BSTG Biostage Inc (QB)

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

  

FORM 8-K

   

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 13, 2015

 

  

HARVARD APPARATUS REGENERATIVE TECHNOLOGY, INC.

(Exact name of registrant as specified in its charter)

 

Delaware	001-35853	45-5210462
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

 

84 October Hill Road, Suite 11, Holliston, MA	01746
(Address of principal executive offices)	(Zip Code)

 

Registrant's telephone number, including area code:   (774) 233-7300

 

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On August 13, 2015, Harvard Apparatus Regenerative Technology, Inc. issued a press release announcing financial results for the three and six months ended June 30, 2015 and the details of a related conference call to be held at 5:00 PM EST on August 13, 2015. The press release is furnished as Exhibit 99.1 and incorporated herein by reference.

 

The information in Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the United States Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the United States Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit Number		Title
99.1		Press release of Harvard Apparatus Regenerative Technology, Inc., issued on August 13, 2015.

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		Harvard Apparatus Regenerative Technology, INC.
		(Registrant)
August 13, 2015		/s/   Thomas McNaughton
(Date)		Thomas McNaughton Chief Financial Officer

 

 

INDEX TO EXHIBITS

 

Exhibit Number		Description of Exhibit
99.1		Press release of Harvard Apparatus Regenerative Technology, Inc., issued on August 13, 2015.

  

 

 

EXHIBIT 99.1

 

 

 

Harvard Apparatus Regenerative Technology Provides Business Update and Reports Second Quarter 2015 Financial Results

 

-Conference call to be held at 5:00 p.m. ET today-

 

Holliston, MA, August 13, 2015 - Harvard Apparatus Regenerative Technology, Inc. (Nasdaq: HART), or HART, a biotechnology company developing bioengineered organs for life-threatening conditions, today provided a business update and reported unaudited financial results for the three months ended June 30, 2015.

 

“We have made tremendous progress in recent months with the development of our second-generation bioengineered organ implant products,” said Jim McGorry, Chief Executive Officer of HART. “I took this job because I deeply believe in HART’s technology, my ability to add value, and our commitment to patients and shareholders. HART has evolved from a research bioreactor company working with a single external surgeon to an integrated biotechnology company collaborating with recognized leaders in regenerative medicine like Mayo Clinic and Connecticut Children’s Medical Center. We are poised to make significant further progress over the coming 18 months, including key preclinical and regulatory achievements.”

 

Business Overview

Our central focus continues to be the development of bioengineered organs for life-threatening conditions. HART has built a dedicated internal team of materials scientists, engineers and biologists who are working with our collaborators at Mayo Clinic and Connecticut Children’s Medical Center to bring our products to the patients who need them as quickly as possible.

 

For the past several months our scientific efforts have focused primarily on making sure that we addressed the body response issues encountered by our first-generation trachea product design. Our second-generation scaffold is engineered to better guide the repair of tissue during the body’s natural healing process. We started by selecting a different chemistry for the scaffold and refined several microstructural properties as well. We have done considerable work and extensive mechanical and biological testing of our second-generation scaffold. As a result, we believe that we have developed the right combination of product characteristics to restore the function of the airways or the esophagus and to guide the repair of the patient’s own tissue by the body’s natural healing process.

 

We look forward to confirming the improvements in our second-generation platform by conducting large-animal studies at Mayo Clinic along with their team of regenerative medicine experts. We expect to conduct 30-day in-life studies in the fourth quarter that will provide the key data to determine if our second-generation scaffolds are ready for use in patients.

 

“We believe positive results from these studies would support the use of a second-generation product in compassionate use surgeries,” said Saverio La Francesca, M.D., Chief Medical Officer and Executive Vice President of HART.

 

The intended use of our first-generation product was for diseases of the trachea. As our development team was designing and testing improvements, we refined several properties so that the same fundamental product design could be used for additional indications such as the bronchi and the esophagus. This multi-indication or platform approach is intended to allow a sophisticated but single product design to guide the repair of a patient’s own tissue in three different indications. This efficient use of resources has the potential to expand our market opportunity significantly. Over the upcoming months we will continue to explore the development and regulatory pathway for each indication. We believe the versatility and efficiency of our platform approach will add considerable value to our development opportunities.

 

Assuming we receive positive data from the preclinical studies with Mayo Clinic, we expect to file an Investigational New Drug (IND) application with the U.S. Food and Drug Administration (FDA) and a Clinical Trial Application (CTA) with the European Medicines Agency (EMA) for our first indication coming from our bioengineered organ implant platform during 2016.

