HART Reports Q3 Financial Results and Provides Business Update

- Conference call today at 5:00 p.m. ET -

Nov 12, 2015, 16:05 ET from Harvard Apparatus Regenerative Technology, Inc.

HOLLISTON, Mass., Nov. 12, 2015 /PRNewswire/ -- Harvard Apparatus Regenerative Technology, Inc. (HART) (Nasdaq: HART), a biotechnology company developing bioengineered organ implants for life-threatening conditions, today reported third quarter financial results and provided a business update.  Separately this morning, HART reported significant results from research involving its second-generation (Gen2) bioengineered trachea, bronchus and esophagus implants in large animals (Click here for release). HART will host a conference call today at 5:00 pm ET to review its results, progress and outlook (details below).

Business Update

HART has made solid advances towards key objectives during the past several months. 

Most notably, as announced earlier today, the company has made significant advances in the development of its Gen2 bioengineered implants.   HART's Gen2 technology reflects design enhancements to improve the body's response to the implant and to better guide the repair of tissue in the healing process.  The Company's recent animal studies tested all three of its Gen2 implants – esophagus, trachea, and bronchus – demonstrating resolution of the negative inflammatory response observed with the prior generation of the technology.  Clinically significant evidence of tissue and nerve regeneration was observed in the esophageal implant, positioning the esophageal implant as the current lead development priority. 

Importantly, HART's esophageal implant is intended to address a very significant need as a potentially life-saving treatment for patients with esophageal cancer. Each year in the U.S. approximately 17,000 new cases of esophageal cancer are diagnosed, and more than 4,000 are addressed by surgery.  The Company believes that these results underscore the value and potential of its platform technology to treat these patients and pave the way for further studies and its regulatory pathway for human clinical trials.

The company also continued to advance its development partnerships, specifically collaborations with Mayo Clinic and Connecticut Children's Medical Center (CCMC). HART's collaboration with Mayo Clinic focuses on developing solutions for cancer and other life-threatening diseases affecting the esophagus, bronchus and trachea.  HART has initiated its planned confirmatory large-animal studies of its Gen2 implants in collaboration with Mayo Clinic.  The study design has been completed, prerequisite tests are underway and the Company expects the animal surgeries to occur in December. The Company's collaboration with CCMC is focused on developing a solution for a congenital childhood condition, pediatric esophageal atresia, a condition in which a significant or complete separation of a child's esophagus prevents normal eating function. Initial tests with CCMC commenced during the third quarter.

Recent Highlights:

HART CEO, Jim McGorry, commented, "We made significant progress during the quarter. The results of our recent animal research were very encouraging, suggesting we have developed the right combination of product characteristics to restore the function of the esophagus. Our work further confirms the potential of our technology as a platform that can address a number of life-threatening conditions in the esophagus and airways. Leveraging our multi-indication platform approach, HART is well-positioned to advance our pre-clinical and regulatory work over the next year with the goal of initiating human compassionate use procedures and filing an IND with the FDA in 2016."

Third Quarter / Year-To-Date Financial Overview

HART's net loss in the third quarter of 2015 improved to $2.3 million, or $0.19 per basic share, compared to $2.7 million, or $0.34 per basic share, in the third quarter of 2014. The improvement was primarily due to decreases of $0.2 million in payroll-related cost, $0.2 million in recruiting expenses, $0.1 million in legal fees associated with intellectual property, and $0.1 million in other spending, offset by $0.2 million in incremental spending related to animal studies.

For the first nine months of 2015, HART's net loss increased to $9.4 million, or $0.91 per basic share, compared to a net loss of $8.2 million, or $1.05 per basic share, over the corresponding period in 2014. The higher net loss was primarily due to a $1.6 million increase in non-cash stock-based compensation expense, principally related to the resignation of HART's Chief Executive Officer in April 2015, offset by a $0.4 million reduction in other operating costs.

Balance Sheet and Cash

At September 30, 2015, HART had cash on hand of $8.2 million and had no debt. The Company used net cash of $1.8 million for operations and $0.2 million for capital expenditures during Q3 2015. For the first nine months of 2015, HART used net cash of $5.6 million for operations and $0.2 million for capital expenditures, and the Company raised net proceeds of $8.6 million in an equity offering.

