Company announces Fast Track Designation
by FDA for Stroke Program and other progress
Athersys, Inc. (Nasdaq:ATHX) today announced its financial results
for the three months ended March 31, 2017.
Highlights of the first quarter of 2017 and
recent events include:
- Clinical program for stroke awarded Fast Track Designation by
U.S. Food & Drug Administration (“FDA”) – designation means
that the program becomes eligible for Rolling Submission,
Accelerated Approval and Priority Review of the biologics license
application, facilitating timely regulatory review;
- Clinical investigators published two articles in March 2017 in
peer-reviewed journals, Stem Cells and Lancet Neurology,
respectively, with the first article describing preclinical results
showing how MultiStem® cell therapy could provide benefit to
patients following ischemic stroke and the second article
describing results from Phase 2 trial of MultiStem cell therapy for
treating ischemic stroke patients (the “MASTERS” trial);
- Following completion of an assessment of operational issues
related to a recent FDA inspection at our contract manufacturer,
Lonza, investigational product is now being released, and our
partner, HEALIOS K.K., is preparing for patient enrollment of the
TREASURE study in Japan;
- Commercial milestone payment of $1.0 million received from
collaboration with RTI Surgical, Inc. (“RTI”);
- Net proceeds of $20.9 million received in February 2017 from
common stock offering in support of ongoing and planned clinical
and process development activities;
- Proceeds from warrant exercises of $1.9 million received in
first quarter of 2017, resulting in the issuance of approximately
1.8 million shares of common stock, and no warrants remain
outstanding;
- Revenues of $1.5 million recognized for quarter ended March 31,
2017 and net loss of $5.6 million, or $0.06 loss per share;
and
- Cash and cash equivalents balance of $31.9 million at first
quarter-end.
“We are excited about receiving Fast Track
designation for our clinical stroke program, and we thank the FDA
for its continued support of our efforts to develop and provide an
important new treatment option for patients in this area of unmet
medical need,” commented Dr. Gil Van Bokkelen, Chairman & CEO
at Athersys. “Recent publications and presentations continue
to illustrate how we might be able to extend the treatment window
for stroke patients out to 36 hours with MultiStem, beyond the
narrow window for treatment that exists today, and also the
important biological mechanisms that our cell therapy may provide
to help patients recover from a debilitating stroke event.
Stroke remains the leading cause of serious disability, yet many
people are still unaware of the signs and symptoms of stroke, or
the need to take action right away, and we are committed to
building public awareness in this area.
“We are pleased that the Healios TREASURE trial
in Japan is now getting underway,” added Dr. Van Bokkelen.
“Additionally, we are actively engaged with the FDA, European
Medicines Agency and other regulators to obtain regulatory
alignment for our planned Phase 3 clinical trial for stroke,
MASTERS-2, and we anticipate completing the key regulatory
activities for our study sometime this summer. In parallel,
we are advancing our partnering discussions in stroke and other
areas, which represent an important priority for the company,”
concluded Dr. Van Bokkelen.
First Quarter Results
For the three months ended March 31, 2017,
revenues were $1.5 million compared to $15.5 million in the same
period in 2016, reflecting the recognition of a $1.0 million
commercial milestone in the first quarter of 2017 from our RTI
collaboration and a $15.0 million license fee from our Healios
collaboration in the first quarter of 2016. Grant revenue
remained consistent between the two quarters ended March 31.
We expect our future contract revenues to be comprised
primarily of revenues associated with our Healios collaboration,
royalty payments and potential commercial milestone payments from
RTI, and proceeds from potential new collaborations. Grant
revenues continue to vary from period-to-period with new and
completed grants, and with the timing of grant-funded projects.
Research and development expenses decreased to
$5.6 million in the 2017 first quarter from $6.7 million in the
2016 first quarter primarily due to decreased clinical and
preclinical development costs, decreased internal research
supplies, decreased license fees and decreased travel costs.
General and administrative expenses were relatively consistent at
$2.1 million and $2.0 million for the three months ended March 31,
2017 and 2016, respectively.
Net loss was $5.6 million in 2017, compared to
net income of $4.8 million in 2016. The difference of $10.4
million reflects the above variances, as well as a $2.9 million
non-cash increase in the gain related to the fair value of our
warrant liabilities. All outstanding warrants had either been
exercised or expired as of March 31, 2017.
Cash used in operating activities was $5.4
million during the 2017 first quarter, compared to cash provided of
$7.3 million in the 2016 first quarter, with the change of $12.7
million driven primarily from collaborative payments in the
three-month periods ending March 31, 2017 and 2016,
respectively. As of March 31, 2017, we had $31.9 million in
cash and cash equivalents, compared to $14.8 million at December
31, 2016, which includes, among other things, the net proceeds of
the common stock offering in February 2017.
