Cellect Biotechnology Reports First Quarter 2020 Financial and Operating Results; Continues to Demonstrate Significant Progre...
May 21 2020 - 4:00PM
Cellect Biotechnology Ltd. (NASDAQ: "APOP"), a developer of
innovative technology which enables the functional selection of
stem cells, today reported financial and operating results for the
first quarter ended March 31, 2020 and provided an update on recent
operating developments, including the status of the previously
announced LOIs with Canndoc Ltd, a wholly owned subsidiary of
publicly-traded Intercure Ltd. (TASE: INCR).
First Quarter and Recent Operating
Milestones
- Entered into an international consortium of companies to
examine the therapeutic effects of stem cells on the reduction of
pulmonary manifestations caused by COVID-19. The
cytokine storm typical to COVID-19-related Acute Respiratory
Distress Syndrome (ARDS) is similar in mechanism to the GvHD, and
therefore Cellect may use its clinical data to expedite the
development of therapy for COVID-19. This collaboration is in the
early phase and the results will be published following the
conclusion of the preliminary studies.
- Expanded its thought leadership as a featured article
highlighting the safety and tolerability of ApoGraft was accepted
for publication in Bone Marrow Transplantation, a high quality,
peer-reviewed journal published monthly by Nature Research. The
results highlighted in the article were included, along with other
data, in the Company’s Investigational New Drug (IND), which was
accepted and approved by the U.S. Food and Drug Administration
(FDA) in December 2019.
- Strengthened its intellectual property (IP) portfolio in
multiple jurisdictions: China, Europe, Australia, Canada and
Israel. The Company owns 64 patents in 9 patent families, with
45 already granted/allowed patents, 17 pending/in examination and 2
PCT applications, and plans to continue expanding and protecting
its global IP to create further barriers to entry.
- Bolstered its balance through a registered direct offering of
$3.0 million, before deducting fees and other estimated offering
expenses.
“Although the COVID-19 pandemic has delayed the
initiation of our first U.S. trial (for which we have already
received the IND approval from the U.S. Food and Drug
Administration and completed the technology transfer to our
academic partner - Washington University) and slowed the
recruitment of the final patient in the Israel trial, we remain
bullish on Cellect’s long-term business prospects,” commented Dr.
Shai Yarkoni, Chief Executive Officer. “In addition to these
clinical opportunities, we are making considerable progress
elsewhere to advance our core capabilities and seeding potentially
sizeable revenue opportunities.”
While the Company is continuing to conduct its
due diligence and negotiate a definitive agreement with Canndoc
Ltd., the business disruption caused by the ongoing COVID-19
pandemic is delaying the execution and completion of certain other
closing conditions, such as delivery of a fairness opinion and
approval of the IMCA (Israeli Medical Cannabis Agency). Upon
the closing of the merger, the Company and Canndoc Ltd. intend to
fulfill all of the requirements to ensure the Company’s ADRs and
warrants continue trading on the Nasdaq Stock Market (Nasdaq). The
proposed merger is also subject to approval of the Company’s Board
and shareholders and other customary closing conditions.
The Company’s cash and cash equivalents totaled
$7.08 million as of March 31, 2020. As previously disclosed
on May 12, 2020, several investors exercised certain warrants that
were issued in February 2019 for cash proceeds of approximately
$1.5 million.
First Quarter 2020
Financial Results:
- Research and development (R&D) expenses for the first
quarter of 2020 were $0.43 million, compared to $0.72 million in
the fourth quarter of 2019 and $0.99 million in the first quarter
of 2019. The decrease in the first quarter of 2020 as compared to
the fourth quarter of 2019 was primarily due expenses related to
our Fas Ligand manufacturing campaign finalized in the fourth
quarter of 2019.
- General and administrative (G&A) expenses for the first
quarter of 2020 were $0.73 million, compared to $0.67 million in
the fourth quarter of 2019 and $0.66 million in the first quarter
of 2019. The increase in the first quarter of 2020 as compared to
the fourth quarter of 2019 was primarily due to increase in
expenses related to provision for bonuses for 2019 payable in the
second quarter of 2020.
