On November 6, 2019 Sierra Oncology, Inc. (Nasdaq: SRRA), a late-stage drug development company focused on the development and commercialization of momelotinib, a JAK1, JAK2 & ACVR1 inhibitor with a potentially differentiated therapeutic profile for the treatment of myelofibrosis, reported that new analyses of RBC transfusion data from SIMPLIFY-1, a double-blind Phase 3 trial of its investigational drug momelotinib vs ruxolitinib in JAK inhibitor naïve patients, will be presented in a poster at the 61st American Society of Hematologists (ASH) (Free ASH Whitepaper) Annual Meeting in Orlando, Florida (Press release, Sierra Oncology, NOV 6, 2019, View Source [SID1234550547]). These retrospective analyses, to be presented by renowned myelofibrosis expert, Dr. Ruben Mesa, demonstrate that patients who received momelotinib had significantly decreased transfusion requirements compared to those treated with ruxolitinib, including a decreased risk of receiving a transfusion and a longer transfusion-free period.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"We explored the relative burden of transfusions, a tangible and significant concern to clinicians and patients with myelofibrosis, by examining the SIMPLIFY-1 data comprising more than 400 myelofibrosis patients through statistical models utilizing a variety of novel dynamic anemia benefit endpoints, including the proportion of patients who remained transfusion free, the odds of requiring zero transfusions, the time to first transfusion in patients who remain transfusion requiring and the overall transfusion burden," said Dr. Ruben Mesa, Director of the Mays Cancer Center, home to UT Health San Antonio MD Anderson Cancer Center. "Overall, these highly persuasive statistical analyses further confirm that momelotinib treatment elicits a substantive mechanistically-driven anemia benefit, including a significantly greater proportion of momelotinib patients remaining transfusion free, a 50% lower risk of receiving a transfusion and nearly 10-fold higher odds of receiving no transfusions during the 24-week study period, directly compared to ruxolitinib."

Historically, myelofibrosis clinical studies have employed landmark analyses of transfusion independence or dependence to describe anemia benefit. While momelotinib is the only JAK inhibitor to have demonstrated superior head-to-head landmark anemia benefits compared to ruxolitinib, these static measures of anemia alone do not fully describe the significant, clinically meaningful anemia benefit observed following momelotinib administration. In conjunction with the statistical consulting group at the International Drug Development Institute (IDDI), Sierra has developed additional sophisticated dynamic statistical analyses of anemia benefit in order to complement those assessments typically presented in the myelofibrosis literature.

"Chronic, progressive anemia is a key hallmark feature of myelofibrosis and the most important negative prognostic indicator of reduced survival in this disease. Approximately 60% of patients are anemic and 45% are transfusion dependent within one year of diagnosis, with most patients ultimately progressing to transfusion dependency. Unfortunately, currently approved JAK inhibitor therapies induce or worsen anemia, exacerbating this significant unmet medical need in anemic myelofibrosis patients," said Dr. Barbara Klencke, Chief Development Officer of Sierra Oncology. "The marked systemic inflammation seen in myelofibrosis leads to increased ACVR1 activity which in turn increases secretion of hepcidin, resulting in perturbed iron homeostasis and an iron-restricted anemia. Momelotinib’s inhibition of ACVR1 in addition to JAK1 and JAK2, unique amongst the JAK inhibitor class, results in notable reductions of both hepcidin and inflammation, restoring iron homeostasis and RBC production, thereby alleviating anemia and transfusion dependency."

The SIMPLIFY-1 trial is a double-blind, active-controlled Phase 3 study in which 432 patients received randomized treatment with momelotinib or ruxolitinib for 24 weeks (JCO. 2017;35:3844–50). In addition to a significant reduction in splenomegaly and improvements in constitutional symptoms, previously reported analyses of the SIMPLIFY-1 data demonstrated that patients in the momelotinib arm achieved nominal-statistical significance for all anemia endpoints tested, including a higher rate of transfusion independence (p < 0.001) and lower rates of transfusion dependence (p = 0.019) at Week 24, compared to patients on ruxolitinib, consistent with momelotinib’s pro-erythropoietic effect.

