Brooklyn ImmunoTherapeutics, Inc. (NYSE American: BTX)
(“Brooklyn”), a biopharmaceutical company focused on exploring the
role that gene editing/cell and cytokine therapy can have in
treating patients with cancer, blood disorders, and monogenic
diseases, today announced financial results for the quarter ended
June 30, 2021.
Financial and corporate highlights for the
quarter ended June 30, 2021 and subsequently include the
following:
- Completed the acquisition of
Novellus Therapeutics Limited (“Novellus”) in July 2021. Novellus
is developing next-generation engineered mesenchymal stem cell
(“MSC”) therapies using patented mRNA-based cell reprogramming and
gene editing technologies licensed from Factor Bioscience
(“Factor”).
- Raised nearly $51 million through
equity line sales of common stock for general corporate purposes,
including working capital to be used to enhance the development of
the mRNA gene editing and cell therapies technology recently
licensed from Factor.
- Appointed Jay Sial as chief
administrative officer and Kevin D’Amour, Ph.D. as chief scientific
officer.
- Established a research and
development center in Cambridge, Massachusetts, to pursue its
mRNA-based gene editing and cellular therapies, co-locating with
Factor.
Howard Federoff, M.D., Ph.D., Brooklyn’s
President and Chief Executive Officer, commented, “The second
quarter advanced the evolution of Brooklyn ImmunoTherapeutics from
being a cytokine-focused immunotherapeutics company to a platform
company with a pipeline of next-generation engineered cellular,
gene editing and cytokine products. This was in no small measure
due to the acquisition of Novellus, which enables us to utilize the
full range of the MSCs they have developed with no restriction on
fields of use. By combining these with our licensed mRNA-based cell
reprogramming and gene editing technology from Factor Bioscience,
we believe we can create a platform technology that will lead to a
family of product candidates in varying stages of development from
target selection to research and preclinical, including one in the
respiratory area that is in the IND-enabling stage.”
“Further, we believe we are positioned to
develop a variety of gene-modified products using this platform,
which ultimately could help solve problems of treating certain
conditions that to date have confounded science, including
potential treatments for a set of solid tumors, autoimmune
disorders where inflammation is a prominent feature, and addressing
multiple issues in the liver, the brain and the eye, as well as
applying that technology again to iPSCs for a multitude of
applications,” continued Dr. Federoff.
“The quarter also resulted in creating a strong
balance sheet and a growing in-licensed intellectual property
portfolio,” said Dr. Federoff. “Following the Novellus acquisition,
we had approximately $25 million of cash on hand, which we estimate
will fund our operations and expansion through the end of 2023,”
Dr. Federoff continued. “We are awaiting the readout of our Phase
2b trial for neoadjuvant head and neck cancer with our original
asset, IRX-2 human-derived cytokines, during the first half of
2022. Additionally, we have multiple investigator-driven trials in
a number of additional cancer types, and additional planned studies
in 2022 and 2023.”
“We have made a considerable investment in
ensuring that we have the right people in place, and with the
addition of our new chief scientific officer Dr. Kevin D’Amour and
new chief administrative officer Jay Sial. Now it’s time for us to
begin to execute on these ambitious plans that this next-generation
version of Brooklyn ImmunoTherapeutics promises,” concluded Dr.
Federoff.
Financial Results for Quarter Ended June
30, 2021
Operating expenses for the quarter ended June 30, 2021 were
$10.1 million, as compared to operating expenses for the quarter
ended June 30, 2020 of $2.0 million.
Research and development expenses increased to $5.4 million for
the quarter ended June 30, 2021 compared to $1.0 million in the
quarter ended June 30, 2020. Research and development expenses
increased due to upfront payments associated with licensed
technology, increased clinical trial expenses, and stock-based
compensation for the issuance of equity awards. Brooklyn expects
research and development expenses to continue to grow as it expands
its clinical trial activities.
General and administrative expenses increased to $4.6 million in
the second quarter of 2021 compared to $1.0 million during the same
period in 2020. The quarter-over-quarter increase in general and
administrative expense was primarily related to increased legal,
accounting and consulting fees associated with merger and
acquisition activity, costs associated with being a publicly traded
company, and increased stock-based compensation resulting from the
issuance of equity awards. Brooklyn expects general and
administrative expenses to continue to increase in future periods
as it increases its business activities and incurs costs associated
with being a publicly traded company.
