AgeX Therapeutics Reports Third Quarter 2019 Financial Results and Provides Business Update

11/14/2019

  • Advanced GMP-compliant manufacturing capability
  • Published two peer-reviewed scientific papers
  • Included in MIT Technology Review Special Issue on Longevity
  • Presented at industry and investor conferences

ALAMEDA, Calif.--(BUSINESS WIRE)--Nov. 14, 2019-- AgeX Therapeutics, Inc. (“AgeX”; NYSE American: AGE), a biotechnology company developing therapeutics for human aging and regeneration, reported financial and operating results for the third quarter ended September 30, 2019.

“Driven by our vision of being the leading biotechnology company with a focus on human aging, in the third quarter we advanced our product development on numerous fronts,” said Michael D. West, Ph.D., founder and Chief Executive Officer. “Our recent build-out of GMP-compliant manufacturing laboratory space will facilitate our manufacture of master cell banks such as those that carry the UniverCyteTM genetic modification for off-the-shelf cell-based regenerative therapy.”

Recent Highlights

  • Dr. West and AgeX were included in a feature article that was part of the cover theme in MIT Technology Review magazine. The September-October edition of this respected magazine from the Massachusetts Institute of Technology, called “The longevity issue” had the cover theme, “Old Age is Over!”
  • On the company’s behalf, Dr. West participated at two industry and investor conferences during the quarter. He discussed the company’s metabolic and diabetes-related programs as part of a panel at Metabesity 2019, October 15-16 in Washington, DC. He also delivered an investor presentation at the H.C. Wainwright (Rodman & Renshaw) Investment Conference, September 8-10 in New York City.
  • The company published two papers in the peer-reviewed scientific journal Regenerative Medicine, from Future Medicine. The first, “Toward a Unified Theory of Aging and Regeneration,” outlines the theory behind the company’s induced tissue regeneration (iTR) program. The second, “Engineering strategies for generating hypoimmunogenic cells with high clinical and commercial value,” is a joint paper with Juvenescence. It includes a review of the most promising approaches to producing UniverCyte™ cells and shares a previously unpublished in vivo mouse observation.
  • We continue to make progress to engineer pluripotent cell lines with immune tolerance UniverCyte™ technology to generate hypoimmunogenic (universal) cells.

Second Quarter 2019 Operating Results

Revenues: Total revenues for the three months ended September 30, 2019 were $411,000, as compared with $380,000 in the same period in 2018. AgeX revenue is primarily generated from subscription and advertising revenues from the GeneCards® online database through its subsidiary LifeMap Sciences, Inc. 2019 revenues also included $41,000 of grant revenue from the NIH. AgeX had no grant revenues in the same period in 2018.

Operating expenses: Operating expenses for the three months ended September 30, 2019 were $3.6 million, as compared with $2.6 million for the same period in 2018. On an as-adjusted basis, operating expenses for the three months ended September 30, 2019 were $2.9 million as compared to $2.2 million for the same period in 2018.

The reconciliation between operating expenses determined in accordance with accounting principles generally accepted in the United States (GAAP) and operating expenses, as adjusted, a non-GAAP measure, is provided in the financial tables included at the end of this press release.

Research and development expenses for the three months ended September 30, 2019 were $1.4 million, as compared with $1.3 million in the same period in 2018.

General and administrative expenses for the three months ended September 30, 2019 were $2.2 million, as compared with $1.3 million in the same period in 2018.

Net loss attributable to AgeX: The net loss attributable to AgeX for the three months ended September 30, 2019 was $3.2 million, or ($0.09) per share (basic and diluted) compared to $2.2 million, or ($0.06) per share (basic and diluted), for the same period in 2018.

Balance Sheet Highlights

Cash, and cash equivalents, including restricted cash totaled $3.8 million as of September 30, 2019, in addition to which we have $1.5 million remaining available for borrowing under a credit facility provided by Juvenescence Limited, which brought our total available capital to $5.3 million. However, under accounting standard ASC 205-40 Presentation of Financial Statements-Going Concern, AgeX’s cash and cash equivalents of $3.8 million as of September 30, 2019 and the loan facility by Juvenescence may not be sufficient, without raising additional capital and reducing expenditures, to satisfy AgeX’s anticipated operating and other funding requirements for the next twelve months from the issuance of its interim condensed consolidated interim financial statements.

