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Asterias Biotherapeutics Reports Second Quarter Financial Results and Reviews Recent Clinical Progress and Corporate Developments

- Achieved meaningful progress with key clinical programs; multiple milestones anticipated during remainder of 2017-

- Conference Call and Webcast Today, August 14, at 4:30 p.m. ET -

FREMONT, Calif., Aug. 14, 2017 (GLOBE NEWSWIRE) -- Asterias Biotherapeutics, Inc. (NYSE MKT:AST), a biotechnology company pioneering the field of regenerative medicine, today reported financial and operational results for the quarter ended June 30, 2017, as well as recent corporate progress.

“We made significant progress during the second quarter and in recent months in our two lead development programs: our AST-OPC1 program in spinal cord injury and our AST-VAC2 cancer immunotherapy program in non-small cell lung cancer,” said Mike Mulroy, President and Chief Executive Officer of Asterias. “We reported encouraging data from our SCiStar study that shows meaningful improvements in arm, hand, and finger function in patients with severe cervical spinal cord injuries. Importantly, these improvements have been sustained—and in some cases further improved—at nine months following administration of AST-OPC1. In our cancer immunotherapy program, we recently completed a major step toward advancing AST-VAC2 into the clinic. In particular, together with our research partner Cancer Research UK, we successfully completed the production of the first cGMP clinical grade lot of AST-VAC2. This lot of AST-VAC2 provides the initial clinical trial material for patients enrolling in the upcoming clinical study evaluating AST-VAC2 in non-small cell lung cancer. Lastly, we continue to be mindful of our cost structure as we advance our programs and make adjustments to our operating expenses where appropriate.”

2017 Upcoming Milestones

  • In late third quarter or early fourth quarter of 2017, Asterias will report 12-month data from the AIS-A 10 million cell cohort in the SCiStar Phase 1/2a clinical study of AST-OPC1 in complete cervical spinal cord injury.
  • Asterias expects to complete patient enrollment with a total of between 25-30 subjects in the SCiStar study by the end of 2017.
  • In the second half of 2017, Asterias expects to have all necessary regulatory clearances to commence the first clinical study of the company’s cancer immunotherapy product candidate AST-VAC2 in non-small cell lung cancer.
  • By the end of 2017, Asterias expects to have up to three sites opened and patient enrollment initiated in the AST-VAC2 clinical study.

Second Quarter 2017 and Recent Key Achievements

During the second quarter, the company continued to provide promising updates on recovery of arm, hand and finger function for patients that have been administered AST-OPC1:

  • Reported nine-month data from the AIS-A 10 million cell cohort that showed improvements in arm, hand, and finger function observed at three months and six months following administration of AST-OPC1 were confirmed and in some patients further increased at nine months. The results suggest a meaningful and favorable improvement to date in recovery of arm, hand, and finger function in patients treated with the 10 million cell dose of AST-OPC1 compared to the level of expected rates of spontaneous recovery based on historical control data of a closely matched patient population.
  • Reported new MRI data from the SCiStar study that indicates AST-OPC1 cells have durably engrafted in patients post-implantation, and have the potential to prevent lesion cavity formation, possibly reducing spinal cord tissue deterioration after spinal cord injury.
  • Lucas Lindner of Eden, Wisconsin, a former quadriplegic patient who has regained functional use of his fingers, hands, and lower arms after receiving 10 million cells of AST-OPC1 in the SCiStar study, threw out the ceremonial first pitch at a Major League Baseball game on August 13, 2017.

