Amarantus Provides
Comprehensive Corporate Update
- - Recapitalization plan to use funding mechanisms created under
the JOBS Act
- Elto Pharma, Inc. preparing to re-start Eltoprazine Phase 2b
PD-LID clinical trial
- Cutanogen Corporation focusing on identifying new cGMP
manufacturer for ESS
SAN FRANCISCO, California USA - December 1, 2017 --
Investorshub Newswire -- Amarantus Bioscience Holdings, Inc. (OTCPK:
AMBS), a US-based biotechnology holding company with
wholly-owned subsidiaries developing first-in-class orphan
neurologic, regenerative medicine and ophthalmic therapies, today
provided a comprehensive corporate update to shareholders. The
Company is focused on its capital restructuring efforts and
restarting operations in Q1 2018.
Completion of Holding Company Structure / Termination
of SED Biomedical Agreement
In Q2 2017, the Company completed the formation of two
wholly-owned subsidiaries, Elto Pharma, Inc. and MANF Therapeutics,
Inc. to focus on the development of Eltoprazine and MANF,
respectively. These new subsidiaries are in addition to its
wholly-owned Cutanogen Corporation subsidiary, acquired from Lonza
Group in July 2015 to advance Engineered Skin Substitute (ESS) for
the treatment of life-threatening severe burns. These actions
created a clear segmentation between our therapeutic verticals that
now allows for the sourcing of direct financing via
product-specific corporate entities. This corporate structure is
similar to emerging growth companies such as Roivant Sciences and
Fortress Bio (NASDAQ:
FBIO), and opens innovative funding possibilities for the
holding company and its operating subsidiaries.
In Q3 2017, Amarantus and Singapore eDevelopment Biomedical,
Inc. (SeD Biomedical), a wholly-owned subsidiary of Singapore
eDevelopment (SeD) (SGX: 40V) agreed to terminate the letter of
intent the companies executed in Q1 2017 (the "SED
LOI"). The SED LOI contemplated the contribution of one or more
biotechnology assets from SeD Biomedical into Amarantus in exchange
for a significant equity ownership. In light of the Q3 2017 FDA
approval of Gycovri for the treatment of Parkinson's Disease
Levodopa-Induced Dyskinesia (PD-LID), Amarantus believes the
termination of the SED LOI will limit dilution for shareholders by
allowing the Company to focus on building value in its existing
subsidiaries, initially focusing on Elto Pharma.
Recapitalization Plan
As the Company moves forward, we are working closely with our
financial advisors to determine the best path forward for funding
of each of our subsidiaries that will allow Amarantus to rebuild
shareholder value as quickly as possible. One key element of our
recapitalization plan is centered on the Company's secured debt,
convertible preferred stock, and warrants (Legacy Convertible
Securities). The plan focuses on placing a moratorium on the
ability of the Legacy Convertible Securities to convert into
Amarantus common stock so that the Company's stock can be valued
without being subjected to the imminent dilution risk created by
the "discount to market" aspects of the Legacy Convertible
Securities.
The Company took a major step forward in achieving its
recapitalization goals on November 17th, 2017 when it announced the
completion of Forbearance and Capital
Restructuring agreements with holders of a controlling majority of
the Legacy Convertible Securities. Under the terms of those
agreements, Legacy Convertible Securities conversions into common
stock have ceased. The Company is required to achieve certain
restructuring milestones by January 10, 2018 to complete the
exchange of the Legacy Convertible Securities into new securities
with more favorable terms (the "Tender Exchange") in order to
extend the moratorium. Upon completing the Tender Exchange,
Amarantus will have into July 2018 to complete an up-listing of the
Amarantus common stock to a national stock exchange (the "Uplist")
and further extend the moratorium. Upon the Uplist, there will be a
further 9-month (until April 2019) moratorium on liquidating the
securities issued in the Tender Exchange, followed by a highly
restricted 'leak-out' arrangement that will significantly limit the
Tender Exchange holders' ability to convert.
Upon finalizing the Tender Exchange, the Company intends to
employ capital raising mechanisms created under the
recently-implemented JOBS Act to complete the capitalization of the
subsidiaries, as well as an Uplist of the Amarantus common stock.
Several private companies have successfully completed national
exchange listings using these newly created mechanisms, and the
Company believes these funding mechanisms are particularly
well-suited for Amarantus and its subsidiaries given Amarantus'
large legacy shareholder base. The JOBS Act allows companies to use
'general solicitation' marketing efforts, as well as provides 'Blue
Sky' exemptions that allow companies to more easily raise funding
from retail investors.
