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BioTime Reports First Quarter 2019 Financial Results and Provides Business Update

BusinessWire

ALAMEDA, Calif.–(BUSINESS WIRE)–lt;a href="https://twitter.com/search?q=%24BTX&src=ctag" target="_blank"gt;$BTXlt;/agt; lt;a href="https://twitter.com/hashtag/AMD?src=hash" target="_blank"gt;#AMDlt;/agt;–BioTime, Inc. (NYSE American and TASE: BTX), a clinical-stage
biotechnology company developing cellular therapies for unmet medical
needs, reported financial and operating results for the first quarter
ended March 31, 2019. BioTime management will host a conference call and
webcast today at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time to
discuss its first quarter 2019 financial results and to provide a
business update.

“We have been transforming BioTime into what we believe is one of the
foremost cell therapy companies, with a pipeline which now consists of
three innovative and promising clinical-stage product candidates, each
with the potential to significantly and positively impact serious
diseases or degenerative conditions,” stated Brian M. Culley, Chief
Executive Officer of BioTime. “We will remain focused on progressing our
clinical programs in a thoughtful and cost-effective manner throughout
2019. As of March 31, 2019, the value of our cash, marketable
securities, equity positions in our affiliate companies, and the balance
of the promissory note due to us in August 2020 was more than $100
million, and we believe we are well-positioned to advance our programs.
Our goal is to build awareness and support for our reinvigorated and
repositioned company with the investment, medical, and patient
communities, and advance our objective of bringing cell therapies to
patients who can most benefit from their extraordinary potential.”

Recent Highlights

Plans for 2019

Balance Sheet Highlights

Cash, cash equivalents and marketable securities totaled $27.1 million
as of March 31, 2019.

BioTime’s investment in OncoCyte was valued at $58.0 million as of March
31, 2019 and at $65.7 million as of May 8, 2019, under the equity method
of accounting, and based on the closing stock price of OncoCyte as of
such dates.

Intangible assets, net increased during the first quarter of 2019 due to
the Asterias merger and the acquisition of OPC1 (fair value of $31.7
million) and VAC2 (fair value of $14.8 million).

BioTime’s promissory note due from Juvenescence Limited had an
outstanding balance (principal plus accrued interest) of $22.5 million
as of March 31, 2019. Unless earlier converted into Juvenescence common
shares, the promissory note is payable in cash, plus accrued interest at
7% per year, at maturity in August 2020. If Juvenescence completes an
initial public offering (IPO) resulting in gross proceeds of not less
than $50.0 million, the promissory note automatically converts into the
Juvenescence securities issued in the IPO based on the per-share price
to the public in the IPO, subject to an upward adjustment in the number
of shares that would be issued to BioTime upon such conversion if the
20-day volume-weighted average trading price of one share of common
stock of AgeX Therapeutics, Inc. (AgeX) before the IPO is priced above
$3.00. If the promissory note is converted, the Juvenescence ordinary
shares will be a marketable security that BioTime may use to supplement
its liquidity, as needed and as market conditions allow.

First Quarter Operating Results

Revenues: BioTime’s revenue is generated primarily from
research grants, licensing fees and royalties. Total revenues for the
three months ended March 31, 2019 were $0.9 million, an increase of $0.2
million, compared to $0.7 million for the same period in 2018. The
increase was primarily related to a $0.4 million increase in grant
revenues, offset by a $0.2 million decrease in subscriptions and
advertisement revenues attributable to the deconsolidation of AgeX. AgeX
was deconsolidated from BioTime on August 30, 2018, and beginning on
that date, AgeX’s revenues are not included in BioTime revenues.

Operating Expenses: Operating expenses are comprised of
research and development (“R&D”) expenses and general and administrative
(“G&A”) expenses. Total operating expenses for the three months ended
March 31, 2019 were $13.6 million, as reported, and $7.9 million, as
adjusted. AgeX was deconsolidated from BioTime on August 30, 2018, and
beginning on that date, AgeX’s operating expenses are not included in
BioTime’s operating expenses.

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

R&D Expenses: Beginning on August 30, 2018, BioTime ceased
recognizing R&D expenses related to AgeX and its programs due to the
AgeX deconsolidation on that date.

R&D expenses for the three months ended March 31, 2019 were $5.0
million, a decrease of $0.9 million, compared to $5.9 million for the
same period in 2018. The decrease was primarily related to a $1.6
million decrease from the AgeX deconsolidation and the absence of AgeX
R&D expenses incurred after August 30, 2018, offset by a net increase of
$0.6 million in BioTime programs primarily related to: (1) an increase
of $0.8 million in OpRegen related expenses, (2) an increase of $0.6
million in OPC1 and VAC2 expenses (these programs were acquired in the
Asterias merger) offset by (3) decreases of $0.8 million in Renevia and
HyStem related expenses.

G&A Expenses: Beginning on August 30, 2018, BioTime ceased
recognizing G&A expenses related to AgeX and its subsidiaries due to the
AgeX deconsolidation on that date.

G&A expenses for the three months ended March 31, 2019 were $8.7
million, an increase of $2.7 million, compared to $6.0 million for the
same period in 2018. The increase was primarily attributable to a $3.5
million increase in severance, legal, accounting and other expenses
related to the Asterias merger and a $0.5 million increase in
stock-based compensation, offset by a $1.3 million decrease in AgeX
related G&A expenses.

Other Income/(Expenses), Net: Other income/(expenses), net for
the three months ended March 31, 2019 reflected other income, net of
$47.7 million, compared to other expense, net of ($51.5) million for the
same period in 2018. The variance was primarily related to changes in
the value of equity investments in OncoCyte and Asterias for the
applicable periods.

Net income/(loss) attributable to BioTime: The net
income/(loss) attributable to BioTime for the three months ended March
31, 2019 was net income of $39.3 million, or $0.30 per share (basic and
diluted), compared to a net loss attributable to BioTime of ($63.5)
million, or ($0.50) per share (basic and diluted), for the same period
in 2018.

Conference Call and Webcast

BioTime will host a conference call and webcast today, at 1:30pm
PT/4:30pm ET to discuss its first quarter 2019 financial results and to
provide a business update. Interested parties may access the conference
call by dialing (866) 888-8633 from the U.S. and Canada and (636)
812-6629 from outside the U.S. and Canada and should request the
“BioTime Inc. Call”. A live webcast of the conference call will be
available online in the Investors section of BioTime’s website. A replay
of the webcast will be available on BioTime’s website for 30 days and a
telephone replay will be available through May 16th,
2019, by dialing (855) 859-2056 from the U.S. and Canada and (404)
537-3406 from outside the U.S. and Canada and entering conference ID
number 9155549.

About BioTime, Inc.

BioTime is a clinical-stage biotechnology company developing new
cellular therapies for unmet medical needs. BioTime’s programs are based
on its proprietary cell-based therapy platform and associated
development and manufacturing capabilities. With this platform BioTime
develops and manufactures specialized, terminally-differentiated human
cells from its pluripotent and progenitor cell starting materials. These
differentiated cells are developed either to replace or support cells
that are dysfunctional or absent due to degenerative disease or
traumatic injury, or administered as a means of helping the body mount
an effective immune response to cancer. BioTime’s clinical assets
include (i) OpRegen®, a retinal pigment epithelium transplant
therapy in Phase I/IIa development for the treatment of dry age-related
macular degeneration, the leading cause of blindness in the developed
world; (ii) OPC1, an oligodendrocyte progenitor cell therapy in Phase
I/IIa development for the treatment of acute spinal cord injuries; and
(iii) VAC2, an allogeneic cancer immunotherapy of antigen-presenting
dendritic cells currently in Phase I development for the treatment of
non-small cell lung cancer. For more information, please visit www.biotimeinc.com.

Forward-Looking Statements

BioTime cautions you that all statements, other than statements of
historical facts, contained in this press release, are forward-looking
statements. Forward-looking statements, in some cases, can be identified
by terms such as “believe,” “may,” “will,” “estimate,” “continue,”
“anticipate,” “design,” “intend,” “expect,” “could,” “plan,”
“potential,” “predict,” “seek,” “should,” “would,” “contemplate,”
project,” “target,” “tend to,” or the negative version of these words
and similar expressions. Such statements include, but are not limited
to, statements relating to: the potential of BioTime’s cell therapy
product candidates to significantly and positively impact serious
diseases or degenerative conditions; BioTime’s ability to advance its
clinical programs; the cost reductions and benefits expected to result
from the ongoing transfer of assets acquired in the Asterias merger to
BioTime’s existing GMP manufacturing facility in Jerusalem in
preparation for the hand off of Asterias’s Fremont facility to Novo
Nordisk in the third quarter of 2019; BioTime’s plans to use Orbit’s
proprietary injection technology and device to initiate dosing of the
first patient in the ongoing Phase I/IIa clinical study of OpRegen for
the treatment of dry-AMD and the timing thereof; the timing of an
announcement of the decision on BioTime’s CE Mark application for
Renevia; BioTime’s ability to advance its product candidates and the
timing thereof; BioTime’s ability to strengthen and expand its
partnerships for the ongoing support of the development of the OPC1 and
VAC2 programs and the timing thereof; the completion of patient
enrollment in the ongoing Phase I/IIa clinical study of OpRegen for the
treatment of dry-AMD and the timing thereof; BioTime’s ability to
evaluate the development of OPC1 as a candidate for the potential
treatment of MS and ischemic stroke through ongoing research
collaborations with major universities and the timing thereof; and
BioTime’s ability to increase presence and engagement with the patient,
physician and advocacy communities and the timing thereof.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause BioTime’s actual results,
performance or achievements to be materially different from future
results, performance or achievements expressed or implied by the
forward-looking statements in this press release, including, without
limitation, risk and uncertainties related to: BioTime’s ability to
raise additional capital when and as needed, to advance its product
candidates; BioTime’s ability to develop and commercialize product
candidates; the failure or delay in starting, conducting and completing
clinical trials or obtaining FDA or foreign regulatory approval for
BioTime’s product candidates in a timely manner; the therapeutic
potential of BioTime’s product candidates, and the disease indications
for which BioTime intends to develop its product candidates; BioTime’s
ability to conduct and design successful clinical trials, to enroll a
sufficient number of patients, to meet established clinical endpoints,
to avoid undesirable side effects and other safety concerns, and to
demonstrate sufficient efficacy of its product candidates; developments
by BioTime competitors that make BioTime’s product candidates less
competitive or obsolete; BioTime’s ability to manufacture its product
candidates for clinical development and, if approved, for
commercialization, and the timing and costs of such manufacture; the
performance of third parties in connection with the development and
manufacture of BioTime’s product candidates, including third parties
conducting clinical trials as well as third-party suppliers and
manufacturers; the potential of BioTime’s cell therapy platform, and
BioTime’s plans to apply its platform to research, develop and
commercialize our product candidates; BioTime’s ability, and the ability
of its licensors, to obtain, maintain, defend and enforce intellectual
property rights protecting BioTime’s product candidates, and BioTime’s
ability to develop and commercialize its product candidates without
infringing the proprietary rights of third parties; BioTime’s ability to
recruit and retain key personnel; and BioTime’s ability to successfully
integrate the operations of Asterias into BioTime. BioTime’s
forward-looking statements are based upon its current expectations and
involve assumptions that may never materialize or may prove to be
incorrect. All forward-looking statements are expressly qualified in
their entirety by these cautionary statements. For a detailed
description of BioTime’s risks and uncertainties, you are encouraged to
review its documents filed with the SEC including its recent filings on
Form 8-K, Form 10-K and Form 10-Q. You are cautioned not to place undue
reliance on forward-looking statements, which speak only as of the date
on which they were made. BioTime undertakes no obligation to update such
statements to reflect events that occur or circumstances that exist
after the date on which they were made, except as required by law.

 
BIOTIME, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
 
 

March 31,
2019
(Unaudited)

 

December 31,
2018

ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 18,011 $ 23,587
Marketable equity securities 9,085 7,154
Trade accounts and grants receivable, net 1,402 767
Receivables from affiliates, net – 2,112
Prepaid expenses and other current assets   2,158   2,738
Total current assets   30,656   36,358
 
NONCURRENT ASSETS
Property and equipment, net 8,918 5,835
Deposits and other long-term assets 890 505
Promissory note from Juvenescence 22,482 22,104
Equity method investment in OncoCyte, at fair value 57,963 20,250
Equity method investment in Asterias, at fair value – 13,483
Goodwill 12,977 –
Intangible assets, net   49,829   3,125
TOTAL ASSETS $ 183,715 $ 101,660
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 7,336 $ 6,463
Financing lease and right-of-use lease liabilities, current portion 954 237
Promissory notes, current portion 18 70
Deferred grant revenue 43 42
Liability classified warrants, current portion   372   –
Total current liabilities   8,723   6,812
 
LONG-TERM LIABILITIES
Deferred tax liability 8,581 –
Deferred revenues, net of current portion 200 –
Deferred rent liabilities, net of current portion – 244
Right-of-use lease liability, net of current portion 4,016 1,854
Financing lease, net of current portion 103 104
Liability classified warrants, net of current portion, and other
long-term liabilities 		  856   400
TOTAL LIABILITIES   22,479   9,414
 
Commitments and contingencies
 
SHAREHOLDERS’ EQUITY
Preferred shares, no par value, authorized 2,000 shares; none issued
and outstanding as of March 31, 2019 and December 31, 2018 		– –
Common shares, no par value, 250,000 shares authorized; 149,388
shares issued and outstanding as of March 31, 2019 and 127,136
shares issued and outstanding as of December 31, 2018 		384,553 354,270
Accumulated other comprehensive income 694 1,426
Accumulated deficit   (222,403)   (261,856)
BioTime, Inc. shareholders’ equity 162,844 93,840
Noncontrolling interest (deficit)   (1,608)   (1,594)
Total shareholders’ equity   161,236   92,246
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 183,715 $ 101,660
 
 
BIOTIME, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
 
 

Three Months Ended
March 31,

2019 2018
REVENUES:
Grant revenue $ 749 $ 326
Royalties from product sales and license fees 86 136
Subscription and advertisement revenues – 239
Sale of research products and services   93   –
Total revenues 928 701
 
Cost of sales   (68)   (109)
 
Gross profit   860   592
 
OPERATING EXPENSES:
Research and development 4,961 5,935
Acquired in-process research and development – 800
General and administrative   8,660   6,044
Total operating expenses   13,621   12,779
Loss from operations   (12,761 )   (12,187)
OTHER INCOME/(EXPENSES):
Interest income, net 442 52
Gain on sale of equity method investment in Ascendance – 3,215
Gain (loss) on equity method investment in OncoCyte at fair value 37,713 (37,419)
Gain (loss) on equity method investment in Asterias at fair value 6,744 (17,398)
Unrealized gain on marketable equity securities 1,931 215
Change in fair value of warrant liability 37 –

Other income (expense), net

  806   (176)

Total other income (expense), net

  47,673   (51,511)
INCOME/(LOSS) BEFORE INCOME TAXES 34,912 (63,698)
 
Deferred income tax benefit   4,384   –
 
NET INCOME/(LOSS) 39,296 (63,698)
 
Net loss attributable to noncontrolling interest   14   150
 
NET INCOME/(LOSS) ATTRIBUTABLE TO BIOTIME, INC. $ 39,310 $ (63,548)
 
NET INCOME/(LOSS) PER COMMON SHARE:
BASIC $ 0.30 $ (0.50)
DILUTED $ 0.30 $ (0.50)
 
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING:
BASIC   132,865   126,869
DILUTED   132,869   126,869
 

Non-GAAP Financial Measures

This press release includes: (1) operating expenses prepared in
accordance with accounting principles generally accepted in the United
States (GAAP); (2) operating expenses, by entity, prepared in accordance
with GAAP; (3) operating expenses not prepared in accordance with GAAP
(non-GAAP operating expenses); and (4) non-GAAP operating expenses, by
entity. In particular, this press release includes both (a) non-GAAP
total operating expenses, adjusted to exclude noncash stock-based and
other compensation, depreciation and amortization expense; Asterias
transaction related costs and acquired in-process research and
development expense incurred by AgeX Therapeutics, Inc. (AgeX),
considered to be nonrecurring items, 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, BioTime believes the
presentation of non-GAAP total operating expenses and non-GAAP operating
expenses, by entity, when viewed in conjunction with its 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.

Contacts

BioTime Inc. IR
Ioana C. Hone
ir@biotimeinc.com
(510)
871-4188

Solebury Trout IR
Gitanjali Jain Ogawa
Gogawa@troutgroup.com
(646)
378-2949

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