Cellect Biotechnology : Reports Third Quarter Financial and Operating Results; Recent Developments Position Company to Accelerate Progress in 2021
November 20, 2020 at 08:01 am EST
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Promising Progress on Clinical Development Progress, Collaborations and Partnering
Mutually Ended Discussion on Medical Cannabis Commercial and Merger Agreements
TEL AVIV, Israel, Nov. 20, 2020 (GLOBE NEWSWIRE) -- Cellect Biotechnology Ltd. (NASDAQ: APOP), a developer of innovative technology which enables the functional selection of stem cells, today reported financial and operating results for the third quarter ended September 30, 2020. Subsequent to the end of the third quarter, the Company announced several other key achievements subsequent to the end of the third quarter that position it for continued success in 2021, including clinical and operational objectives:
Initiated its clinical trial in the U.S. The trial is being performed at Washington University School of Medicine in St. Louis, Missouri, which is among the leading medical centers in the U.S. The Principal Investigator for the clinical trial is Zhifu Xiang, M.D., of Washington University. He is an Associate Professor in the Division of Oncology's Bone Marrow Transplantation & Leukemia Section in the Department of Medicine. John Dipersio M.D, Ph.D., will act as co-Principal Investigator for the study. He is the chief of the Division of Oncology in the Department of Medicine at Washington University.
Entered into a collaborative agreement with the Swedish XNK Therapeutics, enabling it to leverage Cellect’s technology in Natural Killer cell therapies. XNK is a clinical stage Swedish company working with the Karolinska Institute.
“In spite of the COVID-19 challenges we expedited our clinical and business development activities as we successfully achieved several objectives,” commented Dr. Shai Yarkoni, Chief Executive Officer. “Specifically, we recently initiated our U.S. clinical trial and entered into a partnership with a clinical stage biotech company that will leverage our functional cell selection technology. I believe these results reflect our steadfast determination and success progressing our clinical trials, which also includes the trial in Israel, combined with the latest collaboration agreement with XNK Therapeutics gives us multiple shots on goal to maximize shareholder value. We believe, based on our internal evaluation and assessment, that each of these opportunities could potentially represent significant revenue streams in the coming years.”
Separately, Cellect and Canndoc Ltd. have mutually agreed to end previously announced commercial and merger discussions. The Company will continue to pursue a partner that can bring value to its shareholders and progress the development of the Company’s platform technology.
The Company's cash and cash equivalents totaled $6.07 million as of September 30, 2020. The Company will use its resources to progress clinical and business development efforts to advance its functional cell selection technology. The Company has sufficient funds to operate in the next 15 months. Reference is made to Note 1. C (Going Concern) in the Interim Consolidated Financial Statements as of June 30th, 2020, which were filed as an exhibit to a Form 6-K dated August 12, 2020.
Third Quarter 2020 Financial Results:
Research and development (R&D) expenses for the third quarter of 2020 were $0.37 million, compared to $0.72 million in the third quarter of 2019. The decrease in the R&D expenses is primarily due to decrease in clinical activities as a result of the COVID-19.
General and administrative (G&A) expenses for the third quarter of 2020 were $0.36 million compared to $0.80 million in the third quarter of 2019. The decrease in G&A expenses was primarily due to the decrease in professional expenses.
Finance income for the third quarter of 2020 were $0.26 million, compared to finance income of $0.12 million in the third quarter of 2019. The change was primarily due to changes related to the fair value of the tradable and non-tradable warrants issued in a prior fundraising.
Net loss for the third quarter of 2020 was $0.47 million, or $0.001 per share compared to $1.40 million, or $0.006 per share in the third quarter of 2019.
* For the convenience of the reader, the amounts above have been translated from NIS into U.S. dollars, at the representative rate of exchange on September 30, 2020 (U.S. $1 = NIS 3.441).
About Cellect Biotechnology Ltd.
Cellect Biotechnology (APOP) has developed a breakthrough technology, for the selection of stem cells from any given tissue, that aims to improve a variety of cell based therapies.
