HOLLISTON, Mass., May 11, 2017 /PRNewswire/ -- Biostage Inc.,
(Nasdaq: BSTG), ("Biostage" or the "Company"), a biotechnology
company developing bioengineered organ implants to treat cancers
and other life-threatening conditions of the esophagus, bronchus
and trachea, today announced financial results for the quarter
ended March 31, 2017.
The Company also provided an update to its corporate and
clinical progress and reviewed its expected near-term milestones.
As previously announced, Biostage management will host a business
update conference call and live webcast, with accompanying
presentation slides, for investors, analysts and other interested
parties today at 9:00 AM ET (details
below).
Jim McGorry, CEO of Biostage, stated, "Coming into this year,
our focus was on continuing to build out our operating requirements
to transition to a clinical stage company; to provide greater
scientific validation of our technology via publication; to attract
additional clinician and hospital collaborations; and to file in
the third quarter an Investigational New Drug ("IND") application
for our esophageal organ implant product candidate to provide an
alternative treatment. In this regard, we had a very productive
first quarter and I am pleased with our progress."
Mr. McGorry continued, "Many of our first quarter activities
were internally focused, in that we devoted much attention to
building on the foundation of regulatory, quality and manufacturing
processes, as well as designing and implementing the required
preclinical studies to advance toward the IND. We made good
progress on those fronts. More recently, we have advanced our
outwardly focused objectives by attending and presenting data on
our technology at a number of scientific and medical conferences,
for which we have received very positive reactions. As this year
progresses, we plan to present further data on our science,
continue to expand our Scientific Advisory Board and enter into
collaborations with additional hospitals."
Recent Corporate, Development and Regulatory
Highlights
- Welcomed Stephen F. Badylak DVM, PhD, MD, a preeminent Key
Opinion Leader at the forefront of a paradigm shift in treatments
in the regenerative medicine space, as Co-Chairman of Biostage's
Scientific Advisory Board;
- Presented positive preclinical data of Cellspan Esophageal
Implant at the Society for Biomaterials 2017 Annual Meeting and
Exposition;
- Provided an update on the Company's progress at the American
Academy of Thoracic Surgery (AATS) Centennial meeting and
participated in additional key investor and scientific
meetings;
- Successfully completed an $8.0 million public offering, with
$6.8 million net proceeds;
additionally, warrants issued in the offering have the potential to
net an incremental $7.8 million in
the future, if fully exercised; and
- Advanced collaborative preclinical studies with Connecticut
Children's Medical Center for pediatric esophageal atresia.
Cellspan Esophageal Organ Implant Program Overview
The Company's Cellspan™ Esophageal Implant has
previously been granted Orphan Drug Designation by the U.S. Food
and Drug Administration ("FDA") to restore the structure and
function of the esophagus subsequent to esophageal damage due to
cancer, injury or congenital abnormalities. The Company's Cellspan
Esophageal Implants are aimed to solve the clinical and surgical
issue of reconstructing a functional esophagus following an
esophageal resection. During the first quarter, Biostage was able
to demonstrate material operational improvements and manufacturing
developments from the cells, to the scaffold and the process. With
its continued progress, Biostage believes it is efficiently
building a technology that meets the requirements of a clinical and
commercial organization.
The Company's technology of a proprietary biocompatible organ
scaffold seeded with the patient's own stem cells has continued to
show consistent esophageal regeneration results in its preclinical
studies.
In addition to developing its Cellspan esophageal implant
product candidate for use in adults with esophageal cancer, the
Company is evaluating its Cellspan esophageal implant for use to
treat pediatric esophageal atresia ("EA"). EA is a rare birth
defect in which a baby is born with a gap between the upper and
lower esophagus, which effects about 1 in 2,500 babies in the U.S.
Biostage remains extremely encouraged with its EA co-development
efforts with Connecticut Children's Medical Center.
Successful development of the Company's Cellframe™
technology in EA opens the opportunity for a pediatric voucher.
Under Section 529 to the Federal Food, Drug, and Cosmetic Act
(FD&C Act), the FDA will award priority review vouchers to
sponsors of rare pediatric disease product applications that meet
certain criteria. Under this program, a sponsor who receives an
approval for a drug or biologic for a "rare pediatric disease" may
qualify for a voucher that can be redeemed to receive a
priority review of a subsequent marketing application for a
different product.
Saverio La Francesca, MD,
Biostage's President and Chief Medical Officer, commented, "We are
excited as we continue to advance our Cellspan esophageal implant
program forward to potentially provide a better surgical solution
for patients in need of esophageal replacement. We believe the
progress made in the first quarter has kept us on track to meet our
goal of filing an IND in the third quarter of this year."
