On March 16, 2017 BioTime, Inc. (NYSE MKT and TASE: BTX), a clinical-stage biotechnology company developing and commercializing products addressing degenerative diseases, reported financial results for the fourth quarter and year ended December 31, 2016 (Press release, BioTime, MAR 16, 2017, View Source [SID1234518157]). Schedule your 30 min Free 1stOncology Demo! "I’m happy with the tremendous progress we made last year in all three of our strategic objectives, clinical development, simplification and unlocking value of non-core programs," said Adi Mohanty, Co-Chief Executive Officer. "We still have more to do, and are well on our way to transforming the company in 2017."
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"This year is shaping up to be the year of data with top line data from our registrational trial for Renevia in Europe planned for mid-year, data from OpRegen in Dry AMD to be reported in early May at ARVO and then again in the second half of the year, final validation data from our affiliate OncoCyte on its lung cancer diagnostic leading to a commercial launch in the second half of the year and additional data on OPC-1 for spinal cord injury from our affiliate Asterias and several other data reports from our other pipeline products. These data events and our planned actions to simplify the company while unlocking value will lead to continued positive transformation of BioTime," concluded Mr. Mohanty.
Highlights
Clinical Progress
Renevia (adipose cells + cell delivery matrix)
Positive early Renevia data presented at the International Federation for Adipose Therapeutics and Science meeting (IFATS) meeting in November. The data related to the treatment of the initial 9 run-in patients for BioTime’s ongoing pivotal clinical trial in Europe assessing the efficacy of Renevia for the treatment of HIV-associated lipoatrophy. In December, achieved the recruitment milestone of 50 patients enrolled in the trial. Data from the run-in portion of the study (N=9) indicated that adipose progenitor cells (fat cells), obtained from a liposuction aspirate, remained viable and were observed to proliferate when combined with Renevia hydrogel. Analysis suggests that the grafts retain volume over the assessment period, and the treating physician observed incremental volume was retained in patients who had progressed to the one-year follow-up evaluation. In addition, there were encouraging signs of new tissue regeneration observed. No serious adverse events were noted during the run-in portion of the study.
Additional positive data from the pivotal trial would allow the Company to launch a commercial product in about a year and provide support for future studies of Renevia in certain broader indications of fat tissue deficits in various medical aesthetics applications, such as age-related and trauma-related facial fat loss.
Top-line clinical trial results are expected to be read out mid-2017. If the data are positive, the Company plans to submit an application for CE Mark approval in Europe at the end of 2017.
OpRegen (retinal pigment epithelial cells)
Presented positive early OpRegen data at the International Symposium on Ocular Pharmacology and Therapeutics (ISOPT) in December. The data from the first cohort in the Phase I/IIa clinical trial of OpRegen in the advanced form of dry age-related macular degeneration (dry-AMD). The data suggest that OpRegen is safe and well tolerated. Imaging data from a patient who completed one-year of post-treatment clinical assessment suggests that the graft can survive for at least 12 months.
Enrollment in the second cohort, in which patients are receiving a higher and more clinically meaningful 200,000 cell dose started in 2016. The Company intends to approach the DSMB in the second quarter of this year for approval to begin administering the next higher 500,000 cell dose to the third cohort, and if approved, also begin the fourth cohort before year end.
An abstract with data from the first and second cohorts in the ongoing trial has been accepted for poster presentation at the annual meeting for the Association for Research in Vision and Ophthalmology (ARVO), which will take place in Baltimore, MD, May 7- 11.
The Company is expanding the trial to U.S. sites and recently announced that two of the top retinal surgeons will be enrolling patients at their centers of excellence.
AST-OPC1 (oligodendrocyte progenitor cells)
In November, BioTime’s affiliate, Asterias (NYSE MKT: AST) reported the successful administration of the highest dose of 20 million cells of AST-OPC1 to a patient with complete cervical spinal cord injury (SCI) as part of the SCiStar Phase I/IIa clinical trial. In January 2017, they announced positive efficacy results that showed additional motor function improvement at 6-months and 9-months following administration of 10 million AST-OPC1 cells in 6 AIS-A patients with complete cervical SCIAsterias plans to initiate discussions with the FDA in mid-2017 to determine the most appropriate clinical and regulatory path forward for AST-OPC1.
