Biostage Reports Third Quarter 2020 Financial Results
HOLLISTON, Mass., Nov. 13, 2020 /PRNewswire/ -- Biostage, Inc. (OTCQB: BSTG) ("Biostage" or the "Company"), a clinical-stage biotechnology company developing bioengineered organ implants based on the Company's novel Cellspan(TM) technology for the treatment of esophageal atresia and esophageal disease, today announced its financial results for the three and nine months ended September 30, 2020.
The Company will not hold an earnings conference call at this time. The Company plans to hold a conference call at a future date to discuss its clinical and business plans.
Operating Highlights
Following the approval of Biostage's Investigational New Drug Application from U.S. Food and Drug Administration (FDA) in March of this year, Biostage continued its efforts during the third quarter for clinical planning, including engaging with clinical research organizations as well as other contract research organizations in advance of the start of the clinical trial for the Company's CEI product candidate.
Although the Company continues to make progress towards the start of its first clinical trial, the COVID-19 pandemic has and will continue to affect the Company's operations, including causing delays or difficulties in its ability to finalize plans for the clinical study.
Summary of Financial Results
For the three months ended September 30, 2020, the Company reported a net loss of $0.7 million, ($0.07) per share, compared to a net loss of $2.4 million, ($0.33) per share, for the three months ended September 30, 2019. The $1.7 million year-over-year net loss decrease was due primarily to a $1.1 million decrease in research and development costs, a $0.4 million decrease in general and administrative expenses, and a $0.2 million increase in grant income from the Company's Fast-Track Small Business Innovation Research (SBIR) grant.
For the nine months ended September 30, 2020, the Company reported a net loss of $3.8 million, ($0.45) per share, compared to a net loss of $6.7 million, ($1.02) per share, for the nine months ended September 30, 2019. The $2.9 million year-over-year net loss decrease was due primarily to $2.3 million of lower research and development costs, and a $0.7 million decrease in general and administrative expenses. Slightly offsetting the lower operating expense was a decrease of $0.1 million of grant income recorded from the Company's SBIR grant.
Balance Sheet and Cash
At September 30, 2020, the Company had operating cash on-hand of $2.0 million. The Company also had debt of $0.4 million based on receiving a loan in May 2020 pursuant to the Paycheck Protection Program (PPP), established as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act, although there is no assurance that any portion of the loan will be forgiven.
During the nine-month period ended September 30, 2020, the Company used net cash in operations of $3.0 million and received $4.2 million from financing activities, including approximately $1.1 million of proceeds from private placement transactions that resulted in the issuance of 276,027 shares of the Company's common stock and warrants to investors in private placement transactions and approximately $2.7 million from the issuance of 930,877 shares of its common stock to a group of investors in connection with the exercise of previously issued warrants. The Company also received proceeds of approximately $0.4 million from the aforementioned PPP loan.
About Biostage, Inc.
Biostage is a clinical-stage biotechnology company developing bioengineered organ implants based on the Company's novel Cellspan(TM) technology. The Company's Cellspan technology combines a proprietary, biocompatible scaffold with a patient's own cells to create an esophageal implant that could potentially be used to treat pediatric esophageal atresia and other tubular organ conditions. The Company's novel technology harnesses the body's response and modulates it toward the healing process to regenerate tissue and restore the continuity and integrity of the organ. These implants have the potential to dramatically improve the quality of life for children and adults. At Biostage, we believe the future of medicine has been inside us all along.
For more information, please visit www.biostage.com and connect with the Company on Twitter and LinkedIn.
Biostage, Inc. Social Media
The Company uses its website (www.biostage.com), corporate Twitter account (https://twitter.com/BiostageInc), and LinkedIn page (https://www.linkedin.com/company/biostage-inc) as channels of distribution of information about the Company and its product candidates. Such information may be deemed material information, and the Company may use these channels to comply with its disclosure obligations under Regulation FD. Therefore, investors should monitor Biostage's website and its social media accounts in addition to following its press releases, SEC filings, public conference calls, and webcasts. The social media channels that Biostage intends to use as a means of disclosing the information described above may be updated from time to time.
