Athersys Reports Third Quarter 2023 Financial Results and Business Highlights

Rhea-AI Summary

Athersys, Inc. (OTC: ATHX) Announces Financial Results and Business Update, Including Interim Analysis of Phase 3 MASTERS-2 Clinical Trial for MultiStem Cell Therapy. The company also secured funding through warrant exercise and a Memorandum of Understanding with Healios for global rights to develop and commercialize MultiStem for the treatment of Acute Respiratory Distress Syndrome (ARDS). Athersys appointed Ms. Jane Wasman as Chair of the Board of Directors. Financially, the third quarter of 2023 showed a decrease in revenue, research and development expenses, and general and administrative expenses compared to the same period in 2022, resulting in a net loss of $(3.8) million. Cash and cash equivalents were $1.0 million as of September 30, 2023, compared with $9.0 million as of December 31, 2022.

Positive

• Announcement of positive results from the interim analysis of the MASTERS-2 clinical trial is a significant milestone for Athersys, indicating ongoing progress in the development of MultiStem for critical care indications.
• Securing funding through warrant exercise and the MOU with Healios provides Athersys with additional liquidity to support business operations and explore strategic options, including potential mergers, business combinations, investments, or acquisitions.
• Appointment of Ms. Jane Wasman as Chair of the Board of Directors adds strong leadership to the company's governance structure, potentially enhancing decision-making processes and strategic planning.

Negative

• The decrease in revenue and net loss for the third quarter of 2023 compared to the same period in 2022 reflects ongoing financial challenges for Athersys, raising concerns about the company's ability to achieve sustainable profitability and financial stability.
• The significant decline in cash and cash equivalents from $9.0 million as of December 31, 2022, to $1.0 million as of September 30, 2023, raises concerns about Athersys' short-term liquidity and financial resilience.

CLEVELAND--(BUSINESS WIRE)-- Athersys, Inc. (OTC: ATHX), a regenerative medicine company developing MultiStem^® (invimestrocel) cell therapy for critical care indications, announced financial results for the three and nine months ended September 30, 2023 and provided a business update.

Third Quarter 2023 and Recent Corporate and Operational Highlights:

• Announced results of a blinded interim analysis of Phase 3 MASTERS-2 clinical trial studying MultiStem for treatment of ischemic stroke indicating additional patients would need to be added to the trial to achieve statistical significance with a primary endpoint of mRS Shift Analysis at Day 365.
• Completed warrant exercise inducement generating gross proceeds of $3.9M, extending near term liquidity.
• Executed a Memorandum of Understanding (MOU) with Healios for global rights to develop and commercialize MultiStem for the treatment of Acute Respiratory Distress Syndrome (ARDS) and received a $1.5M upfront payment along with potential future development milestones and royalties.
• Received a second $1.5M payment from Healios under the terms of the MOU associated with purchasing MultiStem bioreactor manufactured clinical doses to support Healios’ Phase 3 ARDS trial.
• Engaged Outcome Capital to assist Athersys in evaluating strategic alternatives, which could include exploring potential for a merger, business combination, investment into the company, or a purchase, license or other acquisition of assets.
• Completed a $3.5M public offering with institutional investors to fund ongoing operations.
• Completed license of animal health assets to Ardent Health for future development milestones and royalties.
• Appointed Ms. Jane Wasman as Chair of the Board of Directors.

Management Commentary

“Since announcing the results of the blinded interim analysis of MASTERS-2 indicating additional patients would be needed to achieve statistical significance on the primary endpoint, we’ve been actively engaged in exploring strategic options with interested parties to determine the best path forward for MultiStem and Athersys. Capital raised from the recent warrant inducement transaction and MOU with Healios provides us additional funding to support business operations while we explore strategic options,” said Daniel Camardo, Chief Executive Officer of Athersys.

Third Quarter Results

There was no revenue for the third quarter of 2023 compared with $0.1 million for the third quarter of 2022, which included the delivery of services under the arrangement with Healios. As of September 30, 2022, services under this arrangement were largely complete and were limited to close-out activities.

Research and development expenses were $4.0 million for the third quarter of 2023 compared with $12.4 million for the comparable period in 2022. The decrease reflects our restructuring plan which resulted in reduced clinical trial expenses which includes personnel, manufacturing, and other costs.

General and administrative expenses were $2.8 million for the third quarter of 2023 compared with $3.7 million for the comparable period in 2022, with the decrease primarily due to the restructuring.

Net loss for the third quarter of 2023 was $(3.8) million, or $0.15 per share, compared with a net loss of $(13.7) million, or $1.15 per share, for the comparable period in 2022.