One caveat to the JOBS Act is that significant portions of its
advantages are not available to fully-reporting companies. While
there is currently legislation circulating Capitol Hill to allow
fully-reporting companies to utilize certain key funding mechanisms
created under the JOBS Act, such legislation has not yet been
passed into law. As a result, Amarantus must become an 'Alternate
Reporting' company in order to utilize these key funding
mechanisms. To become an Alternate Reporting company, Amarantus
must file a Form 15 with the Securities & Exchange Commission
(SEC) to deregister the Company from its 1934 Securities Act ('34
Act) reporting obligations. Despite the pending Form 15 filing, the
Company intends to disclose material events to shareholders on a
voluntary basis during the capital restructuring process. The
Company is preparing to file the Form 15 in the near future.
As part of the Form 15 filing process, Amarantus will file
current financial information with OTC Markets, allowing the
company to be deemed up to date in its reporting obligations under
the Alternate Reporting standard. Over the next several months, the
Company intends to raise sufficient capital (approximately $1.5
million) to complete the Tender Exchange and prepare its audited
financial statements for fiscal years 2016 and 2017 so that
Amarantus can be prepared to again become a 'Fully Reporting'
company under the '34 Act in conjunction with the Uplist.
Near-term focus on Elto Pharma
Overview
Elto Pharma is developing the oral, small molecule drug
candidate Eltoprazine for the treatment of symptoms associated with
central nervous system (CNS) disorders. Eltoprazine is a selective
5HT1a/1b partial agonist that was originally developed by Solvay
(now Abbvie). The Company currently has an approved Investigational
New Drug (IND) application on file with the neurology division of
the U.S. Food and Drug Administration (FDA) for Eltoprazine in the
treatment of Parkinson's Disease Levodopa-Induced Dyskinesia
(PD-LID). Amarantus began enrolling subjects into a Phase 2b PD-LID
clinical study in Q2 2015, which was put on hold in Q4 2015 due to
funding constraints. Eltoprazine has a well-established safety
profile, having been dosed in over 680 human subjects to date in
various CNS clinical trial settings.
Phase 2b clinical trial for PD-LID
In Q1 2015 Amarantus published positive results from a Phase
2a clinical study of Eltoprazine in PD-LID in the peer-reviewed
medical journal Brain. Results from the clinical study
demonstrated a statistically significant improvement in severity of
dyskinesia for the Eltoprazine treated group vs. placebo (p=0.004)
according to the Clinical Dyskinesia Rating Scale (CDRS).
In August 2017, the US FDA approved the first-ever treatment
specifically for PD-LID: Gycovri from Adamas Pharmaceuticals
(NASDAQ:
ADMS). This approval mitigates a key regulatory risk for
Eltoprazine by validating that the Unified Dyskinesia Rating Scale
(UDysRS) is viewed by the FDA as an acceptable rating scale on
which to base approval in PD-LID. The UDysRS contains the primary
measures incorporated in the CDRS, as well as additional measures
on which the Company believes Eltoprazine is likely to have a
favorable impact, based on historical clinical data. In addition,
Eltoprazine received orphan drug designation (ODD) in PD-LID in Q1
2016, which improves Eltoprazine's net present value due to tax and
other incentives. The FDA reaffirmed Gycovri's ODD post-approval,
giving the Company a high-degree of confidence that Eltoprazine
will be afforded similar consideration.
Elto Pharma is redesigning the Phase 2b clinical trial for
PD-LID as a result of these market developments. Amarantus believes
the positive reception by the market for CNS companies such as
Adamas Pharmaceuticals, Acadia Pharmaceuticals (NASDAQ:ACAD)
and Acorda Therapeutics (NASDAQ:
ACOR) signals significant investor optimism for symptomatic
neurological treatment companies, and Amarantus believes Elto
Pharma compares favorably.
Eltoprazine in Agitation in Dementia (Alzheimer's) and Adult
ADHD
Eltoprazine has also successfully completed Phase 2 trials in
Agitation in Dementia and in Adult ADHD. The initial efficacy data generated in
Agitation in Dementia demonstrates a statistically significant
effect on the Social Dysfunction and Aggression Scale
(p<0.05) in the most severely agitated patient population.
