AgeX Therapeutics Reports Second Quarter 2020 Financial Results and Provides Business Update
08/14/2020
AgeX made strides with respect to its newly established licensing and collaboration model, which aims to embed its technology platforms across the cell therapy industry. AgeX has entered into a research license for the use of its immunotolerance UniverCyteTM technology by Sernova Corp. (“Sernova”), a publicly-listed Canadian regenerative medicine therapeutics company. It also entered a Manufacturing, Marketing, and Distribution Agreement with
“We are working diligently to position our subsidiary Reverse Bioengineering to optimize the potential of induced tissue regeneration (iTR) technology,” said
AgeX completed its restructuring to streamline its operations to allow efficient usage of capital in the current pandemic environment as well to meet near-term strategic company priorities of deriving value and generating preclinical and ultimately clinical data from our technology platforms through external licensing and collaboration agreements. In the longer-term, AgeX remains committed to in-house product development of AgeX-BAT1 and AgeX-VASC1. AgeX is considering options to bring capital into the company.
“AgeX has made excellent progress in terms of its collaboration and licensing model, closing five deals since the beginning of the year so far,” said
Q2 Highlights
- AgeX entered into a research license with Sernova Corp. in which Sernova will utilize AgeX’s UniverCyteTM gene technology to generate immune-protected universal therapeutic cells for use in combination with Sernova’s Cell PouchTM for the treatment of type I diabetes and hemophilia A. The goal is to eliminate the need for immunosuppressive medications following cellular transplantation. Sernova has been granted a time-limited, non-exclusive research license by AgeX. A commercial license for Sernova to utilize UniverCyte for therapeutic and commercial purposes may be negotiated pending successful study outcomes. UniverCyte uses a proprietary, novel, modified form of HLA-G, a potent immunomodulatory molecule, which protects an unborn child from their mother’s immune system. In almost all human cells, native HLA-G expression is silenced after birth. AgeX’s modified HLA-G shows evidence of being resistant to this silencing, hence potentially allowing for long-term, stable and high expression. Sernova is a Canadian regenerative medicine therapeutics company.
-
AgeX andImStem Biotechnology, Inc. signed a non-binding letter of intent for ImStem to obtain from AgeX a non-exclusive license to use AgeX’s embryonic stem cell line ESI 053 to derive ImStem’s investigational mesenchymal stem cell (MSC) product IMS001 for development in COVID-19 as well as ARDS due to other causes. AgeX and ImStem are cooperating to finalize financial terms and other provisions of a license agreement. ImStem has previously used AgeX ESI 053 to derive its IMS001 product. Earlier this year, theU.S. Food and Drug Administration (FDA) cleared IMS001 to begin a Phase 1 clinical study in patients with multiple sclerosis. This is believed to be the first MSC product derived from human embryonic stem cells to be accepted for a clinical trial by the FDA. ImStem is a biopharmaceutical company developing human embryonic stem cell-derived mesenchymal stem cells.
-
AgeX entered into a Manufacturing, Marketing and Distribution Agreement with
Pluristyx, Inc. under which Pluristyx will perform certain services to manufacture, market and distribute on AgeX’s behalf, research-grade and clinical-grade AgeX ESI brand human pluripotent stem cells for therapeutic applications. This agreement allows industry and academia access to current Good Manufacturing Practice (cGMP)-grade,National Institutes of Health (NIH)-registered AgeX ESI cell lines. AgeX ESI cells are among only a few pluripotent stem cell lines from which derived cell therapy candidates have been granted FDA investigational new drug (IND) clearance to begin human trials. Academic and biopharma organizations will need to obtain separate commercial licenses from AgeX in order to advance their cellular product candidates generated from AgeX ESI cell lines into human clinical trials and commercialization. Pluristyx is an advanced therapy tools and services company serving customers in the fields of regenerative medicine and cellular and gene therapies.
Liquidity and Capital Resources
AgeX is in need of additional capital to finance its operations. On
On
Staff Reductions
In
Going Concern Considerations
As required under Accounting Standards Update 2014-15, Presentation of Financial Statements-Going Concern (ASC 205-40), AgeX evaluates whether conditions and/or events raise substantial doubt about its ability to meet its future financial obligations as they become due within one year after the date its financial statements are issued. Based on AgeX’s most recent projected cash flows, and considering that loans from Juvenescence under the New Loan Agreement will be subject to Juvenescence’s discretion, AgeX believes that its cash and cash equivalents, the remaining
Second Quarter 2020 Operating Results
Revenues: Total revenues for the second quarter of 2020 were
Operating expenses: Operating expenses for the three months ended
The reconciliation between GAAP and non-GAAP operating expenses is provided in the financial tables included with this earnings release.
