- Entered research collaboration with Japanese biopharma company
to generate hypoimmunogenic cells
- Formed collaboration with UC Irvine on neural stem cell
research program for Huntington’s disease and other neurological
disorders
- First ever clearance of cell therapy derived from AgeX’s
embryonic stem cells by FDA to enter clinical trials
- Published data in an Elsevier journal on successful age
reprogramming of super-centenarian cells
AgeX Therapeutics, Inc. (“AgeX”; NYSE American: AGE), a
biotechnology company developing therapeutics for human aging and
regeneration, reported its financial and operating results for the
fourth quarter and year-end results for 2019.
Additional Recent Highlights
- AgeX entered into a research collaboration with a
Japanese biopharma company to generate hypoimmunogenic cells. This
represents the first research collaboration for AgeX’s
immunotolerance UniverCyteTM technology platform, marking the
launch of its new business development and collaboration strategy.
UniverCyte has the potential to deliver therapeutic cells without
the need for immunosuppressive therapy.
- AgeX entered into a sponsored research agreement with the
University of California at Irvine for the derivation of neural
stem cells using AgeX’s PureStem technology for Huntington’s
Disease and potentially other neurological conditions. The
collaboration builds on UC Irvine’s research in neural stem cell
transplantation for Huntington’s disease, including safety and
efficacy animal data, which may support an IND submission as early
as 2021.
- AgeX’s embryonic stem cell line ESI-053 has been used by ImStem
Biotechnology for the derivation of mesenchymal stem cells (MSCs).
ImStem received FDA IND clearance to begin a clinical trial of MSCs
in multiple sclerosis. This marks the first-ever clearance of a
cell therapy derived from AgeX’s embryonic stem cells by the FDA to
enter human studies.
- AgeX researchers and others published a scientific paper on the
age reprogramming of super-centenarian cells in the peer-reviewed
scientific journal Biochemical and Biophysical Research
Communications from Elsevier, describing the conversion of cells of
one of the longest-lived people in history, a deceased 114-year-old
American woman, to a young pluripotent state. The research helps
pave the way to understanding how “extreme agers” manage to avoid
the major chronic illnesses of aging.
- U.S. Patent number 10,501,723 was issued for generating induced
pluripotent stem (iPS) cells. The patent broadly describes multiple
techniques for reprogramming cells of the body back to the
all-powerful stem cell state.
Balance Sheet Information
Cash, and cash equivalents, and restricted cash totaled $2.5
million as of December 31, 2019, as compared with $6.7 million as
of December 31, 2018.
AgeX is in need of additional capital to finance its operations.
On March 30, 2020, AgeX entered into a Secured Convertible Facility
Agreement (the “Loan Facility”) with Juvenescence Limited pursuant
to which AgeX may borrow funds from time to time. Loans from
Juvenescence in excess of an initial $500,000 advance will be
subject to Juvenescence’s discretion. If AgeX makes a second
$500,000 draw under the Loan Facility, it will be required to
implement a cost reduction plan that will entail significant
reductions in staffing and research and development activities, and
if a third advance of funds is approved by Juvenescence, AgeX and
certain of its subsidiaries will be required to enter into a
Security and Pledge Agreement pursuant to which they will pledge
substantially all of their assets to collateralize all loans drawn
under the Loan Facility. AgeX will issue stock purchase warrants to
Juvenescence based on the amount of loans Juvenescence makes, and
will issue 28,500 shares of AgeX common stock to Juvenescence if
Juvenescence lends AgeX $3 million in the aggregate. Juvenescence
will also have the right to convert outstanding loan balances into
shares of AgeX common stock at market prices. More information
about the Loan Facility can be found in AgeX’s Annual Report on
Form 10-K filed with the Securities and Exchange Commission.
As required under Accounting Standards Update 2014-15,
Presentation of Financial Statements-Going Concern (ASC 205-40),
AgeX evaluates whether conditions and/or events raise substantial
doubt about its ability to meet its future financial obligations as
they become due within one year after the date its financial
statements are issued. Based on AgeX’s most recent projected cash
flows, and considering that loans from Juvenescence in excess of an
initial $500,000 advance under the Loan Facility will be subject to
Juvenescence’s discretion, AgeX believes that its cash and cash
equivalents and a $500,000 loan under the Loan Facility would not
be sufficient to satisfy its anticipated operating and other
funding requirements for the twelve months following the filing of
the Form 10-K. These factors raise substantial doubt regarding the
ability of AgeX to continue as a going concern, and the report of
AgeX’s independent registered public accountants accompanying the
audited financial statements in AgeX’s Annual Report on Form 10-K
contains a qualification to such effect.
