Corporate restructuring underway and MASTERS-2
clinical trial prioritized
Conference call begins at 4:30 p.m. Eastern
time today
Athersys, Inc. (NASDAQ: ATHX) announced today its financial
results for the three and six months ended June 30, 2022 and
provided a business update.
Second quarter 2022 Corporate and Operational
Highlights:
Corporate Restructuring
- Implemented a restructuring of our organization with the
intention of significantly reducing expenses, conserving cash,
improving focus of the Company’s activities and becoming more
attractive to potential financial and strategic partners.
- Reduction in workforce of up to 70% including changes to
leadership team
- Reduced size of Board of Directors from ten to five members
while maintaining critical skills and enhancing efficiency
- Suspended expensive manufacturing and process development
initiatives
- Initiated a process to sublet the Stow, Ohio facility
- Reduced internal research function to focus resources on
MASTERS-2
- Made key executive appointments to pursue Athersys’ new
business strategy
- Engaged Ankura Consulting Group LLC and named financial expert
Kasey Rosado interim Chief Financial Officer
- Operations and supply-chain leader Maia Hansen named Chief
Operating Officer
- Exploring financing options to enable us to obtain funds to
continue operations and execute reprioritized business
strategy
Business Development Strategy
- Participated in multiple investor conferences to build
awareness, including:
- Maxim Group 2022 Virtual Growth Conference
- Locust Walk Stem Cell Conference
- Needham Healthcare Conference
- Bank of America Securities 2022 Global Healthcare
Conference
- H.C. Wainwright Global Healthcare Conference
- Pursuing a business development strategy focused on securing
regional and/or global MultiStem partners, non-dilutive funding and
complementary capabilities across clinical, regulatory, commercial
and manufacturing functions
- Announced an August 29th webinar to provide a comprehensive
review of preclinical research across multiple indications with
MultiStem hosted by Dr. Willie Mays, Executive Vice President and
Head of Regenerative Medicine & Neuroscience Programs, and Dr.
Sarah Busch, Vice President, Regenerative Medicine & Head of
Nonclinical Development; previously published preclinical data
demonstrate that MultiStem holds potential in Alzheimer’s disease,
multiple sclerosis, epilepsy, Parkinson’s disease, spinal cord
injury, hypoxia and ischemia
- Announced preclinical research by the Armed Forces Radiobiology
Research Institute, a Department of Defense research laboratory
under the leadership of the Uniformed Services University of the
Health Sciences, showing the benefit of MultiStem in an animal
model of acute radiation syndrome
Second Quarter MultiStem Clinical Trial Updates
MASTERS-2 (Phase 3 global study in
ischemic stroke)
- Reprioritized MASTERS-2 as development focus following
restructuring
- Increased enrollment rate, doubling the average number of
patients enrolled per month in 2022 from prior years; enrolled more
subjects in the second quarter of 2022 than during any other
quarter
- Expanded the network of active trial sites by adding new
locations, including key stroke centers in Germany, the UK, Taiwan
and Australia
- Analyzed TREASURE results for potential read through to
MASTERS-2 trial design
TREASURE (Phase 2/3 Japan study in
ischemic stroke)
- Trial did not reach statistical significance for its primary
endpoint of Excellent Outcomes at 90-days, yet the long-term impact
on the quality of life among treated patients was supported by
topline results reported by Healios. The full data set demonstrated
consistent improvement in essentially all measured functional
outcomes over time through one year
- Full results will be presented in a plenary session at the 14th
World Stroke Congress in October
MATRICS-1 (Phase 2 study in
trauma)
- Collaborating with The University of Texas Health Science
Center at Houston, one of the busiest Level 1 trauma centers in the
U.S.
- Funding provided by Medical Technology Enterprise Consortium
and Memorial Hermann Foundation
- Completed enrollment of the first patient cohort
- Initiated dosing with product derived from Athersys’
large-scale bioreactors, providing greater scalability and
efficiency
MACOVIA (Phase 2/3 study in acute
respiratory distress syndrome)
- Fast-track designation by the FDA
- Now have data evaluating two different dosing levels of
MultiStem produced by a cell factory process. Analysis of this data
will help inform the design of the next phase of the trial
- In order to focus resources on MASTERS-2, MACOVIA has been
suspended until we receive additional financing or establish a
partnership to move forward with the next phase of the study.