Forward-Looking Statements
Some of the statements in this press release are "forward-looking" and are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These "forward-looking" statements in this press release include, but are not limited to, statements relating to the viability of the Company's technology; success with respect to any clinical trials and other development and commercialization efforts of the Company's products, which such success may not be achieved on a timely basis or at all; the Company's financing activities; expectations as to regulatory approval of any of the Company's products, including those utilizing its Cellspan(TM) and Cellframe(TM) technology, by the U.S. Food and Drug Administration, the European Medicines Agency or otherwise, which approvals may not be obtained on a timely basis or at all. These statements involve risks and uncertainties that may cause results to differ materially from the statements set forth in this press release, including, among other things, the Company's inability to obtain needed funds in the immediate future; the impact of COVID-19 on the Company's business and operations; the Company's ability to obtain and maintain regulatory approval for its products; plus other factors described under the heading "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 or described in the Company's other public filings. The Company's results may also be affected by factors of which the Company is not currently aware. The forward-looking statements in this press release speak only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to such statements to reflect any change in its expectations with regard thereto or any changes in the events, conditions or circumstances on which any such statement is based.
Investor Relations Contacts
Shunfu Hu
Vice President of Business Development and Operations
774-233-7300
shu@biostage.com
BIOSTAGE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value and share data)
September 30, December 31,
2020 2019
ASSETS
(Unaudited)
Current assets:
Cash $
2,048 $
913
Restricted cash 50 50
Grant receivable 370
Prepaid expenses and other current assets 174 444
Total current assets 2,642 1,407
Property, plant and equipment, net 262 394
Operating lease assets 115 191
Total non-current assets 377 585
Total assets $
3,019 $
1,992
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $
71 $
241
Accrued and other current liabilities 393 438
Current portion of notes payable 224
Warrant liability 27 33
Current portion of operating lease
liability 78 102
Total current liabilities 793 814
Notes payable, net of current portion 180
Operating lease liability, net of current
portion 37 89
Total liabilities $
1,010 $
903
Commitments and contingencies
Stockholders' equity:
Undesignated preferred stock,
$0.01 par value; 984,000
shares authorized and none
issued and outstanding at
September 30, 2020 and
December 31, 2019
$
$
Common stock, par value $0.01 per share,
60,000,000 shares authorized at
September 30, 2020 and December 31,
2019; 9,388,407 and 8,155,555 issued and
outstanding at September 30, 2020 and
December 31, 2019, respectively 94 82
Additional paid-in capital 69,851 65,102
Accumulated deficit (67,936) (64,095)
Total stockholders' equity 2,009 1,089
Total liabilities and
stockholders' equity $
3,019 $
1,992
BIOSTAGE, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
Three Months ended Nine Months ended
September 30, September 30,
2020 2019 2020 2019
---
Revenues
$
$
$
$
Operating expenses:
Research and development 548 1,597 1,727 4,007
Selling, general and administrative 510 902 2,488 3,194
Total operating expenses 1,058 2,499 4,215 7,201
Operating loss (1,058) (2,499) (4,215) (7,201)
Other income (expense):
Grant income 370 136 370 473
Change in fair value of warrant
liability 28 (14) 6 (5)
Interest expense (2)
Total other income (expense), net 398 122 374 468
Net loss $
(660) $
(2,377) $
(3,841) $
(6,733)
===
Basic and diluted net loss
per share $
(0.07) $
(0.33) $
(0.45) $
(1.02)
===
Weighted-average common shares,
basic and diluted 8,855 7,224 8,594 6,611
BIOSTAGE, INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Nine Months Ended
September 30,
2020 2019
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $
(3,841) $
(6,733)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Share-based compensation expense 1,004 1,353
Depreciation 139 165
Change in fair value of warrant
liability (6) 5
Changes in operating assets and
liabilities:
Grant receivable (370) 40
Prepaid expenses and other current
assets 270 375
Accounts payable (170) 110
Accrued and other current
liabilities (45) 69
Net cash used in operating
activities (3,019) (4,616)
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchases of property, plant and
equipment (7) (118)
Net cash used in investing
activities (7) (118)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issuance of common
stock and warrants 1,058 1,277
Proceeds from exercise of warrants 2,741 3,250
Proceeds from notes payable 404
Payments of tax withholdings of
shares repurchased for vested
stock awards (42)
Net cash provided by financing
activities 4,161 4,527
Net decrease in cash and restricted
cash 1,135 (207)
Cash and restricted cash at
beginning of period 963 1,355
Cash and restricted cash at end of
period $
2,098 $
1,148
Supplemental disclosure of non-
cash investing and financing
activities:
Equipment purchases included in
accounts payable
$
Issuance of vested stock $
42
View original content to download multimedia:http://www.prnewswire.com/news-releases/biostage-reports-third-quarter-2020-financial-results-301172522.html
SOURCE Biostage, Inc.