Fourth Quarter and Annual 2019 Operating Results
Revenues: Total Revenues for the fourth quarter of 2019 were
$0.5 million as compared to $0.3 million in the comparable quarter
in 2018. Total revenues for the year ended December 31, 2019 were
$1.73 million, as compared with $1.4 million in the same period in
2018, representing an increase of approximately 24%. AgeX revenue
is primarily generated from subscription and advertising revenues
from the GeneCards® online database through its subsidiary LifeMap
Sciences, Inc. Revenues for the year ended December 31, 2019 also
included approximately $180,000 of allowable expenses under its
research grant from the NIH as compared with $20,000 in the same
period in 2018.
Operating expenses: Operating expenses for the three months
ended December 31, 2019, were $3.2 million, as reported, which was
comprised of $2.7 million for AgeX and $0.5 million for LifeMap
Sciences, and were $2.5 million, as adjusted, comprised of $2.1
million for AgeX and $0.4 million for LifeMap Sciences.
Operating expenses for the full year 2019 were $14.0 million, as
reported, which was comprised of $11.8 million for AgeX and $2.2
million for LifeMap Sciences, and were $11.2 million, as adjusted,
comprised of $9.4 million for AgeX and $1.8 million for LifeMap
Sciences.
Research and development expenses for the year ended December
31, 2019 decreased by $0.7 million to $5.9 million compared to $6.6
million in 2018. The decrease was mainly attributable to a
nonrecurring expense of $800,000 to acquire certain in-process
R&D in 2018.
General and administrative expenses for the year ended December
31, 2019 increased by $2.5 million to $8.1 million as compared with
$5.6 million for 2018. The increases were mainly attributable to
increased professional fees for consulting and accounting,
insurance premiums, facilities related expenses, and non-cash
stock-based compensation expense due to increased stock option
grants. In April 2019 AgeX moved into its own facilities and
terminated its shared facilities and services arrangement with
Lineage Cell Therapeutics, Inc. (formerly BioTime, Inc.).
Consequently AgeX now incurs the full cost of its facilities and
finance and administrative personnel.
The reconciliation between operating expenses determined in
accordance with accounting principles generally accepted in the
United States (GAAP) and operating expenses, as adjusted, a
non-GAAP measure, is provided in the financial tables included at
the end of this press release.
Other income, net: Other income for the year ended December 31,
2019 was $0.3 million, as compared with $3.5 million in the same
period in 2018. The decrease is entirely attributable to a
nonrecurring $3.2 million gain on sale of our ownership interest in
Ascendance Biotechnology, Inc. when that company was acquired by a
third party in 2018.
Net loss attributable to AgeX: The net loss attributable to AgeX
for the year ended December 31, 2019 was $12.2 million, or ($0.33)
per share (basic and diluted) compared to $7.5 million, or ($0.21)
per share (basic and diluted), for the same period in 2018.
About AgeX Therapeutics
AgeX Therapeutics, Inc. (NYSE American: AGE) is focused on
developing and commercializing innovative therapeutics for human
aging. Its PureStem® and UniverCyte™ manufacturing and
immunotolerance technologies are designed to work together to
generate highly defined, universal, allogeneic, off-the-shelf
pluripotent stem cell-derived young cells of any type for
application in a variety of diseases with a high unmet medical
need. AgeX has two preclinical cell therapy programs: AGEX-VASC1
(vascular progenitor cells) for tissue ischemia and AGEX-BAT1
(brown fat cells) for Type II diabetes. AgeX’s revolutionary
longevity platform induced Tissue Regeneration (iTR™) aims to
unlock cellular immortality and regenerative capacity to reverse
age-related changes within tissues. AGEX-iTR1547 is an iTR-based
formulation in preclinical development. HyStem® is AgeX’s delivery
technology to stably engraft PureStem cell therapies in the body.
AgeX is developing its core product pipeline for use in the clinic
to extend human healthspan, and is seeking opportunities to
establish licensing and collaboration arrangements around its broad
IP estate and proprietary technology platforms.
For more information, please visit www.agexinc.com or connect
with the company on Twitter, LinkedIn, Facebook, and YouTube.
