BioTime, Inc. (NYSE American and TASE: BTX), a clinical-stage biotechnology company developing cellular therapies for unmet medical needs, reported financial and operating results for the first quarter ended March 31, 2019. BioTime management will host a conference call and webcast today at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time to discuss its first quarter 2019 financial results and to provide a business update.
“We have been transforming BioTime into what we believe is one of the foremost cell therapy companies, with a pipeline which now consists of three innovative and promising clinical-stage product candidates, each with the potential to significantly and positively impact serious diseases or degenerative conditions,” stated Brian M. Culley, Chief Executive Officer of BioTime. “We will remain focused on progressing our clinical programs in a thoughtful and cost-effective manner throughout 2019. As of March 31, 2019, the value of our cash, marketable securities, equity positions in our affiliate companies, and the balance of the promissory note due to us in August 2020 was more than $100 million, and we believe we are well-positioned to advance our programs. Our goal is to build awareness and support for our reinvigorated and repositioned company with the investment, medical, and patient communities, and advance our objective of bringing cell therapies to patients who can most benefit from their extraordinary potential.”
Recent Highlights
Plans for 2019
Balance Sheet Highlights
Cash, cash equivalents and marketable securities totaled $27.1 million as of March 31, 2019.
BioTime’s investment in OncoCyte was valued at $58.0 million as of March 31, 2019 and at $65.7 million as of May 8, 2019, under the equity method of accounting, and based on the closing stock price of OncoCyte as of such dates.
Intangible assets, net increased during the first quarter of 2019 due to the Asterias merger and the acquisition of OPC1 (fair value of $31.7 million) and VAC2 (fair value of $14.8 million).
BioTime’s promissory note due from Juvenescence Limited had an outstanding balance (principal plus accrued interest) of $22.5 million as of March 31, 2019. Unless earlier converted into Juvenescence common shares, the promissory note is payable in cash, plus accrued interest at 7% per year, at maturity in August 2020. If Juvenescence completes an initial public offering (IPO) resulting in gross proceeds of not less than $50.0 million, the promissory note automatically converts into the Juvenescence securities issued in the IPO based on the per-share price to the public in the IPO, subject to an upward adjustment in the number of shares that would be issued to BioTime upon such conversion if the 20-day volume-weighted average trading price of one share of common stock of AgeX Therapeutics, Inc. (AgeX) before the IPO is priced above $3.00. If the promissory note is converted, the Juvenescence ordinary shares will be a marketable security that BioTime may use to supplement its liquidity, as needed and as market conditions allow.
First Quarter Operating Results
Revenues: BioTime’s revenue is generated primarily from research grants, licensing fees and royalties. Total revenues for the three months ended March 31, 2019 were $0.9 million, an increase of $0.2 million, compared to $0.7 million for the same period in 2018. The increase was primarily related to a $0.4 million increase in grant revenues, offset by a $0.2 million decrease in subscriptions and advertisement revenues attributable to the deconsolidation of AgeX. AgeX was deconsolidated from BioTime on August 30, 2018, and beginning on that date, AgeX’s revenues are not included in BioTime revenues.
Operating Expenses: Operating expenses are comprised of research and development (“R&D”) expenses and general and administrative (“G&A”) expenses. Total operating expenses for the three months ended March 31, 2019 were $13.6 million, as reported, and $7.9 million, as adjusted. AgeX was deconsolidated from BioTime on August 30, 2018, and beginning on that date, AgeX’s operating expenses are not included in BioTime’s operating expenses.
As adjusted operating expenses is a non-generally accepted accounting principles (non-GAAP) financial measure. The reconciliation between operating expenses determined in accordance with GAAP and non-GAAP operating expenses, by entity, is provided in the financial tables included at the end of this press release.
R&D Expenses: Beginning on August 30, 2018, BioTime ceased recognizing R&D expenses related to AgeX and its programs due to the AgeX deconsolidation on that date.