Summary of Financial Results
For the three months ended March 31,
2017, the Company reported a net loss of approximately
$3.8 million, or a net loss per
diluted share of $0.14, compared to a
net loss of approximately $2.5
million, or a net loss per diluted share of $0.18 for the three months ended March 31, 2016. The year-over-year increase was
attributable to an $0.8 million
non-cash expense from the fair value of warrants, $0.7 million in additional research and
development costs, partially offset by a $0.1 million decrease in selling general and
administrative expenses.
Research and development expense increased $0.7 million, to $2.1
million for the three months ended March 31, 2017 compared to $1.4 million for the three months ended
March 31, 2016. The increase was
primarily due to an additional $0.3
million in compensation expense, which reflected increased
headcount to support greater activities, and increases of
$0.3 million of outsourced research
and consulting costs and $0.1 million
of costs associated with scientific conferences and related
travel.
Selling, general and administrative expense decreased
$0.1 million, to $1.0 million for the three months ended
March 31, 2017 compared to
$1.1 million for the three months
ended March 31, 2016. The
$0.1 million decrease was due to a
decrease in stock-based compensation primarily due to options
previously issued becoming fully vested during 2016.
On February 10, 2017, the Company
completed a public offering of 20,000,000 shares of common stock at
a purchase price of $0.40 per share
and the issuance of warrants to purchase 20,000,000 shares of
common stock at an exercise price of $0.40 per warrant for gross proceeds of
$8.0 million and net proceeds of
$6.8 million. Additionally, Biostage
issued warrants to purchase 1,000,000 shares of common stock to the
placement agent for the offering at an exercise price of
$0.50 per warrant. The current
stock price is below the warrants' exercise prices. However,
if in the future, the common stock's market price were to increase
and market conditions were such that all of the above-mentioned
21,000,000 warrants were to be exercised, then such exercises would
provide approximately $7.8 million of
cash proceeds to the Company, net of issuance costs.
The Company ended the quarter with approximately $6.6 million of cash. Based on management's
current projections, it believes it has sufficient cash on hand to
fund operations through the third quarter of 2017.
Conference Call and Webcast Details:
Please click here to access the link to the webcast and slides
available for download.
|
Date and
Time:
|
Today, Thursday, May
11 at 9:00 AM ET
|
|
Call Dial In
#:
|
877-407-8293 U.S. or
201-689-8349 Int'l
|
|
Live
webcast/replay:
|
public.viavid.com/index.php?id=124312
|
|
Telephone
replay:
|
877-660-6853 U.S. or
201-612-7415 Int'l
|
|
|
Access ID #:
13661700
|
About Biostage
Biostage is a biotechnology company
developing bioengineered organ implants based on the Company's new
Cellframe™ technology which combines a proprietary
biocompatible scaffold with a patient's own stem cells to create
Cellspan organ implants. Cellspan implants are being developed to
treat life-threatening conditions of the esophagus, bronchus or
trachea with the hope of dramatically improving the treatment
paradigm for patients. Based on its preclinical data, Biostage has
selected life-threatening conditions of the esophagus as the
initial clinical application of its technology.
Cellspan implants are currently being advanced and tested in
collaborative preclinical studies. Preclinical, large-animal safety
studies, conducted in compliance with the FDA Good Laboratory
Practice ("GLP") regulations, for the Company's Cellspan Esophageal
Implant product candidate are ongoing, in support of Biostage's
goal of filing an Investigational New Drug application ("IND") with
the U.S. FDA in the third quarter of 2017. Upon IND approval, the
Company plans to initiate its first-in-human clinical trials for
its esophageal implant product candidate by the end of 2017.
For more information, please visit www.biostage.com and connect
with the Company on Twitter and LinkedIn.
Forward-Looking Statements:
Some of the statements in
this press release are "forward-looking" and are made pursuant to
the safe harbor provision of the Private Securities Litigation
Reform Act of 1995. These "forward-looking" statements in this
press release include, but are not limited to, statements relating
to the development expectations and regulatory approval of any of
our products, including those utilizing our Cellframe technology,
by the U.S. Food and Drug Administration, the European Medicines
Agency or otherwise, which expectations or approvals may not be
achieved or obtained on a timely basis or at all; or success with
respect to any collaborations, clinical trials and other
development and commercialization efforts of our products,
including those utilizing our Cellframe technology, which such
success may not be achieved or obtained on a timely basis or at
all. These statements involve risks and uncertainties that may
cause results to differ materially from the statements set forth in
this press release, including, among other things, our ability to
obtain and maintain regulatory approval for our products; plus
other factors described under the heading "Item 1A. Risk Factors"
in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2016 or described in our
other public filings. Our results may also be affected by factors
of which we are not currently aware. The forward-looking statements
in this press release speak only as of the date of this press
release. Biostage expressly disclaims any obligation or undertaking
to release publicly any updates or revisions to such statements to
reflect any change in its expectations with regard thereto or any
changes in the events, conditions or circumstances on which any
such statement is based.
