Substantial progress over the year,
advancing programs andexpanding collaboration with
HEALIOS K.K.
Athersys, Inc. (NASDAQ: ATHX) announced today its fourth quarter
2018 and annual 2018 financial results and recent highlights.
“As we have announced previously, we had a
number of important accomplishments in 2018, including the
initiation of our Phase 3 MASTERS-2 study and the expansion of our
partnership with Healios. Additionally, we completed
enrollment of, and recently announced positive results for, our
exploratory clinical study of MultiStem® treatment of acute
respiratory distress syndrome patients,” commented Dr. Gil Van
Bokkelen, Chairman and Chief Executive Officer of Athersys. “We
also finished the year in a meaningfully stronger financial
position, which was an important objective.”
Fourth Quarter 2018 and Recent Highlights:
- Announced positive results from our exploratory clinical study
of MultiStem cell therapy for treatment of acute respiratory
distress syndrome (ARDS), further confirming the tolerability and
safety profile of MultiStem treatment and demonstrating trends of
lower mortality and greater ventilator-free and ICU-free days; the
study has been selected for presentation at the American Thoracic
Society International Conference in May 2019;
- Our partner, HEALIOS K.K. (Healios), announced plans to
initiate an ARDS trial using MultiStem therapy for patients in
Japan, which, if successful could lead to registration under
Japan’s regenerative medicine regulatory framework;
- Advanced our ischemic stroke program through continued support
of Healios’ Japan TREASURE trial and enrollment of our MASTERS-2
Phase 3 registration study for ischemic stroke;
- Received a $2.0 million payment from Healios for a right of
first negotiation through June 2019 for an option to develop and
commercialize MultiStem therapy for certain indications in China;
Healios may extend the negotiation period through December 2019
with an additional payment of $3.0 million;
- Recognized revenues of $1.5 million and net loss of
$11.3 million, or $0.08 net loss per share, for the quarter
ended December 31, 2018; and
- Ended 2018 with $51.1 million in cash and cash equivalents
and February 28, 2019 with $51.5 million in cash and cash
equivalents, reflecting a solid financial foundation.
Other 2018 Highlights:
- Expanded our collaboration with Healios in June 2018 to include
additional areas - such as development for the treatment of ARDS in
Japan, iPSC and MultiStem cells in combination to treat dysfunction
in certain organs in Japan, and potential use of MultiStem cells
alone or with RPE cells for certain ophthalmological indications
globally - for $20 million in license fees, plus potential
milestone payments and royalties; this followed a $21.1 million
investment by Healios through the purchase of our common stock in
March 2018;
- Commenced the MASTERS-2 Phase 3 registration study for ischemic
stroke and started enrolling patients;
- Completed the enrollment of our exploratory clinical study of
MultiStem cell therapy treatment for ARDS, and announced positive
results soon thereafter as noted above;
- Announced grant funding and began preparations to conduct a
Phase 2 clinical trial evaluating MultiStem cell therapy for early
treatment and prevention of complications after severe traumatic
injury, in collaboration with The University of Texas Health
Science Center at Houston and Hermann Memorial Trauma Center;
- Expanded our process development and manufacturing efforts,
including strategic leadership hires and diversification in our
manufacturing networks; and
- Entered into a new equity facility during the first quarter of
2018 as a follow-on to the existing facility, giving us the right
to sell up to $100 million of common stock over a three-year
period, providing access to capital, as needed, to support
operations.
“We believe we are well-positioned to capitalize
on our innovative MultiStem product platform and to develop and
deliver highly effective new treatments to patients in areas of
substantial unmet medical need, particularly in the critical care
area. The Healios’ TREASURE trial and our MASTERS-2 trial are
making continued progress, and the results from our exploratory
ARDS trial illustrate the potential of MultiStem therapy in other
acute care settings. We continue to work toward the scale-up of our
manufacturing capabilities and to focus on the further development
of other core capabilities and programs, while we continue to
explore additional partnering opportunities,” concluded Dr. Van
Bokkelen.
Fourth Quarter 2018 Financial Results
Revenues increased to $1.5 million for the three months
ended December 31, 2018 compared to $1.2 million for the
three months ended December 31, 2017. Our revenues are
generally derived from license fees, manufacturing-related services
for Healios, royalty and related contract revenue from our
collaborations, and grant revenue.