Liquid Biopsy (lung cancer confirmatory test)
In early March, BioTime’s affiliate, OncoCyte (NYSE MKT: OCX) reported successful completion of a critical step in the development of its lung cancer diagnostic test by locking the prediction algorithm. The cancer diagnostic, has been selected for presentation in a poster discussion session at the 2017 American Thoracic Society (ATS) International Conference that will take place May 19-24 in Washington, D.C.
The lung cancer diagnostic test targets a multi-billion dollar market opportunity. On March 6, 2017, OncoCyte announced the successful completion of the study and that it has locked the prediction algorithm of the test. Based on the study results, OncoCyte announced that it will begin ramping-up its commercial capabilities in anticipation of the potential commercial launch of the test. OncoCyte will initiate a clinical validation phase for the diagnostic. During this phase, OncoCyte will also continue to carry out analytical validation studies to refine its operational stage laboratory processes, and will apply for certification of its CLIA diagnostic testing lab. Upon CLIA certification, OncoCyte will conduct a small CLIA lab validation study to demonstrate that the full assay system utilized in the CLIA lab provides the same results on clinical samples as those obtained in the R&D lab. OncoCyte will then begin a clinical validation study on a new set of at least 300 blinded prospectively collected blood samples to confirm whether the sensitivity and specificity of the test remain within commercial parameters in a CLIA operational setting. Assuming successful completion of these steps, OncoCyte anticipates launching the test commercially in the second half of 2017.
Simplification and Unlocking Value
Subsidiary Deconsolidation
In February, OncoCyte financials were deconsolidated from BioTime’s consolidated financial statements. This will be reflected in BioTime’s future quarterly and annual consolidated financial statements, beginning February 18, 2017.
Business Development
In February, BioTime announced that it expanded its ophthalmology portfolio with the acquisition of a world-wide license to ophthalmology-related intellectual (IP) property assets from University of Pittsburgh. The technology was developed in part in collaboration with BioTime scientists. The IP includes composition and methodologies to develop 3-D retinal tissue constructs from pluripotent cells for their implantation in patients with advanced stages of retinal degeneration.
BioTime continues to leverage and develop its delivery technology platforms. The Company’s Hystem technology is being used to deliver Renevia. ReGylde is in preclinical development as a device for viscosupplementation and a combination product for drug delivery in osteoarthritis. Delivery is a third area of focus for the Company, in addition to aesthetics and ophthalmology.
Management
BioTime expanded its senior management team with the appointments of Jim Knight as Senior Vice President of Corporate Development, in October, and Stephana Patton, Ph.D., J.D., as General Counsel, in February. These industry veterans further strengthen the BioTime management team, complementing other management team additions, such as Oscar Cuzzani, M.D., Ph.D., Vice President of Clinical Development. Dr. Cuzzani joined in February 2016.
Operations
In January, the Company announced the opening of a new, state-of-the art, cGMP manufacturing facility in Jerusalem Bio Park on the campus of Hadassah University Hospital in Jerusalem. This facility has the capabilities to produce multiple cell therapy products.
Financial
In February, the Company successfully completed a public equity offering raising net proceeds of approximately $18.7 million. The raise was completed on attractive terms involving modest discounts and no warrants. It followed a similarly successful raise in June of 2016.
Cash Position and Marketable Securities:
Cash and cash equivalents totaled $22.1 million as of December 31, 2016, compared to $42.2 million as of December 31, 2015, which included Asterias’ cash and cash equivalents of $11.2 million. Based on the March 15, 2017 closing prices of Asterias and OncoCyte common stock owned by BioTime, the combined market value of these securities was $152 million on that date.
Revenues: Total revenues were $1.1 million for the fourth quarter, compared to $1.5 million in the fourth quarter of 2015. Asterias’ total revenues included in the fourth quarter of 2015 were $0.6 million as compared to none in 2016 due to the deconsolidation in May 2016. Total revenues for 2016 were $5.9 million compared to $7.0 million in 2015, which included revenues of Asterias of $2.4 million and $3.6 million, respectively. BioTime’s operating revenues are currently generated primarily from research grants, advertising from the marketing of online database products, sales of research products and royalties and licensing fees.
R&D Expenses: Research and development expenses were $7.0 million for the fourth quarter, compared to $12.8 million for the comparable period in 2015. For 2016, research and development expenses were $36.1 million compared to $42.6 million in 2015. The year over year decrease in research and development expenses of $6.5 million was primarily attributable to the deconsolidation of Asterias which contributed to $8.6 million of the decrease as shown below. This decrease was offset by an increase of $1.2 million in BioTime research and development programs and $0.9 million in OncoCyte expenses related to cancer diagnostics.