 

Given the significant improvements to our platform, we expect to file an amendment to our current orphan drug designation with the FDA, which was granted for the HART-Trachea in September 2014. Additionally, we expect to file our orphan drug application with the EMA for the second-generation product in 2016. Over the upcoming months we will continue to evaluate and advance the preclinical and regulatory filing requirements for the different indications of our bioengineered organ implant platform.

 

Jim McGorry continued, “I am excited about our potential value-creation opportunities over the upcoming 18 months. We have made tremendous progress and we have a plan for bringing our potential life-extending platform to patients.”

 

Financial Update

·

Cash used in operations in Q2 2015 - $2.0 million

·

Cash used in operations YTD - $3.7 million

 

Second Quarter Reported Results

Net loss was $4.5 million, or $0.44 per diluted share, for the three months ended June 30, 2015 compared to a net loss of $2.5 million, or $0.32 per diluted share, for the same period in 2014. The unfavorable year-to-year quarterly net loss comparison was primarily due to a $2.1 million increase in non-cash stock-based compensation expense related to the acceleration of vesting and extension of stock options made to David Green, the Company’s former CEO, at the time of his resignation in April 2015 in accordance with his employment agreement.

 

For the three months ended June 30, 2015, the Company used net cash of $2.0 million for operations, and used $15,000 for capital expenditures. At June 30, 2015, the Company had cash on hand of $10.1 million and had no debt.

 

Year-to-Date Reported Results

Net loss was $7.1 million, or $0.74 per diluted share, for the six months ended June 30, 2015 compared to a net loss of $5.5 million, or $0.71 per diluted share, for the same period in 2014. The unfavorable year-to-year net loss comparison was primarily due to a $2.1 million increase in non-cash stock-based compensation expense, primarily related to the acceleration of vesting and extension of stock options made to David Green, the Company’s former CEO, at the time of his resignation in April 2015 in accordance with his employment agreement partially offset by a decrease of $0.5 million in stock-based compensation to other employees.

 

For the six months ended June 30, 2015, the Company used net cash of $3.7 million for operations, raised $8.6 million in net proceeds in an equity offering and used $21,000 for capital expenditures.

 

 

Frequently Asked Questions (FAQ)

 

 

Q: What are the improvements of the second-generation product over the first-generation product?

A: We started by selecting a more elastic material for the scaffold, and refined several microstructural properties to minimize the likelihood of eliciting a negative response from the body toward the product. We also changed the type of cell that we seed onto the scaffold prior to implantation, though we still use the patient’s own cells. This cell type will better guide the patient’s natural healing processes and should therefore lead to better incorporation of the implanted product into the tissues surrounding it. We believe that this refined combination of product characteristics will lead to a better regenerative response from the body, leading to a more natural restoration of organ function than we observed with the first-generation scaffold.

 

Q: When will HART’s product next be used in humans?

A: We expect to conduct preclinical studies examining our second-generation platform products with Mayo Clinic in the fourth quarter of 2015. We will be able to evaluate the impact that the new design has on modulating the body response that follows any implant, consistent with the biological activity of the product. By design, these types of studies are meant to provide relevant information and the initial perspective necessary to advance our second-generation products into clinical trials. The preclinical work will also provide a strong foundation for subsequent development and we are moving ahead accordingly. We expect that a positive outcome of these studies and our ongoing internal work will give us a very clear path to support U.S. or European hospitals in doing compassionate use cases in people.

 

Q: What do you mean by “product platform”?

A: As we worked to improve the first-generation trachea product, we changed the product’s design significantly. In doing so, we moved to a more sophisticated design that we believe will allow us to treat conditions of the bronchi and esophagus, in addition to conditions of the trachea, with the same product design. This multi-product or multi-indication treatment capability with the same product design is what we are referring to as a product platform.

 

Q: Give the platform approach, is the trachea still expected to be the first indication?

A: We believe that our second generation platform shows great potential in three indications for treating conditions of the trachea, bronchi and esophagus. The completion of our initial preclinical studies with Mayo Clinic will provide clarity as to which product would allow HART to bring our life-saving technology to the greatest number of patients in the shortest amount of time.

 

Q: Is HART still working with Dr. Macchiarini?

A: No, there is no ongoing relationship between HART and Dr. Macchiarini. We discontinued our collaboration with Dr. Macchiarini approximately one year ago and have not worked with him since that time.

 

Conference Call Information:

The Company will host a conference call today at 5:00 p.m. ET to discuss its second quarter financial results and operations. On that call, management may respond to questions from the audience on any of a number of topics related to the business, including clinical and preclinical research, operations, plans and outlook. The live conference call is accessible by dialing toll-free 877-407-8293, or toll/international 201-689-8349, and referencing Harvard Apparatus Regenerative Technology, Inc. An audio webcast will also be available at http://public.viavid.com/index.php?id=115675.