New retrospective analyses of the SIMPLIFY-1 transfusion data demonstrated that:

The Kaplan-Meier (K-M) proportion of patients who did not require any transfusions during the randomized treatment period was significantly greater for the momelotinib treated group (73%) than those who received ruxolitinib (46%; p<0.0001)
The K-M proportion of patients requiring fewer than 5 RBC units over the treatment period was also significantly greater for momelotinib (83%) than ruxolitinib (62%; p<0.0001).
The odds of a momelotinib patient receiving no transfusions was approximately 10-fold higher including covariates, compared to a patient treated with ruxolitinib
The overall transfusion burden during momelotinib therapy was approximately half of that for ruxolitinib (HR 0.522; p<0.0001) for models both with and without baseline characteristics from patients as covariates.
These dynamic measures of transfusion requirement will be further evaluated as exploratory endpoints in MOMENTUM, a planned Phase 3 study of momelotinib in anemic myelofibrosis patients previously treated with a JAK inhibitor, anticipated to launch in the fourth quarter of 2019. The MOMENTUM trial has been designed to re-confirm momelotinib’s ability to address each of the three hallmark features of myelofibrosis, namely constitutional symptoms, anemia, and splenomegaly. Dr. Srdan Verstovsek, MD, PhD, Chief, Section for Myeloproliferative Neoplasms, Department of Leukemia, Division of Cancer Medicine, The University of Texas MD Anderson Cancer Center, Houston, Texas, has been named Chief Investigator of the trial.

About the ASH (Free ASH Whitepaper) 2019 Poster:
Title: Dynamic and Time-To-Event Analyses Demonstrate Marked Reduction in Transfusion Requirements for Janus Kinase Inhibitor–Naïve Myelofibrosis Patients Treated with Momelotinib Compared Head to Head with Ruxolitinib
Session Name: 634. Myeloproliferative Syndromes: Clinical: Poster I
Date: Saturday, December 7, 2019
Presentation Time: 5:30 PM – 7:30 PM
Location: Orange County Convention Center, Hall B

On November 6, 2019 Innate Pharma SA (Euronext Paris: IPH – ISIN: FR0010331421; Nasdaq: IPHA) ("Innate" or the "Company") reported that it will share new, long-term data from the pivotal Phase III trial of Lumoxiti (moxetumomab pasudotox) at the 61st American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting in Orlando, Florida, December 7-10 (Press release, Innate Pharma, NOV 6, 2019, View Source [SID1234550593]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"At this year’s ASH (Free ASH Whitepaper), we look forward to providing important new follow-up data from the Lumoxiti phase III trial and engaging with the hemato-oncology community on improving treatment outcomes for patients with relapsed or refractory hairy cell leukemia," commented Pierre Dodion, MD, Executive Vice President and Chief Medical Officer of Innate Pharma.

Details of the poster presentation at ASH (Free ASH Whitepaper) are as follows:

Moxetumomab Pasudotox-tdfk in Heavily Pretreated Patients with Relapsed/Refractory Hairy Cell Leukemia (HCL): Long-Term Follow-up from the Pivotal Phase 3 Trial, [poster#2808]
Authors: Robert J Kreitman, Claire Dearden, Pier Luigi Zinzani, Julio Delgado, Tadeusz Robak, Philipp D le Coutre, Bjørn T Gjertsen, Xavier Troussard, Gail J Roboz, Lionel Karlin, Douglas E Gladstone, Nataliya Kuptsova-Clarkson, Shiyao Liu, Priti Patel, Wyndham H Wilson, Ira Pastan, Francis Giles, on behalf of the Study 1053 investigators
Date: Sunday December 8 | 6:00-8:00 pm ET

About Lumoxiti (moxetumomab pasudotox):
Lumoxiti is a CD22-directed cytotoxin and a first-in-class treatment in the US for adult patients with relapsed or refractory (r/r) hairy cell leukemia (HCL) who have received at least two prior systemic therapies, including treatment with a purine nucleoside analog. Lumoxiti is not recommended in patients with severe renal impairment (CrCl ≤ 29 mL/min). It comprises the CD22 binding portion of an antibody fused to a truncated pseudomonas exotoxin. The toxin inhibits protein synthesis and ultimately triggers apoptotic cell death. Lumoxiti received U.S. FDA approval in September 2018 and has been granted Orphan Drug Designation by the FDA for the treatment of r/r HCL. AstraZeneca is the current Biologics License Application (BLA) holder for Lumoxiti.