Cash and cash equivalents were $1.0 million as of September 30, 2023, compared with $9.0 million as of December 31, 2022.

About MultiStem^®

MultiStem^® (invimestrocel) cell therapy is a patented regenerative medicine product in clinical development that has shown the ability to promote tissue repair and healing in a variety of ways, such as through the production of therapeutic factors in response to signals of inflammation and tissue damage. MultiStem therapy’s potential for multidimensional therapeutic impact distinguishes it from traditional biopharmaceutical therapies focused on a single mechanism of benefit. The therapy represents a unique "off-the-shelf" stem cell product that can be manufactured in a scalable manner, may be stored for years in frozen form, and is administered without tissue matching or the need for immune suppression. Based upon its efficacy profile, its novel mechanisms of action, and a favorable and consistent tolerability demonstrated in clinical studies, we believe that MultiStem therapy could provide a meaningful benefit to patients, including those suffering from serious diseases and conditions with unmet medical need.

About Athersys

Athersys is a biotechnology company engaged in the discovery and development of therapeutic product candidates designed to extend and enhance the quality of human life. The Company is developing its MultiStem^® cell therapy product, a patented, adult-derived “off-the-shelf” stem cell product, initially for disease indications in the neurological, inflammatory and immune, and other critical care indications and has several ongoing clinical trials evaluating this potential regenerative medicine product. Athersys has forged strategic partnerships and a broad network of collaborations to further advance MultiStem cell therapy toward commercialization. Investors and others should note that we may post information about the Company on our website at www.athersys.com and/or on our accounts on Twitter, Facebook, LinkedIn or other social media platforms. It is possible that the postings could include information deemed to be material information. Therefore, we encourage investors, the media and others interested in the Company to review the information we post on our website at www.athersys.com and on our social media accounts. Follow Athersys on Twitter at www.twitter.com/athersys. Information that we may post about the Company on our website and/or on our accounts on Twitter, Facebook, LinkedIn or other social media platforms may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. You should not place undue reliance on forward-looking statements contained on our website and/or on our accounts on Twitter, Facebook, LinkedIn or other social media platforms, and we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These forward-looking statements relate to, among other things, the expected timetable for development of our product candidates, expected timetable for any results of our trials or analyses, the consummation or timing of any strategic transaction, our growth strategy, and our future financial performance, including our operations, economic performance, financial condition, prospects, and other future events. We have attempted to identify forward-looking statements by using such words as “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “should,” “suggest,” “will,” or other similar expressions. These forward-looking statements are only predictions and are largely based on our current expectations. In addition, a number of known and unknown risks, uncertainties, and other factors could affect the accuracy of these statements. Some of the more significant known risks that we face are the risk that we will be unable to raise capital to fund our operations in the near term and long term, including our ability to obtain funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources, on terms acceptable to us or at all, and to continue as a going concern. The following risks and uncertainties may cause our actual results, levels of activity, performance, or achievements to differ materially from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements: our ability to raise capital to fund our operations in the near term and long term, including our ability to obtain funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources, on terms acceptable to us or at all, and to continue as a going concern; whether we receive a grant from BARDA; our collaborators’ ability and willingness to continue to fulfill their obligations under the terms of our collaboration agreements and generate sales related to our technologies; the possibility of unfavorable results from ongoing and additional clinical trials involving MultiStem; the risk that positive results in a clinical trial may not be replicated in subsequent or confirmatory trials or success in an early stage clinical trial may not be predictive of results in later stage or large scale clinical trials; our ability to successfully license our SIFU technology; our ability to regain and maintain compliance with the Nasdaq continued listing requirements; the timing and nature of results from MultiStem clinical trials, including the MASTERS-2 Phase 3 clinical trial evaluating the administration of MultiStem for the treatment of ischemic stroke; our ability to meet milestones and earn royalties under our collaboration agreements, including the success of our collaboration with Healios; the success of our MACOVIA clinical trial evaluating the administration of MultiStem for the treatment of ARDS induced by COVID-19 and other pathogens, and the MATRICS-1 clinical trial being conducted with The University of Texas Health Science Center at Houston evaluating the treatment of patients with serious traumatic injuries; the availability of product sufficient to meet our clinical needs and potential commercial demand following any approval; the possibility of delays in, adverse results of, and excessive costs of the development process; our ability to successfully initiate and complete clinical trials of our product candidates; the possibility of delays, work stoppages or interruptions in manufacturing by third parties or us, such as due to material supply constraints, contamination, operational restrictions due to COVID-19 or other public health emergencies, labor constraints, regulatory issues or other factors that could negatively impact our trials and the trials of our collaborators; uncertainty regarding market acceptance of our product candidates and our ability to generate revenues, including MultiStem cell therapy for neurological, inflammatory and immune, cardiovascular and other critical care indications; changes in external market factors; changes in our industry’s overall performance; changes in our business strategy; our ability to protect and defend our intellectual property and related business operations, including the successful prosecution of our patent applications and enforcement of our patent rights, and operate our business in an environment of rapid technology and intellectual property development; our possible inability to realize commercially valuable discoveries in our collaborations with pharmaceutical and other biotechnology companies; the success of our efforts to enter into new strategic partnerships and advance our programs; our possible inability to execute our strategy due to changes in our industry or the economy generally; changes in productivity and reliability of suppliers; the success of our competitors and the emergence of new competitors; and the risks mentioned elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2022 under Item 1A, “Risk Factors” and our other filings with the SEC. You should not place undue reliance on forward-looking statements, and we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise.