Research and development expenses decreased by
General and administrative expenses decreased by
About
For more information, please visit www.agexinc.com or connect with the company on Twitter, LinkedIn, 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
CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT PAR VALUE AMOUNTS) |
||||||||
|
|
|
|
|
|
|
||
|
|
(Unaudited) |
|
|
|
|
||
ASSETS |
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,033 |
|
|
$ |
2,352 |
|
Accounts and grants receivable, net |
|
|
235 |
|
|
|
363 |
|
Prepaid expenses and other current assets |
|
|
836 |
|
|
|
1,339 |
|
Total current assets |
|
|
2,104 |
|
|
|
4,054 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
681 |
|
|
|
1,126 |
|
Deposits and other long-term assets |
|
|
100 |
|
|
|
111 |
|
Intangible assets, net |
|
|
1,872 |
|
|
|
2,151 |
|
TOTAL ASSETS |
|
$ |
4,757 |
|
|
$ |
7,442 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
1,771 |
|
|
$ |
1,582 |
|
Loan due to Juvenescence, net of debt issuance cost, current portion |
|
|
1,821 |
|
|
|
- |
|
Related party payables, net |
|
|
142 |
|
|
|
64 |
|
Deferred revenues |
|
|
328 |
|
|
|
283 |
|
Right-of-use lease liability |
|
|
218 |
|
|
|
428 |
|
Paycheck Protection Program Loan |
|
|
434 |
|
|
|
- |
|
Insurance premium liability and other current liabilities |
|
|
433 |
|
|
|
940 |
|
Total current liabilities |
|
|
5,147 |
|
|
|
3,297 |
|
|
|
|
|
|
|
|
|
|
Loan due to Juvenescence, net of debt issuance cost, net of current portion |
|
|
1,732 |
|
|
|
1,528 |
|
TOTAL LIABILITIES |
|
|
6,879 |
|
|
|
4,825 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
|
|
|
|
|
|
Preferred stock, |
|
|
- |
|
|
|
- |
|
Common stock, |
|
|
4 |
|
|
|
4 |
|
Additional paid-in capital |
|
|
89,555 |
|
|
|
88,353 |
|
Accumulated other comprehensive income |
|
|
81 |
|
|
|
69 |
|
Accumulated deficit |
|
|
(92,084 |
) |
|
|
(86,208 |
) |
|
|
|
(2,444 |
) |
|
|
2,218 |
|
Noncontrolling interest |
|
|
322 |
|
|
|
399 |
|
Total stockholders’ equity (deficit) |
|
|
(2,122 |
) |
|
|
2,617 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
|
$ |
4,757 |
|
|
$ |
7,442 |
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) |
||||||||||||||||
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||||||
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
REVENUES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and advertisement revenues |
|
$ |
298 |
|
|
$ |
275 |
|
|
$ |
636 |
|
|
$ |
620 |
|
Grant revenues |
|
|
36 |
|
|
|
47 |
|
|
|
122 |
|
|
|
62 |
|
Other revenues |
|
|
80 |
|
|
|
58 |
|
|
|
171 |
|
|
|
86 |
|
Total revenues |
|
|
414 |
|
|
|
380 |
|
|
|
929 |
|
|
|
768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
(36 |
) |
|
|
(53 |
) |
|
|
(70 |
) |
|
|
(116 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
378 |
|
|
|
327 |
|
|
|
859 |
|
|
|
652 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
1,350 |
|
|
|
1,650 |
|
|
|
2,953 |
|
|
|
2,988 |
|
General and administrative |
|
|
1,653 |
|
|
|
2,119 |
|
|
|
3,726 |
|
|
|
4,228 |
|
Total operating expenses |
|
|
3,003 |
|
|
|
3,769 |
|
|
|
6,679 |
|
|
|
7,216 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(2,625 |
) |
|
|
(3,442 |
) |
|
|
(5,820 |
) |
|
|
(6,564 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME/(EXPENSES): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income (expense), net |
|
|
(87 |
) |
|
|
33 |
|
|
|
(139 |
) |
|
|
45 |
|
Other income (expense), net |
|
|
(19 |
) |
|
|
257 |
|
|
|
6 |
|
|
|
229 |
|
Total other income (expense), net |
|
|
(106 |
) |
|
|
290 |
|
|
|
(133 |
) |
|
|
274 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS BEFORE INCOME TAXES |
|
|
(2,731 |
) |
|
|
(3,152 |
) |
|
|
(5,953 |
) |
|
|
(6,290 |
) |
Income tax provision |
|
|
- |
|
|
|
(3 |
) |
|
|
- |
|
|
|
(76 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS |
|
|
(2,731 |
) |
|
|
(3,155 |
) |
|
|
(5,953 |
) |
|
|
(6,366 |
) |
Net loss attributable to noncontrolling interest |
|
|
42 |
|
|
|
66 |
|
|
|
77 |
|
|
|
144 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS ATTRIBUTABLE TO AGEX |
|
$ |
(2,689 |
) |
|
$ |
(3,089 |
) |
|
$ |
(5,876 |
) |
|
