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Asterias Biotherapeutics Reports Third Quarter Financial Results and Recent Developments

- Continues to execute on key clinical programs and streamline cost structure -

- Conference call and webcast today, November 14, at 4:30 p.m. ET -

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

“We have continued to advance our spinal cord injury clinical trial while improving our financial profile in advance of the next phase of our AST-OPC1 program,” said Mike Mulroy, President and Chief Executive Officer of Asterias. “Recent 12-month data from our SCiStar study showed subjects administered 10 million cells of AST-OPC1 observed meaningful and durable recovery of arm, hand and finger function that was more than double the rates of recovery seen at 12 months in both matched historical controls and published data. Based on this early encouraging result in the clinic, combined with our extensive pre-clinical work, our safety study in thoracic spinal cord injury, and MRI data suggesting durable engraftment of our OPC1 cells, we look forward to investing in a larger randomized controlled trial in the future. Our next data readout is expected in early 2018, and that data should help provide further clarity surrounding the design of that trial. Separately, in our cancer immunotherapy program, we received regulatory clearance during the third quarter to initiate the first-in-human clinical trial of AST-VAC2 in non-small cell lung cancer in the United Kingdom.”

“On the financial front, the company has strengthened its cash position and improved its cost structure,” said Ryan Chavez, Chief Financial Officer. “These steps, which include both our recent capital raise and a more focused allocation of capital into investments that can deliver value in the short and medium term, have strengthened the company’s financial outlook so that it may continue to advance its programs in the clinic and achieve additional important clinical milestones in 2018.”

Third Quarter 2017 and Recent Key Achievements

AST-OPC1:

  • Reported 12-month data from the AIS-A 10 million cell cohort (Cohort 2) in the SCiStar study that showed additional motor level improvement was seen at 12 months. Specifically, 67% (4/6) of subjects have recovered two or more motor levels over baseline on at least one side through 12 months, which compares favorably to the rates of recovery at 9 months (50%) and at 3 months and 6 months (33%). Furthermore, the rate of recovery at 12 months is more than double the rates of recovery seen in both matched historical controls (29%) and published data in a similar population (26%).
  • Reported new 12-month MRI data from the SCiStar study that indicated no sign of lesion cavities in any subject. The MRI results are consistent with formation of a tissue matrix at the injury site, which is supportive evidence showing that AST-OPC1 cells have durably engrafted to help prevent lesion cavity formation, possibly reducing spinal cord tissue deterioration after spinal cord injury.
  • Reported continued positive safety profile for AST-OPC1 based on trial results to date. In September, an independent Data Monitoring Committee (DMC) recommended the SCiStar study continue as planned after it completed a regularly scheduled review of the accumulated safety data to date from the study.
  • Obtained U.S. Food and Drug Administration (FDA) designation as a Regenerative Medicine Advanced Therapy (RMAT) under the 21st Century Cures Act. The RMAT designation is intended to facilitate expedited development, review and approval for important new regenerative medicine therapies for which preliminary clinical evidence indicates the potential to address a serious or life-threatening disease or condition. In addition to providing an avenue for increased and earlier interactions with the FDA, RMAT-designated products may be eligible for priority review and accelerated approval.
  • Published new efficacy and safety data from preclinical studies of AST-OPC1 in the peer-reviewed journal “Stem Cells Translational Medicine.” The preclinical studies described in this paper were among those submitted in Asterias’ 2014 Investigational New Drug Amendment in support of the SCiStar trial.

AST-VAC2:

  • Received regulatory clearance in the United Kingdom to initiate the clinical trial of Asterias’ cancer immunotherapy product AST-VAC2 in subjects with early and late stage non-small cell lung cancer (NSCLC). This First-In-Human (FIH) trial, which is being sponsored and managed by Cancer Research UK, will examine the safety, tolerability, immunogenicity and activity of AST-VAC2 in subjects with NSCLC.

Corporate:

  • In October 2017, Asterias closed the sale of shares of its common stock in a registered direct offering which raised approximately $10.4 million in gross proceeds.
  • Asterias expanded its operating expense reduction efforts and reduced staffing allocated to non-clinical activities as a part of a broader effort to more closely align operating expenses with the company’s primary goal of continuing to generate clinical data in its key clinical stage programs. The company anticipates a one-time severance-related pre-tax restructuring charge of approximately $0.6 million in the fourth quarter of 2017 associated with the operating expense reductions. As a result of the operating cost saving initiatives implemented year to date, the company expects to reduce its operating costs by approximately 40% to start 2018.

