Cellect Biotechnology Reports First Quarter 2020 Financial and Operating Results; Continues to Demonstrate Significant Progress Despite Adjusted Operations Due to COVID-19
TEL AVIV, Israel, May 21, 2020 /PRNewswire/ -- Cellect Biotechnology Ltd. (NASDAQ: APOP), a developer of innovative technology which enables the functional selection of stem cells, today reported financial and operating results for the first quarter ended March 31, 2020 and provided an update on recent operating developments, including the status of the previously announced LOIs with Canndoc Ltd, a wholly owned subsidiary of publicly-traded Intercure Ltd. (TASE: INCR).
First Quarter and Recent Operating Milestones
-- Entered into an international consortium of companies to examine the
therapeutic effects of stem cells on the reduction of pulmonary
manifestations caused by COVID-19. The cytokine storm typical to
COVID-19-related Acute Respiratory Distress Syndrome (ARDS) is similar
in mechanism to the GvHD, and therefore Cellect may use its clinical
data to expedite the development of therapy for COVID-19. This
collaboration is in the early phase and the results will be published
following the conclusion of the preliminary studies.
-- Expanded its thought leadership as a featured article highlighting the
safety and tolerability of ApoGraft was accepted for publication in Bone
Marrow Transplantation, a high quality, peer-reviewed journal published
monthly by Nature Research. The results highlighted in the article were
included, along with other data, in the Company's Investigational New
Drug (IND), which was accepted and approved by the U.S. Food and Drug
Administration (FDA) in December 2019.
-- Strengthened its intellectual property (IP) portfolio in multiple
jurisdictions: China, Europe, Australia, Canada and Israel. The Company
owns 64 patents in 9 patent families, with 45 already granted/allowed
patents, 17 pending/in examination and 2 PCT applications, and plans to
continue expanding and protecting its global IP to create further
barriers to entry.
-- Bolstered its balance through a registered direct offering of $3.0
million, before deducting fees and other estimated offering expenses.
"Although the COVID-19 pandemic has delayed the initiation of our first U.S. trial (for which we have already received the IND approval from the U.S. Food and Drug Administration and completed the technology transfer to our academic partner - Washington University) and slowed the recruitment of the final patient in the Israel trial, we remain bullish on Cellect's long-term business prospects," commented Dr. Shai Yarkoni, Chief Executive Officer. "In addition to these clinical opportunities, we are making considerable progress elsewhere to advance our core capabilities and seeding potentially sizeable revenue opportunities."
While the Company is continuing to conduct its due diligence and negotiate a definitive agreement with Canndoc Ltd., the business disruption caused by the ongoing COVID-19 pandemic is delaying the execution and completion of certain other closing conditions, such as delivery of a fairness opinion and approval of the IMCA (Israeli Medical Cannabis Agency). Upon the closing of the merger, the Company and Canndoc Ltd. intend to fulfill all of the requirements to ensure the Company's ADRs and warrants continue trading on the Nasdaq Stock Market (Nasdaq). The proposed merger is also subject to approval of the Company's Board and shareholders and other customary closing conditions.
The Company's cash and cash equivalents totaled $7.08 million as of March 31, 2020. As previously disclosed on May 12, 2020, several investors exercised certain warrants that were issued in February 2019 for cash proceeds of approximately $1.5 million.
First Quarter 2020 Financial Results:
-- Research and development (R&D) expenses for the first quarter of 2020
were $0.43 million, compared to $0.72 million in the fourth quarter of
2019 and $0.99 million in the first quarter of 2019. The decrease in the
first quarter of 2020 as compared to the fourth quarter of 2019 was
primarily due expenses related to our Fas Ligand manufacturing campaign
finalized in the fourth quarter of 2019.
-- General and administrative (G&A) expenses for the first quarter of 2020
were $0.73 million, compared to $0.67 million in the fourth quarter of
2019 and $0.66 million in the first quarter of 2019. The increase in the
first quarter of 2020 as compared to the fourth quarter of 2019 was
primarily due to increase in expenses related to provision for bonuses
for 2019 payable in the second quarter of 2020.
-- Finance income for the first quarter of 2020 was $0.44 million, compared
to finance expenses of $0.32 million in the fourth quarter of 2019. The
change was primarily due to changes related to the fair value of the
tradable and non-tradable warrants issued in a prior fundraising.
-- Net loss for the first quarter of 2020 was $0.72 million, or $0.002 per
share, compared to $1.70 million, or $0.008 per share, in the fourth
quarter of 2019, and $1.43 million, or $0.008 per share, in the first
quarter of 2019.
* For the convenience of the reader, the amounts above have been translated from NIS into U.S. dollars, at the representative rate of exchange on March 31, 2020 (U.S. $1 = NIS 3.565).
About Cellect Biotechnology Ltd.
Cellect Biotechnology (APOP) has developed a breakthrough technology, for the selection of stem cells from any given tissue, that aims to improve a variety of stem cell-based therapies.
The Company's technology is expected to provide researchers, clinical community and pharma companies with the tools to rapidly isolate stem cells in quantity and quality allowing stem cell-based treatments and procedures in a wide variety of applications in regenerative medicine. The Company's current clinical trial is aimed at bone marrow transplantations in cancer treatment.
Forward Looking Statements
This press release contains forward-looking statements about the Company's expectations, beliefs and intentions. Forward-looking statements can be identified by the use of forward-looking words such as "believe", "expect", "intend", "plan", "may", "should", "could", "might", "seek", "target", "will", "project", "forecast", "continue" or "anticipate" or their negatives or variations of these words or other comparable words or by the fact that these statements do not relate strictly to historical matters. For example, forward-looking statements are used in this press release when we discuss Cellect's expectations regarding timing of the commencement of its planned U.S. clinical trial and its plan to reduce operating costs. These forward-looking statements and their implications are based on the current expectations of the management of the Company only and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. In addition, historical results or conclusions from scientific research and clinical studies do not guarantee that future results would suggest similar conclusions or that historical results referred to herein would be interpreted similarly in light of additional research or otherwise. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: the Company's history of losses and needs for additional capital to fund its operations and its inability to obtain additional capital on acceptable terms, or at all; the Company's ability to continue as a going concern; uncertainties of cash flows and inability to meet working capital needs; the Company's ability to obtain regulatory approvals; the Company's ability to obtain favorable pre-clinical and clinical trial results; the Company's technology may not be validated and its methods may not be accepted by the scientific community; difficulties enrolling patients in the Company's clinical trials; the ability to timely source adequate supply of FasL; risks resulting from unforeseen side effects; the Company's ability to establish and maintain strategic partnerships and other corporate collaborations; the scope of protection the Company is able to establish and maintain for intellectual property rights and its ability to operate its business without infringing the intellectual property rights of others; competitive companies, technologies and the Company's industry; unforeseen scientific difficulties may develop with the Company's technology; the Company's ability to retain or attract key employees whose knowledge is essential to the development of its products; and the Company's ability to pursue any strategic transaction or that any transaction, if pursued, will be completed. Any forward-looking statement in this press release speaks only as of the date of this press release. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws. More detailed information about the risks and uncertainties affecting the Company is contained under the heading "Risk Factors" in Cellect Biotechnology Ltd.'s Annual Report on Form 20-F for the fiscal year ended December 31, 2019 filed with the U.S. Securities and Exchange Commission, or SEC, which is available on the SEC's website, www.sec.gov, and in the Company's periodic filings with the SEC.
Contact
Cellect Biotechnology Ltd.
Eyal Leibovitz, Chief Financial Officer
www.cellect.co
+972-9-974-1444
Or
EVC Group LLC
Michael Polyviou
(732) 933-2754
mpolyviou@evcgroup.com
Cellect Biotechnology Ltd.
