BioTime Reports Fourth Quarter and Full Year 2018 Financial Results and Provides Business Update

March 14, 2019 Off By BusinessWire

Completed Acquisition of Asterias Biotherapeutics, Inc.
Completed Distribution of AgeX Therapeutics Shares to BioTime
Shareholders
Entered Into Exclusive Collaboration with Orbit Biomedical Ltd.

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 focused on degenerative diseases, reported
financial and operating results for the fourth quarter and full year
ended December 31, 2018. BioTime management will host a conference call
and webcast today at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time to
provide a business update.

“BioTime has been moving rapidly towards building a pioneering cell
therapy company through strategic transactions on the corporate
development, clinical, and operational fronts,” stated Brian M. Culley,
Chief Executive Officer of BioTime. “We have broadened our pipeline
through the acquisition of Asterias, adding two innovative product
candidates that we believe can substantially impact diseases in need of
innovative therapeutic approaches. Moreover, we entered into an
exclusive agreement with Orbit Biomedical Ltd. which will allow us
access to its recently 510(k)-approved device for the sub-retinal
delivery of OpRegen^® for the treatment of dry-AMD. We also
completed the distribution of AgeX Therapeutics, Inc. shares to BioTime
shareholders, following the sale of half of our ownership in AgeX to
Juvenescence Ltd. for a total of $43.2 million. Importantly, we have
continued to streamline BioTime’s corporate structure and priorities
with a focus on creating value from our most compelling clinical
opportunities. Executing on our stated milestones at each stage of
corporate and clinical development and increasing our visibility within
the investment, medical, and patient communities are vital activities
which we believe will help drive the company’s success.”

Recent Highlights

Completed acquisition of Asterias Therapeutics, Inc. BioTime acquired
all of the remaining outstanding common stock of Asterias not
previously owned by BioTime, and the operations of BioTime and
Asterias were combined. BioTime is now advancing three clinical stage
product candidates for the potential treatment of degenerative retinal
diseases and neurological conditions associated with demyelination,
and to potentially aid the body in detecting and combating cancer.
Announced exclusive agreement with Orbit Biomedical Ltd. (Orbit) under
which BioTime and Orbit will collaborate on the use of Orbit’s
proprietary injection technology to deliver OpRegen for the treatment
of dry age-related macular degeneration (dry-AMD) in BioTime’s ongoing
Phase I/IIa clinical study.
Completed the distribution of approximately 12.7 million shares of
AgeX common stock owned by BioTime on a pro rata basis to eligible
BioTime shareholders. BioTime retained an equity position in AgeX of
1.7 million shares, or approximately 5% of AgeX’s common stock. As of
March 13, 2019, the value of BioTime’s AgeX share position was
approximately $7.2 million.
Presented encouraging data on BioTime’s proprietary pluripotent stem
cell technology as a platform to address the retinal degeneration
disease continuum presented at the 14^th Annual Scientific
Meeting of the Association For Ocular Pharmacology and Therapeutics
(AOPT 2019).

BioTime affiliate OncoCyte Corporation (NYSE American: OCX) recently
reported positive results from an R&D validation study of DetermaVu™,
its non-invasive liquid biopsy test intended to facilitate clinical
decision making in lung cancer diagnosis. Following a recently
completed $40.25 million public offering by OncoCyte, BioTime owns
approximately 28% of OncoCyte’s common stock, or 14.7 million shares.
As of March 13, 2019, the value of BioTime’s OncoCyte share position
was approximately $55.9 million.

Plans for 2019

Present updated results from the ongoing Phase I/IIa clinical study of
OpRegen for the treatment of dry-AMD and the Vision Restoration
Program at the 2019 Association for Research in Vision and
Ophthalmology Annual Meeting on May 2, 2019 and April 30, 2019,
respectively.
Pursuant to an exclusive collaboration with Orbit Biomedical Ltd. for
the use of Orbit’s proprietary injection technology, initiate dosing
of the first patient with the Orbit device and a new thaw and inject
formulation in the ongoing Phase I/IIa clinical study of OpRegen for
the treatment of dry-AMD, anticipated in Q2 2019.
Advance the OPC1 program and meet with the FDA to discuss plans for
next steps in the clinical development of the program, anticipated in
2019.
Strengthen and expand existing partnerships with the California
Institute for Regenerative Medicine and Cancer Research UK, for the
ongoing support of the development of the OPC1 and VAC2 programs.
Complete patient enrollment in the ongoing Phase I/IIa clinical study
of OpRegen for the treatment of dry-AMD, anticipated by year end 2019.
Evaluate the development of OPC1 as a candidate for the potential
treatment of multiple sclerosis (MS) and ischemic stroke through
ongoing research collaborations with major universities.
Announce decision on BioTime’s CE Mark application for Renevia, an
investigational medical device being developed as an alternative for
whole adipose tissue transfer procedures, expected in the second half
of 2019.

Balance Sheet Highlights

Cash, cash equivalents and marketable securities totaled $30.7 million
as of December 31, 2018.

BioTime’s investment in OncoCyte was valued at $20.3 million as of
December 31, 2018 and at $55.9 million as of March 13, 2019, under the
equity method of accounting.

BioTime’s promissory note from Juvenescence was valued at $22.1 million
as of December 31, 2018. If Juvenescence completes an initial public
offering (IPO) resulting in gross proceeds of not less than $50,000,000,
the promissory note converts into Juvenescence ordinary shares 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 AgeX’s common stock before the IPO is priced is 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. If the promissory note is not converted, it is
payable in cash, plus accrued interest at 7% per year, at maturity in
August 2020.

Fourth Quarter Operating Results

Revenues: BioTime’s revenue is generated primarily from
research grants, licensing fees and royalties. Total revenues for the
three months ended December 31, 2018 were $0.8 million, a decrease of
$0.2 million, compared to $1.0 million for the same period in 2017. The
decrease was primarily related to a reduction of $0.4 million
attributable to the deconsolidation of AgeX operations from BioTime’s
financial results in August 2018, offset by an increase of $0.2 million
attributable to an increase in grant 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
December 31, 2018 were $10.8 million, as reported, and $8.1 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.

The reconciliation between GAAP and non-GAAP operating expenses, by
entity, is provided in the financial tables included with this earnings
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 December 31, 2018 were $3.8
million, a decrease of $0.9 million, compared to $4.7 million for the
same period in 2017. The decrease was primarily related to a $0.8
million decrease from the AgeX deconsolidation and the absence of AgeX
research and development expenses incurred after August 30, 2018.

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 December 31, 2018 were $7.0
million, an increase of $1.2 million, compared to $5.8 million for the
same period in 2017. The increase was primarily attributable to
increases of $1.0 million in legal and related costs related to the
Asterias merger announced in November 2018 and completed on March 8,
2019, and $0.8 million in noncash stock-based compensation expense due
to additional equity award grants and vesting of certain restricted
stock units for meeting performance milestones. These increases were
partially offset by a decrease of $0.8 million from the AgeX
deconsolidation and the absence of AgeX research and development
expenses incurred after August 30, 2018.

Other Income/(Expenses), Net: Other expenses, net for the three
months ended December 31, 2018 were $35.2 million, a decrease of $32.1
million, compared to $67.3 million for the same period in 2017. The
decrease was primarily related to changes in the value of equity
investments in OncoCyte, Asterias and AgeX for the applicable periods.

Net loss attributable to BioTime: The net loss
attributable to BioTime for the three months ended December 31, 2018
was $45.0 million, or $0.35 per share (basic and diluted), compared to a
net loss attributable to BioTime of $71.9 million, or $0.58 per share
(basic and diluted), for the same period in 2017.

Year-to-Date Operating Results

Revenues: Total revenues for the year ended December 31,
2018 were $5.0 million, an increase of $1.5 million, compared to $3.5
million for 2017. The increase was primarily related to an increase in
grant revenues of $1.9 million, offset by a reduction of $0.4 million in
subscription and research related revenues attributable to the
deconsolidation of AgeX operations from BioTime’s financial results in
August 2018.

BioTime receives two types of grant revenues: one is for the development
of OpRegen and is received through BioTime’s Israeli subsidiary, Cell
Cure, from the Israeli Innovation Authority (IIA), and the second is for
BioTime’s vision restoration program and is a Small Business Innovation
Research grant from the National Institutes of Health (NIH). Revenues
from the IIA grant and the NIH grant were $2.5 million and $1.1 million
for the year ended December 31, 2018, respectively, compared to revenues
from the IIA grant and the NIH grant of $1.5 million and $0.2 million,
respectively, for 2017.

Operating Expenses: Total operating expenses for the year ended
December 31, 2018 were $46.5 million, as reported, which is comprised of
$38.8 million for BioTime and $7.7 million for AgeX. Total operating
expenses for the year ended December 31, 2018 were $37.0 million, as
adjusted, which is comprised of $31.0 million for BioTime and $6.0
million for AgeX.

R&D Expenses: R&D expenses for the year ended December
31, 2018 were $21.8 million, a decrease of $2.2 million, compared to
$24.0 million for 2017. The decrease was mainly attributable to:

a decrease of $1.5 million in AgeX related programs, including LifeMap
Sciences, due to the AgeX deconsolidation;
a decrease of $0.8 million from the absence of OncoCyte research and
development expenses incurred in 2017 as a result of the OncoCyte
deconsolidation in February 2017;
a decrease of $0.5 million in LifeMap Solutions expenses resulting
from the cessation of its mobile health software development
application business in July 2017; and
a decrease of $0.3 million in BioTime related program expenses,
primarily related to completing the Renevia clinical trial in early
2018.

The decreases were partially offset by an $0.8 million write-off of
certain acquired in-process R&D assets in March 2018 that have no
alternative future use by AgeX.

G&A Expenses: G&A expenses for the year ended December
31, 2018 were $24.7 million, an increase of $4.8 million, compared
to $19.9 million for 2017. The increase was primarily attributable:

an increase of $2.3 million related to management transition and other
compensation related costs, including hiring costs for a new chief
executive officer during September 2018;
an increase of $2.1 million for legal, audit and compliance costs
related to distributing 12.7 million shares of AgeX common stock to
BioTime shareholders in November 2018; and
an increase of $1.5 million in noncash stock-based compensation
expense due to increases in equity award grants.

These increases were partially offset by decreases of $1.4 million in
combined G&A expenses related to the OncoCyte deconsolidation in
February 2017, and to LifeMap Solutions, which ceased conducting its
mobile health software application business in July 2017, and $0.3
million in AgeX related costs, including LifeMap Sciences, due to the
AgeX deconsolidation.

Other Income/(Expenses), Net: Other income/(expenses), net for
the year ended December 31, 2018 were $5.3 million in expenses, as
compared to $15.6 million in income for 2017. The variance was primarily
driven by changes in market values of the Asterias and OncoCyte shares
held by BioTime and gains from the AgeX deconsolidation in 2018 from the
sale AgeX shares to Juvenescence, and from the OncoCyte deconsolidation
in 2017.

Net loss attributable to BioTime: The net loss
attributable to BioTime for the year ended December 31, 2018 was $46.0
million, or $0.36 per share (basic and diluted), compared to a net loss
attributable to BioTime of $20.0 million, or $0.17 per share (basic and
diluted), for 2017.

Conference Call and Webcast

BioTime will host a conference call and webcast today, at 1:30pm
PT/4:30pm ET to discuss its fourth quarter and full year 2018 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 elsewhere outside the U.S. 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 March 21^st,
2019, by dialing (855) 859-2056 from the U.S. and Canada and (404)
537-3406 from elsewhere outside the U.S. and entering conference ID
number 1091719.

About BioTime, Inc.

BioTime is a clinical-stage biotechnology company developing new
cellular therapies for degenerative retinal diseases, neurological
conditions associated with demyelination, and aiding the body in
detecting and combating cancer. 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 common stock is traded on the NYSE American
and TASE under the symbol BTX. For more information, please visit www.biotimeinc.com.
To receive ongoing BioTime corporate communications, please click on the
following link to join the Company’s email alert list: http://news.biotime.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 ability of BioTime’s product candidates
to substantially impact diseases; 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; 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; 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; ongoing research
collaborations with major universities to evaluate the development of
OPC1 as a candidate for the potential treatment of MS and ischemic
stroke; patient and community advocacy engagement and initiatives, and
the timing thereof; and the timing of a decision on BioTime’s CE Mark
application for Renevia. 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.

