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Entry into a Material Definitive Agreement

On August 14, 2020, Navidea Biopharmaceuticals, Inc. ("Navidea" or the "Company") reported that signed an amended and restated equity commitment letter (the "Commitment Letter") with Mastiff Group LLC as lead investor (the "Sponsor"), for a private placement financing of up to $25,000,000 in aggregate gross proceeds for the sale and issuance of shares of Navidea’s common stock (Filing, 8-K, Navidea Biopharmaceuticals, AUG 14, 2020, View Source [SID1234563741]). The Commitment Letter supersedes and replaces a previously disclosed commitment letter entered into between Navidea and the Sponsor on August 9, 2020 and August 13, 2020 (the "Prior Commitment Letters"). The Prior Commitment Letters contained substantially similar terms as the Commitment Letter.

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The Commitment Letter requires the Sponsor to purchase, or cause the purchase of, shares of Navidea’s common stock, and to pay, or cause to be paid, to Navidea an aggregate of up to $25,000,000 (the "Equity Commitment"). The Commitment Letter provides that the initial tranche of the private placement will be in an amount of $5,000,000, at a purchase price of $5.00 per share, and that subsequent sales of the shares of common stock shall be made "at-the-market," provided that no such subsequent sales shall be made unless Navidea’s common stock closes at or above $5.00 for five consecutive trading days on the NYSE American. The Sponsor may effect the funding of the Equity Commitment directly or indirectly through one or more affiliates of the Sponsor or any other investment fund that the Sponsor deems appropriate. The Commitment Letter provides that definitive agreements (the "Definitive Agreements"), including a Stock Purchase Agreement and Registration Rights Agreement, must be signed within 7 business days of the date of the Commitment Letter, and one or more closings will be held not later than 90 calendar days from the date of execution of the Definitive Agreements. The Equity Commitment is subject to the approval by the NYSE American of the Company’s additional listing application and other customary closing conditions.

This Commitment Letter and the obligation of the Sponsor to fund the Equity Commitment will terminate automatically and immediately upon the earliest to occur of (a) the mutual agreement of the Sponsor and Navidea, (b) failure of the parties to agree to definitive documents, and (c) the funding of the initial tranche of $5,000,000 and funding of $20,000,000 in subsequent closings, at which time such obligation will be discharged but subject to the performance of such obligation. In addition, Navidea may terminate this the Commitment Letter and the Equity Commitment if the purchase price proposed by the Sponsor is not above the "at-market" per share price on the date of execution of the Definitive Agreements.

The securities to be sold pursuant to the Equity Commitment have not been, and will not be, registered under the Securities Act of 1933, as amended (the "Securities Act"), or applicable state securities laws, and accordingly may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of Navidea’s securities. No offer, solicitation or sale will be made in any state or other jurisdiction in which such offering, solicitation or sale would be unlawful.

Titan Pharmaceuticals Reports Second Quarter 2020 Financial Results

On August 14, 2020 Titan Pharmaceuticals, Inc. (NASDAQ: TTNP) ("Titan" or the "Company") reported financial results for the second quarter ended June 30, 2020 and provided an update on its business (Press release, Titan Pharmaceuticals, AUG 14, 2020, View Source [SID1234563671]).

Second Quarter 2020 Highlights

In June 2020, Titan initiated a fully-virtual Probuphine (buprenorphine) implant Risk Evaluation and Mitigation Strategy ("REMS") training and certification program for qualified health care providers ("HCPs") who treat patients with Opioid Use Disorder ("OUD").
In June 2020, the Company entered into a co-promotion partnership with Indegene, Inc., a leading healthcare solutions company, to establish multichannel digital marketing programs throughout the United States to increase awareness of Probuphine as a long-term maintenance treatment for OUD, and expand the capabilities for the engagement of HCPs who can be certified to prescribe Probuphine to eligible patients.
Since January 1, 2020, Titan received proceeds of approximately $7.0 million as a result of the exercise of previously issued common stock purchase warrants.
COVID-19 Impact and Adjusted Probuphine Commercial Strategy