Net loss for the quarter ended June 30, 2021 was
$(27.8) million, as compared to $(3.1) million for the quarter
ended June 30, 2020.
As of June 30, 2021, Brooklyn ImmunoTherapeutics
had $50.2 million in cash, of which approximately $23.0 million was
paid as partial consideration for the acquisition of Novellus on
July 16, 2021.
About Brooklyn ImmunoTherapeutics
Brooklyn is focused on exploring the role that
cytokine, gene editing, and cell therapy can have in treating
patients with cancer, blood disorders, and monogenic diseases.
Brooklyn’s most advanced program is IRX-2, a
human cell-derived cytokine therapy, studying the safety and
efficacy of IRX-2 in patients with head and neck cancer in Phase
2B. In a Phase 2A clinical trial in head and neck cancer, IRX-2
demonstrated an overall survival benefit. Additional studies are
either underway or planned in other solid tumor cancer
indications.
Brooklyn has multiple next-generation cell and
gene-editing therapies in preclinical development for various
indications including acute respiratory distress syndrome, solid
tumor indications, as well as in vivo gene-editing therapies for
rare genetic diseases. For more information about Brooklyn and its
clinical programs, please visit www.BrooklynITx.com.
FINANCIAL TABLES FOLLOW
|
BROOKLYN
IMMUNOTHERAPEUTICS, INC. |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
June 30,2021 |
|
December 31,2020 |
ASSETS |
(unaudited) |
|
|
Current assets: |
|
|
|
Cash |
$ |
50,164,673 |
|
|
$ |
1,630,455 |
|
Tax receivable |
|
23,303 |
|
|
|
- |
|
Prepaid expenses and other current assets |
|
1,753,197 |
|
|
|
102,322 |
|
Total current assets |
|
51,941,173 |
|
|
|
1,732,777 |
|
Property and equipment,net |
|
582,041 |
|
|
|
594,106 |
|
Right-of-use assets - operating leases |
|
2,767,804 |
|
|
|
2,092,878 |
|
Goodwill |
|
2,043,747 |
|
|
|
2,043,747 |
|
In-process research and development |
|
6,860,000 |
|
|
|
6,860,000 |
|
Security deposits and other assets |
|
514,881 |
|
|
|
453,252 |
|
Total assets |
$ |
64,709,646 |
|
|
$ |
13,776,760 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
3,679,311 |
|
|
$ |
1,275,223 |
|
Accrued expenses |
|
1,916,126 |
|
|
|
1,051,020 |
|
Loans payable |
|
410,000 |
|
|
|
410,000 |
|
PPP loan, current |
|
309,905 |
|
|
|
115,972 |
|
Operating lease liabilities, current |
|
383,923 |
|
|
|
273,217 |
|
Other current liabilities |
|
985,233 |
|
|
|
- |
|
Total current liabilities |
|
7,684,498 |
|
|
|
3,125,432 |
|
Contingent consideration |
|
19,290,000 |
|
|
|
20,110,000 |
|
Operating lease liabilities, non-current |
|
2,529,422 |
|
|
|
1,905,395 |
|
PPP loan, non-current |
|
- |
|
|
|
193,933 |
|
Other liabilities |
|
22,863 |
|
|
|
22,863 |
|
Total liabilities |
|
29,526,783 |
|
|
|
25,357,623 |
|
|
|
|
|
|
|
|
|
Stockholders' and members' equity (deficit): |
|
|
|
|
|
|
|
Class A membership units |
|
- |
|
|
|
23,202,005 |
|
Class B membership units |
|
- |
|
|
|
1,400,000 |
|
Class C membership units |
|
- |
|
|
|
1,000,000 |
|
Common units |
|
- |
|
|
|
197,873 |
|
Common stock, $0.005 par value, 100,000,000 shares authorized,
44,707,382 issued and outstanding at June 30, 2021; no shares
issued and outstanding at December 31, 2020. |
|
223,537 |
|
|
|
- |
|
Series A preferred stock |
|
781 |
|
|
|
- |
|
Additional paid-in capital |
|
100,134,743 |
|
|
|
- |
|
Accumulated deficit |
|
(65,176,198 |
) |
|
|
(37,380,741 |
) |
Total stockholders' and members' equity (deficit) |
|
35,182,863 |
|
|
|
(11,580,863 |
) |