- Finance income for the first quarter of 2020 was $0.44 million,
compared to finance expenses of $0.32 million in the fourth quarter
of 2019. The change was primarily due to changes related to the
fair value of the tradable and non-tradable warrants issued in a
prior fundraising.
- Net loss for the first quarter of 2020 was $0.72 million, or
$0.002 per share, compared to $1.70 million, or $0.008 per share,
in the fourth quarter of 2019, and $1.43 million, or $0.008 per
share, in the first quarter of 2019.
* For the convenience of the reader, the amounts
above have been translated from NIS into U.S. dollars, at the
representative rate of exchange on March 31, 2020 (U.S. $1 = NIS
3.565).
About Cellect Biotechnology
Ltd.
Cellect Biotechnology (APOP) has developed a
breakthrough technology, for the selection of stem cells from any
given tissue, that aims to improve a variety of stem cell-based
therapies.
The Company's technology is expected to provide
researchers, clinical community and pharma companies with the tools
to rapidly isolate stem cells in quantity and quality allowing stem
cell-based treatments and procedures in a wide variety of
applications in regenerative medicine. The Company's current
clinical trial is aimed at bone marrow transplantations in cancer
treatment.
Forward Looking Statements
This press release contains forward-looking
statements about the Company's expectations, beliefs and
intentions. Forward-looking statements can be identified by the use
of forward-looking words such as "believe", "expect", "intend",
"plan", "may", "should", "could", "might", "seek", "target",
"will", "project", "forecast", "continue" or "anticipate" or their
negatives or variations of these words or other comparable words or
by the fact that these statements do not relate strictly to
historical matters. For example, forward-looking statements are
used in this press release when we discuss Cellect's expectations
regarding timing of the commencement of its planned U.S. clinical
trial and its plan to reduce operating costs. These forward-looking
statements and their implications are based on the current
expectations of the management of the Company only and are subject
to a number of factors and uncertainties that could cause actual
results to differ materially from those described in the
forward-looking statements. In addition, historical results or
conclusions from scientific research and clinical studies do not
guarantee that future results would suggest similar conclusions or
that historical results referred to herein would be interpreted
similarly in light of additional research or otherwise. The
following factors, among others, could cause actual results to
differ materially from those described in the forward-looking
statements: the Company's history of losses and needs for
additional capital to fund its operations and its inability to
obtain additional capital on acceptable terms, or at all; the
Company's ability to continue as a going concern; uncertainties of
cash flows and inability to meet working capital needs; the
Company's ability to obtain regulatory approvals; the Company's
ability to obtain favorable pre-clinical and clinical trial
results; the Company's technology may not be validated and its
methods may not be accepted by the scientific community;
difficulties enrolling patients in the Company's clinical trials;
the ability to timely source adequate supply of FasL; risks
resulting from unforeseen side effects; the Company's ability to
establish and maintain strategic partnerships and other corporate
collaborations; the scope of protection the Company is able to
establish and maintain for intellectual property rights and its
ability to operate its business without infringing the intellectual
property rights of others; competitive companies, technologies and
the Company's industry; unforeseen scientific difficulties may
develop with the Company's technology; the Company's ability to
retain or attract key employees whose knowledge is essential to the
development of its products; and the Company’s ability to pursue
any strategic transaction or that any transaction, if pursued, will
be completed. Any forward-looking statement in this press release
speaks only as of the date of this press release. The Company
undertakes no obligation to publicly update or review any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by any
applicable securities laws. More detailed information about the
risks and uncertainties affecting the Company is contained under
the heading "Risk Factors" in Cellect Biotechnology Ltd.'s Annual
Report on Form 20-F for the fiscal year ended December 31, 2019
filed with the U.S. Securities and Exchange Commission, or SEC,
which is available on the SEC's website, www.sec.gov, and in the
Company's periodic filings with the SEC.
