Athersys, Inc. (NASDAQ: ATHX) announced today its financial results
for the three months ended June 30, 2018.
Highlights of the second quarter of 2018 and
recent events include:
- Announced the completion of an expansion of our collaboration
with HEALIOS K.K. (“Healios”) in June 2018 to develop and
commercialize additional indications for $20 million in license
fees, plus potential payments and royalties, which followed a $21.1
million investment by Healios in the Company’s common stock in
March 2018;
- Granted to Healios a time-limited first right of negotiation
for an exclusive option for a license to develop and commercialize
MultiStem® therapy in China for several indications;
- Launched the MASTERS-2 Phase 3 registration study for ischemic
stroke and enrolled initial patients into the study;
- Continued to support the enrollment of Healios’ ongoing
TREASURE study for ischemic stroke in Japan by providing clinical
product;
- Made several strategic hires, including Greg Liposky as Senior
Vice President of Commercial Manufacturing to lead the execution of
our manufacturing strategy;
- Progressed Phase 1/2 study evaluating MultiStem therapy in
acute respiratory distress syndrome (ARDS) patients, nearing
enrollment completion;
- Announced the award of a grant from the Medical Technology
Enterprise Consortium (funded through the Department of Defense) to
The University of Texas Health Science Center at Houston and
Hermann Memorial Trauma Center to conduct a Phase 2 clinical trial
evaluating MultiStem cell therapy for early treatment and
prevention of complications after severe traumatic injury;
- Recognized revenues of $19.4 million for the quarter ended June
30, 2018 and net income of $6.9 million, or $0.05 per diluted
share; and
- Ended the second quarter with $53.4 million of cash and cash
equivalents.
“We finished the second quarter in a strong
financial position, following the successful recent expansion of
our partnership with Healios. We continue to explore additional
partnering opportunities,” commented Dr. Gil Van Bokkelen, Chairman
& CEO at Athersys. “Just as importantly, we have achieved the
goal of initiating our Phase 3 MASTERS-2 trial evaluating the
treatment of patients that have suffered a debilitating ischemic
stroke, and we are pleased to report the trial is off to a strong
start.
“The recent addition of key members to the
organization underscores our commitment to systematically
establishing the capabilities necessary to enable us to fulfill our
vision of becoming a leading biopharma company. We’re very pleased
with the talented individuals and leadership that have joined the
company, and we look forward to working together to achieve our
goals,” concluded Dr. Van Bokkelen.
Second Quarter
Results
Revenues increased by $18.7 million to $19.4
million for the three months ended June 30, 2018 compared to $0.7
million for the three months ended June 30, 2017. Our revenues are
derived from license fees, manufacturing-related activities for
Healios, royalty and other contract revenue, and grant revenue. Our
revenue from Healios increased during the second quarter of 2018
compared to the prior year second quarter by approximately $18.5
million due to the collaboration expansion in June 2018, which
included several additional licensed indications.
Research and development expenses increased to
$10.1 million for the three months ended June 30, 2018 from $4.6
million in the comparable period in 2017. The $5.5 million increase
is primarily comprised of an increase in preclinical and clinical
development costs of $4.4 million, an increase in license fees of
$0.6 million, an increase in personnel costs of $0.2 million, and
an increase in internal research supplies and other research costs
of $0.3 million. The increase in our clinical and preclinical costs
during the period is primarily a result of increased clinical
product manufacturing costs, a portion of which are invoiced to
Healios, technology transfer services performed on Healios’ behalf
in Japan that are reimbursed to us by Healios, start-up contractual
costs related to our MASTERS-2 clinical trial, and process
development activities to support large-scale manufacturing.
General and administrative expenses increased to
$2.4 million for the three months ended June 30, 2018 from $2.2
million in the comparable period in 2017. The $0.2 million increase
was due primarily to increases in professional fees, consulting
services, personnel costs and other administrative costs compared
to the same period last year.
Net income for the second quarter was $6.9
million in 2018 compared to a net loss of $6.3 million in 2017. The
difference of $13.2 million reflects the above variances, as well
as an increase of $0.2 million in other items.
Net cash provided by operating activities was
$4.4 million in the three months ended June 30, 2018 and net cash
used by operating activities was $5.7 million in the three
months ended June 30, 2017, reflecting the receipt of $12.5 million
of license fees from our expansion with Healios, partially offset
by an increase in the use of cash to fund preclinical and clinical
development activities. Of the $20 million of license fees related
to the June 2018 expansion with Healios, we will receive the
remaining $7.5 million from Healios over the next three quarters.
At June 30, 2018, we had $53.4 million in cash and cash
equivalents, compared to $29.3 million at December 31, 2017.
Conference Call
Laura Campbell, Senior Vice President of Finance
and William (B.J.) Lehmann, President and Chief Operating Officer,
will host a conference call today to review the results as
follows:
Date |
Tuesday, August 7th, 2018 |
Time |
4:30 p.m. (Eastern Time) |
Telephone access: U.S. and Canada |
800-273-1254 |
Telephone access: International |
973-638-3440 |
Access code |
5144048 |
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 August 21st, 2018 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 5144048.
About MultiStem®
MultiStem® cell therapy is a patented
regenerative medicine product in clinical development that has
shown the ability to promote tissue repair and healing in a variety
of ways, such as through the production of therapeutic factors
produced in response to signals of inflammation and tissue damage.
