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]).
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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.