About AgeX Therapeutics

AgeX Therapeutics, Inc. (NYSE American: AGE) is focused on developing and commercializing innovative therapeutics for human aging. Its PureStem® and UniverCyte™ manufacturing and immunotolerance technologies are designed to work together to generate highly-defined, universal, allogeneic, off-the-shelf pluripotent stem cell-derived young cells of any type for application in a variety of diseases with a high unmet medical need. AgeX has two preclinical cell therapy programs: AGEX-VASC1 (vascular progenitor cells) for tissue ischemia and AGEX-BAT1 (brown fat cells) for Type II diabetes. AgeX’s revolutionary longevity platform induced Tissue Regeneration (iTR™) aims to unlock cellular immortality and regenerative capacity to reverse age-related changes within tissues. AGEX-iTR1547 is an iTR-based formulation in preclinical development. HyStem® is AgeX’s delivery technology to stably engraft PureStem cell therapies in the body. AgeX is developing its core product pipeline for use in the clinic to extend human healthspan and is seeking opportunities to establish licensing and collaboration agreements around its broad IP estate and proprietary technology platforms.

For more information, please visit www.agexinc.com or connect with the company on Twitter, Facebook, and YouTube.

Forward-Looking Statements

Certain statements contained in this release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. 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 forward-looking statements. Forward-looking statements involve risks and uncertainties. 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 AgeX Therapeutics, Inc. and its subsidiaries, particularly those mentioned in the cautionary statements found in more detail in the “Risk Factors” section of AgeX’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commissions (copies of which may be obtained at www.sec.gov). Subsequent events and developments may cause these forward-looking statements to change. AgeX 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.

AGEX THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PAR VALUE AMOUNTS)

 

 

 

September 30, 2019

 

 

December 31, 2018

 

 

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

3,768

 

 

$

6,707

 

Accounts and grants receivable, net

 

 

234

 

 

 

131

 

Prepaid expenses and other current assets

 

 

688

 

 

 

1,015

 

Total current assets

 

 

4,690

 

 

 

7,853

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

1,010

 

 

 

90

 

Deposits and other long-term assets

 

 

193

 

 

 

19

 

Intangible assets, net

 

 

2,290

 

 

 

2,709

 

TOTAL ASSETS

 

$

8,183

 

 

$

10,671

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

1,757

 

 

$

1,366

 

Related party payables, net

 

 

319

 

 

 

132

 

Deferred revenues

 

 

219

 

 

 

317

 

Right-of-use lease liability, current portion

 

 

417

 

 

 

-

 

Insurance premium liability and other current liabilities

 

 

195

 

 

 

625

 

Total current liabilities

 

 

2,907

 

 

 

2,440

 

 

 

 

 

 

 

 

 

 

Loan due to Juvenescence, net of debt issuance cost

 

 

191

 

 

 

-

 

Right-of-use lease liability, net of current portion and other noncurrent liabilities

 

 

142

 

 

 

-

 

TOTAL LIABILITIES

 

$

3,240

 

 

$

2,440

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Preferred stock, $0.0001 par value, authorized 5,000 shares; none issued and outstanding as of September 30, 2019 and December 31, 2018

 

 

-

 

 

 

-

 

Common stock, $0.0001 par value, 100,000 shares authorized; 37,649 and 35,830 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively

 

 

4

 

 

 

4

 

Additional paid-in capital

 

 

87,758

 

 

 

81,499

 

Accumulated other comprehensive income (loss)

 

 

74

 

 

 

(2

)

Accumulated deficit

 

 

(83,497

)

 

 

(74,054

)

AgeX Therapeutics, Inc. stockholders’ equity

 

 

4,339

 

 

 

7,447

 

Noncontrolling interest

 

 

604

 

 

 

784

 

Total stockholders’ equity

 

 

4,943

 

 

 

8,231

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

8,183

 

 

$

10,671

 

AGEX THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2019

 

2018

 

2019

 

2018

REVENUES:

 

 

 

 

 

 

 

 

 

 

 

 

Subscription and advertising revenues

 

$

342

 

 

$

373

 

