Athersys Inc. said Thursday it has raised $10.4 million from investors and licensing partners during the third quarter to extend the company's liquidity and stave off a potential bankruptcy filing.
The regenerative medicine developer in Cleveland has been working since 1994 to develop MultiStem, an off-the-shelf therapy derived from adult stem cells, to treat some stroke, acute respiratory distress syndrome (ARDS) and traumatic injury patients.
Over the last 18 months, Athersys has overcome several challenges on the road to taking its stem cell therapy and other technologies to market, including dwindling cash, the loss of a $100 million stock purchase agreement and some disappointing clinical study results from its Japanese development partner, Healios K.K.
Most recently, Athersys shares were delisted from the Nasdaq Stock Market because the company could not meet stock price and market value minimums. And in early October, the company paused enrollment for a pivotal clinical trial using MultiStem to treat ischemic stroke patients after an independent data safety monitoring board concluded that the study's 300-patient target was too few to achieve its primary objective.
About a week later, Athersys said it had hired Outcome Capital to help the company evaluate strategic alternatives, including merger, business combination or investment, as well as a purchase, license or other acquisition of assets.
Also during the third quarter, Athersys:
- Extended its near-term liquidity by inducing investors to exercise warrants — promises to sell shares in the future — which generated more than $3.9 million.
- Agreed with Healios to license the global rights to develop and commercialize MultiStem for the treatment of ARD Syndrome to Healios, receiving a $1.5 million upfront payment along with potential future development milestones and royalties.
- Received a second $1.5 million payment from Healios for purchasing MultiStem doses to support the company's clinical trial in Japan.
- Raised $3.5 million from institutional investors to fund ongoing operations.
- Licensed its animal health assets to Ardent Health for future development milestones and royalties.
Athersys said Thursday its net loss narrowed to $3.8 million, or 15 cents per diluted share, during the third quarter from a net loss of $13.7 million, or $1.15 cents per diluted share, in the year-ago quarter.
Athersys shares (PINK: ATHX) was unchanged at two cents in noontime trading on Thursday. The shares moved to the Pink market of over-the-counter trading among brokers last month.
