Equity investment and binding letter of
intent outlines expansion of Japan collaboration, including
exclusive option for China development and
commercialization
Athersys, Inc. (NASDAQ:ATHX) and HEALIOS K.K. (“Healios”) announced
today their intent to significantly expand their existing
development and commercialization collaboration. As part of
this expansion, Healios is making an approximate $21 million equity
investment at $1.76 per share, will deposit $10 million into
escrow, and has entered into a letter of intent (“LOI”) with
Athersys to expand Healios’ license to develop MultiStem® products
for indications to include acute respiratory distress syndrome
(“ARDS”), trauma in Japan and the use of MultiStem products in
conjunction with organ bud technology and certain ophthalmological
indications globally. Healios will also obtain an exclusive
option to a license to develop and commercialize MultiStem products
for ischemic stroke, ARDS and trauma in China, and obtain certain
other rights. In exchange, Athersys would receive committed
payments of $35 million, as well as additional payments, including
milestones and royalties. If Healios elects to exercise its
option for a license in China, Healios would pay Athersys license
fees, milestone payments and escalating royalties or profit-sharing
for each indication.
In addition to its purchase of 12 million shares
of common stock as part of its equity investment, Healios will
receive a warrant that will give it the right, but not the
obligation, to purchase additional shares of Athersys common stock
up until September 1, 2020, subject to certain conditions and
limitations, including a fixed exercise price with respect to
certain of the warrant shares and a floating exercise price with
respect to certain of the warrant shares that will be based on the
greater of a minimum floor price and the-then current market price,
as well as a cap on the total number of shares Healios may own
during the term of the warrant of 19.9% of Athersys’ outstanding
common stock. The warrant becomes exercisable if the
collaboration expansion becomes effective.
The parties will work under the terms of the LOI
to execute the agreements necessary to expand the existing
collaboration, which is expected to be completed by April 30,
2018. As part of Healios’ equity investment, Dr. Hardy
Kagimoto, CEO of Healios, would be nominated for election to the
Athersys Board of Directors at the next scheduled annual
stockholders’ meeting in June 2018.
In conjunction with the execution of the LOI and
in addition to the equity investment, under the binding portion of
the LOI, Healios will fund $10 million into escrow. That
amount will be paid to Athersys as either (1) the initial portion
of the $35 million in payments associated with the execution of the
expansion agreements described above or (2) if such agreements
described above are not executed on or before April 30, 2018,
payment for expanding the scope of the current Japan license to
include ARDS, ophthalmological indications and organ bud. The
expansion of the collaboration between these existing partners is
expected to benefit both parties through the consolidation of
development and commercialization of important indications in the
key Asian markets of Japan and China, and provides Athersys with
capital to support its development activities, including its
pivotal Phase 3 stroke study, MASTERS-2, in North America and
Europe.
In conjunction with the collaboration expansion,
and in addition to the approximate $21 million equity investment
and the $10 million payment from escrow, Healios will pay an
additional $25 million in license/option fees, in
installments. This $25 million payment obligation cannot be
terminated or otherwise abrogated over time, and though the
payments are non-refundable, they can be used as credit against
certain milestone payments due under the MultiStem license for
stroke, ARDS or trauma in Japan.
“This is a significant opportunity for both
Healios and Athersys,” commented Dr. Gil Van Bokkelen, CEO of
Athersys. “It provides for a meaningful expansion of the existing
partnership, providing a much broader scope of rights for Healios,
while providing Athersys with substantial additional capital and a
committed development partner in key areas.”
“Through this meaningful expansion of our
relationship with Athersys, we aim to leverage MultiStem to
accelerate the practical application of regenerative medicine
across a variety of unmet patient needs. We are delighted to be
working even more closely with them in this regard,” commented Dr.
Hardy Kagimoto, CEO of Healios.