Early this year, Titan implemented its staffing plans for expanded commercial operations with additions to its sales and medical liaison teams, including support from additional marketing and medical access staff to enable improved coverage across all 50 states and Puerto Rico. Unfortunately, the COVID-19 pandemic-related shelter in place and social distancing restrictions and minimized personal physician/patient interaction have hindered the full effectiveness of the commercial team. In order to try and mitigate the impact of the ongoing public health crisis, Titan has undertaken a number of key activities during this period, including:

Training the commercial team in utilizing digital communication techniques to establish relationships with existing and new HCPs and their staff;
Providing Probuphine information in electronic format for ease of virtual communication for HCPs to use with their patients and to highlight the potential benefits of Probuphine as a treatment modality in the increasing telemedicine environment;
Establishing a social media presence in select geographies to increase awareness of Probuphine and enhance its share of voice in the OUD medication assisted treatment space;
Rapidly developing and obtaining FDA approval to implement a virtual REMS training program to certify HCPs during this period; and
Seeking partnering opportunities to increase the commercial capabilities in support of Probuphine.
"We continue to adapt to this ever-changing pandemic environment, and thanks to our dedicated staff, we are making progress," said Titan’s President and CEO, Sunil Bhonsle. "We are pleased with the FDA’s prompt approval of our fully-virtual REMS training program, which enables us to continue to certify HCPs to prescribe and administer Probuphine, facilitating access to our six-month maintenance treatment option for eligible patients with OUD. Our commercial team continues to focus on digital outreach to establish relationships with the medical community and to inform HCPs, their staff and their patients of the potential benefits of Probuphine, particularly at a time when patient/physician interactions are limited. Following a substantial decline in the number of patient enrollments for Probuphine treatment during the first two months of the quarter, clinics in certain regions began to see an increase in enrollments in June, which has continued. We believe this is an early indication that the efforts of our commercial team are working and we look forward to continued progress in the coming months."

Probuphine is indicated for the maintenance treatment of OUD in eligible patients.

Please see Full Indication and Important Safety Information below, and link below to Full Prescribing Information.

"Our goal is to increase the use of Probuphine for the maintenance treatment of OUD, and in the current environment, our recently established co-promotion partnership with Indegene is timely," said Titan’s Executive Chairman, Dr. Marc Rubin. "With the support of our commercial team, Indegene’s capabilities provide Titan with sophisticated multichannel marketing tools, predictive analytics and social media campaigns that will be critical to expanding our outreach to the medical community and patients. The first virtual nationwide outreach campaign commenced last week, and the Titan-Indegene team is looking forward to continuing the implementation of a comprehensive program over the next few months. During the third quarter we will also implement a three-month program to seek and assist patients who may be suitable for treatment with Probuphine and connect them with REMS-certified HCPs. I want to emphasize that our progress can be sustained only if our stockholders approve the proposal to increase the authorized shares at our special stockholder meeting scheduled for August 31, 2020.

"In addition, Sunil has expressed his desire to retire, hopefully by the end of the year. To prepare for this transition, and contingent on our ability to raise additional capital, we will look for a successor with experience in the commercial space, as we continue our transition to a commercial-stage company."

Second Quarter 2020 Financial Results

For the three months ended June 30, 2020, Titan reported approximately $1.3 million in revenue, which reflects approximately $0.1 million in product sales and approximately $1.2 million related to the Company’s National Institute on Drug Abuse ("NIDA") grant. This compared with revenues of approximately $0.5 million in the same period in 2019, which was comprised of $0.3 million in product sales and $0.2 million related to the NIDA grant. Product revenue during the quarter ended June 30, 2020 declined substantially from the comparable period in 2019 due to substantial decreases in unit sales volumes, increased utilization of our patient assistance programs and the COVID-19 pandemic and the related shelter in place restrictions and clinic closures. Also, the second quarter of 2019 unit sales volume included initial purchases by a specialty pharmacy.