The Company's technology is expected to provide researchers, clinical community, and pharma companies with the tools to rapidly isolate specific cells in quantity and quality allowing cell-based treatments and procedures in a wide variety of applications in regenerative medicine. The Company's current clinical trial is aimed at bone marrow transplantations in cancer treatment.
Forward Looking Statements
This press release contains forward-looking statements about the Company's expectations, beliefs and intentions. Forward-looking statements can be identified by the use of forward-looking words such as "believe", "expect", "intend", "plan", "may", "should", "could", "might", "seek", "target", "will", "project", "forecast", "continue" or "anticipate" or their negatives or variations of these words or other comparable words or by the fact that these statements do not relate strictly to historical matters. For example, forward-looking statements are used in this press release when we discuss Cellect's expectations regarding timing of the commencement of its planned U.S. clinical trial and its plan to reduce operating costs. These forward-looking statements and their implications are based on the current expectations of the management of the Company only and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. In addition, historical results or conclusions from scientific research and clinical studies do not guarantee that future results would suggest similar conclusions or that historical results referred to herein would be interpreted similarly in light of additional research or otherwise. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: the Company's history of losses and needs for additional capital to fund its operations and its inability to obtain additional capital on acceptable terms, or at all; the Company's ability to continue as a going concern; uncertainties of cash flows and inability to meet working capital needs; the Company's ability to obtain regulatory approvals; the Company's ability to obtain favorable pre-clinical and clinical trial results; the Company's technology may not be validated and its methods may not be accepted by the scientific community; difficulties enrolling patients in the Company's clinical trials; the ability to timely source adequate supply of FasL; risks resulting from unforeseen side effects; the Company's ability to establish and maintain strategic partnerships and other corporate collaborations; the scope of protection the Company is able to establish and maintain for intellectual property rights and its ability to operate its business without infringing the intellectual property rights of others; competitive companies, technologies and the Company's industry; unforeseen scientific difficulties may develop with the Company's technology; the Company's ability to retain or attract key employees whose knowledge is essential to the development of its products; and the Company’s ability to pursue any strategic transaction or that any transaction, if pursued, will be completed. Any forward-looking statement in this press release speaks only as of the date of this press release. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws. More detailed information about the risks and uncertainties affecting the Company is contained under the heading "Risk Factors" in Cellect Biotechnology Ltd.'s Annual Report on Form 20-F for the fiscal year ended December 31, 2019 filed with the U.S. Securities and Exchange Commission, or SEC, which is available on the SEC's website, www.sec.gov, and in the Company's periodic filings with the SEC.
EVC Group LLC Michael Polyviou (732) 933-2754 mpolyviou@evcgroup.com
Cellect Biotechnology Ltd Consolidated Statement of Operation
Convenience
translation
Nine months ended
Nine months ended
Three months ended
September 30,
September 30,
September 30,
2020
2020
2019
2020
2019
Unaudited
Unaudited
U.S. dollars
NIS
(In thousands, except share and per share data)
Research and development expenses
1,218
4,190
9,551
1,289
2,465
General and administrative expenses
1,727
5,944
7,832
1,241
2,768
Operating loss
2,945
10,134
17,383
2,530
5,233
Financial expenses (income) due to warrants exercisable into shares
790
2,717
(8,020)
(1,090)
(910)
Other financial expenses, net
40
138
1,369
193
489
Total comprehensive loss
3,775
12,989
10,732
1,633
4,812
Loss per share:
Basic and diluted loss per share
0.010
0.036
0.051
0.004
0.021
Weighted average number of shares outstanding used to compute basic and diluted loss per share
390,949,079
390,949,079
208,771,303
390,949,079
224,087,799
Cellect Biotechnology Ltd. Consolidated Balance Sheet Data
Convenience
translation
September 30,
September 30,
December 31,
2020
2020
2019
Unaudited
Unaudited
Audited
U.S. dollars
NIS
(In thousands, except share and per share data)
CURRENT ASSETS:
Cash and cash equivalents
6,071
20,889
18,106
Other receivables
205
707
469
6,276
21,596
18,575
NON-CURRENT ASSETS:
Restricted cash
96
329
328
Right-of-use assets
238
819
1,035
Other long-term receivables
19
66
94
Property, plant and equipment, net
379
1,304
1,288
732
2,518
2,745
7,008
24,114
21,320
CURRENT LIABILITIES:
Trade payables
71
243
158
Other payables
579
1,994
3,080
Current maturities of lease liability
136
468
396
786
2,705
3,634
NON-CURRENT LIABILITIES:
Warrants to ADS
354
1,218
2,172
Lease liability
112
386
677
466
1,604
2,849
EQUITY:
Ordinary shares of no par value:
Authorized: 500,000,000 shares at December 31, 2019 and September 30, 2020; Issued and outstanding: 390,949,079*) and 224,087,799*) shares as of December 31, 2019 and September 30, 2020, respectively.