Stroke Program Update: TREASURE and
MASTER-2 Ischemic Stroke Studies
In Japan, Healios is conducting the TREASURE
study, evaluating MultiStem therapy for ischemic stroke, and has
received a priority review designation under Sakigake from Japan’s
Pharmaceutical and Medical Devices Agency. The TREASURE study,
designed to enroll 220 subjects, is being conducted at hospitals in
Japan that have extensive experience at providing care for stroke
victims. Based on the experience from our B01-02 study,
subjects enrolled in the trial receive either a single dose of
MultiStem or placebo, administered within 18 to 36 hours of the
occurrence of the stroke, in addition to standard of care.
The study is evaluating patient recovery through approximately 90
days following initial treatment based on Excellent Outcome (mRS
≤1, NIHSS ≤1, and Barthel Index ≥95) and other neurological,
functional and clinical endpoints.
Athersys is preparing to launch in the North
America and Europe its Phase 3, registration study, entitled
MASTERS-2, which has received special protocol assessment, Fast
Track and RMAT designations from the FDA and a Final Scientific
Advice positive opinion from the European Medicines Agency.
The MASTERS-2 clinical trial will be a randomized, double-blind,
placebo-controlled clinical trial designed to enroll 300 patients
who have suffered moderate to moderate-severe ischemic
stroke. The enrolled subjects will receive either a single
intravenous dose of MultiStem cell therapy or placebo, administered
within 18 to 36 hours of the occurrence of the stroke, in addition
to the standard of care. The primary endpoint will evaluate
disability using modified Rankin Scale (mRS) scores at three
months, comparing the distribution, or the “shift”, between the
MultiStem treatment and placebo groups. The mRS shift analysis
considers disability across the full spectrum, enabling recognition
of large and small improvements in disability and differences in
mortality and other serious outcomes, among strokes of different
severities. The study will also assess Excellent Outcome at three
months and one year as key secondary endpoints. Additionally,
the study will consider other measures of functional recovery,
biomarker data and clinical outcomes, including hospitalization,
mortality and life-threatening adverse events, and post-stroke
complications such as infection.
About Ischemic Stroke
Stroke represents an area where the clinical
need is particularly significant, since it is a leading cause of
death and serious disability worldwide, with a substantially
impaired quality of life for many stroke victims. Currently, there
are nearly 17 million people that suffer a stroke globally and, on
average, someone in the United States has a stroke every 40
seconds. Ischemic strokes, which represent the most common
form of stroke, are caused by a blockage of blood flow in the brain
that cuts off the supply of oxygen and nutrients and can result in
long-term or permanent disability due to neurological damage.
Unfortunately, current therapeutic options for ischemic stroke
victims are limited, since the only available therapies,
administration of the clot dissolving agent tPA, or “thrombolytic,”
or surgical intervention using mechanical reperfusion to remove the
clot, must be conducted within several hours of the occurrence of
the stroke. As a consequence of this limited time window, only a
small percentage of stroke victims are treated with the currently
available therapy—most simply receive supportive or “palliative”
care. The long-term costs of stroke are substantial, with many
patients requiring extended hospitalization, extended physical
therapy or rehabilitation (for those patients that are capable of
entering such programs), and many require long-term institutional
or family care.
About
MultiStem®
MultiStem® cell therapy is a patented
regenerative medicine product in clinical development that has
shown the ability to promote tissue repair and healing in a variety
of ways, such as through the production of therapeutic factors
produced in response to signals of inflammation and tissue
damage. MultiStem therapy’s potential for multidimensional
therapeutic impact distinguishes it from traditional
biopharmaceutical therapies focused on a single mechanism of
benefit. The therapy represents a unique "off-the-shelf" stem cell
product that can be manufactured in a scalable manner, may be
stored for years in frozen form, and is administered without tissue
matching or the need for immune suppression. Based upon its
efficacy profile, its novel mechanisms of action, and a favorable
and consistent safety profile demonstrated in clinical studies,
MultiStem therapy could provide a meaningful benefit to patients,
including those suffering from serious diseases and conditions with
unmet medical need.