Management Commentary
“My first six months at Athersys have certainly been both
challenging and productive,” stated Dan Camardo, Chief Executive
Officer of Athersys. “While the topline data from the TREASURE
study evaluating MultiStem for the treatment of ischemic stroke
conducted by our partner Healios in Japan did not reach statistical
significance for its primary Endpoint of Excellent Outcome at
90-days, there were important and encouraging takeaways from this
trial. We are particularly pleased that the study demonstrated
improvement in other pre-specified measures of functional outcomes
over time, supporting the long-term impact of MultiStem in ischemic
stroke patients. The TREASURE trial results were positively
endorsed by stroke key opinion leaders offering further
encouragement as we proceed with our own MASTERS-2 study.” Camardo
continued, “We also implemented a restructuring of our organization
with the intention of significantly reducing expenses, conserving
cash, improving focus of the Company’s activities and creating a
positive impact on enrollment progress in our MASTERS-2 study. We
are confident that the actions taken over the last two months will
better position Athersys in bringing MultiStem to market and
becoming a global leader in regenerative medicine.”
Second Quarter Results
Revenues increased to $2.3 million for the three months ended
June 30, 2022 compared to no revenues for the three months ended
June 30, 2021. Our collaboration revenues currently fluctuate from
period to period based on the delivery of services under our
arrangement with Healios.
Research and development expenses increased to $20.8 million for
the three months ended June 30, 2022 from $17.7 million for the
comparable period in 2021. The $3.1 million increase is associated
with an impairment charge of $4.9 million related to assets that
are no longer necessary to support future research and development
and restructuring costs of $1.5 million. These increases were
partially offset by decreases in clinical trial and manufacturing
costs of $2.0 million, internal research supplies of $0.7 million,
consulting fees of $0.4 million and decreases in other research
development costs of $0.2 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. These variations in
activity level may also impact our accounts payable, accrued
expenses, prepaid expenses and deposits balances from period to
period. Other than external expenses for our clinical and
preclinical programs, we generally do not track our research
expenses by project; rather, we track such expenses by the type of
cost incurred. We expect our research and development expenses to
decrease in connection with our restructuring plan.
General and administrative expenses were $5.2 million for the
three months ended June 30, 2022, which was higher than the $4.2
million for the comparable period in 2021. The increase is
primarily related to restructuring costs of $1.2 million. We expect
our general and administrative expenses to decrease in connection
with our restructuring plan.
Net loss for the second quarter of 2022 was $23.6 million
compared to a net loss of $22.6 million in the second quarter of
2021. The difference primarily results from the above
variances.
During the six months ended months ended June 30, 2022, net cash
used in operating activities was $36.6 million compared to $37.2
million in the six months ended months June 30, 2021. At June 30,
2022, we had $13.4 million in cash and cash equivalents, compared
to $37.4 million at December 31, 2021.
Conference Call
Athersys will host a conference call today at 4:30 p.m. Eastern
time to discuss these results and answer questions. Stockholders
are encouraged to listen using this Webcast link. To participate
via phone if you intend to ask a question, please pre-register for
the conference call using this Call registration link. Registered
stockholders will receive the toll-free number, a direct entry
passcode and a registrant ID.
A replay of the event will be available on the webcast link at
www.athersys.com under the investors' section approximately two
hours after the call has ended. Stockholders may also call in for
on-demand listening approximately three hours after the completion
of the call until 11:59 p.m. Eastern time on August 18, 2022, by
dialing (888) 330-2506 or (240) 789-2712 and entering the
conference code 70781.
About Athersys
Athersys is a biotechnology company engaged in the discovery and
development of therapeutic product candidates 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, inflammatory and immune, and other
critical care indications and has two 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. Investors
and others should note that we may post information about the
Company on our website at www.athersys.com and/or on our accounts
on Twitter, Facebook, LinkedIn or other social media platforms. It
is possible that the postings could include information deemed to
be material information. Therefore, we encourage investors, the
media and others interested in the Company to review the
information we post on our website at www.athersys.com and on our
social media accounts. Follow Athersys on Twitter at
www.twitter.com/athersys. Information that we may post about the
Company on our website and/or on our accounts on Twitter, Facebook,
LinkedIn or other social media platforms may contain
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 that involve risks and
uncertainties. You should not place undue reliance on
forward-looking statements contained on our website and/or on our
accounts on Twitter, Facebook, LinkedIn or other social media
platforms, and we undertake no obligation to publicly update
forward-looking statements, whether as a result of new information,
future events or otherwise.
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.
In addition, 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 are the risk
that we will be unable to raise capital to fund our operations in
the near term and long term, including our ability to obtain
funding through public or private equity offerings, debt
financings, collaborations and licensing arrangements or other
sources, on terms acceptable to us or at all, and to continue as a
going concern and our ability to successfully resolve the payment
issues with our primary contract manufacturer and gain access to
our clinical product. The following risks and uncertainties 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: our collaborators’ ability and
willingness to continue to fulfill their obligations under the
terms of our collaboration agreements and generate sales related to
our technologies; the possibility of unfavorable results from
ongoing and additional clinical trials involving MultiStem; the
risk that positive results in a clinical trial may not be
replicated in subsequent or confirmatory trials or success in an
early stage clinical trial may not be predictive of results in
later stage or large scale clinical trials; our ability to regain
compliance with the requirement to maintain a minimum closing bid
price of $1.00 per share as set forth in Nasdaq Listing Rule
5550(a)(2); the timing and nature of results from MultiStem
clinical trials, including the MASTERS-2 Phase 3 clinical trial
evaluating the administration of MultiStem for the treatment of
ischemic stroke; our ability to meet milestones and earn royalties
under our collaboration agreements, including the success of our
collaboration with Healios; the success of our MACOVIA clinical
trial evaluating the administration of MultiStem for the treatment
of ARDS induced by COVID-19 and other pathogens, and the MATRICS-1
clinical trial being conducted with The University of Texas Health
Science Center at Houston evaluating the treatment of patients with
serious traumatic injuries; the availability of product sufficient
to meet our clinical needs and potential commercial demand
following any approval; 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 or us, such as
due to material supply constraints, contamination, operational
restrictions due to COVID-19 or other public health emergencies,
labor constraints, regulatory issues or other factors that 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 neurological, inflammatory and immune, cardiovascular
and other critical care 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; the success of our efforts to enter
into new strategic partnerships and advance our programs; our
possible inability to execute our strategy due to changes in our
industry or the economy generally; changes in productivity and
reliability of suppliers; the success of our competitors and the
emergence of new competitors; and the risks mentioned elsewhere in
our Annual Report on Form 10-K for the year ended December 31, 2021
under Item 1A, “Risk Factors” and our other filings with the SEC.
You should not place undue reliance on forward-looking statements
contained on our website and/or on our accounts on Twitter,
Facebook, LinkedIn or other social media platforms, and we
undertake no obligation to publicly update forward-looking
statements, whether as a result of new information, future events
or otherwise.
(Tables Follow)
Athersys, Inc.
Condensed Consolidated Balance
Sheets
(In thousands)
June 30, 2022
December 31,
2021
(Unaudited)
(Note)
Assets
Cash and cash equivalents
$
13,378
$
37,407
Accounts receivable from Healios, billed
and unbilled
3,594
4,414
Prepaid expenses, deposits and other
5,916
5,711
Operating right-of-use assets, net
8,448
8,960
Property and equipment, net
3,868
3,692
Total assets
$
35,204
$
60,184
Liabilities and stockholders’
equity
Accounts payable, accrued expenses and
other current liabilities
$
31,123
$
24,391
Deferred revenue - Healios
—
3,340
Operating lease liabilities
9,263
9,766
Accounts payable to Healios
1,119
1,119
Advance from Healios
5,199
5,199
Other long-term liabilities
238
—
Total stockholders' equity
(11,738
)
16,369
Total liabilities and stockholders'
equity
$
35,204
$
60,184
Note: The Condensed Consolidated Balance Sheet Data has
been derived from the audited financial statements as of that
date.
Athersys, Inc.
Condensed Consolidated
Statements of Operations and Comprehensive Loss
(Unaudited)
(In Thousands, Except Per Share
Amounts)
Three Months Ended June
30,
2022
2021
Revenues
Contract revenue from Healios
$
2,316
$
—
Total revenues
2,316
—
Costs and expenses
Research and development
20,794
17,691
General and administrative
5,162
4,158
Depreciation
618
723
Total costs and expenses
26,574
22,572
Loss from operations
(24,258
)
(22,572
)
Other income, net
610
(27
)
Net loss and comprehensive loss
$
(23,648
)
$
(22,599
)
Net loss per share, basic and diluted
$
(0.09
)
$
(0.10
)
Weighted average shares outstanding, basic
and diluted
259,570
222,436
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220811005749/en/
Athersys Ellen Gurley Manager of Corporate Communications
and Investor Relations ir@athersys.com
LHA Investor Relations Tirth T. Patel 212-201-6614
tpatel@lhai.com
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