 

$

992

 

 

$

945

 

Grant revenues

 

 

41

 

 

 

-

 

 

 

103

 

 

 

-

 

Other revenues

 

 

28

 

 

 

7

 

 

 

84

 

 

 

138

 

Total revenues

 

 

411

 

 

 

380

 

 

 

1,179

 

 

 

1,083

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

(49

)

 

 

4

 

 

 

(165

)

 

 

(184

)

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

Gross profit

 

 

362

 

 

 

384

 

 

 

1,014

 

 

 

899

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

1,447

 

 

 

1,332

 

 

 

4,435

 

 

 

4,307

 

Acquired in-process research and development

 

 

-

 

 

 

-

 

 

 

-

 

 

 

800

 

General and administrative

 

 

2,194

 

 

 

1,254

 

 

 

6,422

 

 

 

3,679

 

Total operating expenses

 

 

3,641

 

 

 

2,586

 

 

 

10,857

 

 

 

8,786

 

Loss from operations

 

 

(3,279

)

 

 

(2,202

)

 

 

(9,843

)

 

 

(7,887

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME/(EXPENSES):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

 

8

 

 

 

39

 

 

 

53

 

 

 

84

 

Gain on sale of equity method investment in Ascendance

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,215

 

Other income/(expense), net

 

 

48

 

 

 

(22

)

 

 

277

 

 

 

131

 

Total other income, net

 

 

56

 

 

 

17

 

 

 

330

 

 

 

3,430

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS BEFORE INCOME TAXES

 

 

(3,223

)

 

 

(2,185

)

 

 

(9,513

)

 

 

(4,457

)

Income tax provision

 

 

(54

)

 

 

-

 

 

 

(130

)

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

 

(3,277

)

 

 

(2,185

)

 

 

(9,643

)

 

 

(4,457

)

Net loss attributable to noncontrolling interest

 

 

56

 

 

 

34

 

 

 

200

 

 

 

141

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS ATTRIBUTABLE TO AGEX

 

$

(3,221

)

 

$

(2,151

)

 

$

(9,443

)

 

$

(4,316

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS PER COMMON SHARE: BASIC AND DILUTED

 

$

(0.09

)

 

$

(0.06

)

 

$

(0.25

)

 

$

(0.12

)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: BASIC AND DILUTED

 

 

37,640

 

 

 

35,790

 

 

 

37,143

 

 

 

34,606

 

AGEX THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

(UNAUDITED)

 

 

 

 

 

 

Nine Months Ended

September 30,

 

 

 

2019

 

2018

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net loss attributable to AgeX

 

$

(9,443

)

 

$

(4,316

)

Net loss attributable to noncontrolling interest

 

 

(200

)

 

 

(141

)

Adjustments to reconcile net loss attributable to AgeX to net cash used in operating activities:

 

 

 

 

 

 

 

 

Gain on sale of equity method investment in Ascendance

 

 

(354

)

 

 

(3,215

)

Acquired in-process research and development

 

 

-

 

 

 

800

 

Depreciation expense

 

 

38

 

 

 

48

 

Amortization of intangible assets

 

 

419

 

 

 

337

 

Amortization of right-of-use asset

 

 

200

 

 

 

-

 

Amortization of debt issuance cost

 

 

17

 

 

 

-

 

Stock-based compensation

 

 

1,487

 

 

 

488

 

Stock-based compensation allocated from Lineage

 

 

-

 

 

 

184

 

Subsidiary stock-based compensation

 

 

-

 

 

 

4

 

Foreign currency remeasurement gain (loss) and other

 

 

85

 

 

 

(47

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts and grants receivable, net

 

 

(103

)

 

 

(84

)

Prepaid expenses and other current assets

 

 

331

 

 

 

(100

)

Accounts payable and accrued liabilities

 

 

319

 

 

 

241

 

Related party payables

 

 

187

 

 

 

(112

)

Insurance premium liability

 

 

(600

)

 

 

-

 

Deferred revenues and other current liabilities

 

 

(132

)

 

 

(36

)

Net cash used in operating activities

 

 

(7,749

)

 

 

(5,949

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from the sale of equity method investment in Ascendance

 

 

354

 

 

 

3,215

 