About the ‘1053’ Phase III trial:
The AstraZeneca-sponsored ‘1053’ trial is a single-arm, multicenter Phase III clinical trial assessing the efficacy and safety of Lumoxiti monotherapy in patients with r/r HCL who have received at least two prior therapies, including one purine nucleoside analog. The trial enrolled 80 patients and was conducted across 34 sites in 14 countries. The primary endpoint was durable complete response (CR), defined as CR with hematologic remission (blood count normalization) for >180 days. Secondary outcome measures included objective response rate, duration of complete and objective response, progression-free survival, safety/tolerability, pharmacokinetics and immunogenic potential.

On November 6, 2019 Geron Corporation (Nasdaq: GERN) reported that two abstracts related to imetelstat, the Company’s first-in-class telomerase inhibitor, have been accepted for presentation at the 61st American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting and Exposition to be held in Orlando, Florida from December 7-10, 2019 (Press release, Geron, NOV 6, 2019, View Source [SID1234550639]). The abstracts were published today on the ASH (Free ASH Whitepaper) website at www.hematology.org.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Poster Presentations

Title: IMerge: A Study to Evaluate Imetelstat (GRN163L) in Transfusion-Dependent Subjects with IPSS Low or Intermediate-1 Risk Myelodysplastic Syndromes (MDS) That Is Relapsed/Refractory to Erythropoiesis-Stimulating Agent (ESA) Treatment (Abstract #4248)

Session Name: 637. Myelodysplastic Syndromes—Clinical Studies: Poster III
Session Date: Monday, December 9, 2019
Session Time: 6:00 p.m. ET – 8:00 p.m. ET

As of this year, ASH (Free ASH Whitepaper) has created a new category for abstract submissions called Trials in Progress. Abstracts for this category describe innovative clinical trials that have not reached their primary endpoint to provide opportunities for early engagement and collaboration amongst investigators, translational research, clinical and industry investigators, statisticians and regulators. The Phase 3 IMerge clinical trial will be presented as a poster in this new category, and the details of the trial design are described in the abstract.

Title: Combination Treatment with Imetelstat, a Telomerase Inhibitor, and Ruxolitinib Depletes Myelofibrosis Hematopoietic Stem Cells and Progenitor Cells (Abstract #2963)

Session Name: 635. Myeloproliferative Syndromes: Basic Science: Poster II
Session Date: Sunday, December 8, 2019
Session Time: 6:00 p.m. ET – 8:00 p.m. ET

The abstract reports results from early, nonclinical experiments on the potential effect of combining imetelstat and ruxolitinib on malignant myelofibrosis (MF) cells. The experiments explored the hypothesis that the combination of imetelstat and ruxolitinib might create a treatment regimen for MF that could be more efficacious than using either drug alone in reducing myelofibrosis hematopoietic stem cells and hematopoietic progenitor cells. In the experiments, the regimen of sequential treatment of ruxolitinib followed by imetelstat resulted in greater reductions in the MF hematopoietic stem and progenitor cells, compared to when either drug was used alone or simultaneously. In addition, the sequential treatment regimen did not affect normal hematopoietic stem and progenitor cells. As stated in the abstract, these findings suggest that an additive inhibitory activity against malignant myelofibrosis hematopoietic stem and progenitor cells can be achieved using a sequential treatment regimen of ruxolitinib followed by imetelstat.