ContactCellect Biotechnology
Ltd. Eyal Leibovitz, Chief Financial
Officerwww.cellect.co+972-9-974-1444Or
EVC Group LLC Michael Polyviou(732)
933-2754mpolyviou@evcgroup.com
Cellect Biotechnology Ltd.Consolidated Statement
of Operation
|
|
Convenience |
|
|
|
|
|
|
translation |
|
|
|
|
|
|
Three monthsended |
|
Three months ended |
|
|
March 31, |
|
March 31, |
|
|
2020 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
Unaudited |
|
Unaudited |
|
|
U.S. dollars |
|
NIS |
|
|
|
|
|
|
|
Research and development expenses, net |
|
431 |
|
|
1,537 |
|
|
3,523 |
|
|
|
|
|
|
|
|
General and administrative expenses |
|
726 |
|
|
2,587 |
|
|
2,355 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating loss |
|
1,157 |
|
|
4,124 |
|
|
5,878 |
|
|
|
|
|
|
|
|
Financial expenses (income) due to warrants exercisable into
ADS |
|
(250 |
) |
|
(890 |
) |
|
(1,192 |
) |
|
|
|
|
|
|
|
Other financial expenses (income), net |
|
(191 |
) |
|
(682 |
) |
|
418 |
|
|
|
|
|
|
|
|
Total comprehensive loss |
|
716 |
|
|
2,552 |
|
|
5,104 |
|
|
|
|
|
|
|
|
Loss per share and ADS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per share |
|
0.002 |
|
|
0.008 |
|
|
0.029 |
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding used to compute basic
and diluted loss per share |
|
324,311,822 |
|
|
324,311,822 |
|
|
177,277,833 |
|
|
|
|
|
|
|
|
|
|
|
Cellect Biotechnology Ltd.Consolidated Balance
Sheet Data
|
Convenience |
|
|
|
|
|
|
translation |
|
|
|
|
|
|
March 31, |
|
March 31, |
|
December 31, |
|
|
2020 |
|
2020 |
|
2019 |
|
Unaudited |
|
Unaudited |
|
Audited |
|
|
|
|
|
U.S. dollars |
|
NIS |
|
(In thousands, except share and per share
data) |
CURRENT ASSETS: |
|
|
|
|
|
Cash and cash equivalents |
7,077 |
|
|
25,231 |
|
|
18,106 |
|
Other receivables |
115 |
|
|
409 |
|
|
469 |
|
|
|
|
|
|
|
|
7,192 |
|
|
25,640 |
|
|
18,575 |
|
NON-CURRENT ASSETS: |
|
|
|
|
|
Restricted cash |
93 |
|
|
332 |
|
|
328 |
|
Right of use - Assets under operating lease |
280 |
|
|
1,000 |
|
|
1,035 |
|
Other long-term receivables |
24 |
|
|
85 |
|
|
94 |
|
Property, plant and equipment, net |
328 |
|
|
1,168 |
|
|
1,288 |
|
|
|
|
|
|
|
|
725 |
|
|
2,585 |
|
|
2,745 |
|
|
|
|
|
|
|
|
7,917 |
|
|
28,225 |
|
|
21,320 |
|
CURRENT LIABILITIES: |
|
|
|
|
|
Trade payables |
240 |
|
|
855 |
|
|
158 |
|
Other payables |
892 |
|
|
3,181 |
|
|
3,080 |
|
Current maturities of lease liability |
118 |
|
|
419 |
|
|
396 |
|
|
1,250 |
|
|
4,455 |
|
|
3,634 |
|
NON-CURRENT LIABILITIES: |
|
|
|
|
|
Warrants to ADS |
360 |
|
|
1,282 |
|
|
2,172 |
|
Lease liability |
175 |
|
|
625 |
|
|
677 |
|
|
535 |
|
|
1,907 |
|
|
2,849 |
|
EQUITY: |
|
|
|
|
|
Ordinary shares of no par value: |
|
|
|
|
|
|
|
|
Authorized: 500,000,000 shares at December 31, 2019 and March
31, 2020; Issued and outstanding: 224,087,799*) and 337,533,079*)
shares as of December 31, 2019 and March 31, 2020,
respectively. |
- |
|
|
- |
|
|
- |
|
Additional Paid in Capital |
33,363 |
|
|
118,939 |
|
|
108,598 |
|
Share-based payments |
4,422 |
|
|
15,765 |
|
|
16,528 |
|
Treasury shares |
(2,644 |
) |
|
(9,425 |
) |
|
(9,425 |
) |
Accumulated deficit |
(29,009 |
) |
|
(103,416 |
) |
|
(100,864 |
) |
|
|
|
|
|
|
|
6,132 |
|
|
21,863 |
|
|
14,837 |
|
|
|
|
|
|
|
|
7,917 |
|
|
28,225 |
|
|
21,320 |
|
|
|
|
|
|
|
|
|
|
*) Net of 2,641,693
treasury shares of the Company held by the Company.