$ |
(6,222 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS PER COMMON SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC AND DILUTED |
|
$ |
(0.07 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.16 |
) |
|
$ |
(0.17 |
) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC AND DILUTED |
|
|
37,657 |
|
|
|
37,630 |
|
|
|
37,654 |
|
|
|
36,891 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED) |
||||||||
|
|
Six Months Ended
|
|
|||||
|
|
2020 |
|
|
2019 |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net loss attributable to AgeX |
|
$ |
(5,876 |
) |
|
$ |
(6,222 |
) |
Net loss attributable to noncontrolling interest |
|
|
(77 |
) |
|
|
(144 |
) |
Adjustments to reconcile net loss attributable to AgeX to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Gain on sale of equity method investment in Ascendance |
|
|
- |
|
|
|
(277 |
) |
Depreciation expense |
|
|
247 |
|
|
|
22 |
|
Amortization of intangible assets |
|
|
279 |
|
|
|
279 |
|
Amortization of right-of-use asset |
|
|
209 |
|
|
|
99 |
|
Amortization of debt issuance cost |
|
|
130 |
|
|
|
- |
|
Stock-based compensation |
|
|
519 |
|
|
|
996 |
|
Foreign currency remeasurement gain (loss) and other |
|
|
44 |
|
|
|
49 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts and grants receivable, net |
|
|
103 |
|
|
|
(77 |
) |
Prepaid expenses and other current assets |
|
|
511 |
|
|
|
359 |
|
Accounts payable and accrued liabilities |
|
|
186 |
|
|
|
121 |
|
Related party payables |
|
|
78 |
|
|
|
(71 |
) |
Insurance premium liability |
|
|
(473 |
) |
|
|
(448 |
) |
Deferred revenues and other liabilities |
|
|
(188 |
) |
|
|
(63 |
) |
Net cash used in operating activities |
|
|
(4,308 |
) |
|
|
(5,377 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from the sale of equity method investment in Ascendance |
|
|
- |
|
|
|
277 |
|
Security deposit paid |
|
|
- |
|
|
|
(77 |
) |
Purchase of equipment and other |
|
|
(8 |
) |
|
|
(109 |
) |
Net cash provided by (used in) investing activities |
|
|
(8 |
) |
|
|
91 |
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from exercise of warrants |
|
|
- |
|
|
|
4,500 |
|
Draw down on loan facility from Juvenescence |
|
|
2,700 |
|
|
|
- |
|
Proceeds from Paycheck Protection Program Loan |
|
|
433 |
|
|
|
- |
|
Payment of debt related costs |
|
|
(126 |
) |
|
|
- |
|
Repayment of financing lease liability |
|
|
(15 |
) |
|
|
(9 |
) |
Net cash provided by financing activities |
|
|
2,992 |
|
|
|
4,491 |
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
5 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,319 |
) |
|
|
(794 |
) |
|
|
|
|
|
|
|
|
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH: |
|
|
|
|
|
|
|
|
At beginning of the period |
|
|
2,452 |
|
|
|
6,707 |
|
At end of the period |
|
$ |
1,133 |
|
|
$ |
5,913 |
|
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 AgeX’s business and to evaluate its performance and its programs in clinical development.
|
||||||
Reconciliation of Non-GAAP Financial Measure |
||||||
Adjusted Operating Expenses |
||||||
Amounts In Thousands and Unaudited |
||||||
For the Three Months Ended
|
For the Six Months Ended
|
|||||
2020 |
2019 |
2020 |
2019 |
|||
GAAP Operating Expenses - as reported |
|
3,769 |
|
|
|
|
Stock-based compensation expense (1) |
(259) |
(515) |
|
(519) |
(996) |
|
Depreciation and amortization expense (1) |
(263) |
(152) |
|
(526) |
(301) |
|
Non-GAAP Operating Expenses, as adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating Expenses - by entity |
|
|
|
|
|
|
AgeX and subsidiaries other than LifeMap Sciences (2) |
|
|
|
|
|
|
|
593 |
593 |
|
1,173 |
1,180 |
|
GAAP Operating Expenses - by entity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Operating Expenses - as adjusted, by entity |
|
|
|
|
|
|
AgeX and subsidiaries other than LifeMap Sciences |
|
|
|
|
|
|
|
480 |
478 |
|
945 |
950 |
|
Non-GAAP Operating Expenses - as adjusted, by entity |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Noncash charges |
(2) |
|
(3) |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20200814005442/en/
Contact for AgeX:
apark@agexinc.com
(510) 671-8620
Source: