On March 25, 2021 Athersys, Inc. (NASDAQ: ATHX) reported its fourth quarter 2020 and annual 2020 financial results and recent highlights (Press release, Athersys, MAR 25, 2021, View Source [SID1234577196]).
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"Despite a difficult operating environment, Athersys has made meaningful progress over the past year," commented Mr. William (B.J.) Lehmann, Interim Chief Executive Officer of Athersys. "We made considerable progress in developing our large-scale manufacturing processes. On the clinical front, we took advantage of the opportunity, with the onset of the COVID-19 pandemic, to accelerate the development of our MultiStem therapy for ARDS with the launch of the MACOVIA study. The MASTERS-2 study moved forward but at a slower pace than expected. Importantly, we entered into a cooperation agreement with our partner, Healios, to put us on a better path to jointly prepare for potential commercialization of the MultiStem therapy in Japan.
"In 2021, we expect to see the top-line results from both the TREASURE and ONE-BRIDGE studies, the TREASURE study giving us the first look at late-stage clinical trial data for MultiStem treatment of ischemic stroke. We are also working to achieve proof-of-principle for our large-scale manufacturing processes, an important milestone on the way to establishing the capability to serve large potential markets such as ischemic stroke," added Mr. Lehmann.
Fourth Quarter, 2020 and Recent Highlights:
Assisted HEALIOS K.K. (Healios), our partner in Japan, in its regulatory preparations as it advanced enrollment to near completion in its TREASURE ischemic stroke and ONE-BRIDGE acute respiratory distress syndrome (ARDS) studies;
Reached a cooperation agreement with Healios to resolve the legal matter between its CEO and Athersys Board member, Dr. Kagimoto, and the Company, and to set the stage for addressing open matters important to continued development, regulatory progress and successful commercialization in Japan following approval;
Received INN designation for "invimestrocel" as the non-proprietary name for the MultiStem cell therapy and made progress in registering our proprietary brand name for the product candidate;
Received Regenerative Medicine Advanced Therapy (RMAT) designation from the U.S. Food and Drug Administration (FDA) for MultiStem therapy for the treatment of ARDS;
Initiated and conducting the MACOVIA study for the treatment of ARDS in COVID-19 patients, and amended the protocol with the FDA to include other pathogen-induced ARDS patients;
Launched the MATRICS-1 study evaluating MultiStem treatment in severe trauma patients, with the first patient enrolled in the fourth quarter;
Made important leadership hires in key areas, including Mr. Ivor Macleod as Chief Financial Officer and Ms. Maia Hansen as Senior Vice President, Operations and Supply Chain;
Appointed four new directors to our board, adding experience and diversity, to help the Company achieve its growth objectives and success;
Raised gross proceeds of approximately $57.6 million, before deducting the underwriting discount and offering expenses, through an underwritten public offering of 25.6 million shares of common stock, providing additional working capital for key initiatives;
Recognized revenues of $1.3 million and net loss of $22.2 million, or $0.11 net loss per share, for the quarter ended December 31, 2020; and
Had $51.5 million in cash and cash equivalents as of December 31, 2020, $61.5 million in cash and cash equivalents as of March 19, 2021.
"We believe deeply in the quality and distinctiveness of our science and technology and the potential to help patients in important critical care areas. Though there are risks ahead of us, we believe we are well-situated to advance our programs and Company over the course of this year," concluded Mr. Lehmann.
Fourth Quarter 2020 Financial Results
Revenues increased to $1.3 million for the three months ended December 31, 2020 compared to $0.3 million for the three months ended December 31, 2019. Our collaboration revenues are primarily derived from our Healios arrangement. 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 $18.7 million for the three months ended December 31, 2020 from $7.6 million for the comparable period in 2019. The $11.1 million increase is primarily associated with clinical trial and manufacturing process development costs, timing of reagent purchases used for our internal process development activities, and personnel costs, including stock compensation expense.
General and administrative expenses increased to $4.3 million for the three months ended December 31, 2020 from $2.4 million in the comparable period in 2019. The $1.9 million increase in the fourth quarter of 2020 over the same period of 2019 was due primarily to increased personnel costs, including stock compensation costs, as well as legal and professional services.
Net loss for the fourth quarter was $22.2 million in 2020 compared to a net loss of $9.9 million in the fourth quarter of 2019. The difference of $12.3 million reflects the above variances, as well as a decrease of $0.3 million in other income items.
Full Year 2020 Financial Results
Revenues decreased to $1.4 million for the year ended December 31, 2020 from $5.6 million in 2019. Our contract revenues from our collaboration with Healios decreased $4.1 million year over year. Our collaboration revenues fluctuate from period-to-period based on new licenses conferred and the delivery of goods and services under our arrangement with Healios.
Research and development expenses increased to $63.0 million for the year ended December 31, 2020 from $39.0 million for the year ended December 31, 2019. The $24.0 million increase in research and development expenses year-over-year was due primarily to increased clinical trial and manufacturing process development costs of $15.0 million, internal research supply costs of $4.2 million, personnel costs of $3.0 million, including stock-based compensation, outside service costs of $0.9 million, and other costs of $0.9 million.
General and administrative expenses increased to $15.9 million in 2020 from $11.4 million in 2019. The $4.5 million increase was due primarily to increases in personnel costs including stock-based compensation, legal and professional services, and other outside services.
Net loss was $78.8 million in 2020 compared to a net loss of $44.6 million in 2019. The difference of $34.2 million reflects the above variances, as well as an increase in other net expenses.
In the twelve months ended December 31, 2020, net cash used in operating activities was $61.8 million compared to $35.3 million in the twelve months ended December 31, 2019. The difference is primarily associated with overall increases in cash usage to fund our clinical development activity in 2020.
At December 31, 2020, we had $51.5 million in cash and cash equivalents, compared to $35.0 million at December 31, 2019.
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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. Shareholders may also call in for on-demand listening approximately three hours after the completion of the call until 11:59 PM Eastern Time on April 5, 2021, by dialing (800) 585-8367 or (416) 621-4642 and entering the conference code 8674678.