On August 12, 2021 Brooklyn ImmunoTherapeutics, Inc. (NYSE American: BTX) ("Brooklyn"), a biopharmaceutical company focused on exploring the role that gene editing/cell and cytokine therapy can have in treating patients with cancer, blood disorders, and monogenic diseases, reported financial results for the quarter ended June 30, 2021 (Press release, Brooklyn ImmunoTherapeutics, AUG 12, 2021, View Source [SID1234591393]).
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Financial and corporate highlights for the quarter ended June 30, 2021 and subsequently include the following:
Completed the acquisition of Novellus Therapeutics Limited ("Novellus") in July 2021. Novellus is developing next‑generation engineered mesenchymal stem cell ("MSC") therapies using patented mRNA-based cell reprogramming and gene editing technologies licensed from Factor Bioscience ("Factor").
Raised nearly $51 million through equity line sales of common stock for general corporate purposes, including working capital to be used to enhance the development of the mRNA gene editing and cell therapies technology recently licensed from Factor.
Appointed Jay Sial as chief administrative officer and Kevin D’Amour, Ph.D. as chief scientific officer.
Established a research and development center in Cambridge, Massachusetts, to pursue its mRNA-based gene editing and cellular therapies, co-locating with Factor.
Howard Federoff, M.D., Ph.D., Brooklyn’s President and Chief Executive Officer, commented, "The second quarter advanced the evolution of Brooklyn ImmunoTherapeutics from being a cytokine-focused immunotherapeutics company to a platform company with a pipeline of next-generation engineered cellular, gene editing and cytokine products. This was in no small measure due to the acquisition of Novellus, which enables us to utilize the full range of the MSCs they have developed with no restriction on fields of use. By combining these with our licensed mRNA-based cell reprogramming and gene editing technology from Factor Bioscience, we believe we can create a platform technology that will lead to a family of product candidates in varying stages of development from target selection to research and preclinical, including one in the respiratory area that is in the IND-enabling stage."
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"Further, we believe we are positioned to develop a variety of gene-modified products using this platform, which ultimately could help solve problems of treating certain conditions that to date have confounded science, including potential treatments for a set of solid tumors, autoimmune disorders where inflammation is a prominent feature, and addressing multiple issues in the liver, the brain and the eye, as well as applying that technology again to iPSCs for a multitude of applications," continued Dr. Federoff.
"The quarter also resulted in creating a strong balance sheet and a growing in-licensed intellectual property portfolio," said Dr. Federoff. "Following the Novellus acquisition, we had approximately $25 million of cash on hand, which we estimate will fund our operations and expansion through the end of 2023," Dr. Federoff continued. "We are awaiting the readout of our Phase 2b trial for neoadjuvant head and neck cancer with our original asset, IRX-2 human-derived cytokines, during the first half of 2022. Additionally, we have multiple investigator-driven trials in a number of additional cancer types, and additional planned studies in 2022 and 2023."
"We have made a considerable investment in ensuring that we have the right people in place, and with the addition of our new chief scientific officer Dr. Kevin D’Amour and new chief administrative officer Jay Sial. Now it’s time for us to begin to execute on these ambitious plans that this next-generation version of Brooklyn ImmunoTherapeutics promises," concluded Dr. Federoff.
Financial Results for Quarter Ended June 30, 2021
Operating expenses for the quarter ended June 30, 2021 were $10.1 million, as compared to operating expenses for the quarter ended June 30, 2020 of $2.0 million.
Research and development expenses increased to $5.4 million for the quarter ended June 30, 2021 compared to $1.0 million in the quarter ended June 30, 2020. Research and development expenses increased due to upfront payments associated with licensed technology, increased clinical trial expenses, and stock-based compensation for the issuance of equity awards. Brooklyn expects research and development expenses to continue to grow as it expands its clinical trial activities.
General and administrative expenses increased to $4.6 million in the second quarter of 2021 compared to $1.0 million during the same period in 2020. The quarter-over-quarter increase in general and administrative expense was primarily related to increased legal, accounting and consulting fees associated with merger and acquisition activity, costs associated with being a publicly traded company, and increased stock-based compensation resulting from the issuance of equity awards. Brooklyn expects general and administrative expenses to continue to increase in future periods as it increases its business activities and incurs costs associated with being a publicly traded company.
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Net loss for the quarter ended June 30, 2021 was $(27.8) million, as compared to $(3.1) million for the quarter ended June 30, 2020.
As of June 30, 2021, Brooklyn ImmunoTherapeutics had $50.2 million in cash, of which approximately $23.0 million was paid as partial consideration for the acquisition of Novellus on July 16, 2021.