About Imetelstat

Imetelstat is a novel, first-in-class telomerase inhibitor exclusively owned by Geron and being developed in hematologic myeloid malignancies. Early clinical data suggest imetelstat may have disease-modifying activity through the suppression of malignant progenitor cell clone proliferation, which allows potential recovery of normal hematopoiesis. Ongoing clinical studies of imetelstat consist of IMerge, a Phase 2/3 trial in lower risk myelodysplastic syndromes (MDS), and IMbark, a Phase 2 trial in Intermediate-2 or High-risk myelofibrosis (MF). Imetelstat has been granted Fast Track designation by the United States Food and Drug Administration for both the treatment of patients with non-del(5q) lower risk MDS who are refractory or resistant to an erythropoiesis-stimulating agent and for patients with Intermediate-2 or High-risk MF whose disease has relapsed after or is refractory to janus kinase (JAK) inhibitor treatment.

On November 6, 2019 Arbutus Biopharma Corporation (Nasdaq: ABUS), a Hepatitis B Virus (HBV) therapeutic solutions company, reported its third quarter 2019 financial results and provides a corporate update (Press release, Arbutus Biopharma, NOV 6, 2019, View Source [SID1234550410]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"We remain committed to our mission of developing a portfolio of assets with differing mechanisms of action that we believe will form the basis for a functional cure of chronic Hepatitis B", said William Collier, Arbutus’ President and Chief Executive Officer. "Our current efforts are focused on completing the Phase 1a/b clinical trial of AB-729, rapidly selecting a next-generation capsid inhibitor for IND-enabling studies to replace our recently discontinued AB-506, evaluating our oral RNA destabilizer, AB-452, as well as next-generation compounds in this class, and research on compounds that inhibit PD-L1."

Recent Corporate Updates

AB-729

In July 2019, the Company initiated a single and multiple dose Phase 1a/1b clinical trial for AB-729, a subcutaneously delivered RNAi agent which has been shown in preclinical models to span all HBV transcripts, reduce all viral antigens, including hepatitis B surface antigen (HBsAg) expression, and inhibit HBV replication. In this trial, which is designed to investigate the safety, tolerability, pharmacokinetics, and pharmacodynamics of AB-729 in healthy volunteers and in subjects with chronic hepatitis B (CHB) infection, AB-729 will be dosed monthly.

Preliminary safety data in single-dose cohorts of healthy subjects and safety and efficacy data in single-dose cohorts of subjects with CHB infection are expected in the first quarter of 2020.

Capsid Inhibitors

In October 2019, Arbutus announced its decision to discontinue the clinical development of AB-506, an oral capsid inhibitor, in Phase 1a/1b clinical development for the treatment of CHB due to safety observations in a Phase 1a 28-day clinical trial in healthy volunteers. Arbutus intends to present results from the AB-506 Phase 1a/1b clinical trial program at the American Association for the Study of Liver Diseases meeting later this month.

Arbutus is evaluating a number of oral next-generation capsid inhibitor compounds with chemical scaffolding different from AB-506 that the Company believes have the potential to contribute to the inhibition of HBV replication as part of a combination regimen. The Company’s objective is to select one of several lead compounds for IND-enabling studies in December of this year.

AB 452

Arbutus remains committed to the development of oral RNA-destabilizers that have shown compelling anti-viral effects in multiple HBV preclinical models. AB-452, Arbutus’ lead oral RNA-destabilizer is being evaluated in a repeat 90-day preclinical safety study in two species before making a go/no-go decision. We expect that the results of this study will allow us to make that decision early in 2020. The Company is also continuing to advance back-up compounds with chemical scaffolding different from that of AB-452.

Early R&D Programs

Arbutus continues a focused discovery effort on follow-on compounds for its current HBV pipeline, including efforts to identify compounds potentially capable of reawakening patients’ HBV-specific immune response by inhibiting PD-L1.

New Appointment to Arbutus’ Board of Directors

Andrew Cheng, M.D., Ph.D., was appointed to the Arbutus Board of Directors. Previously, Dr. Cheng spent nearly two decades at Gilead Sciences, Inc., where he most recently served as Chief Medical Officer and Executive Vice President. Dr. Cheng is currently President and Chief Executive Officer of Akero Therapeutics (Nasdaq: AKRO).

