On May 7, 2020 Athersys, Inc. (NASDAQ: ATHX) reported its financial results for the three months ended March 31, 2020 (Press release, Athersys, MAY 7, 2020, View Source [SID1234557275]).
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Highlights of the first quarter of 2020 and recent events include:
Received authorization from the U.S. Food and Drug Administration (FDA) to initiate a Phase 2/3 COVID-19 induced acute respiratory distress syndrome (ARDS) clinical trial; completed site initiation and began enrolling patients in this trial referred to as the MACOVIA study;
Received FDA authorization to initiate a Phase 2 clinical trial with The University of Texas Health Science Center at Houston (UTHealth) titled MultiStem Administration for Trauma Related Inflammation and Complications (MATRICS-1); funded by a grant from the Medical Technology Enterprise Consortium (MTEC) and the Memorial Hermann Foundation;
Announced positive one-year results from our exploratory clinical study of MultiStem cell therapy for ARDS; MultiStem treated patients reported consistent improvement in quality of life over the one-year evaluation period and showed marked improvements in key clinical metrics, including intensive care unit-free days, ventilator-free days and mortality compared to placebo, especially in patients with pneumonia-induced ARDS;
Furthered discussions with the Biomedical Advanced Research and Development Authority (BARDA) to establish a collaboration to advance our MultiStem program;
Appointed Mr. Ivor Macleod as our Chief Financial Officer and Ms. Maia Hansen as Senior Vice President, Operations and Supply Chain, adding their expertise to our leadership team to help plan and execute our strategy as we approach potential product commercialization;
Initiated new sites for the MASTERS-2 ischemic stroke study while continuing to enroll new patients into the trial;
Advanced through our Japanese partner, HEALIOS K.K. (Healios), its ARDS and ischemic stroke programs, with Healios disclosing its intent to finish enrollment of both its ONE-BRIDGE ARDS study and its TREASURE stroke study this year;
Engaged in partnering discussions with companies interested in MultiStem commercialization rights in Europe and other regions;
Received an additional $7.0 million investment from Healios resulting from its exercise in full of a warrant to purchase additional shares of Athersys common stock;
Raised gross proceeds of approximately $57.6 million, before deducting the underwriting discount and offering expenses, through an underwritten public offering of 25,587,500 shares of common stock, providing additional working capital for general corporate purposes, including the initiation of the MACOVIA trial, further advancement of process development and manufacturing projects, and other key initiatives;
Recognized net loss of $15.6 million, or $0.10 net loss per share, for the quarter ended March 31, 2020; and
Ended the first quarter with $32.7 million of cash and cash equivalents, which excludes the impact of the Healios warrant exercise and proceeds from the recent underwritten public offering.
"We have achieved a number of important milestones recently, including obtaining FDA authorization to move two important trials forward. The first of these, the MACOVIA study for treating patients suffering from COVID-19 induced ARDS and related complications, represents our second pivotal trial, alongside our ongoing MASTERS-2 trial evaluating the administration of MultiStem for treating ischemic stroke. Working in collaboration with the FDA and our clinical partners, we were able to get the MACOVIA trial designed, authorized and up and running very quickly, and we thank everyone for their tremendous commitment and effort over the past several months, " commented Dr. Gil Van Bokkelen, Chairman and CEO of Athersys. "In addition, we recently announced authorization to initiate the MATRICS-1 trial for evaluating administration of MultiStem to patients suffering from serious traumatic injury, which is being supported by MTEC, the funding arm of the
Department of Defense, and UTHealth. We thank the FDA, MTEC and our clinical collaborators for their support in these advancements.
"Following the successful completion of the recent fundraising and the full exercise of the outstanding warrant by our partner, Healios, we have strengthened our financial position, and are focused on making further progress in our important programs and core capabilities. Despite the challenging and chaotic environment created by the COVID-19 pandemic, we have maintained our commitment to the advancement of our portfolio of critical care programs and to helping patients in areas of significant unmet clinical need. I’d like to thank each of our employees for their dedication, determination and extraordinary effort," concluded Dr. Van Bokkelen.
First Quarter Results
There were no revenues for the three months ended March 31, 2020 compared to $1.4 million for the three months ended March 31, 2019. The revenues in the prior period were generated from our collaboration with Healios related to manufacturing services performed. We expect our collaboration revenues to vary over time as we contract with Healios to perform manufacturing services and as we potentially enter into new collaborations.
Research and development expenses increased to $12.1 million for the three months ended March 31, 2020 from $11.4 million for the comparable period in 2019. The $0.7 million net increase is associated with increases in research supplies of $0.7 million, personnel costs of $0.3 million, outside services of $0.2 million, consulting costs of $0.1 million, stock compensation costs of $0.1 million and other research and development costs of $0.2 million with such increases partially offset by decreases in clinical trial and manufacturing process development costs of $0.9 million. Our clinical development, clinical manufacturing and manufacturing process development expenses vary over time based on the timing and stage of clinical trials underway, manufacturing campaigns for clinical trials and manufacturing process development projects.
General and administrative expenses increased to $3.5 million for the three months ended March 31, 2020 compared to $3.1 million in the comparable period in 2019. The $0.4 million increase was primarily due to increased personnel costs, outside services and stock compensation costs.
Net loss for the first quarter of 2020 was $15.6 million compared to a net loss of $13.0 million in the first quarter of 2019. The difference primarily results from the above variances.
During the three months ended March 31, 2020, net cash used in operating activities was $12.1 million compared to $5.5 million in the three months ended March 31, 2019. At March 31, 2020, we had $32.7 million in cash and cash equivalents, compared to $35.0 million at December 31, 2019.
Conference Call
Gil Van Bokkelen, Chairman and Chief Executive Officer, Ivor Macleod, Chief Financial Officer, and Karen Hunady, Director of Corporate Communications and Investor Relations will host a conference call today to review the results as follows:
Date
May 7, 2020
Time
4:30 p.m. (Eastern Time)
Telephone access: U.S. and Canada
(877) 396-3286
Telephone access: International
(647) 689-5528
Access code
6575418
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 May 14, 2020 by dialing (800) 585-8367 or (416) 621-4642 and entering Encore passcode 6575418.