Total operating expenses for the second quarter of 2020 were approximately $5.7 million, compared with approximately $5.4 million from the same quarter in 2019, and consisted primarily of research and development ("R&D") and selling, general and administrative ("SG&A") expenses and costs of goods sold, inclusive of distribution expenses. R&D expenses for the quarter ended June 30, 2020 were approximately $2.0 million, compared to approximately $1.9 million in the same three month period in 2019. SG&A expenses for the 2020 second quarter were approximately $3.5 million, compared with approximately $3.2 million in the same quarter a year ago. Costs of goods sold for the second quarter of 2020 were approximately $0.2 million, consistent with the 2019 second quarter.

Net other expense, consisting primarily of interest expense, was approximately $0.3 million in the second quarter of 2020, consistent with the second quarter of 2019.

Net loss applicable to common stockholders in the second quarter of 2020 was approximately $4.6 million, or approximately $0.05 per share, compared with a net loss applicable to common stockholders of approximately $5.2 million, or approximately $0.38 per share, in the same quarter in 2019.

As of June 30, 2020, Titan had cash and cash equivalents of approximately $5.5 million, which the Company believes are sufficient to fund planned operations through the third quarter of 2020.

Conference Call Details

Titan management will host a conference call today at 12:00 p.m. ET / 9:00 a.m. PT to review these financial results and discuss business developments in the period. The conference call will be hosted by Sunil Bhonsle, President and CEO; Kate Beebe DeVarney, Ph.D., Executive Vice President and Chief Scientific Officer; Brian Crowley, Vice President of Finance; Joe Schrei, Executive Director, Commercial Operations; Mike Fritz, National Sales Director; and Marc Rubin, M.D., Executive Chairman.

The live conference call may be accessed by dialing 1-888-317-6003 (U.S.) or 1-412-317-6061 (international) and providing passcode 8493149. The call will also be broadcast live and archived on Titan’s website at www.titanpharm.com/news/events.

About Probuphine

Probuphine is the only subdermal implant designed to deliver buprenorphine continuously for six months following insertion.

Probuphine was developed using ProNeura, the continuous drug delivery system developed by Titan that consists of a small, solid implant made from a mixture of ethylene-vinyl acetate and a drug substance. The resulting construct is a solid matrix that is placed subdermally, normally in the upper inner arm in an outpatient office procedure and removed in a similar manner at the end of the treatment period. The U.S. Food and Drug Administration ("FDA") approved Probuphine in May 2016, and it is the first and only buprenorphine implant available for the maintenance treatment of opioid addiction in eligible patients.

IMPORTANT SAFETY INFORMATION INCLUDING INDICATION AND BOXED WARNING

INDICATION

PROBUPHINE is an implant that contains the medicine buprenorphine. PROBUPHINE is used to treat certain adults who are addicted to (dependent on) opioid drugs (either prescription or illegal). PROBUPHINE is indicated for the maintenance treatment of opioid dependence in patients who have achieved and sustained prolonged clinical stability on low-to-moderate doses (doses no more than 8 mg per day) of a buprenorphine-containing product.

PROBUPHINE is part of a complete treatment program that also includes counseling and behavioral therapy.

It is not known if PROBUPHINE is safe or effective in children less than 16 years of age.

IMPORTANT SAFETY INFORMATION

WARNING: COMPLICATIONS FROM INSERTION AND REMOVAL OF PROBUPHINE

See Full Prescribing Information for complete Boxed Warning

Serious complications may happen from insertion and removal of PROBUPHINE, including:

•

Nerve or blood vessel injury in your arm

•

Movement of implant (migration). PROBUPHINE or pieces of it can move into blood vessels, possibly to your lung, and could lead to death

•

Implant sticks out of the skin (protrusion)

•

Implant comes out by itself (expulsion)

Call your healthcare provider right away if:

PROBUPHINE sticks out of the skin or comes out by itself
You have bleeding or symptoms of infection at the site after insertion or removal, including excessive or worsening itching, pain, irritation, redness, or swelling
You have numbness or weakness in your arm after the insertion or removal procedure
You have weakness or numbness in your arm, or shortness of breath
If the implant comes out by itself, keep it away from others, especially children, as it may cause severe difficulty in breathing and possibly death.

