- Sponsored research at The Ohio State University to Generate
Proof-of-Concept Animal Data for AgeX’s Brown Adipose Tissue (BAT)
Cell Therapy Candidate for Diabetes and Obesity
- Sublicensed Stem Cell Line ESI-053 to ImStem Biotechnology for
Development of Cell Therapy Candidate IMS001 for COVID-19 and Acute
Respiratory Distress Syndrome
- Announced Preprint Article Relating to Regeneration, Aging, and
Cancer
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 the full year ended December 31, 2020.
Recent Highlights
- AgeX entered into a sponsored research agreement with The Ohio
State University using AgeX’s brown adipocyte tissue (BAT) cell
therapy candidate AgeX-BAT1 in mice to determine whether
transplantation of AgeX-BAT1 cells may improve diet-induced
obesity, metabolic health including glucose metabolism, and cardiac
function. Loss of non-shivering thermogenic BAT, also known as
brown or good fat, in humans with aging is associated with obesity,
type II diabetes, and cardiovascular disease. The research will
utilize AgeX’s proprietary BAT cellular product candidate
AgeX-BAT1.
- AgeX and ImStem Biotechnology, Inc. (“ImStem”), a
biopharmaceutical company developing embryonic stem cell (ESC)
derived mesenchymal stem cells (MSCs) entered into a non-exclusive,
royalty-bearing sublicense for the use of AgeX’s clinical-grade ESC
line ESI-053 to derive ImStem’s investigational MSC product
candidate IMS001 for development in COVID-19 as well as acute
respiratory distress syndrome (ARDS) from other causes. Emerging
preclinical and clinical data support the potential of MSCs to be
useful in COVID-19 and ARDS from other causes. ImStem’s MSC product
candidate IMS001 is derived from AgeX’s stem cell line ESI-053. In
March 2020, IMS001 gained FDA IND clearance to begin a human study
in multiple sclerosis.
- AgeX announced on March 12, 2021 the online publication of data
relating to regeneration, aging, and cancer in bioRxiv. The paper
titled “Differential Expression of α, β, and γ Protocadherin
Isoforms During Differentiation, Aging, and Cancer” presents for
the first time data relating to mechanisms cells may use in the
process of regeneration. The paper discloses alterations in certain
genes that may prevent regeneration from occurring in adult humans.
It also provides evidence that the family of genes may be involved
in a wide array of human cancers.
Liquidity and Capital Resources
Amendment to 2019 Loan Agreement
On February 10, 2021, AgeX entered into an amendment to its 2019
Loan Facility Agreement with Juvenescence Limited (“Juvenescence”).
The Amendment extends the maturity date of loans under the
agreement to February 14, 2022 and increases the amount of the loan
facility by $4.0 million. All loans in excess of the initial $2.0
million that AgeX previously borrowed are subject to Juvenescence’s
discretion.
At-the-market Offering Facility
During January 2021 AgeX entered into a sales agreement with
Chardan Capital Markets LLC (“Chardan”) for the sale of shares of
AgeX common stock in at-the-market (“ATM”) transactions. In
accordance with the terms of the sales agreement, AgeX may offer
and sell shares of common stock having an aggregate offering price
of up to $12.6 million through Chardan acting as the sales agent.
Through March 26, 2021, AgeX raised approximately $496,000 in gross
proceeds through the sale of shares of common stock.
Going Concern Considerations
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, AgeX believes that its cash and cash equivalents and
available sources of debt and equity capital would not be
sufficient to satisfy AgeX’s anticipated operating and other
funding requirements for the twelve months following the filing of
AgeX’s Annual Report on Form 10-K for the year ended December 31,
2020. These factors raise substantial doubt regarding the ability
of AgeX to continue as a going concern.
Balance Sheet Information
Cash, and cash equivalents, and restricted cash totaled $0.6
million as of December 31, 2020, as compared with $2.5 million as
of December 31, 2019. Since January 1, 2021, AgeX had cash proceeds
of approximately $3.2 million through loans from Juvenescence,
sales of shares of AgeX common stock, and the disposition of its
subsidiary LifeMap Sciences, Inc. (“LifeMap Sciences”) through a
cash-out merger.
Fourth Quarter and Annual 2020 Operating Results
Revenues: Total Revenues for the fourth quarter of 2020 were
$0.5 million. Total revenues for the year ended December 31, 2020
were $1.9 million, as compared with $1.7 million in the same period
in 2019. AgeX revenue was primarily generated by its subsidiary
LifeMap Sciences, Inc. which AgeX disposed of on March 15, 2021
through a cash-out merger. Revenues for the year ended December 31,
2020 also included approximately $0.3 million of allowable expenses
under a research grant from the NIH as compared with $0.2 million
in the same period in 2019.
