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Bioengineered Organ Implant Developer Biostage Reports Q1 2016 Results and Hosts Research Update Call Today at 9:00 am ET

HOLLISTON, Mass., May 12, 2016 /PRNewswire/ -- Biostage, Inc. (Nasdaq: BSTG), today announced its financial results for its first quarter ended March 31, 2016. Biostage is hosting a conference call today at 9:00 am ET to review its research data and its Q1 results (details below).

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Biostage is a biotechnology company developing bioengineered organ implants based on the company's new Cellframe technology which combines a proprietary biocompatible scaffold with a patient's own stem cells to create Cellspan organ implants. Cellspan implants are being developed to treat life-threatening conditions of the esophagus, bronchus or trachea with the hope of dramatically improving the treatment paradigm for patients. Based on its preclinical data, Biostage has selected life-threatening conditions of the esophagus as the initial clinical application of its technology.

Q1 2016 Financial Highlights:

  • Net loss for the first quarter ended March 31, 2016 was $2.5 million, or $0.18 per basic share, compared to $2.6 million, or $0.39 per basic share, in Q1 2015.
  • Research and development expense increased $0.2 million to $1.4 million for the three months ended March 31, 2016 compared to $1.2 million for the three months ended March 31, 2015 due primarily to increased spending on outsourced preclinical studies of $0.3 million and laboratory costs of $0.1 million, partially offset by a decrease in compensation-related costs of $0.2 million
  • Selling, general and administrative expense decreased $0.3 million to $1.1 million for the three months ended March 31, 2016 compared with $1.4 million for the three months ended March 31, 2015 due to a decrease in compensation-related costs related primarily to the departure of the Company's former Chairman and CEO in April 2015.
  • Cash used in operating activities increased to $2.5 million in the first quarter of 2016 as compared to $1.7 million in the first quarter of 2015.  Cash on hand at March 31, 2016 was $4.8 million.  The Company continues to have in place its $15 million, 30 month Stock Purchase Agreement with Aspire Capital Fund, LLC. (Aspire Announcement).

Conference Call Details:
Biostage is hosting a conference call today at 9:00 am ET (details below) to discuss the financial results for the quarter ended March 31, 2016 as well as review research results announced today  in a separate press release.

Management: 

CEO Jim McGorry, CMO Saverio La Francesca, M.D. and CFO


Tom McNaughton

Date and Time:

Today, Thursday, May 12, 2016 at 9:00 am (ET)

Call Dial In #:

877-407-8293 (U.S) or 201-689-8349 (Int'l.)

Live webcast/replay:

http://ir.biostage.com/Q1researchupdate

Telephone replay:

877-660-6853 (U.S.) or 201-612-7415 (Int'l.), Access ID # 13636819

About Biostage: (www.biostage.com)
Biostage is a biotechnology company developing bioengineered organ implants based on the company's new Cellframe technology which combines a proprietary biocompatible scaffold with a patient's own stem cells to create Cellspan organ implants. Cellspan implants are being developed to treat life-threatening conditions of the esophagus, bronchus or trachea with the hope of dramatically improving the treatment paradigm for patients. Based on its preclinical data, Biostage has selected life-threatening conditions of the esophagus as the initial clinical application of its technology.

Cellspan implants are currently being advanced and tested in a collaborative preclinical study. This testing is intended to expand the base of preclinical data in support of Biostage's goal of filing an Investigational New Drug (IND) application with the U.S. FDA in late 2016. The IND will seek approval to initiate clinical trials for its esophageal implants in humans.