Consolidated Statement of Operation
Convenience
translation
Three months Three months ended
ended
March 31,
March 31,
2020 2020 2019
Unaudited
Unaudited
U.S. dollars
NIS
Research and development
expenses, net 431 1,537 3,523
General and administrative
expenses 726 2,587 2,355
Total operating loss 1,157 4,124 5,878
Financial expenses (income) due
to warrants exercisable into
ADS (250) (890) (1,192)
Other financial expenses
(income), net (191) (682) 418
Total comprehensive loss 716 2,552 5,104
Loss per share and ADS:
Basic and diluted loss per share 0.002 0.008 0.029
Weighted average number of
shares outstanding used to
compute basic and diluted loss
per share 324,311,822 324,311,822 177,277,833
Cellect Biotechnology Ltd.
Consolidated Balance Sheet Data
Convenience
translation
March 31, March 31,
December 31,
2020 2020 2019
Unaudited Unaudited
Audited
U.S. dollars
NIS
(In thousands, except share and per
share data)
CURRENT ASSETS:
Cash and cash equivalents 7,077 25,231 18,106
Other receivables 115 409 469
7,192 25,640 18,575
NON-CURRENT ASSETS:
Restricted cash 93 332 328
Right of use - Assets under operating lease 280 1,000 1,035
Other long-term receivables 24 85 94
Property, plant and equipment, net 328 1,168 1,288
725 2,585 2,745
7,917 28,225 21,320
CURRENT LIABILITIES:
Trade payables 240 855 158
Other payables 892 3,181 3,080
Current maturities of lease liability 118 419 396
1,250 4,455 3,634
NON-CURRENT LIABILITIES:
Warrants to ADS 360 1,282 2,172
Lease liability 175 625 677
535 1,907 2,849
EQUITY:
Ordinary shares of no par value: -
Authorized: 500,000,000 shares at December 31, 2019
and March 31, 2020; Issued and outstanding: 224,087,799*) and 337,533,079*) shares as of
December 31, 2019 and March 31, 2020, respectively.
Additional Paid in Capital 33,363 118,939 108,598
Share-based payments 4,422 15,765 16,528
Treasury shares (2,644) (9,425) (9,425)
Accumulated deficit (29,009) (103,416) (100,864)
6,132 21,863 14,837
7,917 28,225 21,320
*) Net of 2,641,693 treasury shares of the Company held by the Company.
Cellect Biotechnology Ltd.
Consolidated Cash Flow Data
Convenience
translation
Three months Three months ended
ended
March 31, March 31,
2020 2020 2019
Unaudited Unaudited
U.S. dollars NIS
Cash flows from operating activities:
---
Total comprehensive loss (716) (2,552) (5,104)
Adjustments to reconcile net loss to net cash used in operating activities:
Exchange rate difference (195) (695) 372
Loss from revaluation of financial assets presented at fair value through profit and loss 4
Depreciation 24 86 98
Share-based payment 101 361 (215)
Changes in fair value of traded and not traded warrants to ADS (250) (890) (2,546)
Finance expenses 5 19
Interest received 3 12
Decrease (increase) in other receivables 20 71 70
Depreciation in right of use assets 26 91 114
Increase (decrease) in other payables 244 868 15
Net cash used in operating activities (738) (2,629) (7,192)
Cash flows from investing activities:
---
Restricted deposit (1) (4)
Marketable securities measured at fair value through profit and loss, net
Sales (Purchase) of property, plant and equipment 9 34 (120)
Net cash provided by investing activities 8 30 (120)
Cash flows from financing activities:
---
Exercise of warrants and stock options into shares 7 23
Issue of share capital and warrants, net of issue costs 2,559 9,123 24,837
Interest paid 37
Repayment of lease liability (29) (104) (137)
Net cash provided by financing activities 2,537 9,042 24,737
Exchange differences on balances of cash and cash equivalents 191 682 (372)
Increase (decrease) in cash and cash equivalents 1,998 7,125 17,053
Balance of cash and cash equivalents at the beginning of the period 18,106 17,809
5,079
Balance of cash and cash equivalents at the end of the period 25,231 34,862
7,077
SOURCE Cellect Biotechnology Ltd.
