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BioTime Reports Second Quarter 2019 Financial Results and Provides Business Update

BusinessWire

ALAMEDA, Calif.–(BUSINESS WIRE)–$BTX #AMD—BioTime, Inc. (NYSE American and TASE: BTX), a clinical-stage biotechnology company developing novel cellular therapies for unmet medical needs, reported financial and operating results for the second quarter ended June 30, 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 second quarter 2019 financial results and to provide a business update.

“Over the past several quarters, BioTime has completed several transactions to simplify our corporate structure and highlight our cell therapy programs as our top priority. Acquiring Asterias, distributing AgeX, reducing our OncoCyte ownership, hiring a new management team, reducing overhead and headcount, and relocating clinical operations for our OpRegen program to the U.S. are all constructive components of a larger vision we have to become a premier cell therapy company,” stated Brian M. Culley, Chief Executive Officer of BioTime. “As a result, we are changing our name to reflect our mission and bring attention to our leadership position in the administration of differentiated human cells to treat serious medical conditions such as dry-AMD, spinal cord injuries, and cancer.”

Recent Highlights

Current Plans for 2019

Balance Sheet Highlights

Cash, cash equivalents and marketable securities totaled $16.7 million as of June 30, 2019. BioTime sold 2,250,000 shares of OncoCyte’s common stock on July 2, 2019 for gross proceeds of $4.5 million. BioTime also sold 647,397 shares of Hadasit Bio-Holdings Ltd. common stock in July 2019 for gross proceeds of $1.2 million.

BioTime’s investment in OncoCyte was valued at $36.5 million as of June 30, 2019. As of August 6, 2019, BioTime’s remaining investment in OncoCyte was valued at $21.7 million, under the equity method of accounting, based on the closing stock price of OncoCyte as of such date.

BioTime’s promissory note due from Juvenescence Limited had an outstanding balance (principal plus accrued interest) of $22.9 million as of June 30, 2019. Unless earlier converted into Juvenescence ordinary 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.

In summary, as of June 30, 2019, the value of the Company’s cash, marketable securities, equity holdings in OncoCyte, and the balance of a promissory note due to it in August 2020 were in excess of $76.0 million.

Second Quarter Operating Results

Note regarding AgeX: On August 30, 2018, BioTime deconsolidated AgeX from its consolidated financial statements due to the sale by BioTime of 14,400,000 shares of AgeX common stock to Juvenescence and the related decrease of BioTime’s ownership position in AgeX from 80.4% to 40.2%. Accordingly, BioTime ceased recognizing revenue and expenses related to AgeX and its programs on such date.

Revenues: BioTime’s revenue is generated primarily from research grants, licensing fees and royalties. Total revenues for the three months ended June 30, 2019 were $0.8 million, a decrease of $1.8 million as compared to the same period in 2018. The decrease was primarily related to a $1.4 million decrease in grant revenues, and a $0.3 million decrease in subscriptions and advertisement revenues attributable to the deconsolidation of AgeX.

Operating Expenses: Operating expenses are comprised of research and development (R&D) expenses and general and administrative (G&A) expenses. Total operating expenses, as reported, for the three months ended June 30, 2019 were $11.5 million, a decrease of $0.1 million as compared to the same period in 2018. Total operating expenses, as adjusted, for the three months ended June 30, 2019, were $9.0 million, a decrease of $0.4 million as compared to the same period in 2018.

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

R&D Expenses: R&D expenses for the three months ended June 30, 2019 were $5.2 million, a decrease of $1.1 million as compared to the same period in 2018. The decrease was primarily related to a $1.4 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 $0.3 million in BioTime programs primarily related to: (1) an increase of $1.7 million in OPC1 and VAC2 expenses (these programs were acquired in the Asterias merger) offset by (2) decreases of $1.4 million in Renevia, HyStem and PureStem related expenses.

G&A Expenses: G&A expenses for the three months ended June 30, 2019 were $6.3 million, an increase of $1.0 million as compared to the same period in 2018. The increase was primarily attributable to a $1.9 million increase in severance, legal, accounting and other expenses related to the Asterias merger which was offset by a $1.1 million decrease in AgeX related G&A expenses.

Other Income/(Expenses), Net: Other income/(expenses), net for the three months ended June 30, 2019 reflected other expense, net of ($20.5) million, compared to other income, net of $4.5 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 June 30, 2019 was a net loss of ($30.0) million, or ($0.20) per share (basic and diluted), compared to a net loss attributable to BioTime of ($4.2) million, or ($0.03) per share (basic and diluted), for the same period in 2018.

In line with previous estimates, BioTime expects to spend $14 million to $15 million in the second half of 2019. BioTime anticipates that cash spend in 2020 will range from $24 million to $28 million, a reduction from 2019 spending levels of $32 million to $34 million due to corporate simplification and cost savings initiatives implemented in 2019, and a significant reduction from 2018 spending levels of $43 million for BioTime and Asterias combined.

Conference Call and Webcast

BioTime will host a conference call and webcast today, at 1:30pm PT/4:30pm ET to discuss its second 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 elsewhere 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 August 15th, 2019, by dialing (855) 859-2056 from the U.S. and Canada and (404) 537-3406 from elsewhere outside the U.S. and Canada and entering conference ID number 8783397.

