Transactions Provide Additional Cash to Advance Clinical Programs and Process Development while Reducing Fixed Overhead
FREMONT, Calif., Oct. 01, 2018 (GLOBE NEWSWIRE) -- Asterias Biotherapeutics, Inc. (NYSE American: AST), a biotechnology company dedicated to developing cell-based therapeutics to treat neurological conditions associated with demyelination and cellular immunotherapies to treat cancer, today announced it has entered into two new agreements with an affiliate of Novo Nordisk, a multinational pharmaceutical company based in Denmark. The transaction provides the following benefits to Asterias:
- $2 million upfront upon closing of the transactions
- Approximately $1.0 million annual reduction in fixed overhead allowing Asterias to advance its development programs more cost-effectively
- Continued access to manufacturing, lab and administrative space to move its OPC1 and VAC2 development programs forward
- Potential validation of the value of Asterias’ large IP portfolio
Following the transaction, the Company has cash, cash equivalents, and available-for-sale securities that totaled approximately $14.8 million.
“This transaction strengthens our balance sheet by approximately $2 million and reduces our fixed costs by approximately $1 million annually over the next several years while still providing access to important manufacturing, lab, and administrative space that we need in order to continue to advance our clinical programs over the next few years,” commented Michael Mulroy, President and Chief Executive Officer of Asterias. “Additionally, we view the IP license transaction, which relates to our proprietary suspension culture technology for cell-based manufacturing, as validating the potential value of the intellectual property not only for our programs but also for others developing cell therapy technologies. We will continue to evaluate ways to monetize our large IP portfolio without limiting the protection it provides around our own programs.”
Details of the transactions are as follows:
- Novo Nordisk and Asterias have entered into a new sublease for Asterias’ primary business address, whereby, concurrent with Asterias’ termination of its existing lease, Novo Nordisk has become the leaseholder and has subleased certain manufacturing, lab and office space back to the Company through up to December 31, 2021. The facility consists of approximately 44,000 square feet of space and is used primarily as a laboratory and production facility that can be used to manufacture pluripotent stem cells, such as human embryonic stem (hES) cells, and related products under current good manufacturing practices (cGMP). The Company received a total of approximately $1.0 million in connection with this transaction. In addition, the Company is expecting to lower its fixed costs over the next several years by approximately $1.0 million annually.
- Novo Nordisk and Asterias have also entered into an option agreement whereby Novo Nordisk (or its designated U.S. affiliate) can license, on a non-exclusive basis, certain Asterias intellectual property related to culturing pluripotent stem cells, such as hES cells, in suspension (the “Suspension Culture IP”). In exchange for a 24-month period to negotiate the license during which Asterias has agreed to not grant any exclusive licenses inconsistent with the Novo Nordisk option, Asterias will receive a one-time upfront payment of $1.0 million. The Suspension Culture IP covers a patent family with issued and pending claims in the US and other countries regarding a method for culturing hES cells and other pluripotent stem cells in suspension (i.e., not attached to a surface on a cell culture vessel). The claimed method maximizes the production capacity inside a cell culture vessel allowing for bulk proliferation of hES cells in a more efficient and cost-effective manner, which facilitates commercial production of important products for use in human therapies.
About Asterias Biotherapeutics
Asterias Biotherapeutics, Inc. is a biotechnology company dedicated to developing cell-based therapeutics to treat neurological conditions associated with demyelination and cellular immunotherapies to treat cancer. Asterias is presently focused on advancing two clinical-stage programs which have the potential to address areas of high unmet medical need in the fields of neurology and oncology. OPC1 (oligodendrocyte progenitor cells) is currently in a Phase 1/2a dose escalation clinical trial in spinal cord injury. VAC2 (antigen-presenting allogeneic dendritic cells) is an allogeneic cancer immunotherapy. The Company's research partner, Cancer Research UK, has commenced a first-in-human clinical trial of VAC2 in non-small cell lung cancer. Asterias is also sponsoring pre-clinical work in two conditions with a demyelinating component: Multiple Sclerosis and White Matter Stroke, and is evaluating other cancer indications where its immunotherapy platform could provide therapeutic benefit. Additional information about Asterias can be found at www.asteriasbiotherapeutics.com.
About Novo Nordisk
Novo Nordisk is a global healthcare company with 95 years of innovation and leadership in diabetes care. This heritage has given Novo Nordisk experience and capabilities that also enable the company to help people defeat obesity, haemophilia, growth disorders and other serious chronic diseases. Headquartered in Denmark, Novo Nordisk employs approximately 43,100 people in 79 countries and markets its products in more than 170 countries.
Statements pertaining to future financial and/or operating and/or clinical research results, future growth in research, technology, clinical development, and potential opportunities for Asterias, along with other statements about the future expectations, beliefs, goals, plans, or prospects expressed by management constitute forward-looking statements. Any statements that are not historical fact (including, but not limited to statements that contain words such as "will," "believes," "plans," "anticipates," "expects," "estimates") should also be considered to be forward-looking statements. Forward-looking statements involve risks and uncertainties, including, without limitation, risks inherent in the development and/or commercialization of potential products, uncertainty in the results of clinical trials or regulatory approvals, need and ability to obtain future capital, and maintenance of intellectual property rights. Actual results may differ materially from the results anticipated in these forward-looking statements and as such should be evaluated together with the many uncertainties that affect the businesses of Asterias, particularly those mentioned in the cautionary statements found in Asterias' filings with the Securities and Exchange Commission. Asterias disclaims any intent or obligation to update these forward-looking statements.