Research and development expenses decreased to
$10.2 million for the three months ended December 31,
2018 from $12.1 million for the comparable period in 2017. In
2017, approximately $4.7 million of license fees were expensed (of
which $3.2 million was non-cash) related to a settlement and
license agreement. After factoring in this one-time charge, the net
$2.8 million increase is associated with increased clinical
development costs of $1.6 million, personnel costs of
$0.6 million, internal research supplies of $0.2 million
and other expenses of $0.4 million. The $1.6 million
increase in our clinical costs during the period is primarily
related to clinical product manufacturing, covered in part by
Healios, technology transfer services associated with planned Japan
manufacturing for Healios, process development activities to
support large-scale manufacturing, and our MASTERS-2 clinical trial
that began enrolling patients in the third quarter of 2018.
General and administrative expenses increased to
$2.8 million for the three months ended December 31, 2018
from $2.1 million in the comparable period in 2017. The
$0.7 million increase was due primarily to increases in
personnel costs, professional fees, stock compensation costs and
other administrative costs compared to the same period last
year.
Net loss for the fourth quarter was $11.3 million in 2018
compared to a net loss of $13.1 million in the fourth quarter
of 2017. The difference of $1.8 million reflects the above
variances, as well as an increase of $0.3 million in other
income items.
Full Year 2018 Financial Results
Revenues increased to $24.3 million for the year ended December
31, 2018 from $3.7 million in 2017. Our contract revenues from our
collaboration with Healios increased $21.4 million year over year,
reflecting the expansion of our collaboration in June 2018 to
include additional licensed indications, among other things.
Included in our 2018 revenues were royalties and other contract
revenues of $1.5 million ($1.9 million in 2017) primarily related
to our collaboration with RTI Surgical, Inc., which recently
announced that it will cease distribution of its bone graft product
that utilizes our technology.
Research and development expenses increased to $38.7 million for
the year ended December 31, 2018 from $27.8 million for the year
ended December 31, 2017. The increase in research and development
expenses year-over-year of $10.9 million related to increases in
clinical trial and manufacturing process development costs of $11.4
million, personnel costs of $1.6 million, and internal supply and
other costs of $1.6 million. These increases were partially offset
by a decrease in license fees of $3.7 million related to the
settlement and license agreement in 2017 with one-time payments of
cash and stock that concluded in 2018.
General and administrative expenses increased to $10.4 million
in 2018 from $8.5 million in 2017. The $1.9 million increase was
due primarily to increases in personnel costs, legal and
professional services and stock compensation expense.
Net loss was $24.3 million in 2018 compared to a net loss
of $32.2 million in 2017. The difference of $7.9 million
reflects the above variances, as well as a decrease of
$0.1 million in other net expenses.
In the twelve months ended December 31, 2018, net cash used
in operating activities was $13.4 million compared to
$24.0 million in the twelve months ended December 31,
2017. The difference reflects in part license fees paid by Healios
in connection with the collaboration expansion being partially
offset by an increase in clinical development activity in 2018.
At December 31, 2018, we had $51.1 million in cash and
cash equivalents, compared to $29.3 million at
December 31, 2017.
Conference Call
Gil Van Bokkelen, Chairman and Chief Executive Officer, William
(B.J.) Lehmann, President and Chief Operating Officer, and Laura
Campbell, Senior Vice President of Finance, will host a conference
call today to review the results as follows:
Date |
|
March 14, 2019 |
Time |
|
4:30 p.m. (Eastern Time) |
Telephone access: U.S. and Canada |
|
(877) 396-3286 |
Telephone access: International |
|
(647) 689-5528 |
Encore Password (needed for the replay only) |
|
7677927 |
Live webcast |
|
www.athersys.com, under the Investors section |
We encourage shareholders to listen using the webcast link, and
to use the phone line if you intend to ask a question. A replay
will be available on the webcast at www.athersys.com under the
investors section approximately two hours after the call has ended.
Shareholders may also call in for on-demand listening shortly after
the completion of the call until 11:59 PM Eastern Time on March 21,
2019 by dialing (800) 585-8367 or (416) 621-4642 and entering
Encore passcode 7677927. The archived webcast will be available for
one year at the aforementioned URL.