Because of the risk of complications of, migration, protrusion, expulsion and nerve injury with insertion and removal of PROBUPHINE, it is only available through a restricted program called the PROBUPHINE REMS Program. Healthcare providers who prescribe and/or insert PROBUPHINE must be certified with the program by enrolling and completing live training.

PROBUPHINE is not available in retail pharmacies
PROBUPHINE must be inserted or removed only in the facility of the certified prescriber
Implants may be difficult to locate if inserted too deeply, if you manipulate them, or if you gain significant weight after insertion. Your healthcare provider may do special procedures or tests, or refer you to a surgical specialist to remove the implants if they are difficult to locate.

The medicine in PROBUPHINE can cause serious and life-threatening problems, especially if you take or use certain other medicines or drugs. Call your healthcare provider right away or get emergency help if you:

Feel faint or dizzy, have mental changes such as confusion, slower breathing than you normally have, severe sleepiness, blurred vision, problems with coordination, slurred speech, cannot think well or clearly, high body temperature, slowed reflexes, feel agitated, stiff muscles or have trouble walking.

These can be signs of an overdose or other serious problems.

Coma or death can happen if you take anxiety medicines or benzodiazepines, sleeping pills, tranquilizers, or sedatives, antidepressants, or antihistamines, or drink alcohol during treatment with PROBUPHINE. Tell your healthcare provider if you are taking any of these medicines or if you drink alcohol.

Who should not use PROBUPHINE?

Do not use PROBUPHINE if you are allergic to buprenorphine or any of its ingredients, this includes buprenorphine hydrochloride and the inactive ingredient ethylene vinyl acetate or EVA.

PROBUPHINE may not be right for you. Before starting PROBUPHINE tell your doctor about all of your medical conditions, including:

Trouble breathing or lung problems, an enlarged prostate gland (men), a head injury or brain problem, problems urinating, a curve in your spine that affects your breathing, liver problems, gallbladder or adrenal gland problems, Addison’s disease, low thyroid hormone levels (hypothyroidism), a history of alcoholism, a history of keloid formation, connective tissue disease (such as scleroderma), or history of MRSA infections, mental problems such as hallucinations, an allergy to numbing medicines or medicines used to clean your skin, are pregnant or plan to become pregnant or are breastfeeding or plan to breastfeed.

Tell your doctor about all the medicines you take, including prescription and over-the-counter medicines, vitamins and herbal supplements.

What should I avoid while being treated with PROBUPHINE?

Do not drive, operate heavy machinery, or perform any other dangerous activities until you know how this medication affects you
You should not drink alcohol during treatment. You should not take anxiety medicines or benzodiazepines, sleeping pills, tranquilizers, or sedatives that are not prescribed to you during treatment with PROBUPHINE, as this can lead to slowed breathing, drowsiness, delayed reaction time, loss of consciousness or even death
What are the possible side effects of PROBUPHINE?

PROBUPHINE can cause serious side effects, including:

Infection at the insertion or removal site. Infection may happen at the implant site during insertion or removal. Do not try to remove PROBUPHINE implants yourself
Opioid withdrawal. If PROBUPHINE comes out of your arm or if you stop treatment, tell your doctor right away as you can have symptoms of shaking, sweating more than normal, feeling hot or cold more than normal, runny nose, watery eyes, goose bumps, diarrhea, vomiting and muscle aches
Physical dependency
Liver problems. Call your doctor right away if you notice signs of liver problems that may include your skin or the white part of your eyes turning yellow (jaundice)
Allergic reaction. If you get a rash, hives, itching, swelling of your face, or wheezing, low blood pressure, dizziness or decrease in consciousness
Decrease in blood pressure. You may feel dizzy when you get up from sitting or lying down
Sleep Apnea. Call your doctor right away if you or someone close to you notices: Observed episodes of stopped breathing or abnormal breathing patterns during sleep
Tell your healthcare provider if you develop any of the symptoms listed.

