On August 11, 2022 Athersys, Inc. (NASDAQ: ATHX) reported its financial results for the three and six months ended June 30, 2022 and provided a business update (Press release, Athersys, AUG 11, 2022, View Source [SID1234618131]).
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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.