Management executed well to drive forward the AST-OPC1 program, particularly as it relates to enrollment, and will be providing additional data readouts for a growing number of patients in early 2018:

  • Completed enrollment and dosing in the AIS-B 10 million cell and AIS-A 20 million cell cohorts of the SCiStar study in July. The company has completed enrollment and dosing in four of the five planned cohorts in this study.
  • Enrollment and dosing of the fifth patient in the AIS-A 20 million cell cohort triggered the final $1.5 million grant payment from the California Institute for Regenerative Medicine (CIRM) under the existing $14.3 million Strategic Partnerships Award grant awarded to Asterias. Asterias expects to receive this grant payment in the third quarter of 2017.
  • Enrolled and dosed first patient in fifth and final cohort in the SCiStar study. Twenty-two patients have been administered AST-OPC1 in the SCiStar study and twenty-seven patients have been administered AST-OPC1 after including patients from a previous Phase 1 safety trial.
  • The FDA accepted the company's amendment to the clinical research protocol for the SCiStar study. The amendment expands the eligibility criteria to include patients with a C-4 spinal cord injury and extends the dosing window to allow for administration of AST-OPC1 at up to 42 days post-injury.
  • Opened two additional clinical sites for the SCiStar study, providing additional geographical reach and previous experience with spinal cord injury trials. Asterias now has eight clinical sites throughout the country enrolling patients in the study.

Management is making progress related to its cancer immunotherapy programs as its AST-VAC2 program gets closer to entering the clinic:

  • Published positive AST-VAC1 Phase 2 clinical data in Acute Myeloid Leukemia in 'Cancer,' a leading peer-reviewed journal of the American Cancer Society.
  • Cancer Research UK, supported by Asterias technical personnel, successfully completed the manufacture of the first cGMP (current Good Manufacturing Practice) clinical grade lot of AST-VAC2, which met all release specifications. This lot will provide initial clinical trial material for patients enrolling in the upcoming Phase 1/2a study evaluating AST-VAC2 in non-small cell lung cancer.

Financial Results

Cash and cash equivalents as of June 30, 2017 were $11.9 million, while available-for-sale securities were $13.1 million. The combined total of cash, cash equivalents, and available-for-sale securities totaled $25.0 million.

Total revenues were $0.3 million for the second quarter. Revenues were comprised of grant income as well as royalty revenues on product sales by licensees. Research and development expenses were $7.0 million in the second quarter, with the primary driver being expenses associated with the company’s AST-OPC1 program. General and administrative expenses were $1.8 million in the second quarter.

Net loss was $8.7 million, or $0.18 per share, for the second quarter. For the quarter ended June 30, 2017, net cash used in operating activities was $7.0 million and net cash provided from financing activities was $0.9 million.

Conference Call and Webcast Details

Asterias will host a conference call and webcast today, August 14, 2017, at 4:30 p.m. Eastern / 1:30 p.m. Pacific to discuss the results and corporate developments. For both "listen-only" participants and those participants who wish to take part in the question-and-answer session, the call can be accessed by dialing 888-503-8169 (U.S./Canada) or 719-325-4799 (international) five minutes prior to the start of the call and providing the Conference ID 2083743. To access the live webcast, go to http://asteriasbiotherapeutics.com/inv_events_presentations.php.

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 dialing 888-203-1112 (U.S./Canada) or 719-457-0820 (international) and providing the Conference ID 2083743. Additionally, the archived webcast will be available at http://asteriasbiotherapeutics.com/inv_events_presentations.php.

About Asterias Biotherapeutics

Asterias Biotherapeutics, Inc. is a biotechnology company pioneering the field of regenerative medicine. The company's proprietary cell therapy programs are based on its pluripotent stem cell and immunotherapy platform technologies. Asterias is presently focused on advancing three clinical-stage programs which have the potential to address areas of very high unmet medical need in the fields of neurology and oncology. AST-OPC1 (oligodendrocyte progenitor cells) is currently in a Phase 1/2a dose escalation clinical trial in spinal cord injury. AST-VAC1 (antigen-presenting autologous dendritic cells) is undergoing continuing development by Asterias based on promising efficacy and safety data from a Phase 2 study in Acute Myeloid Leukemia (AML), with current efforts focused on streamlining and modernizing the manufacturing process. AST-VAC2 (antigen-presenting allogeneic dendritic cells) represents a second generation, allogeneic cancer immunotherapy. The company's research partner, Cancer Research UK, plans to begin the first clinical trial of AST-VAC2 in non-small cell lung cancer in 2017. Additional information about Asterias can be found at www.asteriasbiotherapeutics.com.