R&D expenses for the three months ended March 31, 2019 were $5.0 million, a decrease of $0.9 million, compared to $5.9 million for the same period in 2018. The decrease was primarily related to a $1.6 million decrease from the AgeX deconsolidation and the absence of AgeX R&D expenses incurred after August 30, 2018, offset by a net increase of $0.6 million in BioTime programs primarily related to: (1) an increase of $0.8 million in OpRegen related expenses, (2) an increase of $0.6 million in OPC1 and VAC2 expenses (these programs were acquired in the Asterias merger) offset by (3) decreases of $0.8 million in Renevia and HyStem related expenses.
G&A Expenses: Beginning on August 30, 2018, BioTime ceased recognizing G&A expenses related to AgeX and its subsidiaries due to the AgeX deconsolidation on that date.
G&A expenses for the three months ended March 31, 2019 were $8.7 million, an increase of $2.7 million, compared to $6.0 million for the same period in 2018. The increase was primarily attributable to a $3.5 million increase in severance, legal, accounting and other expenses related to the Asterias merger and a $0.5 million increase in stock-based compensation, offset by a $1.3 million decrease in AgeX related G&A expenses.
Other Income/(Expenses), Net: Other income/(expenses), net for the three months ended March 31, 2019 reflected other income, net of $47.7 million, compared to other expense, net of ($51.5) million for the same period in 2018. The variance was primarily related to changes in the value of equity investments in OncoCyte and Asterias for the applicable periods.
Net income/(loss) attributable to BioTime: The net income/(loss) attributable to BioTime for the three months ended March 31, 2019 was net income of $39.3 million, or $0.30 per share (basic and diluted), compared to a net loss attributable to BioTime of ($63.5) million, or ($0.50) per share (basic and diluted), for the same period in 2018.
Conference Call and Webcast
BioTime will host a conference call and webcast today, at 1:30pm PT/4:30pm ET to discuss its first quarter 2019 financial results and to provide a business update. Interested parties may access the conference call by dialing (866) 888-8633 from the U.S. and Canada and (636) 812-6629 from outside the U.S. and Canada and should request the “BioTime Inc. Call”. A live webcast of the conference call will be available online in the Investors section of BioTime’s website. A replay of the webcast will be available on BioTime’s website for 30 days and a telephone replay will be available through May 16th, 2019, by dialing (855) 859-2056 from the U.S. and Canada and (404) 537-3406 from outside the U.S. and Canada and entering conference ID number 9155549.
About BioTime, Inc.
BioTime is a clinical-stage biotechnology company developing new cellular therapies for unmet medical needs. BioTime’s programs are based on its proprietary cell-based therapy platform and associated development and manufacturing capabilities. With this platform BioTime develops and manufactures specialized, terminally-differentiated human cells from its pluripotent and progenitor cell starting materials. These differentiated cells are developed either to replace or support cells that are dysfunctional or absent due to degenerative disease or traumatic injury, or administered as a means of helping the body mount an effective immune response to cancer. BioTime’s clinical assets include (i) OpRegen®, a retinal pigment epithelium transplant therapy in Phase I/IIa development for the treatment of dry age-related macular degeneration, the leading cause of blindness in the developed world; (ii) OPC1, an oligodendrocyte progenitor cell therapy in Phase I/IIa development for the treatment of acute spinal cord injuries; and (iii) VAC2, an allogeneic cancer immunotherapy of antigen-presenting dendritic cells currently in Phase I development for the treatment of non-small cell lung cancer. For more information, please visit www.biotimeinc.com.
