and uncertainties. These
forward-looking statements relate to, among other things, the
expected timetable for development of our product candidates, our
growth strategy, and our future financial performance, including
our operations, economic performance, financial condition,
prospects, and other future events. We have attempted to identify
forward-looking statements by using such words as "anticipates,"
"believes," "can," "continue," "could," "estimates," "expects,"
"intends," "may," "plans," "potential," "should," “suggest,”
"will," or other similar expressions. These forward-looking
statements are only predictions and are largely based on our
current expectations. A number of known and unknown risks,
uncertainties, and other factors could affect the accuracy of these
statements. Some of the more significant known risks that we face
that could cause actual results to differ materially from those
implied by forward-looking statements are the risks and
uncertainties inherent in the process of discovering, developing,
and commercializing products that are safe and effective for use as
human therapeutics, such as the uncertainty regarding market
acceptance of our product candidates and our ability to generate
revenues, including MultiStem for the treatment of ischemic stroke,
acute myocardial infarction, and acute respiratory distress
syndrome and other disease indications, including graft-versus-host
disease. These risks may cause our actual results, levels of
activity, performance, or achievements to differ materially from
any future results, levels of activity, performance, or
achievements expressed or implied by these forward-looking
statements. Other important factors to consider in evaluating our
forward-looking statements include: our possible inability to
realize commercially valuable discoveries in our collaborations
with pharmaceutical and other biotechnology companies; the success
of our collaborations, including our ability to reach milestones
and receive milestone payments, and whether any products are
successfully developed and sold so that we earn royalty payments;
our collaborators' ability to continue to fulfill their obligations
under the terms of our collaboration agreements; the success of our
efforts to enter into new strategic partnerships or collaborations
and advance our programs, including the ability to enter into a
definitive arrangement with the Japanese company for the
development and commercialization of MultiStem cell therapy in
Japan; our ability to raise additional capital; results from our
MultiStem clinical trials; the possibility of delays in, adverse
results of, and excessive costs of the development process; our
ability to successfully initiate and complete clinical trials;
changes in external market factors; changes in our industry's
overall performance; changes in our business strategy; our ability
to protect our intellectual property portfolio; our possible
inability to execute our strategy due to changes in our industry or
the economy generally; changes in productivity and reliability of
suppliers; and the success of our competitors and the emergence of
new competitors. You should not place undue reliance on
forward-looking statements contained in this press release, and we
undertake no obligation to publicly update forward-looking
statements, whether as a result of new information, future events
or otherwise.
(Financial Tables Follow)
Athersys,
Inc. |
|
Condensed
Consolidated Balance Sheets |
|
(In thousands) |
|
|
|
|
|
|
September
30, |
December
31, |
|
|
2015 |
|
|
2014 |
|
|
(Unaudited) |
(Note) |
Assets |
|
|
Cash and cash equivalents |
$ |
28,533 |
|
$ |
26,127 |
|
Accounts and other receivables |
|
315 |
|
|
694 |
|
Other current assets |
|
383 |
|
|
427 |
|
Equipment, net |
|
1,167 |
|
|
1,270 |
|
Other noncurrent assets |
|
195 |
|
|
200 |
|
Total assets |
$ |
30,593 |
|
$ |
28,718 |
|
|
|
|
Liabilities and stockholders’
equity |
|
|
Accounts payable and accrued expenses |
$ |
4,088 |
|
$ |
4,617 |
|
Deferred revenue |
|
10,000 |
|
|
75 |
|
Note payable |
|
189 |
|
|
183 |
|
Warrant liabilities |
|
813 |
|
|
2,948 |
|
Total stockholders’ equity |
|
15,503 |
|
|
20,895 |
|
Total liabilities and stockholders’
equity |
$ |
30,593 |
|
$ |
28,718 |
|
|
Note: The
Condensed Consolidated Balance Sheet Data at December 31, 2014 has
been derived from the audited financial statements as of that
date. |
|
Athersys,
Inc. |
Condensed
Consolidated Statements of Operations and Comprehensive (Loss)
Income |
(In Thousands,
Except Per Share Amounts) |
|
|
|
|
Three Months
ended September 30, |
|
|
2015 |
|
|
2014 |
|
|
(Unaudited) |
Revenues |
|
|
Contract revenue |
$ |
39 |
|
$ |
75 |
|
Grant revenue |
|
357 |
|
|
218 |
|
Total revenues |
|
396 |
|
|
293 |
|
|
|
|
Costs and Expenses |
|
|
Research and development |
|
5,089 |
|
|
5,775 |
|
General and administrative |
|
1,941 |
|
|
1,695 |
|
Depreciation |
|
66 |
|
|
91 |
|
Total costs and expenses |
|
7,096 |
|
|
7,561 |
|
Loss from operations |
|
(6,700 |
) |
|
(7,268 |
) |
Other (expense) income, net |
|
(79 |
) |
|
8 |
|
Income from change in fair value of warrants |
|
255 |
|
|
2,540 |
|
Loss before taxes |
$ |
(6,524 |
) |
$ |
(4,720 |
) |
Tax benefit |
|
27 |
|
|
1 |
|
Net loss and comprehensive
loss |
$ |
(6,497 |
) |
$ |
(4,719 |
) |
Net loss per share - Basic |
$ |
(0.08 |
) |
$ |
(0.06 |
) |
Weighted average shares outstanding- Basic |
|
83,141 |
|
|
77,320 |
|
|
|
|
Net loss per share - Diluted |
$ |
(0.08 |
) |
$ |
(0.08 |
) |
Weighted average shares outstanding- Diluted |
|
83,426 |
|
|
78,350 |
|
|
|
|
Athersys,
Inc. |
Condensed
Consolidated Statements of Cash Flows |
(In Thousands) |
|
|
|
|
Three months
ended September 30, |
|
|
2015 |
2014 |
|
|
(Unaudited) |
|
Operating activities |
|
|
Net loss |
$ |
(6,497 |
) |
$ |
(4,719 |
) |
|
Adjustments to reconcile net loss to
net cash |
|
|
|
used in operating
activities: |
|
|
|
Depreciation |
|
66 |
|
|
91 |
|
|
Stock-based
compensation |
|
730 |
|
|
714 |
|
|
Change in fair value of
warrant liabilities |
|
(255 |
) |
|
(2,540 |
) |
|
Changes in operating
assets and liabilities: |
|
|
|
Accounts receivable and
other |
|
2,035 |
|
|
(59 |
) |
|
Accounts payable,
accrued expenses and other |
|
240 |
|
|
265 |
|
|
Net cash used in
operating activities |
|
(3,681 |
) |
|
(6,248 |
) |
|
|
|
|
|
Investing
activities |
|
|
|
Purchases of equipment |
|
(26 |
) |
|
(79 |
) |
|
Net cash used in investing
activities |
|
(26 |
) |
|
(79 |
) |
|
|
|
|
|
Financing
activities |
|
|
|
Purchase of treasury stock |
|
(106 |
) |
|
(55 |
) |
|
Net cash provided by financing
activities |
|
(106 |
) |
|
(55 |
) |
|
|
|
|
|
Increase in cash and cash
equivalents |
|
(3,813 |
) |
|
(6,382 |
) |
|
Cash and cash equivalents at
beginning of the period |
|
32,346 |
|
|
38,750 |
|
|
Cash and cash equivalents at end of
the period |
$ |
28,533 |
|
$ |
32,368 |
|
|
|
|
|
|
Contacts:
William (B.J.) Lehmann, J.D.
President and Chief Operating Officer
Tel: (216) 431-9900
bjlehmann@athersys.com
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