The tables below show BioTime’s research and development expenses, by program and by company, for the three months ended December 31, 2016 and 2015, and for the years then ended.
Three Months Ended December 31
$000’s
Company Program 2016 2015
BioTime and ESI PureStem progenitor and pluripotent cell lines, and related research products $ 1,427 $ 1,609
BioTime
Hydrogel products, Renevia and other HyStem products and research
1,011 1,273
BioTime Hextend 12 18
Cell Cure OpRegen 1,653 1,357
OrthoCyte Orthopedic therapy 144 122
ReCyte Therapeutics Cardiovascular therapy 262 231
Subtotal therapeutic projects 4,509 4,610
Asterias Pluripotent cell therapy programs - 5,483
LifeMap Sciences Databases and mobile health products 1,099 1,459
OncoCyte Cancer diagnostics 1,405 1,236
Subtotal non-therapeutic projects 2,504 2,695
Total research and development expenses $ 7,013 $ 12,788
Year Ended December 31
$000’s
Company Program 2016 2015
BioTime and ESI PureStem progenitor and pluripotent cell lines, and related research products $ 6,060 $ 5,196
BioTime Renevia and other HyStem products and research 3,856 4,047
BioTime Hextend 54 59
Cell Cure OpRegen 4,803 4,086
OrthoCyte Orthopedic therapy 606 590
ReCyte Therapeutics Cardiovascular therapy 949 1,142
Subtotal therapeutic projects 16,328 15,120
Asterias Pluripotent cell therapy programs 8,684 17,322
LifeMap Sciences Databases and mobile health products 5,348 5,251
OncoCyte Cancer diagnostics 5,746 4,911
Subtotal non-therapeutic projects 11,094 10,162
Total research and development expenses $ 36,106 $ 42,604
G&A Expenses: The tables below show BioTime’s general and administrative expenses, by program and by company, for the three months ended December 31, 2016 and 2015, and for the years then ended. General and administrative expenses were $5.3 million for the fourth quarter, compared to $10.2 million for the fourth quarter of 2015. The decrease was primarily due to the May 2016 deconsolidation of Asterias financial results which contributed by $2.9 million of G&A recorded in the fourth quarter of 2015. The remaining decrease of approximately $2.0 million in the fourth quarter of 2016 was principally due to lower stock-based compensation. Year over year G&A was relatively unchanged at $28.4 million and $29.1 million, respectively.
Three Months Ended December 31
$000’s
Company 2016 2015
BioTime $ 2,331 $ 3,573
Cell Cure 266 211
OrthoCyte 322 422
ReCyte Therapeutics 106 413
Subtotal therapeutic entities 3,025 4,619
Asterias - 2,942
LifeMap Sciences 665 1,094
OncoCyte 1,653 1,568
Subtotal non-therapeutic entities 2,318 2,662
Total general and administrative expenses $ 5,343 $ 10,223
Year Ended December 31
$000’s
Company 2016 2015
BioTime $ 8,958 $ 9,761
Cell Cure 1,185 655
OrthoCyte 570 583
ReCyte Therapeutics 581 760
ESI 276 245
Subtotal therapeutic entities 11,570
12,003
Asterias 7,561 7,711
LifeMap Sciences 3,385 5,142
OncoCyte 5,910
4,278
Subtotal non-therapeutic entities 9,295
9,420
Total general and administrative expenses $ 28,426 $ 29,134
Net Income (loss) attributable to BioTime: Net loss attributable to BioTime was $5.1 million, or ($0.05) per basic and diluted common share for the three months ended December 31, 2016, compared to $13.4 million, or ($0.15) per basic and diluted common share due primarily to the deconsolidation of Asterias in May 2016. For 2016, net income attributable to BioTime was $33.6 million, or $0.35 per basic and $0.34 per diluted common share, compared to net loss attributable to BioTime of $47.4 million, or ($0.59) per basic and diluted common share. The 2016 net income attributable to BioTime was primarily due to the $49.0 million gain on deconsolidation of Asterias and the $34.4 million gain recognized from the increase in the market value of the Asterias shares owned by BioTime from May 13, 2016, the date of the deconsolidation, through the end of the year.