Cellect Biotechnology Ltd.Consolidated Cash Flow
Data
|
|
Convenience |
|
|
|
|
|
translation |
|
|
|
|
|
Three monthsended |
Three months ended |
|
|
March 31, |
March 31, |
|
|
2020 |
2020 |
|
2019 |
|
|
|
|
|
|
Unaudited |
Unaudited |
|
|
U.S. dollars |
NIS |
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
|
Total comprehensive loss |
|
(716 |
) |
(2,552 |
) |
|
(5,104 |
) |
|
|
|
|
|
|
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
Exchange rate difference |
|
(195 |
) |
(695 |
) |
|
372 |
|
Loss from revaluation of financial assets presented at fair value
through profit and loss |
|
- |
|
- |
|
|
4 |
|
Depreciation |
|
24 |
|
86 |
|
|
98 |
|
Share-based payment |
|
101 |
|
361 |
|
|
(215 |
) |
Changes in fair value of traded and not traded warrants to ADS |
|
(250 |
) |
(890 |
) |
|
(2,546 |
) |
Finance expenses |
|
5 |
|
19 |
|
|
- |
|
Interest received |
|
3 |
|
12 |
|
|
- |
|
Decrease (increase) in other receivables |
|
20 |
|
71 |
|
|
70 |
|
Depreciation in right of use assets |
|
26 |
|
91 |
|
|
114 |
|
Increase (decrease) in other payables |
|
244 |
|
868 |
|
|
15 |
|
Net cash used in operating activities |
|
(738 |
) |
(2,629 |
) |
|
(7,192 |
) |
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
Restricted deposit |
|
(1 |
) |
(4 |
) |
|
- |
|
Marketable securities measured at fair value through profit and
loss, net |
|
- |
|
- |
|
|
- |
|
Sales (Purchase) of property, plant and equipment |
|
9 |
|
34 |
|
|
(120 |
) |
Net cash provided by investing activities |
|
8 |
|
30 |
|
|
(120 |
) |
Cash flows from financing activities: |
|
|
|
|
|
Exercise of warrants and stock options into shares |
|
7 |
|
23 |
|
|
- |
|
Issue of share capital and warrants, net of issue costs |
|
2,559 |
|
9,123 |
|
|
24,837 |
|
Interest paid |
|
- |
|
- |
|
|
37 |
|
Repayment of lease liability |
|
(29 |
) |
(104 |
) |
|
(137 |
) |
Net cash provided by financing activities |
|
2,537 |
|
9,042 |
|
|
24,737 |
|
Exchange differences on balances of cash and cash equivalents |
|
191 |
|
682 |
|
|
(372 |
) |
Increase (decrease) in cash and cash equivalents |
|
1,998 |
|
7,125 |
|
|
17,053 |
|
Balance of cash and cash equivalents at the beginning of the
period |
|
5,079 |
|
18,106 |
|
|
17,809 |
|
Balance of cash and cash equivalents at the end of the
period |
|
7,077 |
|
25,231 |
|
|
34,862 |
|
|
|
|
|
|
|
|
|
|
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