Forward Looking Statements

Statements pertaining to future financial and/or operating and/or clinical research results, future growth in research, technology, clinical development, and potential opportunities for Asterias, 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 businesses of Asterias, particularly those mentioned in the cautionary statements found in Asterias' filings with the Securities and Exchange Commission. Asterias disclaims any intent or obligation to update these forward-looking statements.

ASTERIAS BIOTHERAPEUTICS, INC.
STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three months ended June 30,
(Unaudited)
Six months ended June 30,
(Unaudited)
2017
2016
2017
2016
REVENUE
Grant income $291 $1,520 $2,185 $3,007
Royalties from product sales 25 12 141 119
Total revenues 316 1,532 2,326 3,126
Cost of sales (18) (6) (70) (59)
Gross profit 298 1,526 2,256 3,067
EXPENSES
Research and development (6,984) (6,019) (13,582) (12,362)
General and administrative (1,847) (2,581) (6,314) (8,871)
Total operating expenses (8,831) (8,600) (19,896) (21,233)
Loss from operations (8,533) (7,074) (17,640) (18,166)
OTHER INCOME/(EXPENSE)
Gain/(loss) from change in fair value on warrant liability (56) 1,628 2,898 1,628
Interest expense, net (114) (139) (239) (285)
Other expense, net (25) (25) (34) (26)
Total other income (expense), net (195) 1,464 2,625 1,317
LOSS BEFORE INCOME TAX BENEFIT (8,728) (5,610) (15,015) (16,849)
Deferred income tax benefit - 451 - 1,353
NET LOSS $(8,728) $(5,159) $(15,015) $(15,496)
Basic and diluted net loss per share $(0.18) $(0.12) $(0.31) $(0.39)
Weighted average shares outstanding: basic and diluted 48,511 41,777 48,129 40,201


ASTERIAS BIOTHERAPEUTICS, INC.
BALANCE SHEETS
(IN THOUSANDS, EXCEPT PAR VALUE AMOUNTS)
June 30, 2017 (Unaudited) December 31,
2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents $11,875 $19,800
Available-for-sale securities, at fair value 13,141 15,269
Prepaid expenses and other current assets 1,349 1,921
Total current assets 26,365 36,990
NONCURRENT ASSETS
Intangible assets, net 16,787 18,130
Property, plant and equipment, net 4,999 5,475
Other assets 411 415
Total noncurrent assets 22,197 24,020
TOTAL ASSETS $48,562 $61,010
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Amount due to BioTime, Inc. $- $288
Accounts payable 408 1,076
Accrued expenses 1,604 �� 2,495
Capital lease liability, current 7 7
Deferred grant income - 2,185
Total current liabilities 2,019 6,051
LONG-TERM LIABILITIES
Warrant liability 5,767 8,665
Capital lease liability, noncurrent 18 20
Deferred rent liability 296 266
Lease liability 3,747 3,980
TOTAL LIABILITIES 11,847 18,982
STOCKHOLDERS’ EQUITY
Preferred Stock, $0.0001 par value, authorized 5,000 shares; none issued and outstanding - -
Common Stock, $0.0001 par value, authorized 75,000 Series A Common Stock and 75,000 Series B Common Stock; 49,556 and 47,567 shares Series A Common Stock issued and outstanding at June 30, 2017 and December 31, 2016, respectively; no Series B Common Stock issued and outstanding at June 30, 2017 and December 31, 2016 5 5
Additional paid-in capital 138,659 126,829
Accumulated other comprehensive loss (3,206) (1,078)
Accumulated deficit (98,743) (83,728)
Total stockholders’ equity 36,715 42,028
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $48,562 $61,010


Contacts: Investor Relations (510) 456-3892 InvestorRelations@asteriasbio.com or EVC Group, Inc. Michael Polyviou/Greg Gin (646) 445-4800 mpolyviou@evcgroup.com Media Thomas D. Gibson GIBSON Communications, LLC (201) 476-0322 – Main (201) 264-3646 – Mobile tom@tomgibsoncommunications.com

Source:Asterias Biotherapeutics