(Tables follow)

Athersys, Inc. Condensed Consolidated Balance Sheets (In thousands)
		September 30, 2023				December 31, 2022
		(Unaudited)				(Note)
Assets
Cash and cash equivalents		$	1,020			$	9,038
Accounts receivable from Healios, billed and unbilled			—				716
Prepaid expenses, deposits and other			1,210				3,781
Operating right-of-use assets, net			26				7,846
Property and equipment, net			4,236				4,214
Deposits and other			936				2,136
Total assets		$	7,428			$	27,731
Liabilities and stockholders’ equity
Accounts payable, accrued expenses and other current liabilities		$	19,897			$	37,164
Deferred revenue - Healios			150				—
Operating lease liabilities			7,792				8,685
Warrant liability			—				534
Advance from Healios			5,199				5,199
Note Payable			10,785				—
Total stockholders' equity			(36,395	)			(23,851	)
Total liabilities and stockholders' equity		$	7,428			$	27,731
Note: The Condensed Consolidated Balance Sheet Data has been derived from the audited financial statements as of that date.

Athersys, Inc. Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (In Thousands, Except Per Share Amounts)
		Three months ended September 30,
			2023				2022
Revenues
Contract revenue from Healios		$	—			$	65
Total revenues			—				65
Costs and expenses
Research and development			3,995				12,424
General and administrative			2,808				3,737
Depreciation			977				617
Total costs and expenses			7,780				16,778
Loss from operations			(7,780	)			(16,713	)
Other income, net			4,009				3,044
Net loss per share, basic and diluted			(3,771	)			(13,669	)
Weighted average shares outstanding, basic and diluted			(0.15	)			(1.15	)
Net loss per share, basic and diluted			24,492				11,855
Total comprehensive income			1,208				—
Net loss and comprehensive loss		$	(2,180	)		$	(13,669	)

 

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Athersys

ir@athersys.com

Source: Athersys, Inc.

FAQ

What are the recent corporate and operational highlights for Athersys, Inc.?

Athersys announced the results of a blinded interim analysis of Phase 3 MASTERS-2 clinical trial studying MultiStem for the treatment of ischemic stroke, completed a warrant exercise inducement, executed a Memorandum of Understanding with Healios for global rights to develop and commercialize MultiStem for the treatment of Acute Respiratory Distress Syndrome (ARDS), received payments from Healios, engaged Outcome Capital to explore strategic alternatives, completed a public offering with institutional investors, and licensed animal health assets to Ardent Health for future development milestones and royalties.

What were the third quarter financial results for Athersys, Inc.?

The third quarter of 2023 showed no revenue compared with $0.1 million for the third quarter of 2022. Research and development expenses decreased to $4.0 million from $12.4 million, and general and administrative expenses decreased to $2.8 million from $3.7 million. The net loss for the third quarter of 2023 was $(3.8) million, and cash and cash equivalents were $1.0 million as of September 30, 2023.

What is the significance of the MOU with Healios for Athersys, Inc.?

The MOU with Healios provides Athersys with a $1.5M upfront payment and potential future development milestones and royalties, securing global rights to develop and commercialize MultiStem for the treatment of Acute Respiratory Distress Syndrome (ARDS), which enhances Athersys' financial position and potential for long-term growth.

Who was appointed as Chair of the Board of Directors for Athersys, Inc.?

Ms. Jane Wasman was appointed as Chair of the Board of Directors, bringing strong leadership to the governance structure of Athersys and potentially contributing to strategic decision-making and corporate governance.