Cash Position and Cash Guidance

The Company had approximately $90.1 million in cash and cash equivalents as of September 30, 2019. The discontinuation of the AB-506 development program is anticipated to reduce cash burn in the short term and the Company believes its existing cash and cash equivalents balance is sufficient to fund operations into early 2021.

Financial Results

Cash, Cash Equivalents and Investments

Arbutus had cash, cash equivalents and short-term investments totaling $90.1 million as of September 30, 2019, as compared to $124.6 million as of December 31, 2018. The decreased cash balance was due primarily to the $57.7 million used in operating activities during the first nine months of 2019, partially offset by $18.5 million in net proceeds from the sale of a portion of its royalty entitlement on net sales of ONPATTRO in the third quarter of 2019 and $4.7 million of net proceeds from the issuance of shares under its ATM program. Included in the $57.7 million used in operating activities is a $5.9 million payment for the award rendered in the arbitration proceeding with the University of British Columbia in the third quarter of 2019.

Net Loss

Net loss attributable to common shares for the third quarter of 2019, including non-cash charges of $43.8 million related to the impairment of an in-process research and development ("IPR&D") intangible asset and $22.5 million for the impairment of goodwill described further below, was $85.3 million ($1.50 basic and diluted loss per common share) as compared to $27.1 million ($0.49 basic and diluted loss per common share) for the third quarter of 2018. Net loss attributable to common shares also included non-cash expense for the accrual of coupon on the Company’s convertible preferred shares of $2.8 million in the third quarter of 2019 and $2.6 million in the third quarter of 2018, as well as non-cash expense for a proportionate share of Genevant’s net losses of $3.5 million in the third quarter of 2019 and $2.8 million in the third quarter of 2018.

ONPATTRO Royalty Entitlement

Arbutus has a royalty entitlement on global net sales of ONPATTRO (Patisiran) for the lipid nanoparticle delivery (LNP) technology licensed by Arbutus to Alnylam Pharmaceuticals, Inc. (Alnylam) for this product. ONPATTRO is an RNAi therapeutic for the treatment of hereditary ATTR (hATTR) amyloidosis that has been approved by the U.S. Food and Drug Administration and the European Medical Agency. In July 2019, Arbutus sold this royalty entitlement to OCM IP Healthcare Portfolio LP, an affiliate of the Ontario Municipal Employees Retirement System (collectively, OMERS), effective as of January 1, 2019, for $20 million in gross proceeds before advisory fees. OMERS will retain this royalty entitlement until it has received $30 million in royalties, at which point 100% of this royalty entitlement will revert to Arbutus. OMERS has assumed the risk of collecting up to $30 million of future royalty payments from Alnylam and Arbutus is not obligated to reimburse OMERS if they fail to collect any such future royalties. Arbutus recognized the $20 million of gross proceeds from this transaction as a liability, net of transaction costs. The Company is amortizing the liability to non-cash interest expense and will continue to recognize the royalty revenue that Alnylam pays to OMERS as non-cash royalty revenue.

In addition to the royalty entitlement from the Alnylam LNP license agreement, Arbutus is also receiving a second, lower royalty entitlement on global net sales of ONPATTRO originating from a settlement agreement and subsequent license agreement with Acuitas Therapeutics. The royalty entitlement from Acuitas has been retained by Arbutus and is not part of the royalty entitlement sale to OMERS.

Operating Expenses

Research and development expenses were $17.7 million in the third quarter of 2019 compared to $16.6 million in the third quarter of 2018. Research and development expenses in the third quarter of 2019 included costs associated with the Company’s Phase 1a/1b clinical trial for its RNAi agent (AB-729), costs associated with the Company’s Phase 1a/1b clinical trial for its oral capsid inhibitor (AB-506) that was discontinued in October 2019, and toxicology studies for its HBV RNA Destabilizer (AB-452). The increase in research and development expenses was due primarily to increased spending in 2019 for the two Phase 1a/1b clinical trials for AB-729 and AB-506. General and administrative expenses were $3.3 million in the third quarter of 2019 compared to $2.6 million in the third quarter of 2018. The increase in general and administrative expenses was due primarily to increased stock compensation expense and an increase in insurance premiums.