The next step in Agitation in Dementia is to execute a robust Phase
2 clinical program. The efficacy data generated in Adult
ADHD demonstrates positive effects in the ADHD Rating Scale IV
(p=0.03), including positive benefits in both the inattention
(p=0.003) and hyperactivity (p=0.008) subscales. The next step
in Adult ADHD is to execute a pivotal Phase 3 clinical development
program.
Market Opportunity for Eltoprazine in PD-LID and Agitation
in Dementia (Alzheimer's)
In 2014, there were approximately 188,000 patients suffering
from PD LID in the US. Adamas priced Gycovri at $28,000 per year.
Taken together, these metrics imply a $3B+ annual market
opportunity for Eltoprazine in PD-LID in the US alone.
Alzheimer's disease accounts for between 60 and 80% of the
estimated 5.5 million people in the U.S. with dementia, costing
over $250B annually to the US healthcare system. Behavioral
symptoms develop in the majority of Alzheimer's patients, and many
of these symptoms are clinically diagnosed as "agitation."
Agitation is often a determining factor in deciding to place
loved-ones in nursing homes. Agitation symptoms affect 50-80% of
patients with Alzheimer's disease, including nearly 100% of
end-stage patients. The Company estimates the market opportunity
for Elto Pharma in Agitation in Dementia (Alzheimer's) is $5B+. In
December 2015, Otsuka Pharmaceuticals acquired AVANIR
Pharmaceuticals for $3.2B shortly after the publication of positive
clinical data for AVP-786 in Agitation in Alzheimer's disease.
Cutanogen Corporation and MANF
Therapeutics
The Company continues to strongly believe in its biologics
programs being developed at Cutanogen Corporation (ESS) and MANF
Therapeutics (MANF).
In Q3 2016, data was published demonstrating that a non-cGMP
version of ESS reduced mortality (death) by
75%+ in a 16-subject investigator initiated clinical trial
conducted at the Shriner's Hospital in Cincinnati when compared to
historical patient survival data. Due to capital constraints,
the Company was forced halt the initiation of a Phase 2 clinical
trial it had planned with the US Army for the treatment of adults,
including soldiers, who had been injured with stage 3 and 4 burns
covering over 50% of the body. While this was a major
disappointment for Amarantus, the US Army and the burn community at
large, this hiatus has allowed the Company to re-prioritize its
pipeline for the dual-layer ESS product candidate. Considering the
FDA's decision to expand the label of Vericel's
(NASDAQ: VCEL) single-layer burn product, EpiCel, to include
pediatric patients, the Company believes the fastest path to
market for ESS is in the pediatric burn patient population, and we
are evaluating the feasibility or pursuing this development
strategy as ESS' lead indication. ESS has received ODD from the FDA
for the treatment of full thickness burns covering 50%+ of the
body. The next major operational steps for Cutanogen is to identify
a new cGMP manufacturer for ESS and plan pivotal studies in
pediatric severe burn patients. The Company previously requested
rare pediatric disease designation (RPDD) from the FDA for ESS in
the treatment of Giant Congenital Melanocytic Nevus (GCMN), which
was not accepted; Cutanogen intends to appeal that decision. The
Company believes ESS has the potential to receive RPDD for ESS in
the treatment of pediatric severe burns.
Amarantus was originally founded to develop MANF, the Company's
internally-discovered neurotrophic factor that could have important
and unique uses as both a therapeutic protein, gene therapy, and
cell therapy product in ophthalmology, Parkinson's disease,
cardiovascular disease, and several other high-value indications.
The scientific validation for MANF's potential role as a disease
modifying therapy across these indications continues to grow, and
the Company has been diligent in continuing to solidify its
intellectual property position to protect MANF from competition.
The Company continues to be the leader in intellectual property
covering the therapeutic use of MANF. The next major operational
step for MANF is to complete cGMP manufacturing and select the
indication in which first-in-man studies will be conducted. MANF
has received ODD for the treatment of Retinitis Pigmentosa (RP) and
ODD for the treatment of Retinal Artery Occlusion. The Company
previously requested RPDD with the FDA for MANF in RP, which was
not accepted.
About Amarantus Bioscience Holdings, Inc.