Forward-Looking Statements
BioTime cautions you that all statements, other than statements of historical facts, contained in this press release, are forward-looking statements. Forward-looking statements, in some cases, can be identified by terms such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “design,” “intend,” “expect,” “could,” “plan,” “potential,” “predict,” “seek,” “should,” “would,” “contemplate,” project,” “target,” “tend to,” or the negative version of these words and similar expressions. Such statements include, but are not limited to, statements relating to: the potential of BioTime’s cell therapy product candidates to significantly and positively impact serious diseases or degenerative conditions; BioTime’s ability to advance its clinical programs; the cost reductions and benefits expected to result from the ongoing transfer of assets acquired in the Asterias merger to BioTime’s existing GMP manufacturing facility in Jerusalem in preparation for the hand off of Asterias’s Fremont facility to Novo Nordisk in the third quarter of 2019; BioTime’s plans to use Orbit’s proprietary injection technology and device to initiate dosing of the first patient in the ongoing Phase I/IIa clinical study of OpRegen for the treatment of dry-AMD and the timing thereof; the timing of an announcement of the decision on BioTime’s CE Mark application for Renevia; BioTime’s ability to advance its product candidates and the timing thereof; BioTime’s ability to strengthen and expand its partnerships for the ongoing support of the development of the OPC1 and VAC2 programs and the timing thereof; the completion of patient enrollment in the ongoing Phase I/IIa clinical study of OpRegen for the treatment of dry-AMD and the timing thereof; BioTime’s ability to evaluate the development of OPC1 as a candidate for the potential treatment of MS and ischemic stroke through ongoing research collaborations with major universities and the timing thereof; and BioTime’s ability to increase presence and engagement with the patient, physician and advocacy communities and the timing thereof. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause BioTime’s actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by the forward-looking statements in this press release, including, without limitation, risk and uncertainties related to: BioTime’s ability to raise additional capital when and as needed, to advance its product candidates; BioTime’s ability to develop and commercialize product candidates; the failure or delay in starting, conducting and completing clinical trials or obtaining FDA or foreign regulatory approval for BioTime’s product candidates in a timely manner; the therapeutic potential of BioTime’s product candidates, and the disease indications for which BioTime intends to develop its product candidates; BioTime’s ability to conduct and design successful clinical trials, to enroll a sufficient number of patients, to meet established clinical endpoints, to avoid undesirable side effects and other safety concerns, and to demonstrate sufficient efficacy of its product candidates; developments by BioTime competitors that make BioTime’s product candidates less competitive or obsolete; BioTime’s ability to manufacture its product candidates for clinical development and, if approved, for commercialization, and the timing and costs of such manufacture; the performance of third parties in connection with the development and manufacture of BioTime’s product candidates, including third parties conducting clinical trials as well as third-party suppliers and manufacturers; the potential of BioTime’s cell therapy platform, and BioTime’s plans to apply its platform to research, develop and commercialize our product candidates; BioTime’s ability, and the ability of its licensors, to obtain, maintain, defend and enforce intellectual property rights protecting BioTime’s product candidates, and BioTime’s ability to develop and commercialize its product candidates without infringing the proprietary rights of third parties; BioTime’s ability to recruit and retain key personnel; and BioTime’s ability to successfully integrate the operations of Asterias into BioTime. BioTime’s forward-looking statements are based upon its current expectations and involve assumptions that may never materialize or may prove to be incorrect. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. For a detailed description of BioTime’s risks and uncertainties, you are encouraged to review its documents filed with the SEC including its recent filings on Form 8-K, Form 10-K and Form 10-Q. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they were made. BioTime undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.
