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Conference Call and Live Webcast
“The second quarter of 2017 was very productive for
“We continue to make progress on simplifying our corporate structure to allow us to execute our objectives more efficiently, as well as to make it easier for investors and other external stakeholders to better understand BioTime,” continued Mr. Mohanty. “We achieved an important milestone toward accomplishing these goals with the launch of AgeX Therapeutics, a subsidiary formed to consolidate our early-stage research and development programs related to the biology of aging and age-related disease. AgeX recently commenced operations following a
Renevia® (adipose cells + cell delivery matrix)
- Renevia® successfully met its primary endpoint in a pivotal trial in patients with HIV-associated lipoatrophy (facial fat loss) conducted in
Europe. Treated patients retained approximately 100% of transplanted volume at 6 months compared to no incremental hemifacial volume in the untreated patients (p<0.001). All Renevia transplants were shown to be safe and well tolerated and there were no serious adverse events during the trial.
- BioTime is on track to file for CE Mark for commercial approval for Renevia in
Europeby the end of 2017.
- Additional trials in the U.S. are planned that target a broader $7 billion aesthetics market opportunity, which is consistent with the previously stated goal of indication and geographic expansion for Renevia.
OpRegen® (retinal pigment epithelial cells)
- In April, new positive clinical data on OpRegen were presented at the Annual Meeting of the Association for Research in Vision and Ophthalmology (ARVO). The data, from the first and second cohorts of the ongoing Phase I/IIa clinical trial in the advanced form of dry-AMD, showed that OpRegen cells engraft and that there was evidence of a biological response.
- The Data Safety Monitoring Board (DSMB) monitoring the Phase I/IIa OpRegen trial has authorized
BioTimeto move forward with enrollment for cohort 3 which will include two US sites with leading ophthalmologists.
- An abstract related to the Phase I/IIa OpRegen trial has been accepted for presentation at the American Academy of Ophthalmology (AAO) annual meeting being held in New Orleans,
November 11-14, 2017. BioTimeexpanded its ophthalmology program with the signing of a revised and expanded licensing agreement with Hadassah Medical Organization of Jerusalem, Israel. The revised and expand license agreement increases BioTime’s field-of-use for RPE cells to all eye disorders, and also adds photoreceptor cells for all eye disorders.
AST-OPC1 (oligodendrocyte progenitor cells)
- In June, BioTime’s affiliate, Asterias Bio-Therapeutics (NYSE MKT: AST) announced new 9-month follow-up data from the company's ongoing SCiStar Phase I/IIa clinical trial. The results showed that previously reported meaningful improvements in arm, hand and finger function in the 10 million cell cohort treated with AST-OPC1 cells have been maintained and in some patients have been further enhanced 9 months following dosing.
FDAhas accepted Asterias' amendment to the clinical research protocol for the SCiStar trial to include patients with a C-4 spinal cord injury, the second most common form of cervical spinal cord injury.
Liquid Biopsy (lung cancer confirmatory blood test)
- In May, BioTime’s affiliate, OncoCyte (NYSE MKT: OCX) presented positive results from its 300-patient multi-site R&D validation study for its lung cancer diagnostic test at the American Thoracic Society 2017 International Conference (ATS) in Washington, D.C. Results from this study of the optimized final predictive algorithm confirmed the data from a previous study completed in 2016 and further validate the test’s commercial potential.
- OncoCyte is on track to launch its lung cancer confirmatory liquid biopsy diagnostic test in 2017. The test could eventually replace a high percentage of invasive, risky, and expensive lung biopsies with simple blood tests, improving outcomes for patients while also capturing significant cost savings for the U.S. healthcare system. The test targets a market opportunity believed to exceed $4 billion annually.
Simplification and Unlocking Value
- In April, BioTime announced the formation of AgeX Therapeutics, Inc. a new subsidiary that will focus on applying technology relating to cell immortality and regenerative biology, to aging and age-related diseases. AgeX has three initial areas of product development: pluripotent stem cell-derived brown adipocytes (AGEX-BAT1); vascular progenitors (AGEX-VASC1); and induced Tissue Regeneration (iTR). Initial planned indications for these products are Type II diabetes, cardiac ischemia, and cancer, respectively.
- In August, AgeX closed an equity financing to raise
$10 million. The transaction values AgeX at approximately $68 million. BioTimeretains approximately 87% ownership of AgeX.
Value of Holdings in Public Affiliates
At June 30, 2017, BioTime held common stock in publicly-traded affiliates valued at $153.5 million. This amount was the market value of BioTime’s 21.7 million shares in Asterias Bio-Therapeutics (NYSE MKT: AST) and 14.7 million shares in OncoCyte (NYSE MKT: OCX).
Second Quarter Financial Results
Revenues: BioTime’s revenue is generated primarily from research grants, licensing fees and royalties, and subscription and advertising from the marketing of online database products. Total revenue was $381,000 for the second quarter of 2017, compared to $1.3 million in the second quarter of 2016.
Operating Expenses: Operating expenses for the second quarter of 2017 were
Our operating expenses for the six months ended
Cash expenditures in the first half of 2017 were higher than normal due to annual bonuses, AgeX formation costs and some project-based, non-recurring legal expenses. Cash expenditures were further impacted in the second quarter of 2017 due to timing of the payments of certain expenses, including executive bonuses and an extra payroll period.
The reconciliation between GAAP and non-GAAP operating expenses by entity, is provided in the financial tables included with this press release.
R&D Expenses: Research and development expenses were $6.3 million for the second quarter of 2017, compared to $8.9 million for the comparable period in 2016, a decrease of $2.6 million. This decrease was primarily attributable to the deconsolidation of Asterias in May 2016 and OncoCyte in February 2017.
G&A Expenses: General and administrative expenses were $4.4 million for the second quarter of 2017 compared to $6.6 million for the comparable period in 2016. The $2.2 million decrease was primarily due to the deconsolidation of Asterias and OncoCyte.
Net Income or loss attributable to BioTime: Net loss attributable to BioTime was $11.7 million, or (
Conference Call and Webcast Details
BioTime is hosting a conference call and webcast today, Wednesday, August 2, at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time to discuss the results and recent corporate developments. The conference call dial-in number in the U.S./Canada is 1-877-407-0784. For international participants outside the U.S./
A replay of the conference call will be available for seven business days beginning about two hours after the conclusion of the live call, by calling toll-free from U.S./
To receive ongoing
Certain statements contained in this release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements pertaining to future financial and/or operating results, future growth in research, technology, clinical development, and potential opportunities for BioTime, Inc. and its subsidiaries, along with other statements about the future expectations, beliefs, goals, plans, or prospects expressed by management constitute forward-looking statements. Any statements that are not historical fact (including, but not limited to statements that contain words such as “will,” “believes,” “plans,” “anticipates,” “expects,” “estimates” should also be considered to be forward-looking statements. Forward-looking statements involve risks and uncertainties, including, without limitation, risks inherent in the development and/or commercialization of potential products, uncertainty in the results of clinical trials or regulatory approvals, need and ability to obtain future capital, and maintenance of intellectual property rights. Actual results may differ materially from the results anticipated in these forward-looking statements and as such should be evaluated together with the many uncertainties that affect the business of BioTime, Inc. and its subsidiaries, particularly those mentioned in the cautionary statements found in more detail in the “Risk Factors” section of its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q filed with the SEC (copies of which may be obtained at www.sec.gov). Subsequent events and developments may cause these forward-looking statements to change. BioTime specifically disclaims any obligation or intention to update or revise these forward-looking statements as a result of changed events or circumstances that occur after the date of this release, except as required by applicable law.
BIOTIME, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
|Cash and cash equivalents||$||14,550||$||22,088|
|Restricted cash equivalents in escrow||5,100||-|
|Available for sale securities||1,220||627|
|Trade accounts and other receivables||360||646|
|Receivable from affiliates, net||2,706||511|
|Prepaid expenses and other current assets||1,589||1,777|
|Total current assets||25,525||25,649|
|Property, plant and equipment, net||5,240||5,529|
|Deposits and other long term assets||1,014||1,149|
|Equity method investment in OncoCyte, at fair value||76,306||-|
|Equity method investment in Asterias, at fair value||77,204||100,039|
|Intangible assets, net||8,064||10,206|
|LIABILITIES AND SHAREHOLDERS’ EQUITY|
|Accounts payable and accrued liabilities||$||5,130||$||7,144|
|Capital lease liability, current portion||-||202|
|Promissory notes, current portion||124||99|
|Related party convertible debt, net of discount||2,555||833|
|Deferred revenues, current portion||621||572|
|Total current liabilities||13,530||8,850|
|Deferred revenues, net of current portion||154||308|
|Deferred rent liabilities, net of current portion||79||50|
|Capital lease liability, net of current and other liabilities||-||310|
|Related party convertible debt, net of discount||-||1,032|
|Promissory notes, net of current portion||95||120|
|Other long term liabilities||9||8|
|Commitments and contingencies|
|Preferred shares, no par value, authorized 2,000 shares; none issued and outstanding as of June 30, 2017 and December 31, 2016||-||-|
|Common shares, no par value, 150,000 shares authorized; 110,876 shares issued and outstanding and 103,396 shares issued and 102,776 shares outstanding as of June 30, 2017 and December 31, 2016, respectively||334,538||317,878|
|Accumulated other comprehensive income (loss)||271||(738||)|
|Treasury stock at cost: no shares as of June 30, 2017; 620 shares as of December 31, 2016||-||(2,891||)|
|BioTime, Inc. shareholders’ equity||176,125||117,928|
|Total shareholders’ equity||178,185||130,508|
|TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY||$||193,353||$||142,572|
BIOTIME, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
|Three Months Ended
|Six Months Ended
|Royalties from product sales and license fees||81||86||191||286|
|Subscription and advertisement revenues||300||288||564||631|
|Sale of research products||-||132||5||176|
|Cost of sales||(5||)||(95||)||(62||)||(320||)|
|Research and development||(6,271||)||(8,938||)||(12,765||)||(22,671||)|
|General and administrative||(4,423||)||(6,636||)||(9,524||)||(18,509||)|
|Total operating expenses||(10,694||)||(15,574||)||(22,289||)||(41,180||)|
|Loss from operations||(10,318||)||(14,403||)||(21,580||)||(38,160||)|
|Interest expense, net||(413||)||(76||)||(719||)||(88||)|
|BioTime’s share of losses in equity method investment in Ascendance Biotechnology, Inc.||-||(98||)||-||(333||)|
|Gain on deconsolidation of Asterias||-||49,048||-||49,048|
|Gain on deconsolidation of OncoCyte||-||-||71,697||-|
|Gain (loss) on equity method investment in Asterias at fair value||3,262||(13,483||)||(22,835||)||(13,483||)|
|Gain (loss) on equity method investment in OncoCyte at fair value||(11,006||)||-||5,136||-|
|Other income, net||2,371||237||3,098||363|
|Total other income/(expense), net||(5,786||)||35,628||56,377||35,507|
|INCOME (LOSS) BEFORE INCOME TAX BENEFIT||(16,104||)||21,225||34,797||(2,653||)|
|Deferred income tax benefit||3,877||-||-||-|
|NET INCOME (LOSS)||(12,227||)||21,225||34,797||(2,653||)|
|Net loss attributable to noncontrolling interests||576||3,324||2,840||10,091|
|NET INCOME (LOSS) ATTRIBUTABLE TO BIOTIME, INC.||$||(11,651||)||$||24,549||$||37,637||$||7,438|
|NET INCOME (LOSS) PER COMMON SHARE:|
|WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING:|
BIOTIME, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|Six Months Ended
|CASH FLOWS FROM OPERATING ACTIVITIES:|
|Net income attributable to BioTime, Inc.||$||37,637||$||7,438|
|Net loss allocable to noncontrolling interests||(2,840||)||(10,091||)|
|Adjustments to reconcile net income attributable to BioTime, Inc. to net cash used in operating activities:|
|Gain on deconsolidation of Asterias||-||(49,048||)|
|Gain on deconsolidation of OncoCyte||(71,697||)|
|Unrealized loss on equity method investment in Asterias at fair value||22,835||13,483|
|Unrealized gain on equity method investment in OncoCyte at fair value||(5,136||)||-|
|Depreciation expense, including amortization of leasehold improvements||421||748|
|Amortization of intangible assets||1,184||2,292|
|Subsidiary shareholder expense for subsidiary warrants||-||3,125|
|Amortization of discount on related party convertible debt||640||245|
|Foreign currency remeasurement (gain) or loss and other||(1,814||)||883|
|Gain on sale of assets||(1,754||)||-|
|Changes in operating assets and liabilities:|
|Accounts and grants receivable, net||299||(54||)|
|Receivables from affiliates, net of payables||332||-|
|Prepaid expenses and other current assets||105||(396||)|
|Accounts payable and accrued liabilities||841||(211||)|
|Net cash used in operating activities||(17,161||)||(24,559||)|
|CASH FLOWS FROM INVESTING ACTIVITIES:|
|Deconsolidation of cash and cash equivalents of OncoCyte||(8,898||)||-|
|Deconsolidation of cash and cash equivalents of Asterias||-||(8,376||)|
|Purchase of equipment and other assets||(474||)||(1,384||)|
|Restricted cash equivalents in escrow||(5,100||)||-|
|Payments on construction in progress||-||(278||)|
|Cash used in investing activities||(14,484||)||(10,016||)|
|CASH FLOWS FROM FINANCING ACTIVITIES:|
|Proceeds from issuance of common shares||20,125||17,500|
|Fees paid on sale of common shares||(1,669||)||(1,311||)|
|Proceeds deposited in escrow account||5,100||-|
|Proceeds from exercises of stock options||29||2,015|
|Reimbursement from landlord on construction in progress||198||411|
|Shares retired to pay for employees’ taxes||(31||)||-|
|Repayment of capital lease obligation||(31||)||(74||)|
|Net proceeds from sale of common shares of subsidiary||-||171|
|Proceeds from issuance of related party convertible debt||299||1,019|
|Net cash provided by financing activities||24,020||19,731|
|Effect of exchange rate changes on cash and cash equivalents||87||317|
|NET DECREASE IN CASH AND CASH EQUIVALENTS||(7,538||)||(14,527||)|
|CASH AND CASH EQUIVALENTS:|
|At beginning of the period||22,088||42,229|
|At end of the period||$||14,550||$||27,702|
Non-GAAP Financial Measures
This press release includes operating expenses prepared in accordance with accounting principles generally accepted in
Furthermore, management uses these non-GAAP financial measures in the aggregate and on an entity basis to establish budgets and operational goals, to manage BioTime’s business and to evaluate its performance and its programs in clinical development.
BioTime, Inc. and Subsidiaries
Reconciliation of Non-GAAP Financial Measure
Adjusted Operating Expenses
|Amounts In Thousands|
For the Three
For the Six Months
|GAAP Operating Expenses - as reported||$||10,694||$||22,289|
|Stock-based and other noncash compensation expense (1)||(1,111||)||(2,468||)|
|Depreciation and amortization expense (1)||(787||)||(1,605||)|
|Non-GAAP Operating Expenses, as adjusted||$||8,796||$||18,216|
|GAAP Operating Expenses - by entity|
|BioTime and subsidiaries||$||9,145||$||17,711|
|OncoCyte results for the period from January 1 through February 16, 2017||-||1,388|
|LIfeMap Sciences and ReCyte||939||1,865|
|GAAP Operating Expenses - by entity||$||10,694||$||22,289|
|Non-GAAP Operating Expenses - as adjusted, by entity|
|BioTime and subsidiaries||$||7,539||$||14,384|
|OncoCyte results for the period from January 1 through February 16, 2017 (2)||-||1,185|
|LifeMap Solutions (3)||506||1,116|
|LifeMap Sciences and ReCyte (4)||751||1,531|
|Non-GAAP Operating Expenses - as adjusted, by entity||$||8,796||$||18,216|
OncoCyte’s results for the period from January 1 through February 16, 2017, the date immediately before the OncoCyte Deconsolidation included in BioTime’s consolidated results, which are not going to recur,
Entities whose operating expenses will not recur in the future,
Certain entities whose operating expenses are going to be funded by AgeX.
David Nakasone, 510-871-4188
EVC Group, Inc.
Michael Polyviou, 646-445-4800
Doug Sherk, 646-445-4800
JQA Partners, Inc.
Jules Abraham, 917-885-7378