Purchase of in-process research and development

 

 

-

 

 

 

(1,872

)

Security deposit paid

 

 

(74

)

 

 

2

 

Purchase of equipment and other

 

 

(346

)

 

 

(21

)

Net cash (used in) provided by investing activities

 

 

(66

)

 

 

1,324

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from issuance of common shares

 

 

-

 

 

 

5,000

 

Proceeds from sale of warrants

 

 

-

 

 

 

1,000

 

Proceeds from exercise of warrants

 

 

4,500

 

 

 

-

 

Draw down on loan facility from Juvenescence

 

 

500

 

 

 

-

 

Repayment of financing lease liability

 

 

(22

)

 

 

-

 

Net cash provided by financing activities

 

 

4,978

 

 

 

6,000

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(2

)

 

 

6

 

 

 

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 

 

(2,839

)

 

 

1,381

 

 

 

 

 

 

 

 

 

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH:

 

 

 

 

 

 

 

 

At beginning of the period

 

 

6,707

 

 

 

7,375

 

At end of the period

 

$

3,868

 

$

8,756

 

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 below, prepared in accordance with GAAP. This press release also includes certain historical non-GAAP operating expenses and non-GAAP operating expenses, by entity below. In particular, AgeX Therapeutics, Inc. (“AgeX”) has provided both (a) non-GAAP total operating expenses, adjusted to exclude noncash stock-based compensation expense, depreciation and amortization expense, and acquired in-process research and development expense, a nonrecurring item, 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, AgeX 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 AgeX’s ongoing operating expenses and its programs and those of certain subsidiaries.

AGEX THERAPEUTICS, INC. AND SUBSIDIARIES

Reconciliation of Non-GAAP Financial Measure

Adjusted Operating Expenses

 

Amounts In Thousands and
Unaudited

Amounts In Thousands and
Unaudited

For the Three Months Ended
September 30,

For the Nine Months Ended
September 30,

2019

2018

 

2019

2018

GAAP Operating Expenses - as reported

$

3,641

$

2,586

 

$

10,857

$

8,786

 

Stock-based compensation expense (1)

 

(491)

 

(210)

 

 

(1,487)

 

(676)

 

Amortization of right-of-use assets (1)

 

(101)

 

-

 

 

(200)

 

-

 

Depreciation and amortization expense (1)

 

(156)

 

(146)

 

 

(457)

 

(385)

 

Acquired in-process research and development expense (2)

 

-

 

-

 

 

-

 

(800)

 

Non-GAAP Operating Expenses, as adjusted

$

2,893

$

2,230

 

$

8,713

$

6,925

 

 

 

 

 

 

 

 

GAAP Operating Expenses - by entity

 

 

 

 

 

 

AgeX and subsidiaries other than LifeMap Sciences (3)

$

3,114

$

2,027

 

$

9,150

$

7,050

 

LifeMap Sciences, Inc. and subsidiary (4)

 

527

 

559

 

 

1,707

 

1,736

 

GAAP Operating Expenses - by entity

$

3,641

$

2,586

 

$

10,857

$

8,786

 

 

 

 

 

 

 

 

Non-GAAP Operating Expenses - as adjusted, by entity

 

 

 

 

 

 

AgeX and subsidiaries other than LifeMap Sciences

$

2,482

$

1,782

 

$

7,352

$

5,524

 

LifeMap Sciences, Inc. and subsidiary

411

 

448

 

 

1,361

 

1,401

 

Non-GAAP Operating Expenses - as adjusted, by entity

$

2,893

$

2,230

 

$

8,713

$

6,925

 

 

 

 

 

 

 

 

(1)

Noncash charges

(2)

AgeX acquired certain in-process research and development expense in March 2018, considered to be a nonrecurring item.

(3)

AgeX Therapeutics, Inc. includes ReCyte Therapeutics, Inc., a majority-owned and consolidated subsidiary.

(4)

LifeMap Sciences Inc. includes LifeMap Sciences Ltd., both consolidated subsidiaries of AgeX Therapeutics, Inc.

 

Source: AgeX Therapeutics, Inc.

Media Contact for AgeX:
Bill Douglass
Gotham Communications, LLC
bill@gothamcomm.com
(646) 504-0890