-
-
-
Additional Paid in Capital
36,861
126,839
108,598
Share-based payments
4,721
16,244
16,528
Treasury shares
(2,739
)
(9,425
)
(9,425
)
Accumulated deficit
(33,087
)
(113,853
)
(100,864
)
5,756
19,805
14,837
7,008
24,114
21,320
*) Net of 2,641,693 treasury shares of the Company held by the Company.
Cellect Biotechnology Ltd Consolidated Cash Flow Data
Convenience
translation
Nine months ended
Nine months ended
Three months ended
September 30,
September 30,
September 30,
2020
2020
2019
2020
2019
Unaudited
Unaudited
U.S. dollars
NIS
(In thousands)
Cash flows from operating activities:
Total comprehensive loss
(3,775
)
(12,989
)
(10,732
)
(1,633
)
(4,812
)
Adjustments to reconcile net loss to net cash used in operating activities:
Exchange rate difference
(61
)
(211
)
-
(216
)
-
Net financing expenses
14
48
1,087
11
272
Loss (gain) from revaluation of financial assets presented at fair value through profit and loss
-
-
8
-
2
Depreciation
75
256
285
86
93
Changes in fair value of traded and not traded warrants
790
2,718
(9,351
)
(1,089
)
(910
)
Share-based payment
138
476
1,901
(353
)
1,371
Decrease (increase) in other receivables
(61
)
(210
)
146
263
-
Decrease in other payables
(334
)
(1,149
)
(1,855
)
(396
)
(1,138
)
Depreciation of Right of use - Assets under operating lease
79
272
457
89
143
Interest received during the period
16
56
(75
)
21
(29
)
Net cash used in operating activities
(3,119
)
(10,733
)
(18,129
)
(3,217
)
(5,008
)
Cash flows from investing activities:
Restricted deposit, net
-
(1
)
-
1
-
Sales (Purchase) of property, plant, and equipment
(36
)
(124
)
(120
)
(155
)
-
Net cash provided by investing activities
(36
)
(125
)
(120
)
(154
)
-
Cash flows from financing activities:
Exercise of warrants and stock options into shares
1,341
4,615
-
(92
)
-
Leases liabilities
(94
)
(324
)
(422
)
(112
)
(143
)
Issue of share capital and warrants, net of issue costs
2,672
9,194
23,723
-
-
Net cash provided (used) by financing activities
3,919
13,485
23,301
(204
)
(143
)
Exchange differences on balances of cash and cash equivalents
45
156
(1,012
)
195
(243
)
Increase (decrease) in cash and cash equivalents
809
2,783
4,040
(3,380
)
(5,394
)
Balance of cash and cash equivalents at the beginning of the period
5,262
18,106
17,809
24,269
27,243
Balance of cash and cash equivalents at the end of the period
Quoin Pharmaceuticals Ltd, former Cellect Biotechnology Ltd, is an Israel-based specialty pharmaceutical company, focused on developing and commercializing therapeutic products that treat rare and orphan diseases. The Company's first lead product is QRX003, a once daily, topical lotion comprised of a broad-spectrum serine protease inhibitor, formulated with the proprietary Invisicare technology, to treat Netherton Syndrome. The product going to be developed for other rare dermatological diseases including Peeling Skin Syndrome, SAM Syndrome, and Palmoplantar Keratoderma. Quoin is also developing QRX004 as a potential treatment for Dystrophic Epidermolysis Bullosa, and QRX006 as a potential therapy for an, as of yet, undisclosed rare skin disease.