Investor Relations
Contacts:
|
|
Tom
McNaughton
|
Jenene
Thomas
|
Chief Financial
Officer
|
Jenene Thomas
Communications LLC
|
774-233-7321
|
(908)
938-1475
|
tmcnaughton@biostage.com
|
jtc@jenenethomascommunications.com
|
|
|
Media
Contacts:
|
|
David Schull or
Maggie Beller
|
|
Russo Partners
LLC
|
|
212-845-4271 or
646-942-5631
|
|
Email:
Maggie.beller@russopartnersllc.com
|
|
BIOSTAGE,
INC.
UNAUDITED
CONSOLIDATED BALANCE SHEETS
(in thousands,
except par value and share data)
|
|
|
|
March
31,
2017
|
|
|
December 31,
2016
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
6,582
|
|
|
$
|
2,941
|
|
Accounts
receivable
|
|
|
37
|
|
|
|
42
|
|
Prepaid
expenses
|
|
|
249
|
|
|
|
291
|
|
Other current
assets
|
|
|
36
|
|
|
|
212
|
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
6,904
|
|
|
|
3,486
|
|
Property, plant and
equipment, net
|
|
|
1,049
|
|
|
|
1,065
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
7,953
|
|
|
$
|
4,551
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
713
|
|
|
$
|
962
|
|
Accrued and other
current liabilities
|
|
|
917
|
|
|
|
1,210
|
|
Warrant
liabilities
|
|
|
4,800
|
|
|
|
605
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
6,430
|
|
|
|
2,777
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
$
|
6,430
|
|
|
$
|
2,777
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
Undesignated
Preferred stock, $0.01 par value; 1,000,000 shares authorized; none
issued and outstanding
|
|
|
-
|
|
|
|
-
|
|
Series B convertible
preferred stock, $0.01 par value; 1,000,000 shares authorized;
695,857 shares issued and none outstanding
|
|
|
-
|
|
|
|
-
|
|
Common stock, $0.01
par value; 60,000,000 shares authorized and 37,116,570 and
17,108,968 shares issued and outstanding,
respectively
|
|
|
371
|
|
|
|
171
|
|
Additional paid-in
capital
|
|
|
41,311
|
|
37,921
|
Accumulated
deficit
|
|
|
(40,159)
|
|
(36,318)
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
1,523
|
|
|
|
1,774
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
7,953
|
|
|
$
|
4,551
|
|
BIOSTAGE,
INC.
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(In thousands,
except per share amounts)
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Revenues
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development
|
|
|
2,069
|
|
|
|
1,378
|
|
Selling, general and
administrative
|
|
|
979
|
|
|
|
1,094
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
|
3,048
|
|
|
|
2,472
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
|
(3,048)
|
|
|
|
(2,472)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Change
in fair value of warrant liability, including issuance
costs
|
|
|
(793)
|
|
|
|
-
|
|
Other expense,
net
|
|
|
(793)
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
|
(3,841)
|
|
|
|
(2,472)
|
|
Income
taxes
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net loss and
comprehensive loss
|
|
$
|
(3,841)
|
|
|
$
|
(2,472)
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss per share
|
|
$
|
(0.14)
|
|
|
$
|
(0.18)
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares, basic and diluted
|
|
|
27,113
|
|
|
|
14,108
|
|
|
|
|
|
|
|
|
|
|
BIOSTAGE,
INC.
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In
thousands)
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(3,841)
|
|
|
$
|
(2,472)
|
|
Adjustments to
reconcile net loss to net cash flows used in operating
activities:
|
|
|
|
|
|
|
|
|
Share-based
compensation expense
|
|
|
191
|
|
|
|
347
|
|
Depreciation
|
|
|
121
|
|
|
|
111
|
|
Change in fair value
of warrants including issuance costs
|
|
|
793
|
|
|
|
-
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
5
|
|
|
|
3
|
|
Inventories
|
|
|
-
|
|
|
|
(4)
|
|
Prepaid
expenses
|
|
|
42
|
|
|
|
(155)
|
|
Other
assets
|
|
|
176
|
|
|
|
-
|
|
Accounts
payable
|
|
|
(249)
|
|
|
|
(137)
|
|
Accrued and
other current liabilities
|
|
|
(293)
|
|
|
|
(173)
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
operating activities
|
|
|
(3,055)
|
|
|
|
(2,480)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
Additions to property
and equipment
|
|
|
(105)
|
|
|
|
(128)
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
investing activities
|
|
|
(105)
|
|
|
|
(128)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
Proceeds from
issuance of common stock and warrants to purchase common stock,
net
|
|
|
6,801
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
financing activities
|
|
|
6,801
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash
|
|
|
3,641
|
|
|
|
(2,608)
|
|
Cash at beginning of
period
|
|
|
2,941
|
|
|
|
7,456
|
|
Cash at end of
period
|
|
$
|
6,582
|
|
|
$
|
4,848
|
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/biostage-reports-2017-first-quarter-financial-results-and-provides-business-update-300455710.html
SOURCE Biostage, Inc.