| BIOTIME, INC. AND SUBSIDIARIES | ||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| (IN THOUSANDS) | ||||||
|
March 31, |
December 31, |
|||||
| ASSETS | ||||||
| CURRENT ASSETS | ||||||
| Cash and cash equivalents | $ | 18,011 | $ | 23,587 | ||
| Marketable equity securities | 9,085 | 7,154 | ||||
| Trade accounts and grants receivable, net | 1,402 | 767 | ||||
| Receivables from affiliates, net | - | 2,112 | ||||
| Prepaid expenses and other current assets | 2,158 | 2,738 | ||||
| Total current assets | 30,656 | 36,358 | ||||
| NONCURRENT ASSETS | ||||||
| Property and equipment, net | 8,918 | 5,835 | ||||
| Deposits and other long-term assets | 890 | 505 | ||||
| Promissory note from Juvenescence | 22,482 | 22,104 | ||||
| Equity method investment in OncoCyte, at fair value | 57,963 | 20,250 | ||||
| Equity method investment in Asterias, at fair value | - | 13,483 | ||||
| Goodwill | 12,977 | - | ||||
| Intangible assets, net | 49,829 | 3,125 | ||||
| TOTAL ASSETS | $ | 183,715 | $ | 101,660 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| CURRENT LIABILITIES | ||||||
| Accounts payable and accrued liabilities | $ | 7,336 | $ | 6,463 | ||
| Financing lease and right-of-use lease liabilities, current portion | 954 | 237 | ||||
| Promissory notes, current portion | 18 | 70 | ||||
| Deferred grant revenue | 43 | 42 | ||||
| Liability classified warrants, current portion | 372 | - | ||||
| Total current liabilities | 8,723 | 6,812 | ||||
| LONG-TERM LIABILITIES | ||||||
| Deferred tax liability | 8,581 | - | ||||
| Deferred revenues, net of current portion | 200 | - | ||||
| Deferred rent liabilities, net of current portion | - | 244 | ||||
| Right-of-use lease liability, net of current portion | 4,016 | 1,854 | ||||
| Financing lease, net of current portion | 103 | 104 | ||||
| Liability classified warrants, net of current portion, and other long-term liabilities | 856 | 400 | ||||
| TOTAL LIABILITIES | 22,479 | 9,414 | ||||
| Commitments and contingencies | ||||||
| SHAREHOLDERS’ EQUITY | ||||||
| Preferred shares, no par value, authorized 2,000 shares; none issued and outstanding as of March 31, 2019 and December 31, 2018 | - | - | ||||
| Common shares, no par value, 250,000 shares authorized; 149,388 shares issued and outstanding as of March 31, 2019 and 127,136 shares issued and outstanding as of December 31, 2018 | 384,553 | 354,270 | ||||
| Accumulated other comprehensive income | 694 | 1,426 | ||||
| Accumulated deficit | (222,403) | (261,856) | ||||
| BioTime, Inc. shareholders’ equity | 162,844 | 93,840 | ||||
| Noncontrolling interest (deficit) | (1,608) | (1,594) | ||||
| Total shareholders’ equity | 161,236 | 92,246 | ||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 183,715 | $ | 101,660 | ||
| BIOTIME, INC. AND SUBSIDIARIES | ||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||
| (IN THOUSANDS, EXCEPT PER SHARE DATA) | ||||||
| (UNAUDITED) | ||||||
|
Three Months Ended |
||||||
| 2019 | 2018 | |||||
| REVENUES: | ||||||
| Grant revenue | $ | 749 | $ | 326 | ||
| Royalties from product sales and license fees | 86 | 136 | ||||
| Subscription and advertisement revenues | - | 239 | ||||
| Sale of research products and services | 93 | - | ||||
| Total revenues | 928 | 701 | ||||
| Cost of sales | (68) | (109) | ||||
| Gross profit | 860 | 592 | ||||
| OPERATING EXPENSES: | ||||||
| Research and development | 4,961 | 5,935 | ||||
| Acquired in-process research and development | - | 800 | ||||
| General and administrative | 8,660 | 6,044 | ||||
| Total operating expenses | 13,621 | 12,779 | ||||
| Loss from operations | (12,761 | ) | (12,187) | |||
| OTHER INCOME/(EXPENSES): | ||||||
| Interest income, net | 442 | 52 | ||||
| Gain on sale of equity method investment in Ascendance | - | 3,215 | ||||
| Gain (loss) on equity method investment in OncoCyte at fair value | 37,713 | (37,419) | ||||
| Gain (loss) on equity method investment in Asterias at fair value | 6,744 | (17,398) | ||||
| Unrealized gain on marketable equity securities | 1,931 | 215 | ||||
| Change in fair value of warrant liability | 37 | - | ||||
|
Other income (expense), net |
806 | (176) | ||||
|
Total other income (expense), net |
