On November 9, 2017 Histogenics Corporation (Histogenics) (Nasdaq:HSGX), a leader in the development of restorative cell therapies that may offer rapid-onset pain relief and restored function, reported financial and operational results for the quarter ended September 30, 2017 (Press release, Histogenics, NOV 9, 2017, View Source;p=RssLanding&cat=news&id=2315740 [SID1234521909]).
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"With enrollment in the NeoCart Phase 3 clinical trial complete, we are focused on preparing for the top- line, superiority data and potential BLA filing for NeoCart in the third quarter of 2018. In the third quarter of 2017, we enhanced Histogenics’ operational capabilities and expanded our portfolio of data supporting the unique mechanism of action of NeoCart," stated Adam Gridley, President and Chief Executive Officer of Histogenics. "We believe that the data published in the Journal of Biomechanics in October 2017 provide additional evidence that Histogenics’ proprietary cell therapy platform produces cartilage that may accelerate recovery time and reduce pain. These data support the potential of NeoCart to replace microfracture as the standard of care for the treatment of knee cartilage defects, as well as the future development of additional product candidates from the NeoCart product platform. Histogenics’ priorities are now focused on preparing for our upcoming Biologics License Application (BLA) submission, further defining our commercial strategies for our launch of NeoCart, and our ongoing partnering activities for NeoCart in Japan and Asia."
Recent Highlights
Peer Reviewed Publication Further Strengthens NeoCart Data Portfolio. In October 2017, Histogenics announced the publication of a study, "In Vitro Culture Increases Mechanical Stability of Human Tissue Engineered Cartilage Constructs by Prevention of Microscale Scaffold Buckling" in the online version of the peer-reviewed Journal of Biomechanics. The study analyzes the compressive properties of engineered cartilage tissue grown with chondrocytes seeded in a porous scaffold. Histogenics intends to include the results of this study to provide additional data to the U.S. Food and Drug Administration (FDA) as part of a potential BLA for NeoCart, subject to a successful outcome in the ongoing NeoCart Phase 3 clinical trial.
Enhancement of Executive Team in Advance of Potential Approval and Commercialization of NeoCart. In October 2017, Histogenics promoted Stephen Kennedy from Chief Technology Officer to Executive Vice President & Chief Operating Officer. The promotion is consistent with Mr. Kennedy’s focus on the manufacturing scale-up of NeoCart to supply the U.S. market, if approved. Mr. Kennedy has more than 30 years of executive product development, manufacturing, technology assessment and commercialization experience at leading biotechnology companies, which includes extensive experience overseeing product technologies from development through commercial launch.
Financial Results for the Third Quarter of 2017
Loss from operations was $(5.7) million in the third quarter of 2017, compared to $(6.6) million in the third quarter of 2016. The decrease in operating expenses was primarily driven by a reduction in research and development expenses that was offset by an increase in general and administrative expenses.
Research and development expenses were $3.5 million in the third quarter of 2017, compared to $4.9 million in the third quarter of 2016. The decrease was primarily due to reductions in collaboration, consulting and temporary labor expenses and clinical trial-related costs. General and administrative expenses were $2.2 million in the third quarter of 2017, compared to $1.8 million in the third quarter of 2016. The increase was primarily due to activities related to a potential BLA submission and commercialization of NeoCart, if approved.
Net loss attributable to common stockholders was $(5.1) million in the third quarter of 2017, or $(0.23) per share, compared to $(9.2) million, or $(0.70) per share, in the third quarter of 2016. The decrease in net loss attributable to common stockholders is primarily due to lower operating expenses in the third quarter of 2017, $3.1 million in expenses related to the private placement completed in the third quarter of 2016 and an increase in weighted average shares outstanding, also resulting from the 2016 private placement.
As of September 30, 2017, Histogenics had cash, cash equivalents and marketable securities of $12.6 million, compared to $31.9 million at December 31, 2016. Histogenics believes its current cash position will be sufficient to fund its operations into the middle of 2018.
Conference Call and Webcast Information
Histogenics’ management will host a conference call on Thursday, November 9, 2017 at 8:30 a.m. ET. A question-and-answer session will follow Histogenics’ remarks. To participate on the live call, please dial 877-930-8064 (domestic) or 253-336-8040 (international) and provide the conference ID: 89009539 five to ten minutes before the start of the call.
A live audio webcast of the presentation will be available via the "Investor Relations" page of the Histogenics website, www.histogenics.com, or by clicking here. A replay of the webcast will be archived on Histogenics’ website for approximately 45 days following the presentation.