MultiStem therapy’s potential for multidimensional therapeutic
impact distinguishes it from traditional biopharmaceutical
therapies focused on a single mechanism of benefit. The therapy
represents a unique "off-the-shelf" stem cell product that can be
manufactured in a scalable manner, may be stored for years in
frozen form, and is administered without tissue matching or the
need for immune suppression. Based upon its efficacy profile, its
novel mechanisms of action, and a favorable and consistent safety
profile demonstrated in clinical studies, MultiStem therapy could
provide a meaningful benefit to patients, including those suffering
from serious diseases and conditions with unmet medical need.
About Athersys
Athersys is an international biotechnology
company engaged in the development of therapeutic products 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 a broad
network of collaborations to further advance MultiStem cell therapy
toward commercialization. More information is available at
www.athersys.com. Follow Athersys on Twitter at
www.twitter.com/athersys.
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
therapeutics, including the uncertainty regarding market acceptance
of our product candidates and our ability to generate revenues.
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 ability to raise capital to fund our operations; the
timing and nature of results from our MultiStem 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
of our product candidates; the possibility of delays, work
stoppages or interruptions in manufacturing by third parties to us,
such as due to material supply constraints, contaminations, or
regulatory issues; uncertainty regarding market acceptance of our
product candidates and our ability to generate revenues, including
MultiStem cell therapy for the treatment of stroke, acute
respiratory distress syndrome, acute myocardial infarction and
trauma, and the prevention of graft-versus-host disease and other
disease indications; changes in external market factors; changes in
our industry's overall performance; changes in our business
strategy; our ability to protect and defend our intellectual
property and related business operations, including the successful
prosecution of our patent applications and enforcement of our
patent rights, and operate our business in an environment of rapid
technology and intellectual property development; our possible
inability to realize commercially valuable discoveries in our
collaborations with pharmaceutical and other biotechnology
companies; our ability to work with Healios to reach an agreement
for an option in China; our ability to meet milestones and earn
royalties under our collaboration agreements, including the success
of our collaboration with Healios; 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 and advance our programs, including,
without limitation, in North America, Europe and Japan; 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
Contact:
William (B.J.)
Lehmann
President and Chief Operating
Officer
Tel: (216) 431-9900bjlehmann@athersys.com
Karen Hunady Corporate Communications &
Investor RelationsTel: (216) 431-9900khunady@athersys.com
David Schull Russo Partners,
LLCTel: (212) 845-4271 or (858)
717-2310David.schull@russopartnersllc.com
(Tables Follow)
|
Athersys, Inc. |
Condensed Consolidated Balance
Sheets |
(In thousands) |
|
|
|
|
June 30, |
December 31, |
|
|
2018 |
|
2017 |
|
(Unaudited) |
(Note) |
Assets |
|
|
Cash and
cash equivalents |
$ |
53,353 |
$ |
29,316 |
Accounts
receivable |
|
545 |
|
586 |
Accounts
receivable – Healios, billed and unbilled |
|
8,832 |
|
153 |
Contract
assets related to Healios |
|
4,254 |
|
-- |
Prepaid
expenses and other |
|
2,480 |
|
1,135 |
Equipment, net |
|
2,578 |
|
2,206 |
Other
noncurrent assets |
|
866 |
|
197 |
Total assets |
$ |
72,908 |
$ |
33,593 |
|
|
|
Liabilities and stockholders’ equity |
|
|
Accounts
payable and accrued expenses |
$ |
14,678 |
$ |
9,312 |
Deferred
revenue and other |
|
-- |
|
771 |
Advances
from Healios |
|
1,981 |
|
134 |
Total
stockholders’ equity |
|
56,249 |
|
23,376 |
Total liabilities and stockholders’ equity |
$ |
72,908 |
$ |
33,593 |
|
|
|
|
|
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 Income (Loss) (Unaudited) |
(In Thousands, Except Per Share Amounts) |
|
|
|
|
|
Three months endedJune
30, |
|
|
|
2018 |
|
2017 |
|
|
Revenues |
|
|
|
Contract
revenue from Healios |
$ |
18,755 |
$ |
239 |
|
|
Royalty
and other contract revenue |
|
591 |
|
210 |
|
|
Grant
revenue |
|
45 |
|
220 |
|
|
Total
revenues |
|
19,391 |
|
669 |
|
|
|
|
|
|
Costs and expenses |
|
|
|
Research
and development |
|
10,093 |
|
4,633 |
|
|
General
and administrative |
|
2,382 |
|
2,207 |
|
|
Depreciation |
|
191 |
|
167 |
|
|
Total costs and expenses |
|
12,666 |
|
7,007 |
|
|
Gain from
insurance proceeds |
|
20 |
|
-- |
|
|
Income
(loss) from operations |
|
6,745 |
|
(6,338 |
) |
|
Other
income, net |
|
188 |
|
71 |
|
|
Net income (loss) and comprehensive income
(loss) |
$ |
6,933 |
$ |
(6,267 |
) |
|
Net
income (loss) per share – Basic |
$ |
0.05 |
$ |
(0.06 |
) |
|
Weighted
average shares outstanding – Basic |
|
138,225 |
|
111,820 |
|
|
Net
income (loss) per share – Diluted |
$ |
0.05 |
$ |
(0.06 |
) |
|
Weighted
average shares outstanding – Diluted |
|
139,375 |
|
111,820 |
|
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