On November 8, 2017 Athersys, Inc. (Nasdaq:ATHX) reported its financial results for the three months ended September 30, 2017 (Press release, Athersys, NOV 8, 2017, View Source [SID1234521789]).
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Highlights of the third quarter of 2017 and recent events include:
Our partner in Japan, HEALIOS K.K. (Healios), resumed enrollment in the TREASURE stroke clinical trial, following a temporary suspension related to placebo product;
Entered into agreement with Nikon CeLL innovation Co., Ltd. (Nikon) to prepare for manufacturing of MultiStem cell therapy for future commercialization in Japan by Healios;
Awarded Regenerative Medicine Advanced Therapy designation (RMAT) from U.S. Food and Drug Administration (FDA) for MultiStem ischemic stroke program under the landmark 21st Century Cures Legislation, which is intended to expedite the development and regulatory review process and lead to accelerated U.S. approval;
Received Final Scientific Advice positive opinion for stroke program from European Medicines Device Agency (EMA), establishing alignment between European and U.S. regulators about potential for product approval following a successful MASTERS-2 study;
Progressed discussions with multiple parties regarding collaboration and business opportunities associated with stroke program;
Included in Deloitte’s Technology Fast 500, a ranking of the 500 fastest growing technology, media, telecommunications, life sciences and energy tech companies in North America;
Recognized revenues of $0.4 million for quarter ended September 30, 2017 and net loss of $7.2 million, or $0.06 net loss per share; and
Maintained a stable balance sheet with cash and cash equivalents of $28.2 million at the end of the third quarter.
"Over the past year, we have submitted extensive data and information to the FDA, EMA and other regulators who have conducted a rigorous review of the results from the MASTERS-1 trial and the other information we have provided for their consideration," commented Dr. Gil Van Bokkelen, Chairman & CEO at Athersys. "In response, we have received multiple important regulatory designations, including the Fast Track designation from the FDA earlier this year and, more recently, the RMAT designation, as well as the positive opinion from EMA. These actions provide tangible evidence of the support we have received from regulators following their careful review of the clinical data and information, and the potential this program has for redefining clinical care for patients that have suffered a debilitating ischemic stroke.
"We are pleased that Healios’ stroke study has resumed, following the resupply of placebo. In addition to our support for the ongoing TREASURE study and continued preparations for the MASTERS-2 study, we are laying the groundwork for commercialization in anticipation of clinical success. An important recent step was the establishment of a collaboration with Nikon to prepare for commercial manufacturing to support initial commercialization of MultiStem therapy for stroke in Japan. We are also engaged in related activities to support manufacturing scale-up and commercial supply."
Dr. Van Bokkelen continued, "We have also advanced our discussions with potential business partners to support development and commercialization activities, particularly related to our lead stroke program, and we are currently engaged in active negotiations, discussions and other activities regarding specific proposals with certain companies. As we have conveyed previously, we are intent on establishing one or more partnerships that balance our partner’s contribution of capabilities and resources, commitment to the program, and appropriate recognition of the value of the commercial opportunity. Though we are currently focused on several possible options, we cannot provide guidance about the precise nature, scope and size of any potential partnership while this process is ongoing. Needless to say, this remains an important priority and objective for the company and our shareholders."
Third Quarter Results
Revenues increased to $0.4 million for the three months ended September 30, 2017, compared to $0.3 million for the three months ended September 30, 2016, due to an increase of $0.1 million in grant revenues. Our grant revenues fluctuate from period to period based on the timing of grant-related activities and the award and expiration of new grants. Research and development expenses increased to $5.4 million for the three months ended September 30, 2017 from $5.3 million in the comparable period in 2016. The $0.1 million increase is primarily comprised of an increase in preclinical and clinical development costs of $0.8 million partially offset by decreases in internal research supplies of $0.4 million, sponsored research costs of $0.2 million and travel costs of $0.1 million.
General and administrative expenses increased to $2.1 million for the three months ended September 30, 2017 from $1.8 million in the comparable period in 2016. The $0.3 million increase was due primarily to increases in personnel costs of $0.1 million, stock-based compensation of $0.1 million and other administrative costs of $0.1 million.
Net loss was $7.2 million in the 2017 third quarter, compared to net loss of $6.0 million in the comparable period in 2016. The difference of $1.2 million reflects the above variances, as well as a non-recurring $0.2 million gain on the fair value of warrant liabilities and a non-recurring $0.7 million net gain from insurance proceeds related to flood damage, both of which were recognized in the third quarter of 2016.
Cash used in operating activities was $6.8 million during the 2017 third quarter, compared to cash used of $5.5 million in the 2016 third quarter. As of September 30, 2017, we had $28.2 million in cash and cash equivalents, compared to $14.8 million at December 31, 2016, which includes, among other things, the impact of the common stock offering in February 2017, the exercise of warrants to purchase common stock and proceeds from the issuance of common stock under our equity purchase facility.
Conference Call
Gil Van Bokkelen, Chairman and Chief Executive Officer, and William (BJ) Lehmann, President and Chief Operating Officer, will host a conference call today to review the results as follows:
Date Wednesday, November 8, 2017
Time 4:30 p.m. (Eastern Time)
Telephone access: U.S. and Canada 800-273-1254
Telephone access: International 973-638-3440
Access code 96178367
Live webcast www.athersys.com, under the Investors section
A replay will be available for on-demand listening shortly after the completion of the call until 11:59 PM Eastern Time on November 22, 2017 at the aforementioned URL, or by dialing (800) 585-8367 or (855) 859-2056 in the U.S. and Canada, or from abroad (404) 537-3406, and entering access code 96178367.