Operating expenses: Operating expenses for the three months
ended December 31, 2020, were $2.9 million, as reported, which was
comprised of $2.5 million for AgeX and $0.4 million for LifeMap
Sciences, and were $2.3 million, as adjusted, comprised of $2.0
million for AgeX and $0.3 million for LifeMap Sciences.
Operating expenses for the full year 2020 were $12.4 million, as
reported, which was comprised of $10.4 million for AgeX and $2.0
million for LifeMap Sciences, and were $10.2 million, as adjusted,
comprised of $8.7 million for AgeX and $1.5 million for LifeMap
Sciences.
Research and development expenses for the year ended December
31, 2020 decreased by $0.9 million to $5.0 million from $5.9
million in 2019. The decrease was primarily attributable to the
layoff of research and development personnel in May 2020.
General and administrative expenses for the year ended December
31, 2020 decreased by $0.7 million to $7.4 million from $8.1
million in 2019. Increases in personnel costs related to an
increase in administrative staffing were offset to some extent by a
decrease in noncash stock-based compensation expense, general
office expense and supplies and travel related expenses with the
shelter in place mandates since March 15, 2020 resulting from the
COVID-19 pandemic, and the elimination of shared facilities and
services fees from AgeX’s former parent Lineage Cell Therapeutics,
Inc. following the termination of a Shared Facilities and Services
Agreement on September 30, 2019.
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 expense, net: Net other expense for the year ended
December 31, 2020 was $0.5 million, as compared with net other
income of $0.3 million in the same period in 2019. The change is
primarily attributable to increased amortization of deferred debt
costs to interest expense following the consummation of loan
agreements.
Net loss attributable to AgeX: The net loss attributable to AgeX
for the year ended December 31, 2020 was $10.9 million, or ($0.29)
per share (basic and diluted) compared to $12.2 million, or ($0.33)
per share (basic and diluted), for the same period in 2019.
About AgeX Therapeutics
AgeX Therapeutics, Inc. (NYSE American: AGE) is focused on
developing and commercializing innovative therapeutics to treat
human diseases to increase healthspan and combat the effects of
aging. AgeX’s 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. HyStem® is AgeX’s delivery
technology to stably engraft PureStem or other cell therapies in
the body. AgeX is seeking opportunities to establish licensing and
collaboration arrangements around its broad IP estate and
proprietary technology platforms and therapy product
candidates.
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,
2020
2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
527
$
2,352
Accounts and grants receivable, net
326
363
Prepaid expenses and other current
assets
1,430
1,339
Total current assets
2,283
4,054
Property and equipment, net
-
1,126
Deposits and other long-term assets
50
111
Intangible assets, net
1,592
2,151
TOTAL ASSETS
$
3,925
$
7,442
LIABILITIES AND STOCKHOLDERS’ EQUITY
(DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued
liabilities
$
1,656
$
1,582
Loan due to Juvenescence, net of debt
issuance cost, current portion
1,960
-
Related party payables, net
71
64
Deferred revenues, current portion
275
283
Right-of-use lease liability
-
428
Paycheck Protection Program Loan
436
-
Insurance premium liability and other
current liabilities
959
940
Total current liabilities
5,357
3,297
Loan due to Juvenescence, net of debt
issuance cost, net of current portion
3,900
1,528
Deferred revenues, net of current
portion
64
-
TOTAL LIABILITIES
9,321
4,825
Commitments and contingencies
STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock, $0.0001 par value,
authorized 5,000 shares; none issued and outstanding as of December
31, 2020 and 2019
-
-
Common stock, $0.0001 par value, 100,000
shares authorized; 37,691 and 37,649 shares issued and outstanding
as of December 31, 2020 and 2019, respectively
4
4
Additional paid-in capital
91,810
88,353
Accumulated other comprehensive income
143
69
Accumulated deficit
(97,073
)
(86,208
)
AgeX Therapeutics, Inc. stockholders’
equity (deficit)
(5,116
)
2,218
Noncontrolling interest
(280
)
399
Total stockholders’ equity (deficit)
(5,396
)
2,617
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
