MENLO PARK, Calif., Nov. 10, 2014 /PRNewswire/ -- Asterias Biotherapeutics, Inc. (NYSE MKT: AST), a leading biotechnology company in the emerging field of regenerative medicine, today reported financial results for the third quarter and nine months ended September 30, 2014.
“Asterias made substantial progress in the third quarter with respect to our two key development programs that have the potential to address significant unmet medical needs using our pluripotent stem cell technology platform,” stated Pedro Lichtinger, President and CEO of Asterias. “We have partnered with leading scientific institutions, and are poised to initiate a dose-escalation Phase 1/2a clinical trial for AST-OPC1 in spinal cord injury and to progress AST-VAC2 into a Phase 1/2a dose-escalation clinical trial in lung cancer in collaboration with our partner, Cancer Research UK. Regarding our AST-OPC1 clinical program, we have decided to accelerate the current timelines by approximately 6 months in order to obtain safety and efficacy readouts more rapidly. To enable this acceleration, we plan to double the number of clinical trial sites and to expand our patient recruitment efforts. In addition, we intend to seek U.S. Food and Drug Administration (FDA) approval to increase the robustness of the proof of concept that we will establish in this Phase 1/2a clinical trial by expanding enrollment from 13 patients to up to 40 patients. We believe these changes will increase the statistical confidence of the safety and efficacy readouts, reduce the risks of the AST-OPC1 program and position the product for potential accelerated regulatory approvals.”
Third Quarter and Recent Events
- Asterias received clearance from the FDA to initiate a dose-escalation Phase 1/2a clinical trial of AST-OPC1 (oligodendrocyte progenitor cells) in patients with complete cervical spinal cord injury (SCI). The dose escalation will start with three patients being dosed 2 million cells and escalate into two five-patient cohorts at 10 million and 20 million cells, respectively.
- Asterias signed a Notice of Grant Award (NGA) with the California Institute of Regenerative Medicine (CIRM). The NGA provides for the immediate release of clinical development payments and the release of additional grant funds pursuant to the previously announced $14.3 million CIRM grant award for clinical development of AST-OPC1. The grant provides non-dilutive funding to initiate the Phase 1/2a clinical trial of AST-OPC1 for complete cervical SCI and other product development activities for AST-OPC1.
- Asterias, Cancer Research UK (CRUK) and Cancer Research Technology, the development and commercialization arm of CRUK, entered into an agreement to advance Asterias’ novel immunotherapy treatment, AST-VAC2, into clinical trials in subjects with non-small cell lung cancer. Under the agreement, Asterias will transfer the manufacturing process for AST-VAC2 to CRUK, after which CRUK will, at its own cost, manufacture clinical grade AST-VAC2 and conduct the Phase 1/2a clinical trial in the UK, subject to regulatory approval.
- Successfully distributed 8,000,000 warrants to purchase common shares of BioTime, Inc. at a purchase price of $5.00 per common share until the warrant expires on October 1, 2018.
- Simplified the Company’s capital structure with the conversion of all of its outstanding Series B common stock into Series A common stock. After the automatic conversion of the Series B common stock, the Series A common stock is now the only outstanding class of common stock of Asterias.
- Strengthened the Company’s Board of Directors by adding financial expertise and biopharmaceutical leadership experience with the respective appointments of two additional independent directors, Andrew Arno and Natale Ricciardi.
- Asterias Series A common stock commenced trading on the NYSE MKT under the ticker symbol “AST.”
Third Quarter Financial Results
For the three months ended September 30, 2014, total revenue was $84,515, and was comprised of royalty revenues on product sales by licensees. Operating expenses for the three months ended September 30, 2014 were $4.0 million, compared to $2.7 million in the same period in 2013, and were primarily related to the preparation and commencement of planned research and development operations. Research and development expenses in the third quarter 2014 were $2.6 million, compared to $1.1 million in the year ago quarter. Net loss for the three months ended September 30, 2014 was $1.7 million, compared to a net loss of $2.7 million for the same period in 2013. The reduction in net loss is primarily attributed to the deferred income tax benefit of approximately $2.3 million that was recorded as of September 30, 2014. There was no deferred income tax benefit recorded in the three months ended September 30, 2013. On a per share basis, net loss for the third quarter 2014 was $0.05 per share, compared to $51.62 per share for the year ago quarter. The decrease in the net loss per share primarily reflects the increased share count resulting from the issuance of 21.8 million shares of Asterias Series B common stock to BioTime, Inc. and 6.5 million shares of Asterias Series A common stock to Geron Corporation under the previously announced Asset Contribution Agreement that was executed on October 1, 2013.
Year-to-Date Financial Results
For the nine months ended September 30, 2014, total revenue was $167,207, and was comprised of royalty revenues on product sales by licensees. Operating expenses for the nine months ended September 30, 2014 were $12.0 million, compared to $4.8 million in the same period in 2013, and were primarily attributed to increased research and development related activity and increased staffing and operations. Research and development expenses for the first nine months of 2014 were $7.9 million, compared to $1.9 million in the year ago period. General and administrative expenses for the first nine months of 2014 were $4.1 million, compared to $2.9 million in the year ago period. Net loss for the nine months ended September 30, 2014 was $6.8 million, compared to a net loss of $4.8 million for the same period in 2013. The increase in net loss is offset to some extent by the $5.2 million deferred income tax benefit recorded as of September 30, 2014. There was no deferred income tax benefit recorded in the nine months ended September 30, 2013. On a per share basis, net loss for the nine months ended September 30, 2014 was $0.22 per share, compared to $93.13 per share for the year ago period. The decrease in the net loss per share primarily reflects the increased share count resulting from the issuance of 21.8 million shares of Asterias Series B common stock to BioTime, Inc. and 6.5 million shares of Asterias Series A common stock to Geron Corporation under the previously announced Asset Contribution Agreement that was completed on October 1, 2013.
Cash and cash equivalents totaled $5.0 million at September 30, 2014, and the Company held 3,852,880 BioTime common shares, with a market value of approximately $12.1 million on that date. For the third quarter, cash burn was $2.8 million. In the fourth quarter, the Company anticipates a payment from CIRM under the grant award related to the AST-OPC1 development program.
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