Financial Results

As of September 30, 2017, the combined total of cash, cash equivalents, and available-for-sale securities totaled $20.7 million. In October 2017, Asterias closed the sale of shares of its common stock in a registered direct offering which raised approximately $10.4 million in gross proceeds. As of October 31, 2017, Asterias had a combined total of cash, cash equivalents, and available-for-sale securities of approximately $27.3 million.

Total revenues were $1.7 million for the third quarter. Revenues were comprised of grant income as well as royalty revenues on product sales by licensees. Research and development expenses were $6.6 million in the third quarter, with the primary driver being expenses associated with the company’s AST-OPC1 program. General and administrative expenses were $2.0 million in the third quarter.

Net loss was $6.8 million, or $0.14 per share, for the third quarter. For the quarter ended September 30, 2017, net cash used in operating activities was $4.5 million and net cash provided from financing activities was $1.1 million.

Conference Call and Webcast Details

Asterias will host a conference call and webcast today, November 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 877-830-2645 (U.S./Canada) or 785-424-1791 (international) five minutes prior to the start of the call and providing the Conference ID 8579194. 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 8579194. 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 a first-in-human (FIH) clinical trial of AST-VAC2 in non-small cell lung cancer. 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 September 30,
(Unaudited)
Nine months ended September 30,
(Unaudited)
2017 2016 2017 2016
REVENUE
Grant income $ 1,526 $ 1,858 $ 3,711 $ 4,865
Royalties from product sales 162 218 303 337
Total revenues 1,688 2,076 4,014 5,202
Cost of sales (81) (59) (151) (118)
Gross profit 1,607 2,017 3,863 5,084
EXPENSES
Research and development (6,624) (5,232) (20,206) (17,594)
General and administrative (2,046) (4,210) (8,360) (13,081)
Total operating expenses (8,670) (9,442) (28,566) (30,675)
Loss from operations (7,063) (7,425) (24,703) (25,591)
OTHER INCOME/(EXPENSE)
Gain/(loss) from change in fair value on warrant liability 506 (3,995) 3,404 (2,368)
Interest expense, net (112) (128) (351) (413)
Other expense, net (140) (2) (174) (27)
Total other income (expense), net 254 (4,125)
2,879
(2,808)
LOSS BEFORE INCOME TAX BENEFIT (6,809) (11,550) (21,824) (28,399)
Deferred income tax benefit - 902 - 2,255
NET LOSS $ (6,809) $ (10,648) $ (21,824) $ (26,144)
Basic and diluted net loss per share $ (0.14) $ (0.24) $ (0.44) $ (0.63)
Weighted average shares outstanding: basic and diluted 49,771 45,193 49,110 41,588



ASTERIAS BIOTHERAPEUTICS, INC.
BALANCE SHEET
(IN THOUSANDS EXCEPT PAR VALUE AMOUNTS)
September 30, 2017 (Unaudited)

December
31, 2016

ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 8,620 $ 19,800
Available-for-sale securities, at fair value 12,095 15,269
Prepaid expenses and other current assets 1,214 1,921
Total current assets 21,929 36,990
NONCURRENT ASSETS
Intangible assets, net 16,116 18,130
Property, plant and equipment, net 4,760 5,475
Other assets 515 415
Total noncurrent assets 21,391 24,020
TOTAL ASSETS $ 43,320 $ 61,010
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Amount due to BioTime, Inc. $ - $ 288
Accounts payable 311 1,076
Accrued expenses 2,058 2,495
Capital lease liability, current 7 7
Deferred grant income - 2,185
Total current liabilities 2,376 6,051
LONG-TERM LIABILITIES
Warrant liability 5,262 8,665
Capital lease liability, noncurrent 16 20
Deferred rent liability 310 266
Lease liability 3,624 3,980
TOTAL LIABILITIES 11,588 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; 49,950 and 47,467 shares Series A Common Stock issued and outstanding at September 30, 2017 and December 31, 2016, respectively; no Series B Common Stock issued and outstanding at September 30, 2017 and December 31, 2016 5 5
Additional paid-in capital 141,132 126,829
Accumulated other comprehensive loss (3,853) (1,078)
Accumulated deficit (105,552) (83,728)
Total stockholders’ equity 31,732 42,028
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 43,320 $ 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