Tables to follow


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


	December 31,		December 31,
	2018		2017
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	23,587	$	36,838
Marketable equity securities		7,154		1,337
Trade accounts and grants receivable, net		767		780
Landlord receivable		840		–
Receivables from affiliates, net		2,112		2,266
Prepaid expenses and other current assets		1,898		1,402
Total current assets		36,358		42,623

NONCURRENT ASSETS
Property and equipment, net		5,835		5,533
Deposits and other long term assets		505		1,018
Promissory note from Juvenescence		22,104		–
Equity method investment in OncoCyte, at fair value		20,250		68,235
Equity method investment in Asterias, at fair value		13,483		48,932
Intangible assets, net		3,125		6,900
TOTAL ASSETS	$	101,660	$	173,241

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	6,463	$	5,718
Capital lease and lease liability, current portion		237		212
Promissory notes, current portion		70		152
Deferred license and subscription revenues		–		488
Deferred grant revenue		42		309
Total current liabilities		6,812		6,879

LONG-TERM LIABILITIES
Deferred rent liabilities, net of current portion		244		105
Lease liability, net of current portion		1,854		1,019
Capital lease, net of current portion		104		132
Promissory notes, net of current portion		–		18
Liability classified warrants and other long-term liabilities		400		825
TOTAL LIABILITIES		9,414		8,978

Commitments and contingencies

SHAREHOLDERS’ EQUITY
Preferred shares, no par value, authorized 2,000 shares; none issued and outstanding as of December 31, 2018 and 2017, respectively		–		–
Common shares, no par value, 250,000 shares authorized; 127,136 and 126,866 shares issued and outstanding as of December 31, 2018 and 2017, respectively		354,270		378,487
Accumulated other comprehensive income		1,426		451
Accumulated deficit		(261,856)		(216,297)
BioTime, Inc. shareholders’ equity		93,840		162,641
Noncontrolling interest (deficit)		(1,594)		1,622
Total shareholders’ equity		92,246		164,263
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	101,660	$	173,241


BIOTIME, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

	Three Months Ended				Year Ended
	December 31,				December 31,
	2018		2017		2018		2017
REVENUES:
Grant revenue	$	587	$	430	$	3,572	$	1,666
Royalties from product sales and license fees		80		112		392		389
Subscription and advertisement revenues		–		455		691		1,395
Sale of research products and services		91		2		333		8
Total revenues		758		999		4,988		3,458

Cost of sales		(52)		(54)		(302)		(168)

Gross profit		706		945		4,686		3,290

OPERATING EXPENSES:
Research and development		(3,780)		(4,697)		(20,955)		(24,024)
Acquired in-process research and development		–		–		(800)		–
General and administrative		(7,033)		(5,811)		(24,726)		(19,922)
Total operating expenses		(10,813)		(10,508)		(46,481)		(43,946)
Gain on sale of assets		–		–		–		1,754
Loss from operations		(10,107)		(9,563)		(41,795)		(38,902)

OTHER INCOME/(EXPENSES):
Interest income (expense), net		433		37		711		(692)
Gain on sale of equity method investment in Ascendance		–		–		3,215		–
Gain on sale of AgeX shares and deconsolidation of AgeX		–		–		78,511		–
Gain on deconsolidation of OncoCyte		–		–		–		71,697
Loss on equity method investment in OncoCyte at fair value		(16,435)		(42,555)		(47,985)		(2,935)
Loss on equity method investment in Asterias at fair value		(14,789)		(25,010)		(35,449)		(51,107)
Loss on equity method investment in AgeX at fair value		(4,181)		–		(4,181)		–
Unrealized gain on marketable equity securities		523		–		1,158		–
Loss on extinguishment of related party convertible debt		–		–		–		(2,799)
Other income/(expense), net		(774)		247		(1,315)		1,449
Total other income (expenses), net		(35,223)		(67,281)		(5,335)		15,613
LOSS BEFORE INCOME TAXES		(45,330)		(76,844)		(47,130)		(23,289)

Income tax benefit		346		4,772		346		–

NET LOSS		(44,984)		(72,072)		(46,784)		(23,289)

Net loss attributable to noncontrolling interest		32		138		794		3,313

NET LOSS ATTRIBUTABLE TO BIOTIME, INC.	$	(44,952)	$	(71,934)	$	(45,990)	$	(19,976)

NET LOSS PER COMMON SHARE:
BASIC AND DILUTED	$	(0.35)	$	(0.58)	$	(0.36)	$	(0.17)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
BASIC AND DILUTED		126,990		124,822		126,903		114,476