About Athersys
Athersys is an international biotechnology
company engaged in the development of therapeutic products designed
to extend and enhance the quality of human life. The Company is
developing its MultiStem® cell therapy product, a patented,
adult-derived "off-the-shelf" stem cell product, initially for
disease indications in the neurological, cardiovascular, and
inflammatory and immune disease areas, and has several ongoing
clinical trials evaluating this potential regenerative medicine
product. Athersys has forged strategic partnerships and a broad
network of collaborations to further advance MultiStem cell therapy
toward commercialization. More information is available at
www.athersys.com. Follow Athersys on Twitter at
www.twitter.com/athersys.
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 that involve risks and uncertainties. These
forward-looking statements relate to, among other things, the
expected timetable for development of our product candidates, our
growth strategy, and our future financial performance, including
our operations, economic performance, financial condition,
prospects, and other future events. We have attempted to identify
forward-looking statements by using such words as "anticipates,"
"believes," "can," "continue," "could," "estimates," "expects,"
"intends," "may," "plans," "potential," "should," “suggest,”
"will," or other similar expressions. These forward-looking
statements are only predictions and are largely based on our
current expectations. A number of known and unknown risks,
uncertainties, and other factors could affect the accuracy of these
statements. Some of the more significant known risks that we face
that could cause actual results to differ materially from those
implied by forward-looking statements are the risks and
uncertainties inherent in the process of discovering, developing,
and commercializing products that are safe and effective for use as
human therapeutics, such as the uncertainty regarding regulatory
approval and market acceptance of our product candidates and our
ability to generate revenues, including MultiStem for the treatment
of ischemic stroke, acute myocardial infarction, spinal cord injury
and acute respiratory distress syndrome and other disease
indications, including graft-versus-host disease. These risks may
cause our actual results, levels of activity, performance, or
achievements to differ materially from any future results, levels
of activity, performance, or achievements expressed or implied by
these forward-looking statements. Other important factors to
consider in evaluating our forward-looking statements include: our
ability to work with Healios under the terms of the letter of
intent described elsewhere in the press release to successfully
negotiate the terms of and execute, the agreements necessary to
expand the existing collaboration; the success of our collaboration
with Healios and others, including our ability to reach milestones
and receive milestone payments, and whether any products are
successfully developed and sold so that we earn royalty payments;
our possible inability to realize commercially valuable discoveries
in our collaborations with pharmaceutical and other biotechnology
companies; our collaborators' ability to continue to fulfill their
obligations under the terms of our collaboration agreements; the
success of our efforts to enter into new strategic partnerships or
collaborations and advance our programs; our ability to raise
additional capital; results from our MultiStem clinical trials,
including the MASTERS-2 Phase 3 clinical trial and the TREASURE
trial in Japan; the possibility of delays in, adverse results of,
and excessive costs of the development process; our ability to
successfully initiate and complete clinical trials within the
expected time frame or at all; changes in external market factors;
changes in our industry's overall performance; changes in our
business strategy; our ability to protect our intellectual property
portfolio; our possible inability to execute our strategy due to
changes in our industry or the economy generally; changes in
productivity and reliability of suppliers; and the success of our
competitors and the emergence of new competitors. You should not
place undue reliance on forward-looking statements contained in
this press release, and we undertake no obligation to publicly
update forward-looking statements, whether as a result of new
information, future events or otherwise.
ATHX-G
Contact:
William (B.J.)
Lehmann
President and Chief Operating
Officer
Tel: (216) 431-9900bjlehmann@athersys.com
Karen Hunady Corporate Communications &
Investor RelationsTel: (216) 431-9900khunady@athersys.com
David Schull Russo Partners,
LLCTel: (212) 845-4271 or (858)
717-2310David.schull@russopartnersllc.com
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