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Conference Call and Live Webcast 4.30pm Eastern Time Today
BioTime, Inc. (NYSE MKT: BTX), a clinical-stage biotechnology company developing and commercializing products addressing degenerative diseases, today reported financial results for the second quarter ended June 30, 2017.
“The second quarter of 2017 was very productive for BioTime, with numerous significant clinical, financial and operational accomplishments. BioTime and its subsidiaries and affiliates now have six products in clinical trials. The data from those trials continue to be positive and encouraging,” said Adi Mohanty, Co-Chief Executive Officer. “On the strength of the positive results from our pivotal study of Renevia, we are preparing to file for a CE mark for commercial approval in Europe. Our goal is to commercialize Renevia in its first indication in 2018. For OpRegen, our therapeutic product candidate for the treatment of dry AMD, we were pleased to receive DSMB approval to advance the ongoing Phase I/IIa trial to the third cohort, which will include clinical sites in the U.S.”
“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 $10 million equity financing.”
Renevia® (adipose cells + cell delivery matrix)
OpRegen® (retinal pigment epithelial cells)
AST-OPC1 (oligodendrocyte progenitor cells)
Liquid Biopsy (lung cancer confirmatory blood test)
Simplification and Unlocking Value
New Subsidiary AgeX Therapeutics, Inc.
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
Cash Position and Marketable Securities: Cash, cash equivalents, restricted cash in escrow, and available for sale securities totaled $20.9 million as of June 30, 2017, compared to $24.7 million as of March 31, 2017.
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 $10.7 million. On an adjusted basis, operating expenses were $8.8 million, of which $7.5 million was mainly attributable to our clinical programs, $0.8 million in expenses is expected to be funded by AgeX investors going forward and $0.5 million was incurred by our subsidiary LifeMap Solutions, expenses, which are not expected to recur.
Our operating expenses for the six months ended June 30, 2017 were $22.3 million. Adjusted operating expenses were $18.2 million for this period, including $14.4 million spent on our clinical and early stage programs. The remaining $3.8 million in expenses were contributed by OncoCyte during the period in 2017 in which it was consolidated or were in areas to be funded by AgeX going forward; these expenses are not expected to recur.
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 ($0.11) per basic and diluted common share for the three months ended June 30, 2017, compared to net income of $24.5 million, or $0.26 per basic and diluted common share for the three months ended June 30, 2016. For the six months ended June 30, 2017, net income attributable to BioTime was $37.6 million, or $0.34 per diluted common share, compared to $7.4 million, or $0.08 per share for the six months ended June 30, 2016. Results in each period were primarily driven by noncash deconsolidation gains and noncash gains and losses in the changes in share prices of our public affiliate investments in Asterias and OncoCyte common stock.
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./Canada, the dial-in number is 1-201-689-8560. For all callers, please refer to the “BioTime, Inc. Conference Call.” The live webcast can be accessed on the “Events & Presentations” page of the “Investors & Media” section on the company’s website at http://www.biotimeinc.com/.
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./Canada: 1-844-512-2921; international callers dial 1-412-317-6671. Use the Conference ID 13665025. Additionally, the archived webcast will be available on the “Events & Presentations” page of the “Investors & Media” section on the company’s website at http://www.biotimeinc.com/.
BioTime is a clinical-stage biotechnology company focused on developing and commercializing products addressing degenerative diseases. Its clinical programs are based on two platform technologies: pluripotent cells and cell/drug delivery. The foundation of BioTime’s core therapeutic technology platform is pluripotent cells that are capable of becoming any of the cell types in the human body. The foundation of the Company’s cell delivery platform is its HyStem® cell and drug delivery matrix technology. The Company’s current clinical programs are targeting three primary sectors, aesthetics, ophthalmology and cell/drug delivery. BioTime also has significant equity holdings in two publicly traded companies, Asterias Biotherapeutics, Inc. (“Asterias”) and OncoCyte Corporation (“OncoCyte”).
BioTime common stock is traded on the NYSE MKT and TASE under the symbol BTX. For more information, please visit www.biotimeinc.com or connect with the company on Twitter, LinkedIn, Facebook, YouTube, and Google+.
To receive ongoing BioTime corporate communications, please click on the following link to join our email alert list: http://news.biotimeinc.com.
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||$||27,702|
Non-GAAP Financial Measures
This press release includes operating expenses prepared in accordance with accounting principles generally accepted in the United States (GAAP) and, includes operating expenses, by entity, prepared in accordance with GAAP. This press release also includes certain historical non-GAAP operating expenses and non-GAAP operating expenses, by entity. In particular, BioTime has provided both (a) non-GAAP total operating expenses, adjusted to exclude noncash stock-based and other compensation and depreciation and amortization expense, and (b) non-GAAP operating expenses, by entity, to exclude those same noncash charges by the respective entities for consistency. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable financial measures prepared in accordance with GAAP. However, BioTime believes the presentation of non-GAAP total operating expenses and non-GAAP operating expenses, by entity, when viewed in conjunction with our GAAP total operating expenses, and GAAP operating expenses by entity, respectively, is helpful in understanding BioTime’s ongoing operating expenses and its programs within various entities, including BioTime’s programs in clinical development.
Furthermore, management uses these non-GAAP financial measures in the aggregate and on an entity basis to establish budgets and operational goals, to manage BioTime’s business and to evaluate its performance and its programs in clinical development.
BioTime, Inc. and Subsidiaries
Reconciliation of Non-GAAP Financial Measure
Adjusted Operating Expenses
|Amounts In Thousands|
For the Three
For the Six Months
|GAAP Operating Expenses - as reported||$||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
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