About BioTime, Inc.

BioTime is a clinical-stage biotechnology company developing novel 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, a 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 or follow the Company on Twitter @BioTimeBTX. BioTime announced that it is changing its name to Lineage Cell Therapeutics, effective August 12, 2019.

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 BioTime’s cost-savings efforts, enrollment activities, data presentations, clinical study advancement, drug evaluation, rebranding and relocation activities, and anticipated spend for the second half of 2019 and full year 2020. 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 risks and uncertainties inherent in BioTime’s business and other risks in BioTime’s filings with the Securities and Exchange Commission (the SEC). 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. Further information regarding these and other risks is included under the heading “Risk Factors” in BioTime’s periodic reports with the SEC, including BioTime’s Annual Report on Form 10-K filed with the SEC on March 14, 2019 and its other reports, which are available from the SEC’s website. 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)

 

June 30,

2019 (Unaudited)

 

December 31,

2018

ASSETS

 

 

 

CURRENT ASSETS

 

 

 

Cash and cash equivalents

$

8,210

 

$

23,587

Marketable equity securities

 

8,477

 

 

7,154

Trade accounts and grants receivable, net

 

1,671

 

 

767

Receivables from affiliates, net

 

–

 

 

2,112

Prepaid expenses and other current assets

 

2,101

 

 

2,738

Total current assets

 

20,459

 

 

36,358

 

 

 

 

 

 

NONCURRENT ASSETS

 

 

 

 

 

Property and equipment, net

 

8,720

 

 

5,835

Deposits and other long-term assets

 

815

 

 

505

Promissory note from Juvenescence

 

22,860

 

 

22,104

Equity method investment in OncoCyte, at fair value

 

36,539

 

 

20,250

Equity method investment in Asterias, at fair value

 

–

 

 

13,483

Goodwill

 

12,977

 

 

–

Intangible assets, net

 

49,321

 

 

3,125

TOTAL ASSETS

$

151,691

 

$

101,660

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Accounts payable and accrued liabilities

$

6,859

 

$

6,463

Financing lease and right of use lease liabilities, current portion

 

956

 

 

237

Promissory notes, current portion

 

–

 

 

70

Deferred grant revenue

 

44

 

 

42

Total current liabilities

 

7,859

 

 

6,812

 

 

 

 

 

 

LONG-TERM LIABILITIES

 

 

 

 

 

Deferred tax liability

 

7,334

 

 

–

Deferred revenues, net of current portion

 

200

 

 

–

Deferred rent liabilities, net of current portion

 

–

 

 

244

Right-of-use lease liability, net of current portion

 

3,825

 

 

1,854

Financing lease, net of current portion

 

93

 

 

104

Liability classified warrants, net of current portion, and other long-term liabilities

 

621

 

 

400

TOTAL LIABILITIES

 

19,932

 

 

9,414

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY

 

 

 

 

 

Preferred shares, no par value, authorized 2,000 shares; none issued and outstanding as of June 30, 2019 and December 31, 2018

 

–

 

 

–

Common shares, no par value, 250,000 shares authorized; 149,643 shares issued and outstanding as of June 30, 2019 and 127,136 shares issued and outstanding as of December 31, 2018

 

385,615

 

 

354,270

Accumulated other comprehensive income

 

207

 

 

1,426

Accumulated deficit

 

(252,435)

 

 

(261,856)

BioTime, Inc. shareholders’ equity

 

133,387

 

 

93,840

Noncontrolling interest (deficit)

 

(1,628)

 

 

(1,594)

Total shareholders’ equity

 

131,759

 

 

92,246

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

151,691

 

$

101,660

BIOTIME, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

 

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

 

2019

 

2018

 

2019

 

2018

REVENUES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grant revenue

 

$

529

 

 

$

1,941

 

 

$

1,278

 

 

$

2,266

 

Royalties from product sales and license fees

 

 

140

 

 

 

91

 

 

 

226

 

 

 

227

 

Subscription and advertisement revenues

 

 

–

 

 

 

333

 

 

 

–

 

 

 

572

 

Sale of research products and services

 

 

110

 

 

 

182

 

 

 

203

 

 

 

182

 

Total revenues

 

 

779

 

 

 

2,547

 

 

 

1,707

 

 

 

3,247

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

(107

)

 

 

(106

)

 

 

(175

)

 

 

(215

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

672

 

 

 

2,441

 

 

 

1,532

 

 

 

3,032

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

5,235

 

 

 

6,358

 

 

 

10,196

 

 

 

12,293

 

Acquired in-process research and development

 

 

–

 

 

 

–

 

 

 

–

 

 

 

800

 

General and administrative

 

 

6,258

 

 

 

5,227

 

 

 

14,918

 

 

 

11,163

 

Total operating expenses

 

 

11,493

 

 

 

11,585

 

 

 

25,114

 

 

 

24,256

 

Loss from operations

 

 

(10,821

)

 

 

(9,144

)

 

 

(23,582

)

 

 

(21,224

)

OTHER INCOME/(EXPENSES):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

 

437

 

 

 

52

 

 

 

879

 

 

 

105

 

Gain on sale of equity method investment in Ascendance

 

 

–

 

 

 

–

 

 

 

–

 

 

 

3,215

 

(Loss) gain on equity method investment in OncoCyte at fair value

 

 

(21,425

)

 

 

6,603

 

 

 

16,288

 

 

 

(30,816

)

(Loss) gain on equity method investment in Asterias at fair value

 

 

–

 

 

 

(2,175

)

 

 

6,744

 

 

 

(19,573

)

Unrealized (loss) gain on marketable equity securities

 

 

(607

)

 

 

397

 

 

 

1,324

 

 

 

612

 

Unrealized gain on warrant liability

 

 

234

 

 

 

460

 

 

 

271

 

 

 

351

 

Other (expense) income, net

 

 

882

 

 

 

(839

)

 

 

1,688

 

 

 

(1,014

)

Total other (expense) income, net

 

 

(20,479

)

 

 

4,498

 

 

 

27,194

 

 

 

(47,120

)

(LOSS)/INCOME BEFORE INCOME TAXES

 

 

(31,300

)

 

 

(4,646

)

 

 

3,612

 

 

 

(68,344

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred income tax benefit

 

 

1,248

 

 

 

–

 

 

 

5,632

 

 

 

–

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET (LOSS)/INCOME

 

 

(30,052

)

 

 

(4,646

)

 

 

9,244

 

 

 

(68,344

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to noncontrolling interest

 

 

20

 

 

 

431

 

 

 

34

 

 

 

581

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET (LOSS)/INCOME ATTRIBUTABLE TO BIOTIME, INC.

 

$

(30,032

)

 

$

(4,215

)

 

$

9,278

 

 

$

(67,763

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET (LOSS)/INCOME PER COMMON SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC

 

$

(0.20

)

 

$

(0.03

)

 

$

0.07

 

 

$

(0.53

)

DILUTED

 

$

(0.20

)

 

$

(0.03

)

 

$

0.07

 

 

$

(0.53

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC

 

 

149,582

 

 

 

126,873

 

 

 

141,270

 

 

 

126,871

 

DILUTED

 

 

149,582

 

 

 

126,873

 

 

 

141,270

 

 

 

126,871

 

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.

Management uses these non-GAAP financial measures in the aggregate and on an entity basis to establish budgets and operational goals, to manage BioTime’s business and to evaluate its performance and its programs in clinical development.

BIOTIME, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURE

ADJUSTED OPERATING EXPENSES

 

 

For the Three Months Ended

June 30,

For the Six Months Ended

June 30,

 

2019

(unaudited)

2018

(unaudited)

2019

(unaudited)

2018

(unaudited)

GAAP Operating Expenses – as reported (1)

$

11,493

$

11,585

$

25,114

$

24,256

Stock-based and other noncash compensation expense (2)

 

(762)

 

(1,268)

 

(2,202)

 

(2,587)

Depreciation and amortization expense (2)

 

(764)

 

(861)

 

(1,532)

 

(1,734)

Transaction related costs (3)

 

(935)

 

–

 

(4,405)

 

–

Acquired AgeX in-process research and development expense (4)

 

–

 

–

 

–

 

(800)

Non-GAAP Operating Expenses, as adjusted

$

9,032

$

9,456

$

16,975

$

19,135

 

 

 

 

 

 

 

GAAP Operating Expenses – by entity (1)

 

 

 

 

 

 

 

BioTime and subsidiaries other than AgeX Therapeutics, Inc.(5)

$

11,493

$

9,131

$

25,114

$

18,121

AgeX Therapeutics Inc. and subsidiaries (6)

 

–

 

2,454

 

–

 

6,135

GAAP Operating Expenses – by entity

$

11,493

$

11,585

$

25,114

$

24,256

 

 

 

 

 

 

 

Non-GAAP Operating Expenses – as adjusted, by entity

 

 

 

 

 

 

 

BioTime and subsidiaries other than AgeX Therapeutics, Inc.(5)

$

9,032

$

7,323

$

16,975

$

14,518

AgeX Therapeutics Inc. and subsidiaries (6)

 

–

 

2,133

 

–

 

4,617

Non-GAAP Operating Expenses – as adjusted, by entity

$

9,032

$

9,456

$

16,975

$

19,135

(1)

 

Beginning on August 30, 2018, BioTime deconsolidated AgeX’s results and therefore BioTime’s results will not include AgeX’s results for periods after August 30, 2018.

(2)

 

Noncash charges.

(3)

 

One-time transaction related expenses due to the Asterias acquisition.

(4)

 

AgeX acquired certain in-process research and development in March 2018, considered to be a nonrecurring item. See note (1).

(5)

 

BioTime includes Cell Cure Neurosciences Ltd, ES Cell International Pte. Ltd. and OrthoCyte Corporation.

(6)

 

AgeX includes LifeMap Sciences Inc., LifeMap Sciences Ltd., and ReCyte Therapeutics, Inc. (See note (1)).

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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