 

If you are unable to listen to the live conference call, a replay will be available within approximately 3 hours from the end of the call through 11:59 p.m. ET on August 20, 2015 and will be accessible by dialing toll-free 877-660-6853, or toll/international 201-612-7415, and referencing conference ID “13615845”. The replay will also be made available at the web link above and on the company’s web site, www.harvardapparatusregen.com.

 

  

About Harvard Apparatus Regenerative Technology
Harvard Apparatus Regenerative Technology is a biotechnology company developing bioengineered organs for life-threatening conditions. The Company’s technology initially is focused on restoring organ function to a patient’s airways or esophagus.

 

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 regulatory approval of the HART-Trachea or any other HART products, by the FDA, EMA, MHRA or otherwise, which approvals may not be obtained on a timely basis or at all, success with respect to any collaborations, clinical trials and other development and commercialization efforts pertaining to HART’s products including our HART-Trachea and any other product pertaining to the airway or esophagus, which such success may not be achieved or obtained on a timely basis or at all; anticipated future earnings or other financial measures, and the continued availability of a market for the HART securities; any continued benefits of our spin-off from Harvard Bioscience. 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 the bioreactors, scaffolds and other devices and product candidates we pursue; the success of our clinical trials and device; our inability to operate effectively as a stand-alone, publicly traded company; 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, 2014 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. Harvard Apparatus Regenerative Technology 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.

 

 

Contacts:

 

 

Corporate:

Jim McGorry

President and CEO

jmcgorry@hartregen.com    

 

Tom McNaughton

CFO

tmcnaughton@hartregen.com  

 

Tel: 774-233-7321

Fax: 774-233-7302

 

Investors and Media:

Kristina Coppola
LaVoieHealthScience

617-374-8800, ext. 105

kcoppola@lavoiehealthscience.com

 

 

Exhibit 1

HARVARD APPARATUS REGENERATIVE TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share data)

 

		Three Months ended June 30,								Six Months ended June 30,
		2015				2014				2015				2014
Revenues		$	73			$	23			$	73			$	46
Cost of revenues			37				12				37				24
Gross profit			36				11				36				22
Operating expenses:
Research and development			1,053				1,214				2,235				2,431
Sales and marketing			83				88				190				164
General and administrative			3,399				1,242				4,730				2,966
Total operating expenses			4,535				2,544				7,155				5,561
Operating loss			(4,499	)			(2,533	)			(7,119	)			(5,539	)
Other income (expense), net			-				-				(3	)			-
Loss before income taxes			(4,499	)			(2,533	)			(7,122	)			(5,539	)
Income taxes			-				-				-				-
Net loss		$	(4,499	)		$	(2,533	)		$	(7,122	)		$	(5,539	)
Basic and diluted net loss per share		$	(0.44	)		$	(0.32	)		$	(0.74	)		$	(0.71	)
Weighted average common shares, basic and diluted			10,303				7,816				9,592				7,788

 

 

Exhibit 2

 

HARVARD APPARATUS REGENERATIVE TECHNOLOGY, INC.

CONSOLIDATED CONDENSED BALANCE SHEET INFORMATION

(unaudited, in thousands)

 

		June 30,				December 31,
		2015				2014
ASSETS
Cash		$	10,127			$	5,272
Other current assets			455				556
Property, plant and equipment, net			1,199				1,376
Total assets		$	11,781			$	7,204
LIABILITIES AND STOCKHOLDERS' EQUITY
Total liabilities			590				710
Total stockholders' equity			11,191				6,494
Total liabilities and stockholders' equity		$	11,781			$	7,204

 

 

Exhibit 3

HARVARD APPARATUS REGENERATIVE TECHNOLOGY, INC.

CONSOLIDATED CONDENSED CASH FLOW INFORMATION

(unaudited, in thousands)

		Six Months ended June 30,
		2015				2014
Cash flows used in operating activities:
Net loss:		$	(7,122	)		$	(5,539	)
Non-cash items included in net loss			3,409				1,622
Changes in assets and liabilities			3				108
Net cash used in operating activities			(3,710	)			(3,809	)
Cash flows used in investing activities:
Net cash used in investing activities			(21	)			(495	)
Cash flows from financing activities:
Proceeds from issuance of common and convertible preferred stock, net			8,594				358
Net cash provided by financing activities			8,594				358
Effect of exchange rate changes on cash			(8	)			3
Net increase (decrease) in cash			4,855				(3,943	)
Cash at the beginning of the period			5,272				14,008
Cash at the end of the period		$	10,127			$	10,065