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BioTime Reports Fourth Quarter and Full Year 2018 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 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

Plans for 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:

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:

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 21st,
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
 

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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