Common side effects of PROBUPHINE include: Headache, nausea, toothache, constipation, depression, vomiting, back pain, mouth and throat pain.

Common risks with the minor surgical procedure: Itching, pain, irritation, redness, swelling, bleeding, or bruising at the insertion or removal site. Scarring around the insertion site.

Lee’s Pharm Announced 2020 Interim Results Positive Profit Alert

On August 14, 2020 Lee’s Pharmaceutical Holdings Limited ("Lee’s Pharm" or the "Group", Stock Code: 950), an integrated research-driven and market-oriented pharmaceutical group in China, reported that it is anticipated that the Group’s will record a significant increase in its net profit attributable to the Shareholders for the six months ended 30 June 2020 (Press release, Lee’s Pharmaceutical, AUG 14, 2020, View Source [SID1234563670]).

The Board of directors of the Company based on the preliminary assessment of the Group’s unaudited financial information currently available, it is anticipated that the unaudited net profit attributable to the Shareholders for the six months ended 30 June 2020 will increase by about 150%, as compared to that of for the six months ended 30 June 2019.

The Board considers that the improvement of the Group’s interim results was mainly attributable to an one-off compensation income recognised by the Company upon the early termination of the product license of Zanidip during the period under review; and the absence of considerable intangible assets impairment during the period under review, as compared to the non-recurring loss of approximately HK$108 million incurred in the same period last year by China Oncology Focus Limited, a 65%-owned subsidiary of the Group, which arose from the impairment of its intangible asset after the discontinuation of a Phase 3 clinical trial of Pexa-Vec for advanced liver cancer.

In recent years, the Group has made it a strategy to enhance in-house development capability and control over its assets, evidenced by the approval of generic Treprostinil in March 2020 to replace original product Remodulin for sales and marketing in China in which the switch has proved to be beneficial to both pulmonary arterial hypertension (PAH) patients in China and the Group. Given the availability of several generic lercanidipines in China, the Group believes that divesture of this product at this juncture not only brings short term financial benefit but also paves the way for the Group to launch its generic version in the near future for long term prosperity.

Dr. Benjamin Li, Executive Director and Chief Executive Officer of the Group, said, "As mentioned earlier this year, the volatile and complicated macroeconomic and geopolitical environment has already brought up inflationary, foreign currency and other issues and such tension may not be eased in the near future. Together with the COVID-19 pandemic which could remain for a longer period of time, the Group foresees the challenging environment will be persisted throughout this year. Nevertheless, the Group will stay focus on its new drug development, sales organisation reform and expansion, and cost containment, and firmly believes that all these works to be done will eventually drive growth therefor and will eventually create more value for the shareholders."

Izabela Podgorski, Ph.D., researcher at Karmanos Cancer Institute receives RO1 grant to continue research on metastatic prostate cancer

On August 14, 2020 Izabela Podgorski, Ph.D., co-leader of the Prostate Cancer Research Team at the Barbara Ann Karmanos Cancer Institute and associate professor of Pharmacology at Wayne State University (WSU) School of Medicine reported has recently obtained a new five-year, $2,028,733 million RO1 grant from the National Institutes of Health/National Cancer Institute to continue her studies into the ways that prostate cancer cells are affected by bone marrow fat and how they adapt and survive in bone in an effort to identify new ways of treating metastatic prostate cancer (Press release, Karmanos Cancer Institute, AUG 14, 2020, View Source [SID1234563669]). The grant number is CA251394-01. Dr. Podgorski was the first researcher to suggest a link between bone marrow fat cells (adipocytes) and metastatic prostate cancer in 2010.

Her new study hypothesizes that tumor cell and bone marrow adipocyte interactions enhance prostate cancer metastatic progression, while simultaneously reducing the tumor cells’ response to current treatments.

"Bone by itself is a very harsh microenvironment that is difficult to treat," she said. "For a long time, people thought bone marrow fat cells were just energy storage units. We knew they were abundant in adult bones and that their numbers prematurely increased with obesity and metabolic diseases. But we had no idea what role, if any, they played in metastatic prostate cancer. In the past few years our studies, and others, began to reveal that when you have tumor cells in the bone marrow, they trigger some changes in the metabolism of adipocytes, and those changes ultimately help the tumor cells to survive and escape therapy."