Forward-Looking Statements
Certain statements contained in this release are
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Any statements that are
not historical fact including, but not limited to statements that
contain words such as “will,” “believes,” “plans,” “anticipates,”
“expects,” “estimates” should also be considered forward-looking
statements. Forward-looking statements involve risks and
uncertainties. Actual results may differ materially from the
results anticipated in these forward-looking statements and as such
should be evaluated together with the many uncertainties that
affect the business of AgeX Therapeutics, Inc. and its
subsidiaries, particularly those mentioned in the cautionary
statements found in more detail in the “Risk Factors” section of
AgeX’s most recent Annual Report on Form 10-K filed with the
Securities and Exchange Commissions (copies of which may be
obtained at www.sec.gov). Subsequent events and developments may
cause these forward-looking statements to change. AgeX specifically
disclaims any obligation or intention to update or revise these
forward-looking statements as a result of changed events or
circumstances that occur after the date of this release, except as
required by applicable law.
AGEX THERAPEUTICS, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(In thousands, except par value
amounts)
December 31,
2019
2018
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
2,352
$
6,707
Accounts and grants receivable, net
363
131
Prepaid expenses and other current
assets
1,339
1,015
Total current assets
4,054
7,853
Property and equipment, net
1,126
90
Deposits and other long-term assets
111
19
Intangible assets, net
2,151
2,709
TOTAL ASSETS
$
7,442
$
10,671
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES
Accounts payable and accrued
liabilities
$
1,582
$
1,366
Related party payables, net
64
132
Deferred revenues
283
317
Right-of-use lease liability
428
-
Insurance premium liability and other
current liabilities
940
625
Total current liabilities
3,297
2,440
Loan due to Juvenescence, net of debt
issuance cost
1,528
-
TOTAL LIABILITIES
4,825
2,440
Commitments and contingencies
STOCKHOLDERS’ EQUITY
Preferred stock, $0.0001 par value,
authorized 5,000 shares; none issued and outstanding as of December
31, 2019 and 2018
-
-
Common stock, $0.0001 par value, 100,000
shares authorized; 37,649 and 35,830 shares issued and outstanding
as of December 31, 2019 and 2018, respectively
4
4
Additional paid-in capital
88,353
81,499
Accumulated other comprehensive income
(loss)
69
(2
)
Accumulated deficit
(86,208
)
(74,054
)
AgeX Therapeutics, Inc. stockholders’
equity
2,218
7,447
Noncontrolling interest
399
784
Total stockholders’ equity
2,617
8,231
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
7,442
$
10,671
AGEX THERAPEUTICS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per share
data)
Year Ended December
31,
2019
2018
REVENUES:
Subscription and advertisement
revenues
$
1,332
$
1,227
Grant revenues
180
20
Other revenues
216
149
Total revenues
1,728
1,396
Cost of sales
(244
)
(364
)
Gross profit
1,484
1,032
OPERATING EXPENSES:
Research and development
5,904
5,830
Acquired in-process research and
development
-
800
General and administrative
8,139
5,647
Total operating expenses
14,043
12,277
Loss from operations
(12,559
)
(11,245
)
OTHER INCOME, NET:
Interest income, net
29
116
Gain on sale of equity method investment
in Ascendance
-
3,215
Other income, net
294
183
Total other income, net
323
3,514
NET LOSS BEFORE INCOME TAXES
(12,236
)
(7,731
)
Income tax provision
(148
)
-
NET LOSS
(12,384
)
(7,731
)
Net loss attributable to noncontrolling
interest
230
229
NET LOSS ATTRIBUTABLE TO AGEX
$
(12,154
)
$
(7,502
)
NET LOSS PER COMMON SHARE:
BASIC AND DILUTED
$
(0.33
)
$
(0.21
)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING:
BASIC AND DILUTED
37,271
34,914
AGEX THERAPEUTICS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
Year Ended December
31,
2019
2018
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss attributable to AgeX
$
(12,154
)
$
(7,502
)
Net loss attributable to noncontrolling
interest
(230
)
(229
)
Adjustments to reconcile net loss
attributable to AgeX to net cash used in operating activities:
Gain on sale of equity method investment
in Ascendance
(354
)
(3,215
)
Acquired in-process research and
development
-
800
Depreciation expense
91
58
Amortization of intangible assets
558
477
Amortization of right-of-use asset
302
-
Amortization of debt issuance cost