Amarantus Bioscience Holdings (AMBS) is a biotechnology company
developing treatments and diagnostics for diseases in the areas of
neurology, regenerative medicine and orphan diseases through its
subsidiaries. AMBS' wholly-owned subsidiary Elto Pharma, Inc. has
development rights to eltoprazine, a Phase 2b-ready small molecule
indicated for Parkinson's disease levodopa-induced dyskinesia,
Alzheimer's aggression and adult ADHD. AMBS acquired the rights to
the Engineered Skin Substitute program (ESS), a regenerative
medicine-based approach for treating severe burns with
full-thickness autologous skin grown in tissue culture that is
being pursued by AMBS' wholly-owned subsidiary Cutanogen
Corporation. AMBS' wholly-owned subsidiary MANF Therapeutics, Inc.
owns key intellectual property rights and licenses from a number of
prominent universities related to the development of the
therapeutic protein known as mesencephalic astrocyte-derived
neurotrophic factor (MANF). MANF Therapeutics, Inc. is developing
MANF-based products as treatments for brain and ophthalmic
disorders. MANF was discovered by the Company's Chief Scientific
Officer John Commissiong, PhD. Dr. Commissiong discovered MANF from
AMBS' proprietary discovery engine PhenoGuard. AMBS also owns
approximately 80 million shares of Avant Diagnostics, Inc. via the
sale of its wholly-owned subsidiary Amarantus Diagnostics, Inc.
that occurred in May 2016.
For further information please visit www.Amarantus.com, or connect with the Amarantus on
Facebook, LinkedIn, Twitter and Google+.
About Elto Pharma, Inc.
Eltoprazine is a small molecule 5HT1A/1B partial agonist in
clinical development for the treatment of Parkinson's disease
levodopa-induced dyskinesia (PD-LID), Alzheimer's aggression and
adult attention deficit hyperactivity disorder (adult ADHD).
Eltoprazine has been evaluated in over 680 human subjects to date,
and has a well-established safety profile, with statistically
significant efficacy results across multiple central nervous system
indications.
Eltoprazine was originally developed by Abbott Pharmaceuticals
in aggression-related indications. The eltoprazine program was
out-licensed to PsychoGenics, Inc. (PGI). PGI licensed eltoprazine
to Amarantus in 2014 after a successful proof-of-concept trial in
PD-LID.
In April 2017, Amarantus incorporated the wholly-owned
subsidiary Elto Pharma, Inc. to focus on the clinical development
of Eltoprazine.
About Cutanogen Corporation
Engineered Skin Substitute (ESS) is a tissue-engineered skin
prepared from autologous (patient's own) skin cells. It is a
combination of cultured epithelium and a collagen-dermal fibroblast
implant that produces a skin substitute which contains both
epidermal and dermal components. This model has been shown in
preclinical studies to generate a functional skin barrier. Most
importantly, because ESS is composed of a patient's own cells, it
is less likely to be rejected by the immune system of the patient,
unlike with porcine or cadaver grafts in which immune system
rejection is a possibility. A non-GMP version ESS has been used in
investigator-initiated and compassionate-use clinical settings in
over 150 human subjects, primarily pediatric patients, for the
treatment of severe burns up to 95% of total body surface area. The
non-GMP version has also been used in the treatment of two patients
with Giant Congenital Melanocytic Nevi (GCMN).
In July 2015, Amarantus' acquired Lonza Walkersville's
wholly-owned subsidiary Cutanogen Corporation, the sole licensor of
intellectual property rights to ESS from Cincinnati's Shriner's
Hospital for Children and the University of Cincinnati. Cutanogen
Corporation is a wholly-owned subsidiary of Amarantus.
About MANF Therapeutics, Inc.
MANF (mesencephalic-astrocyte-derived neurotrophic factor) is
believed to have broad potential because it is a
naturally-occurring protein produced by the body to reduce/prevent
apoptosis (cell death) in response to injury or disease, via the
unfolded protein response. By administering exogenously produced
MANF the body, Amarantus is seeking to use a regenerative medicine
approach to assist the body with higher quantities of MANF when
needed. Amarantus is the front-runner and primary holder of
intellectual property around MANF, and is initially focusing on the
development of MANF-based protein therapeutics.
MANF's lead indication is retinitis pigmentosa, and additional
indications including Parkinson's disease, diabetes and Wolfram's
syndrome are envisioned. Further applications for MANF may include
Alzheimer's disease, traumatic brain injury, myocardial infarction,
antibiotic-induced ototoxicity and certain other orphan
diseases.
In April 2017, Amarantus incorporated the wholly-owned
subsidiary MANF Therapeutics, Inc. to focus on progressing
preclinical and clinical development of MANF.
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.
Amarantus Investor and Media Contact:
Ascendant Partners, LLC
Richard Galterio
+1-732-410-9810
rich@ascendantpartnersllc.com
Source: Amarantus Bioscience Holdings, Inc.