Adipocytes are cells specialized for the storage of fat. Those cells expel lipids, which are fatty acids.

"Cancer cells take up those fatty acids and use them as energy," Dr. Podgorski said. "Tumor cells push the adipocytes to expel more lipids. They have this interactive relationship that supports (tumor) growth and promotes resistance to standard chemotherapy treatments, which includes docetaxel and cabazitaxel."

Men who are diagnosed with prostate cancer typically have a five-year survival rate of close to 100 percent if the cancer is contained in the original site, according to Dr. Podgorski. But if it metastasizes, the cancer cells will often migrate to a portion of the axial skeleton such as the hip, pelvis or ribs. Metastatic prostate cancer cells could also target a visceral organ such as the liver or travel to the lymph nodes.

According to Dr. Podgorski, 85 to 90 percent of men with metastatic prostate cancer have bone metastases. This lowers a man’s five-year survival rate to below 30 percent. If the tumor cells migrate to the bone and a visceral organ, it creates the most lethal scenario.

In Dr. Podgorski’s research, she and the researchers in her lab have discovered that marrow fat cells can modify normal functions of metabolic enzymes (such as PKM2) or inflammatory molecules (such as interleukin 1B). This helps tumor cells grow more robust and resist therapeutic agents. With the latest RO1 grant, she and her colleagues are striving to demonstrate that inhibiting lipid release by adipocytes will improve therapy response and uncover new molecular targets for therapy.

They are utilizing a variety of different techniques to identify these new molecules. These methods include 3D culture techniques, patient samples, mouse models, models that mix both human and mouse samples, proteomics (the study of cellular proteins) and RNA sequencing approaches. They will use these approaches to study previously unexplored mechanisms that link bone marrow adipocytes with the survival of cancer cells that also resist standard therapy.

Given the research they have already established about bone marrow adiposity, Dr. Podgorski is confident that this will provide progress in the development of new prostate cancer therapies.

"I think we have a lot of tools to answer the questions we’ve asked," she said. "We already identified potential molecules to target, including PKM2 or interleukin 1B. Fat cells change the activity of these targets in the tumor to help it live. They also affect other processes, such as iron metabolism. The design of this study promises to show that lipids supplied by fat cells in the bone marrow are key contributors to chemoresistance. The study is also likely to identify new mechanistic targets for therapy."

We congratulate Dr. Podgorski and her Karmanos and WSU collaborators on the prestigious RO1 grant, including James Granneman, Ph.D., Maik Hüttemann, Ph.D., Paul Stemmer, Ph.D., Elisabeth Heath, M.D. and Dr. Seongho Kim, Ph.D.

ThermoGenesis Holdings Announces Financial Results for the Second Quarter Ended June 30, 2020 and Provides Corporate Update

On August 14, 2020 ThermoGenesis Holdings, Inc. (Nasdaq: THMO), a market leader in automated cell processing tools and services in the cell and gene therapy field, reported financial and operating results for the second quarter ended June 30, 2020 and provided a corporate strategic update (Press release, Thermogenesis, AUG 14, 2020, View Source [SID1234563668]).

Second Quarter and Subsequent Achievements:

In April 2020, the Company’s 19%-owned joint venture, ImmuneCyte, acquired worldwide intellectual property for development of fully human antibody therapeutics for COVID-19, including four high-affinity monoclonal antibody drug candidates against SARS-CoV-2 and tools for screening and quantifying efficacy of such neutralizing antibodies. Results of the research related to these neutralizing antibody therapeutics were published in an article entitled, "Cross-neutralization antibodies against SARS-CoV-2 and RBD mutations from convalescent patient antibody libraries," in bioRxiv in June 2020.
On June 4, at the 2020 annual stockholder meeting, the Company received majority stockholder approval to authorize a new class of non-voting class B common stock. The Company intends to issue shares of the class B common stock to existing stockholders as a dividend payout. The class B common stock will be publicly traded under a separate ticker from its current class of common stock. The Company intends to use the class B shares as a vehicle to assist with future strategic acquisitions. The timing of the dividend will be determined by the Company at a later date.
On June 11, the Company filed patent applications for a point-of-care device which improves the speed and accuracy of its lateral flow immunoassays (LFIA) to detect COVID-19 IgM and IgG antibodies from a single drop of blood.
On June 23, Corning Incorporated’s Life Sciences Division began the commercial launch of the Company’s X-SERIES cell processing platform under the ThermoGenesis and Corning dual brand, as part of the previously announced global distribution agreement.
On June 29, the Company was added to the Russell Microcap Index.
On August 11, the Company entered into a supply agreement with BioHit Healthcare (Hefei) Co., Ltd., to market, under the ThermoGenesis brand, its SARS-CoV-2 IgM/IgG Antibody Test Kit, which has already received Emergency Use Authorization (EUA) from the U.S. Food and Drug Administration (FDA). Marketing activities are expected to begin on August 17, 2020.
"During the last few months, we adapted our strategy to develop and market a range of solutions to fight the global pandemic," stated Chris Xu, Ph.D., Chief Executive Officer of ThermoGenesis. "Notably, we contracted with a new manufacturer for a SARS-CoV-2 (COVID-19) IgM/IgG Antibody Test Kit which has already obtained EUA designation from the FDA and look forward to begin marketing next week. We plan to further differentiate this kit with the addition of a lateral flow immunoassay cartridge testing kit reader, now in the final stages of development, which is designed to improve the speed and accuracy of the COVID-19 antibody assay. Our research team has already filed a number of key patent applications around the reader, which allows for big data analysis, which we believe will be essential information as we continue to re-open our society and our economy."

Dr. Xu continued, "Also of note, was the commercial launch of our proprietary X-SERIES cell processing platform by our global distributor, Corning Life Sciences, under the ThermoGenesis and Corning dual brand. We remain committed to expanding our robust product line of automated cellular processing tools and services to become a market leader for cell banking and cell therapies, which will sustain our growth beyond this COVID-19 pandemic."

Jeff Cauble, Chief Financial Officer of ThermoGenesis, added, "The second quarter marked one of our best quarters for CAR-TXpress sales, up $400,000 from the prior period. This is an encouraging indication of the strength of Corning’s distribution and their ability to expand the market penetration for this product line. While this improvement was offset by a reduction in revenues for our other product lines as a result of the COVID-19 pandemic, we expect sales to return to prior levels as the health emergency subsides."

Financial Results for the Quarter Ended June 30, 2020

Net revenues. Net revenues for the three months ended June 30, 2020 were $2.2 million compared to $4.3 million for the three months ended June 30, 2019, a decrease of $2.1 million or 48%. The decrease was driven by AXP disposable sales, which declined from 1,403 cases sold in the quarter ended June 30, 2019 to 372 cases sold in the quarter ended June 30, 2020. The COVID-19 pandemic has had a significant impact on the cord blood industry, with fewer cord blood units being stored globally after the start of the pandemic. Additionally, with many countries and states on lockdown, some customers opted to consume their existing safety stock in lieu of placing new orders during the current quarter. The Company currently expects AXP disposable sales to increase back to their prior levels after the pandemic is over. Also contributing to the decrease was BioArchive device sales, as one device was sold in the quarter ended June 30, 2019 as opposed to no devices sold in the current quarter. Offsetting these decreases was an increase of $0.5 million in CAR-TXpress sales due to the distributor for this product line, Corning Incorporated, adding CAR-TXpress to its suite of products and beginning sales to their customers in the quarter ended June 30, 2020. Other revenue also increased by $267,000, driven by approximately $200,000 for COVID-19 testing kits.