In the third quarter of 2019, the Company also recorded a charge of $6.5 million related to an arbitration award from the Company’s arbitration with the University of British Columbia.

Impairment of IPR&D Intangible Assets and Goodwill

The Company has historically carried IPR&D and goodwill from its acquisition of technologies and business combination as assets. All acquired IPR&D intangible assets relate to the Company’s covalently closed circular DNA ("cccDNA") program. During the three months ended September 30, 2019, the Company recorded a $43.8 million non-cash impairment expense to reduce the carrying value of its IPR&D intangible assets to zero as of September 30, 2019. The Company also recognized a corresponding income tax benefit of $12.7 million related to the decrease in its deferred tax liability associated with the IPR&D intangible assets. The impairment was due to an indefinite delay in further development of the Company’s cccDNA program while the Company focuses on its other development programs.

Goodwill represents the excess of purchase price over the value assigned to the net tangible and identifiable intangible assets in connection with the business combination that formed Arbutus. For the third quarter of 2019, the Company assessed the changes in circumstances that occurred during the quarter to determine if it was more likely than not that the fair value of the Company was below its carrying amount. Due to a sustained decrease in the Company’s share price in recent months, the Company’s market capitalization was reduced below the book value of its net assets and the Company concluded that its fair value was below its carrying amount by an amount in excess of the carrying value

of the goodwill. As a result, the Company recorded a $22.5 million non-cash impairment expense to reduce the carrying value of its goodwill asset to zero as of September 30, 2019.

Equity Investment Loss in Genevant

As of September 30, 2019, the Company owned approximately 40% of the common equity of Genevant Sciences Ltd. (Genevant), a company launched with Roivant Sciences Ltd. in April 2018. Arbutus recorded a loss of $3.5 million in the third quarter of 2019 for its proportionate share of Genevant’s net loss. Financial results of Genevant are recorded on a one-quarter lag basis.

Outstanding Shares

The Company had 56,850,172 common shares issued and outstanding as of September 30, 2019. In addition, the Company had approximately 9.1 million stock options outstanding and 1.164 million convertible preferred shares outstanding, which (including the annual 8.75% coupon) will be mandatorily convertible into approximately 23 million common shares on October 18, 2021.

Conference Call Today

Arbutus will hold a conference call and webcast today, Wednesday, November 6, 2019 at 8:45 AM Eastern Time to provide a corporate update. You can access a live webcast of the call through the Investors section of Arbutus’ website at www.arbutusbio.com. Alternatively, you can dial (866) 393-1607 or (914) 495-8556 and reference conference ID 7279188.

An archived webcast will be available on the Arbutus website after the event. Alternatively, you may access a replay of the conference call by calling (855) 859-2056 or (404) 537-3406, and reference conference ID 7279188.

On November 6, 2019 Athersys, Inc. (NASDAQ: ATHX) reported its financial results for the three months ended September 30, 2019 (Press release, Athersys, NOV 6, 2019, View Source [SID1234550442]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Highlights of the third quarter of 2019 and recent events include:

Steady advancement of both MultiStem ischemic stroke clinical trials, including the HEALIOS K.K. ("Healios") TREASURE study in Japan and in our Phase 3 registrational study MASTERS-2;

Continued support for the Healios’ acute respiratory distress syndrome ("ARDS") trial, the ONE-BRIDGE study in Japan, which continues to have steady enrollment;

Completion of one-year follow up assessments for our ARDS trial, the MUST-ARDS study, and initiation of planning for subsequent ARDS trial;

Advanced preparations for planned Phase 2 trauma clinical study;

Progressed planning for commercial readiness with our manufacturing process, technical transfer operations and future manufacturing plans;

Engaged in partnering discussions with companies interested in MultiStem commercialization rights in Europe and other regions;

MultiStem recognized in the first ESOT Leonardo Da Vinci Research Innovation Award received by Emily R. Thompson from the University of Newcastle for her work using MultiStem in human kidney transplant research;

Entered in new equity facility that will replace the current facility, providing us with access of up to $100 million to support operational and other initiatives over the next several years;

Recognized revenues of negative $0.4 million and net loss of $12.0 million, or $0.08 net loss per share, for the quarter ended September 30, 2019; and

Ended the 2019 third quarter with $40.4 million of cash and cash equivalents.