47,673 | (51,511) | ||||
| INCOME/(LOSS) BEFORE INCOME TAXES | 34,912 | (63,698) | ||||
| Deferred income tax benefit | 4,384 | - | ||||
| NET INCOME/(LOSS) | 39,296 | (63,698) | ||||
| Net loss attributable to noncontrolling interest | 14 | 150 | ||||
| NET INCOME/(LOSS) ATTRIBUTABLE TO BIOTIME, INC. | $ | 39,310 | $ | (63,548) | ||
| NET INCOME/(LOSS) PER COMMON SHARE: | ||||||
| BASIC | $ | 0.30 | $ | (0.50) | ||
| DILUTED | $ | 0.30 | $ | (0.50) | ||
| WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING: | ||||||
| BASIC | 132,865 | 126,869 | ||||
| DILUTED | 132,869 | 126,869 | ||||
Non-GAAP Financial Measures
This press release includes: (1) operating expenses prepared in accordance with accounting principles generally accepted in the United States (GAAP); (2) operating expenses, by entity, prepared in accordance with GAAP; (3) operating expenses not prepared in accordance with GAAP (non-GAAP operating expenses); and (4) non-GAAP operating expenses, by entity. In particular, this press release includes both (a) non-GAAP total operating expenses, adjusted to exclude noncash stock-based and other compensation, depreciation and amortization expense; Asterias transaction related costs and acquired in-process research and development expense incurred by AgeX Therapeutics, Inc. (AgeX), considered to be nonrecurring items, and (b) non-GAAP operating expenses, by entity, to exclude those same charges by the respective entities for consistency. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable financial measures prepared in accordance with GAAP. However, BioTime believes the presentation of non-GAAP total operating expenses and non-GAAP operating expenses, by entity, when viewed in conjunction with its GAAP total operating expenses and GAAP operating expenses by entity, respectively, is helpful in understanding BioTime’s ongoing operating expenses and its programs within various entities, including BioTime’s programs in clinical development.
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 Months Ended | ||||||
|
March 31, 2019 |
March 31, 2018 |
|||||
| GAAP Operating Expenses - as reported (1) | $ | 13,621 | $ | 12,779 | ||
| Stock-based and other noncash compensation expense (2) | (1,440) | (1,319) | ||||
| Depreciation and amortization expense (2) |
(768) |
(873) | ||||
| Transaction related costs (3) | (3,468) | - | ||||
| Acquired AgeX in-process research and development expense (4) | - |
(800) |
||||
| Non-GAAP Operating Expenses, as adjusted |
$ |
7,945 |
$ | 9,787 | ||
| GAAP Operating Expenses - by entity (1) | ||||||
| BioTime and subsidiaries other than AgeX Therapeutics, Inc.(5) | $ | 13,621 | $ | 9,098 | ||
| AgeX Therapeutics Inc. and subsidiaries (6) | - | 3,681 | ||||
| GAAP Operating Expenses - by entity | $ | 13,621 | $ | 12,779 | ||
| Non-GAAP Operating Expenses - as adjusted, by entity | ||||||
| BioTime and subsidiaries other than AgeX Therapeutics, Inc.(5) | $ |
7,945 |
$ | 7,303 | ||
| AgeX Therapeutics Inc. and subsidiaries (6) | - | 2,484 | ||||
| Non-GAAP Operating Expenses - as adjusted, by entity |
$ |
7,945 |
$ | 9,787 | ||
| (1) | Beginning on August 30, 2018, BioTime deconsolidated AgeX’s results and therefore BioTime’s results will not include AgeX’s results for periods after August 30, 2018. | |
| (2) | Noncash charges. | |
| (3) | One-time transaction related expenses due to the Asterias acquisition. | |
| (4) | AgeX acquired certain in-process research and development in March 2018, considered to be a nonrecurring item. See note (1). | |
| (5) | BioTime includes Cell Cure Neurosciences Ltd, ES Cell International Pte. Ltd. and OrthoCyte Corporation. For the three months ended March 31, 2019 and 2018, the GAAP and non-GAAP operating expenses do not include grant revenues of $749,000 and $326,000, respectively, as grants are revenues for BioTime. | |
| (6) |
AgeX includes LifeMap Sciences Inc., LifeMap Sciences Ltd., and ReCyte Therapeutics, Inc. (see note (1). |
|
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BioTime Inc. IR
Ioana C. Hone
ir@biotimeinc.com
(510)
871-4188
Solebury Trout IR
Gitanjali Jain Ogawa
Gogawa@troutgroup.com
(646)
378-2949