Gross profit. Gross profit (loss) was $(2.6) million or (117)% of net revenues for the three months ended June 30, 2020 compared to $2.0 million or 45% of net revenues for the three months ended June 30, 2019, a decrease of $4.6 million. The loss was driven by an inventory reserve of approximately $3.6 million for the remaining on hand inventory of COVID-19 testing kits from ImmuneCyte recognized during the quarter ended June 30, 2020. Additionally, the quarter ended June 30, 2020 had 1,031 fewer cases of AXP disposables sold as compared to the same period in 2019. This resulted in approximately $1.0 million less in gross profit from AXP disposables. There was also a reduction in gross profit of approximately $75,000 due to no BioArchive devices being sold in the quarter ended June 30, 2020. The reduction in gross profit was offset by an increase in gross profit of approximately $225,000 due to increased CAR-TXpress sales in the quarter ended June 30, 2020 as compared to the same period in 2019.

Sales and marketing expenses. For the three months ended June 30, 2020 sales and marketing expenses were $442,000 compared to $384,000 for the three months ended June 30, 2019, an increase of $58,000 or 15%. The increase was driven by expenses related to the Company’s short-term incentive program.

Research and development expenses. Research and development expenses were $578,000 for the three months ended June 30, 2020 compared to $611,000 for the three months ended June 30, 2019, a decrease of $33,000 or 5%. The decrease was driven by development expenses for the Company’s BACS technology of approximately $100,000 which were incurred in the three months ended June 30, 2019. Those expenses were offset by increases of approximately $35,000 in development costs related to the COVID-19 cartridge reader and approximately $30,000 in expenses for the Company’s short-term incentive program which were incurred in the three months ended June 30, 2020.

General and administrative expenses. General and administrative expenses for the three months ended June 30, 2020 were $1.5 million, compared to $1.2 million for the three months ended June 30, 2019, an increase of $0.3 million or 26%. The increase is due to approximately $200,000 more for stock compensation expense in the quarter ended June 30, 2020, related to stock options granted to the Board and Company Executives during the current quarter; and approximately $100,000 in accrued expenses related to the Company’s short-term incentive program.

Interest expense. Interest expense for the three months ended June 30, 2020 was $1.3 million, as compared $1.2 million for the three months ended June 30, 2019, an increase of $103,000. The increase was driven by additional interest expense and amortization of the debt discount related to the Revolving Credit Agreement with Boyalife Asset Holding II, Inc.

Net loss. For the quarter ended June 30, 2020, the Company reported a comprehensive loss attributable to common stockholders of $6.4 million, or $(1.02) per share, based on 6,315,566 weighted average basic and diluted common shares outstanding. This compares to a comprehensive net loss of $1.3 million, or $(0.47) per share, based on 2,784,776 weighted average basic and diluted common shares outstanding for the quarter ended June 30, 2019.

Adjusted EBITDA. In addition to the results reported under US GAAP, the Company also uses a non-GAAP measure to evaluate operating performance and to facilitate the comparison of its historical results and trends. The Company uses the metric to determine operational cash flow. Adjusted EBITDA loss for the quarter ended June 30, 2020 was $4.7 million, as compared to an Adjusted EBITDA of $53,000 for the quarter ended June 30, 2019, a decrease of $4.7 million. The adjusted EBITDA decrease was primarily due to the $4.6 million decrease in gross profit in the quarter ended June 30, 2020 as compared to the same quarter in 2019, as well as approximately $175,000 more in expenses related to the Company’s short-term incentive program. A reconciliation of adjusted EBITDA loss to net loss is set forth below.

At June 30, 2020, the Company had cash and cash equivalents totaling $7.0 million, compared with $3.2 million at December 31, 2019. Working capital improved to $8.0 million at June 30, 2020 as compared to $3.2 million at December 31, 2019.

Conference Call and Webcast Information
ThermoGenesis will host a conference call today at 1:30 p.m. PT/4:30 p.m. ET. To participate in the conference call, please dial 1-844-889-4331 (domestic), 1-412-380-7406 (international) or 1-866-605-3852 (Canada). To access a live webcast of the call, please visit: View Source

A webcast replay will be available on ThermoGenesis’ website for three months by visiting the Investor page of the Company’s website at www.thermogenesis.com.