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, which could negatively impact our trials and the trials of
our collaborators; 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 and generate sales related to our
technologies; 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.
Contacts:
William (B.J.) LehmannPresident and Chief Operating OfficerTel:
(216) 431-9900bjlehmann@athersys.com
Karen HunadyDirector of Corporate Communications &
Investor RelationsTel: (216) 431-9900khunady@athersys.com
David SchullRusso Partners, LLCTel: (212) 845-4271 or (858)
717-2310David.schull@russopartnersllc.com
(Tables Follow)
Athersys, Inc.Condensed
Consolidated Balance Sheets(Unaudited)(In
thousands)
|
December 31, |
|
2018 |
|
2017 |
Assets |
|
|
|
Cash and cash
equivalents |
$ |
51,059 |
|
|
$ |
29,316 |
|
Accounts
receivable |
262 |
|
|
586 |
|
Accounts receivable
from Healios, billed and unbilled |
4,728 |
|
|
153 |
|
Prepaid expenses,
deposits and other |
2,679 |
|
|
1,332 |
|
Equipment, net |
3,002 |
|
|
2,206 |
|
Total
assets |
$ |
61,730 |
|
|
$ |
33,593 |
|
|
|
|
|
Liabilities and
stockholders’ equity |
|
|
|
Accounts payable and
accrued expenses |
$ |
12,801 |
|
|
$ |
9,312 |
|
Deposit from
Healios |
2,000 |
|
|
— |
|
Deferred revenue |
674 |
|
|
771 |
|
Advance from
Healios |
3,139 |
|
|
134 |
|
Total stockholders’
equity |
43,116 |
|
|
23,376 |
|
Total
liabilities and stockholders’ equity |
$ |
61,730 |
|
|
$ |
33,593 |
|
Athersys, Inc.Condensed
Consolidated Statements of Operations and Comprehensive
Loss(Unaudited)(In Thousands, Except Per
Share Amounts)
|
|
Three months endedDecember
31, |
|
Twelve months ended December 31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenues
(1) |
|
|
|
|
|
|
|
|
Contract revenue from
Healios |
|
$ |
1,267 |
|
|
$ |
686 |
|
|
$ |
22,276 |
|
|
$ |
918 |
|
Royalty and other
contract revenue |
|
158 |
|
|
269 |
|
|
1,461 |
|
|
1,925 |
|
Grant revenue |
|
89 |
|
|
215 |
|
|
554 |
|
|
865 |
|
Total
revenues |
|
1,514 |
|
|
1,170 |
|
|
24,291 |
|
|
3,708 |
|
Costs and
expenses |
|
|
|
|
|
|
|
|
Research and
development |
|
10,167 |
|
|
12,134 |
|
|
38,656 |
|
|
27,841 |
|
General and
administrative |
|
2,846 |
|
|
2,075 |
|
|
10,442 |
|
|
8,466 |
|
Depreciation |
|
283 |
|
|
176 |
|
|
855 |
|
|
684 |
|
Total
costs and expenses |
|
13,296 |
|
|
14,385 |
|
|
49,953 |
|
|
36,991 |
|
Gain from insurance
proceeds, net |
|
234 |
|
|
— |
|
|
617 |
|
|
— |
|
Loss from
operations |
|
(11,548 |
) |
|
(13,215 |
) |
|
(25,045 |
) |
|
(33,283 |
) |
Income from change in
fair value of warrants |
|
— |
|
|
— |
|
|
— |
|
|
728 |
|
Other income, net |
|
227 |
|
|
115 |
|
|
762 |
|
|
314 |
|
Net loss and
comprehensive loss |
|
$ |
(11,321 |
) |
|
$ |
(13,100 |
) |
|
$ |
(24,283 |
) |
|
$ |
(32,241 |
) |
Net loss per common
share — basic and diluted |
|
$ |
(0.08 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.29 |
) |
Weighted average shares
outstanding — basic and diluted |
|
142,315 |
|
|
119,611 |
|
|
136,641 |
|
|
112,053 |
|
(1) We adopted Accounting Standards Update No. 2014-09, Revenue
from Contracts with Customers, effective January 1, 2018. As a
result, the recognized revenue in 2018 is not accounted for on the
same basis as the prior years and is not comparable largely due to
the timing of revenue recognition.
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