Conference Call Information:

Call Dial-In #

877-407-8293 or 201-689-8349

Live Audio Webcast

http://public.viavid.com/index.php?id=117087

Webcast Replay

http://investor.harvardapparatusregen.com/events-calendar 

Call Replay

877-660-6853 or 201-612-7415, Conference ID 13624147, approx. 3 hours after call though Nov. 19, 2015

About HART (www.hartregen.com)

Harvard Apparatus Regenerative Technology (HART) makes bioengineered implants for life-threatening conditions. Our technology platform is to be used to restore function in the esophagus and the trachea and bronchus airways. Our first generation tracheal implant has been used in five human implant procedures approved under compassionate use exemptions, but none of our products are yet approved for marketing by a government regulatory authority. HART is completing further large-animal studies to refine our technology platform with the goal of filing an Investigational New Drug (IND) application with the U.S. Food and Drug Administration to initiate clinical trials for one of our three indications in 2016.

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 HART products by the FDA, EMA, MHRA or otherwise, which expectations or approvals may not be achieved or obtained on a timely basis or at all; success with respect to any collaborations, clinical trials and other development and commercialization efforts of HART products, including those pertaining to the airway or esophagus, which such success may not be achieved or obtained on a timely basis or at all; anticipated future earnings or other financial measures, and the continued availability of a market for HART securities. 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 the our implant products, bioreactors, scaffolds and other devices and product candidates we pursue; our inability to operate effectively as a stand­alone, publicly traded company; 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, 2014 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. Harvard Apparatus Regenerative Technology 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 and Media Contact: David Collins, Tanya Kamatu Catalyst Global 212 924 9800 hart@catalyst-ir.com  

 

 

Exhibit 1

HARVARD APPARATUS REGENERATIVE TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share data)

Three Months ended September 30,

Nine Months ended September 30,

2015

2014

2015

2014

Revenues

$          37

$            2

$        110

$          48

Cost of revenues

18

1

55

25

Gross profit

19

1

55

23

Operating expenses:

Research and development

1,269

1,401

3,504

3,832

Sales and marketing

86

77

276

241

General and administrative

956

1,199

5,686

4,165

Total operating expenses

2,311

2,677

9,466

8,238

Operating loss

(2,292)

(2,676)

(9,411)

(8,215)

Other income (expense), net

-

(4)

(3)

(4)

Loss before income taxes

(2,292)

(2,680)

(9,414)

(8,219)

Income taxes

-

-

-

-

Net loss

$   (2,292)

$   (2,680)

$   (9,414)

$   (8,219)

Basic and diluted net loss per share

$     (0.19)

$     (0.34)

$     (0.91)

$     (1.05)

Weighted average common shares, basic and diluted

11,974

7,851

10,395

7,809

 

 

Exhibit 2

HARVARD APPARATUS REGENERATIVE TECHNOLOGY, INC.

CONSOLIDATED CONDENSED BALANCE SHEET INFORMATION

(unaudited, in thousands)

September 30,

December 31,

2015

2014

 ASSETS

 Cash

$            8,198

$            5,272

 Other current assets

285

556

 Property, plant and equipment, net

1,202

1,376

 Total assets

$            9,685

$            7,204

 LIABILITIES AND STOCKHOLDERS' EQUITY

 Total liabilities

$               331

$               710

 Total stockholders' equity

9,354

6,494

 Total liabilities and stockholders' equity

$            9,685

$            7,204

 

 

Exhibit 3

HARVARD APPARATUS REGENERATIVE TECHNOLOGY, INC.

CONSOLIDATED CONDENSED CASH FLOW INFORMATION

(unaudited, in thousands)

Nine Months ended September 30,

2015

2014

 Cash flows used in operating activities:

 Net loss:

$      (9,414)

$     (8,219)

 Non-cash items included in net loss

3,959

2,182

 Changes in assets and liabilities

(107)

366

 Net cash used in operating activities

(5,562)

(5,671)

 Cash flows used in investing activities:

 Net cash used in investing activities

(175)

(1,033)

 Cash flows from financing activities:

 Proceeds from issuance of common and convertible preferred stock, net

8,671

418

 Net cash provided by financing activities

8,671

418

 Effect of exchange rate changes on cash

(8)

-

 Net increase (decrease) in cash

2,926

(6,286)

 Cash at the beginning of the period

5,272

14,008

 Cash at the end of the period

$        8,198

$       7,722

 

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SOURCE Harvard Apparatus Regenerative Technology, Inc.