54
-
Stock-based compensation
1,907
1,285
Stock-based compensation allocated from
Lineage
-
184
Subsidiary stock-based compensation
-
4
Foreign currency remeasurement gain (loss)
and other
76
(68
)
Changes in operating assets and
liabilities:
Accounts receivable and other
receivables
(232
)
(24
)
Prepaid expenses and other current
assets
473
(219
)
Accounts payable and accrued
liabilities
169
648
Related party payables
(68
)
(128
)
Insurance premium liability
(599
)
(74
)
Deferred revenues
(34
)
137
Other current liabilities
(119
)
(129
)
Net cash used in operating activities
(10,160
)
(7,995
)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Proceeds from the sale of equity method
investment in Ascendance
354
3,215
Purchase of in-process research and
development
-
(1,872
)
Security deposit (paid) received and
other, net
(74
)
5
Purchase of equipment and other
(641
)
(21
)
Net cash (used in) provided by investing
activities
(361
)
1,327
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from issuance of common stock
-
5,000
Proceeds from sale of warrants
-
1,000
Proceeds from exercise of warrants
4,500
-
Draw down on loan facility from
Juvenescence
1,800
-
Repayment of financing liability
(35
)
-
Net cash provided by financing
activities
6,265
6,000
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
1
-
NET INCREASE IN CASH, CASH EQUIVALENTS
AND RESTRICTED CASH
(4,255
)
(668
)
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH:
Beginning of year
6,707
7,375
End of year
$
2,452
$
6,707
Non-GAAP Financial Measures
This press release includes operating expenses prepared in
accordance with accounting principles generally accepted in the
United States (GAAP) and, includes operating expenses, by entity,
prepared in accordance with GAAP. This press release also includes
certain historical non-GAAP operating expenses and non-GAAP
operating expenses, by entity. In particular, AgeX Therapeutics,
Inc. (“AgeX”) has provided both (a) non-GAAP total operating
expenses, adjusted to exclude noncash stock-based compensation
expense, depreciation and amortization expense, and acquired
in-process research and development expense, a nonrecurring item,
and (b) non-GAAP operating expenses, by entity, to exclude those
same charges by the respective entities for consistency. Non-GAAP
financial measures are not meant to be considered in isolation or
as a substitute for comparable financial measures prepared in
accordance with GAAP. However, AgeX believes the presentation of
non-GAAP total operating expenses and non-GAAP operating expenses,
by entity, when viewed in conjunction with our GAAP total operating
expenses, and GAAP operating expenses by entity, respectively, is
helpful in understanding AgeX’s ongoing operating expenses and its
programs and those of certain subsidiaries.
Furthermore, management uses these non-GAAP financial measures
in the aggregate and on an entity basis to establish budgets and
operational goals, to manage AgeX’s business and to evaluate its
performance and its programs in clinical development.
AGEX THERAPEUTICS, INC. AND
SUBSIDIARIES
Reconciliation of Non-GAAP
Financial Measure
Adjusted Operating Expenses
(In thousands)
For the Three Months Ended
December 31, 2019 (unaudited)
For the Year Ended December
31, 2019
GAAP Operating Expenses - as
reported
$
3,186
$
14,043
Stock-based compensation expense (1)
(420
)
(1,907
)
Amortization of right-of-use assets
(1)
(102
)
(302
)
Depreciation and amortization expense
(1)
(192
)
(649
)
Non-GAAP Operating Expenses, as
adjusted
$
2,472
$
11,185
GAAP Operating Expenses - by
entity
AgeX and subsidiaries other than LifeMap
Sciences (2)
$
2,651
$
11,801
LifeMap Sciences, Inc. and subsidiary
(3)
535
2,242
GAAP Operating Expenses - by
entity
$
3,186
$
14,043
Non-GAAP Operating Expenses - as
adjusted, by entity
AgeX and subsidiaries other than LifeMap
Sciences
$
2,051
$
9,403
LifeMap Sciences, Inc. and subsidiary
421
1,782
Non-GAAP Operating Expenses - as
adjusted, by entity
$
2,472
$
11,185
(1) Noncash charges
(2) AgeX Therapeutics, Inc. includes
ReCyte Therapeutics, Inc., a majority-owned and consolidated
subsidiary.
(3) LifeMap Sciences Inc. includes LifeMap
Sciences Ltd., both consolidated subsidiaries of AgeX Therapeutics,
Inc.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200330005747/en/
Media Contact for AgeX: Bill Douglass Gotham Communications, LLC
bill@gothamcomm.com (646) 504-0890
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