Conference Call
Gil Van Bokkelen, Chairman and Chief Executive
Officer, and William (BJ) Lehmann, President and Chief Operating
Officer, will host a conference call today to review the results as
follows:
Date |
|
Tuesday, May 9, 2017 |
Time |
|
4:30 p.m. (Eastern Time) |
Telephone access: U.S. and Canada |
|
800-273-1254 |
Telephone access: International |
|
973-638-3440 |
Access code |
|
5869094 |
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 May 23, 2017 at the aforementioned URL, or by
dialing (800) 585-8367 or (855) 859-2056 in the U.S. and Canada, or
from abroad (404) 537-3406, and entering access code 5869094.
About Athersys
Athersys is an international 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, initially for disease indications in the neurological,
cardiovascular, and inflammatory and immune disease areas, and has
several ongoing clinical trials evaluating this potential
regenerative medicine product. Athersys has forged strategic
partnerships and collaborations with leading pharmaceutical and
biotechnology companies, as well as world-renowned research
institutions to further develop its platform and products. More
information is available at www.athersys.com.
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, spinal cord injury 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: the success of
our collaboration with Healios and others, 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 possible inability to realize commercially
valuable discoveries in our collaborations with pharmaceutical and
other biotechnology companies; 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; our ability to raise additional capital; results from our
MultiStem ongoing and planned clinical trials, including the
MASTERS-2 Phase 3 clinical trial and the Healios TREASURE clinical
trial in Japan; the possibility of delays in, adverse results of,
and excessive costs of the development process; our ability to
successfully initiate and complete clinical trials within the
expected time frame or at all; 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.
ATHX-G
(Tables Follow)
Athersys, Inc. |
Condensed Consolidated Balance
Sheets |
(In thousands) |
|
|
|
|
March 31, |
December 31, |
|
2017 |
2016 |
|
(Unaudited) |
(Note) |
Assets |
|
|
Cash and cash
equivalents |
$ |
31,940 |
$ |
14,753 |
Other current
assets |
|
2,922 |
|
1,527 |
Equipment, net |
|
2,576 |
|
2,605 |
Deferred tax
assets |
|
178 |
|
175 |
Total
assets |
$ |
37,616 |
$ |
19,060 |
|
|
|
Liabilities and
stockholders’ equity |
|
|
Accounts payable and
accrued expenses |
$ |
7,897 |
$ |
6,875 |
Deferred revenue |
|
503 |
|
-- |
Warrant
liabilities |
|
-- |
|
1,004 |
Total stockholders’
equity |
|
29,216 |
|
11,181 |
Total
liabilities and stockholders’ equity |
$ |
37,616 |
$ |
19,060 |
|
|
Note: The Condensed Consolidated Balance
Sheet Data 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
endedMarch 31, |
|
2017 |
2016 |
Revenues |
|
|
Contract revenue |
$ |
1,260 |
|
$ |
15,124 |
|
Grant revenue |
|
210 |
|
|
334 |
|
Total revenues |
|
1,470 |
|
|
15,458 |
|
|
|
|
Costs and
expenses |
|
|
Research and
development |
|
5,633 |
|
|
6,664 |
|
General and
administrative |
|
2,071 |
|
|
2,014 |
|
Depreciation |
|
164 |
|
|
68 |
|
Total
costs and expenses |
|
7,868 |
|
|
8,746 |
|
(Loss) income from
operations |
|
(6,398 |
) |
|
6,712 |
|
Income (expense) from
change in fair value of warrants |
|
728 |
|
|
(2,181 |
) |
Other income, net |
|
26 |
|
|
210 |
|
(Loss) income
before income taxes |
|
(5,644 |
) |
|
4,741 |
|
Income tax benefit |
|
13 |
|
|
9 |
|
Net (loss)
income and comprehensive (loss)
income |
$ |
(5,631 |
) |
$ |
4,750 |
|
Net (loss) income per
share – Basic and Diluted |
$ |
(0.06 |
) |
$ |
0.06 |
|
Weighted average shares
outstanding – Basic |
|
102,047 |
|
|
83,781 |
|
Weighted average shares
outstanding – Diluted |
|
102,047 |
|
|
83,866 |
|
|
|
|
|
|
|
|
Contact:
William (B.J.) Lehmann
President and Chief Operating Officer
Tel: (216) 431-9900
bjlehmann@athersys.com
David Schull
Russo Partners, LLC
Tel: (212) 845-4271 or (858) 717-2310
David.schull@russopartnersllc.com
Investor Contact:
Peter Vozzo
Westwicke Partners
Tel: 443-213-0505 or 443-377-4767 (mobile)
peter.vozzo@westwicke.com
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