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 development expectations and regulatory approval of any of our products, including those utilizing our Cellframe technology, by the FDA, EMA, MHRA or otherwise, which expectations or approvals may not be achieved or obtained on a timely basis or at all; or success with respect to any collaborations, clinical trials and other development and commercialization efforts of our products, including those utilizing our Cellframe technology,  which such success may not be achieved or 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, our ability to obtain and maintain regulatory approval for our products; plus other factors described under the heading "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 or described in our other public filings. Our results may also be affected by factors of which we are not currently aware. The forward-looking statements in this press release speak only as of the date of this press release. Biostage 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 Contact:
Tom McNaughton                                              
Chief Financial Officer                                       
774-233-7321
tmcnaughton@biostage.com

or
David Collins, Bill Jones, Helen Sun
Catalyst Global LLC
212-924-9800
biostage@catalyst-ir.com                                  

 

EXHIBIT 1


BIOSTAGE, INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value and share data)




March 31,
2016

December 31,
2015

Assets



Current Assets:



Cash

$             4,848

$          7,456

Accounts receivable

18

21

Inventory

79

75

Prepaid expenses

485

330

Total current assets

5,430

7,882

Property, plant and equipment, net

1,135

1,074

Total assets

$             6,565

$          8,956




Liabilities and stockholders' equity



Current liabilities:



Accounts payable

$                264

$            357

Accrued and other current liabilities

124

297

Total current liabilities

388

654

Total liabilities

$                388

$            654

Stockholders' equity:



 Preferred stock, $0.01 par value; 1,000,000 shares authorized; none issued and outstanding

 Series B convertible preferred stock, $0.01 par value; 1,000,000 shares authorized; 695,857 issued and none outstanding

  Common stock, $0.01 par value; 30,000,000 shares authorized and 14,110,540 and 14,101,395 shares issued and outstanding

141

141

  Additional paid-in capital

33,255

32,908

  Accumulated deficit

(27,211 )

(24,739)

  Accumulated other comprehensive loss

(8)

(8)

Total stockholders' equity

6,177

8,302

Total liabilities and stockholders' equity

$             6,565

$          8,956




 

 

EXHIBIT 2


BIOSTAGE, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)





Three Months Ended
March 31,


2016

2015

Revenues

$             —

$             —

Cost of revenues

Gross profit

$             —

$             —




Operating expenses:



Research and development

1,378

1,242

Selling, general and administrative

1,094

1,378

Total operating expenses

2,472

2,620

Operating loss

(2,472)

(2,620)

Other expense, net

(3)

Loss before income taxes

(2,472)

(2,623)

Income taxes

Net loss

$          (2,472)

$          (2,623)

Basic and diluted net loss per share

$             (0.18)

$             (0.39)

Weighted-average common shares, basic and diluted

14,108

8,873




Comprehensive loss:



   Net loss

$         (2,472)

$        (2,623)

   Foreign currency translation adjustment

(9)

   Comprehensive loss

$        (2,472)

$        (2,632)




 

 

EXHIBIT 3


BIOSTAGE, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)





Three Months Ended
March 31,


2016

2015

Cash flows from operating activities



Net loss

$      (2,472)

$    (2,623)

Adjustments to reconcile net loss to net cash flows used in operating activities:



Share-based compensation expense

347

738

Depreciation

111

112

Changes in operating assets and liabilities:



Related party receivables, net

21

Accounts receivable

3

Non-trade receivables

5

Inventories

(4)

(5)

Prepaid expenses

(155)

48

Accounts payable

(137)

(109)

Accrued and other current liabilities

(173)

126

Net cash used in operating activities

(2,480)

(1,687)

Cash flows from investing activities



Additions to property and equipment

(128)

(6)

Net cash used in investing activities

(128)

(6)

Cash flows from financing activities



Proceeds from issuance of convertible preferred stock, net

5,357

Proceeds from issuance of common stock, net

3,237

Net cash provided by financing activities

8,594

Effect of foreign exchange rates on cash


(9)

Net (decrease) increase in cash

(2,608)

6,892

Cash at beginning of period

7,456

5,272

Cash at end of period

$       4,848

$   12,164




Supplemental non-cash investing activities:



   Equipment purchases included in accounts payable

$             44

$           —

 

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SOURCE Biostage, Inc.


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