"We continue to make steady progress in our ongoing clinical programs, maintaining our focus on the critical care indications where our prior clinical results and extensive preclinical data suggest there is an excellent opportunity for MultiStem to address substantial areas of unmet medical need. Each of the indications we are focused on represent significant market opportunities, where current standard of care is limited, cost of care is high, and the disability burden and the quality of life impact on the patient and family is substantial," commented Dr. Gil Van Bokkelen, Chairman & CEO of Athersys. "We believe that MultiStem can help address substantial gaps and limitations in current standard of care, meaningfully improving clinical outcomes for patients, and delivering substantial value to the healthcare system.

"We are also heavily focused on strategic partnering activities in Europe and other geographies of interest, while we also pursue other strategic opportunities that have the potential to add value and strengthen our balance sheet. We are focused on preparing for commercialization in the future and maintaining a strong financial position while we pursue these initiatives," concluded Dr. Van Bokkelen.

Third Quarter Results
Our revenues are generally derived from license fees, manufacturing-related activities for Healios, other contract revenue from our collaborations and grant revenue. Revenues were negative $0.4 million for the three months ended September 30, 2019 compared to $2.3 million for the three months ended September 30, 2018, which were primarily related to our collaboration with Healios. In the third quarter of 2019, we determined that the estimated variable transaction price of product supply decreased due to a reduction in the underlying cost per dose that occurred during the quarter. This reduction exceeded the amount of revenue generated during the quarter. Royalty revenue ceased late in 2018 upon a licensee’s decision to discontinue distribution of the licensed product.
Research and development expenses decreased to $8.9 million for the three months ended September 30, 2019 from $9.5 million for the comparable period in 2018. The $0.6 million net decrease is associated with decreases in clinical trial and manufacturing process development costs of $1.1 million and license fees of $0.2 million, with such decreases partially offset by increases in personnel costs of $0.2 million, outside services of $0.2 million, stock compensation costs of $0.2 million, and consulting costs of $0.1 million. Included in our clinical expenses are costs associated with providing manufacturing services to Healios, which are invoiced to Healios in accordance with our collaboration agreements.
General and administrative expenses increased to $3.0 million for the three months ended September 30, 2019 from $2.6 million in the comparable period in 2018. The $0.4 million increase was due primarily to increased legal and professional fees, outside services and stock compensation costs compared to the same period last year.
Net loss for the third quarter of 2019 was $12.0 million compared to a net loss of $9.7 million in the third quarter of 2018. The difference reflects the above variances, as well as an increase in other income.
During the nine months ended September 30, 2019, net cash used in operating activities was $25.2 million compared to $8.8 million in the nine months ended September 30, 2018, with 2018 being impacted by proceeds from the Healios collaboration expansion. At September 30, 2019, we had $40.4 million in cash and cash equivalents, compared to $51.1 million at December 31, 2018.

Conference Call
Gil Van Bokkelen, Chairman and Chief Executive Officer, Laura Campbell, Senior Vice President of Finance, and Karen Hunady, Director of Corporate Communications and Investor Relations will host a conference call today to review the results as follows:
Date

November 6, 2019
Time

4:30 p.m. (Eastern Time)
Telephone access: U.S. and Canada

(877) 396-3286
Telephone access: International

(647) 689-5528
Access code

4183148
Live webcast

www.athersys.com, under the Investors/Events section

We encourage shareholders to listen using the webcast link and to use the phone line if you intend to ask a question. A replay will be available on the webcast 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 shortly after the completion of the call until 11:59 PM Eastern Time on November 13, 2019 by dialing (800) 585-8367 or (416) 621-4642 and entering Encore passcode 4183148.