Total liabilities and stockholders' and members' equity
(deficit) |
$ |
64,709,646 |
|
|
$ |
13,776,760 |
|
|
|
|
|
BROOKLYN
IMMUNOTHERAPEUTICS, INC. |
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Research and
development |
5,392,777 |
|
|
985,081 |
|
|
6,912,410 |
|
|
1,376,140 |
|
General and
administrative |
4,620,353 |
|
|
1,034,120 |
|
|
6,256,910 |
|
|
1,657,595 |
|
Transaction
costs |
- |
|
|
- |
|
|
5,765,407 |
|
|
- |
|
Change in
fair value of contingent consideration |
- |
|
|
- |
|
|
(820,000 |
) |
|
- |
|
Total operating expenses |
10,013,130 |
|
|
2,019,201 |
|
|
18,114,727 |
|
|
3,033,735 |
|
Loss from
operations |
(10,013,130 |
) |
|
(2,019,201 |
) |
|
(18,114,727 |
) |
|
(3,033,735 |
) |
Other
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Loss on sale
of NTN assets |
(50,000 |
) |
|
- |
|
|
(9,648,173 |
) |
|
- |
|
Other
expense, net |
(22,187 |
) |
|
(14,245 |
) |
|
(24,751 |
) |
|
(18,923 |
) |
Total other expenses |
(72,187 |
) |
|
(14,245 |
) |
|
(9,672,924 |
) |
|
(18,923 |
) |
Net
loss |
(10,085,317 |
) |
|
(2,033,446 |
) |
|
(27,787,651 |
) |
|
(3,052,658 |
) |
Series A
preferred stock dividend |
(7,806 |
) |
|
- |
|
|
(7,806 |
) |
|
- |
|
Net loss attributable to common stockholders |
$ |
(10,093,123 |
) |
|
$ |
(2,033,446 |
) |
|
$ |
(27,795,457 |
) |
|
$ |
(3,052,658 |
) |
Net loss per
common share - basic and diluted |
$ |
(0.24 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.79 |
) |
|
$ |
(0.17 |
) |
Weighted
average shares outstanding - basic and diluted |
42,448,188 |
|
|
17,583,489 |
|
|
35,187,292 |
|
|
17,542,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
BROOKLYN
IMMUNOTHERAPEUTICS, INC. |
CONSOLIDATED
STATEMENTS OF CASH FLOWS |
|
|
|
|
|
For the six months endedJune 30, |
|
2021 |
|
2020 |
Cash flows
used in operating activities: |
|
|
|
Net loss |
$ |
(27,787,651 |
) |
|
$ |
(3,052,658 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
Depreciation and amortization |
|
63,485 |
|
|
|
47,638 |
|
Stock-based compensation |
|
1,573,393 |
|
|
|
45,468 |
|
Amortization of right-to-use asset |
|
148,702 |
|
|
|
- |
|
Transaction costs - shares to Financial Advisor |
|
5,765,407 |
|
|
|
- |
|
Loss on sale of NTN assets |
|
9,648,173 |
|
|
|
- |
|
Change in fair value of contingent consideration |
|
(820,000 |
) |
|
|
- |
|
Changes in operating assets and liabilities: |
|
|
|
Account receivable |
|
4,680 |
|
|
|
- |
|
Prepaid expenses and other current assets |
|
(1,509,284 |
) |
|
|
(79,175 |
) |
Security deposits and other non-current assets |
|
(26,909 |
) |
|
|
(84,915 |
) |
Accounts payable and accrued expenses |
|
2,844,135 |
|
|
|
(942,836 |
) |
Operating lease liability |
|
(138,895 |
) |
|
|
(468 |
) |
Other liabilities |
|
- |
|
|
|
10,324 |
|
Net cash used in operating activities |
|
(10,234,764 |
) |
|
|
(4,056,622 |
) |
Cash flows
provided by (used in) investing activities: |
|
|
|
Purchase of property and equipment |
|
- |
|
|
|
(26,177 |
) |
Purchase of NTN, net of cash acquired |
|
147,262 |
|
|
|
- |
|
Proceeds from the sale of NTN assets, net of cash disposed |
|
118,594 |
|
|
|
- |
|
Net cash provided by (used in) investing activities |
|
265,856 |
|
|
|
(26,177 |
) |
Cash flows
provided by financing activities: |
|
|
|
Net proceeds of common stock issued to Lincoln Park |
|
48,524,918 |
|
|
|
- |
|
Proceeds from the exercise of stock options |
|
10,202 |
|
|
|
- |
|
Proceeds from loans payable |
|
- |
|
|
|
309,905 |
|
Repayment of NTN's PPP Loan |
|
(531,994 |
) |
|
|
- |
|