(DEFICIT)
$
3,925
$
7,442
AGEX THERAPEUTICS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per share
data)
Year Ended December
31,
2020
2019
REVENUES:
Subscription and advertisement
revenues
$
1,265
$
1,295
Grant revenues
307
180
Other revenues
296
253
Total revenues
1,868
1,728
Cost of sales
(158
)
(244
)
Gross profit
1,710
1,484
OPERATING EXPENSES:
Research and development
4,978
5,904
General and administrative
7,403
8,139
Total operating expenses
12,381
14,043
Loss from operations
(10,671
)
(12,559
)
OTHER INCOME (EXPENSES), NET:
Interest income (expense), net
(499
)
29
Other income, net
44
294
Total other income (expense), net
(455
)
323
NET LOSS BEFORE INCOME TAXES
(11,126
)
(12,236
)
Income tax provision benefit (expense)
150
(148
)
NET LOSS
(10,976
)
(12,384
)
Net loss attributable to noncontrolling
interest
111
230
NET LOSS ATTRIBUTABLE TO AGEX
$
(10,865
)
$
(12,154
)
NET LOSS PER COMMON SHARE:
BASIC AND DILUTED
$
(0.29
)
$
(0.33
)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING:
BASIC AND DILUTED
37,669
37,271
AGEX THERAPEUTICS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
Year Ended December
31,
2020
2019
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss attributable to AgeX
$
(10,865
)
$
(12,154
)
Net loss attributable to noncontrolling
interest
(111
)
(230
)
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
)
Depreciation expense
699
91
Amortization of intangible assets
559
558
Amortization of right-of-use asset
424
302
Amortization of debt issuance cost
487
54
Stock-based compensation
933
1,907
Foreign currency remeasurement gain and
other
119
76
Changes in operating assets and
liabilities:
Accounts and grant receivables, net
10
(232
)
Prepaid expenses and other current
assets
839
473
Accounts payable and accrued
liabilities
340
169
Related party payables
15
(68
)
Insurance premium liability
(713
)
(599
)
Deferred revenues
57
(34
)
Other current liabilities
(610
)
(119
)
Net cash used in operating activities
(7,817
)
(10,160
)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Proceeds from the sale of equity method
investment in Ascendance
-
354
Security deposit paid
-
(74
)
Purchase of equipment and other
(20
)
(641
)
Net cash used in investing activities
(20
)
(361
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from exercise of warrants
-
4,500
Draw down on loan facility from
Juvenescence
5,700
1,800
Proceeds from Paycheck Protection Program
Loan
433
-
Payment of debt related costs
(157
)
-
Repayment of financing lease liability
(15
)
(35
)
Net cash provided by financing
activities
5,961
6,265
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
1
1
NET DECREASE IN CASH, CASH EQUIVALENTS
AND RESTRICTED CASH
(1,875
)
(4,255
)
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH:
Beginning of year
2,452
6,707
End of year
$
577
$
2,452
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the year for interest
$
12
$
12
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING
AND INVESTING ACTIVITIES:
Issuance of common stock upon vesting of
restricted stock units
$
21
$
-
Issuance of common stock to
Juvenescence
$
37
$
56
Issuance of warrants to Juvenescence
$
1,640
$
236
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 (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, (unaudited)
For the Year Ended December
31,
2020
2019
2020
2019
GAAP Operating Expenses - as
reported
$
2,914
$
3,186
$
12,381
$
14,043
Stock-based compensation expense (1)
(182
)
(420
)
(933
)
(1,907
)
Depreciation and amortization expense
(1)
(469
)
(192
)
(1,258
)
(649
)
Non-GAAP Operating Expenses, as
adjusted
$
2,263
$
2,574
$
10,190
$
11,487
GAAP Operating Expenses - by
entity
AgeX and ReCyte Therapeutics, Inc. (3)
$
2,479
$
2,651
$
10,434
$
11,801
LifeMap Sciences, Inc. and subsidiary
(4)
435
535
1,947
2,242
GAAP Operating Expenses - by
entity
$
2,914
$
3,186
$
12,381
$
14,043
Non-GAAP Operating Expenses - as
adjusted, by entity
AgeX and ReCyte Therapeutics, Inc.
$
1,940
$
2,153
$
8,695
$
9,705
LifeMap Sciences, Inc. and subsidiary
323
421
1,495
1,782
Non-GAAP Operating Expenses - as
adjusted, by entity
$
2,263
$
2,574
$
10,190
$
11,487
(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. through March 15, 2021.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210331005921/en/
Contact for AgeX: Andrea Park apark@agexinc.com (510)
671-8620
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