Proceeds from sale of members' equity |
|
10,500,000 |
|
|
|
3,858,750 |
|
Net cash provided by financing activities |
|
58,503,126 |
|
|
|
4,168,655 |
|
Net increase
in cash and cash equivalents |
|
48,534,218 |
|
|
|
85,856 |
|
Cash and
cash equivalents at beginning of period |
|
1,630,455 |
|
|
|
5,100,819 |
|
Cash and
cash equivalents at end of period |
$ |
50,164,673 |
|
|
$ |
5,186,675 |
|
Supplemental
disclosures of cash flow information: |
|
|
|
Cash paid during the period for: |
|
|
|
Interest |
$ |
- |
|
|
$ |
- |
|
Income taxes |
$ |
- |
|
|
$ |
- |
|
Supplemental
disclosure of non-cash investing and financing activities: |
|
|
|
Issuance of common stock for Series A preferred stock dividend |
$ |
7,806 |
|
|
$ |
- |
|
Issuance of Common Stock for business combination |
$ |
8,177,457 |
|
|
$ |
- |
|
Forfeiture of unvested restricted stock |
$ |
(60 |
) |
|
$ |
- |
|
Preferred shares issued in connection with reverse merger |
$ |
781 |
|
|
$ |
- |
|
Initial measurement of ROU assets and liabilities |
$ |
873,629 |
|
|
$ |
- |
|
|
|
|
|
Forward-Looking Statements
The third, fourth and fifth paragraphs of this release and the
second and third paragraphs under the heading “Financial Results
for Quarter Ended June 30, 2021” contain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which are intended to be covered by the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are any statements that are not
statements of historical fact and may be identified by terminology
such as “believe,” “could,” “estimate,” “plan,” “possible,”
“potential,” “project,” “will” or other similar words.
Forward-looking statements are based on current beliefs and
assumptions that are subject to risks and uncertainties and are not
guarantees of future performance. Actual results could differ
materially from those stated or implied in any forward-looking
statement as a result of various factors, including, but not
limited to, uncertainties related to: (i) the evolution of
Brooklyn’s business model into a platform company focused on
cellular, gene editing and cytokine programs; (ii) Brooklyn’s
ability to successfully, cost-effectively and efficiently develop
its technology and products; (iii) Brooklyn’s ability to
successfully commence clinical trials of any products on a timely
basis or at all; (iv) Brooklyn’s ability to successfully fund
and manage the growth of its development activities;
(v) Brooklyn’s ability to obtain regulatory approvals of its
products for commercialization; and (vi) uncertainties related to
the impact of the COVID-19 pandemic on the business and financial
condition of Brooklyn, including on the timing and cost of its
clinical trials. You should not rely upon forward-looking
statements as predictions of future events. The forward-looking
statements made in this communication speak only as of the date on
which they were made, and Brooklyn does not undertake any
obligation to update the forward-looking statements contained
herein to reflect events that occur or circumstances that exist
after the date hereof, except as may be required by applicable law
or regulation. Factors that may impact Brooklyn's success are
more fully disclosed in Brooklyn's periodic public filings with
the U.S. Securities and Exchange Commission, particularly
under the heading “Risk Factors.”
Investor Relations Contact:CORE
IR516-222-2560investors@brooklynitx.com
Media Contact:Jules AbrahamCORE
IR917-885-7378julesa@coreir.com
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