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Athersys, Inc (NASDAQ: ATHX) announced (with 8-K here) it has reached an agreement with a supplier critical to "the scale-up and manufacturing of clinical and commercial grade MultiStem® using Athersys’ bioreactor production processes." Further to the agreement, Athersys will pay the supplier $11.8mn in monthly cash payments of $250,000 each, beginning October 2023 and will issue the supplier a three year, $15.0mn convertible note (interest of 10.0% and convertible after 18 months into Athersys common stock at $1.30 per share).
Commenting on the agreement, Dan Camardo, Chief Executive Officer of Athersys, provides: "I’m delighted to announce the successful restructuring of our agreement with our supplier. This liability represented more than 80% of our accounts payable balance and was largely driven by commitments made prior to the release of the TREASURE trial results*….This new agreement reflects Athersys’ post-restructuring development and manufacturing needs, which prioritize MultiStem for the treatment of ischemic stroke."
* On May 20th, the Debtors issued a press release on the TREASURE trial, noting: "today…partner, HEALIOS K.K. (Healios), has reported topline results for its Japan ischemic stroke study, TREASURE. The randomized, double-blind placebo-controlled study included patients with moderate to moderate-severe ischemic stroke (baseline NIHSS 8-20) with administration of a single dose of MultiStem® cells…"
The agreement buys some breathing room, but the biotech's future remains stapled to its ability "to further advance MultiStem cell therapy toward commercialization," with cost cutting measures still leaving it with a net loss (albeit cut in three) for the first quarter of 2023 of $7.8mn (see Q1 2023 press release).
In a 10-K filed on April 3, 2023, Athersys, Inc.’s auditor, Ernst & Young LLP, raised substantial doubt about the Company’s ability to continue as a going concern. According to Ernst & Young, the Company has incurred net losses and negative operating cash flows each year since its inception and has a working capital deficiency as of December 31, 2022. The Company had a negative working capital of $24.9 million as of December 31, 2022. These factors, along with its forecasted future cash flows, indicate that the Company will be unable to meet its contractual commitments and obligations as they come due in the ordinary course of business within one year following the issuance of these financial statements."
Previously, on December 22, 2022, Athersys, Inc. received a written notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC that the Company is not in compliance with the requirement to maintain a minimum closing bid price of $1.00 per share, as set forth in Nasdaq Listing Rule 5550(a)(2), because the closing bid price of the Company’s common stock was below $1.00 per share for 30 consecutive business days.
About Athersys, Inc.
Athersys is a biotechnology company engaged in the discovery and development of therapeutic product candidates designed to extend and enhance the quality of human life. The Company is developing its MultiStem® cell therapy product, a patented, adult-derived “off-the-shelf” stem cell product, initially for disease indications in the neurological, inflammatory and immune, and other critical care indications and has several ongoing clinical trials evaluating this potential regenerative medicine product. Athersys has forged strategic partnerships and a broad network of collaborations to further advance MultiStem cell therapy toward commercialization. Investors and others should note that we may post information about the Company on our website at www.athersys.com and/or on our accounts on Twitter, Facebook, LinkedIn or other social media platforms. It is possible that the postings could include information deemed to be material information. Therefore, we encourage investors, the media and others interested in the Company to review the information we post on our website at www.athersys.com and on our social media accounts.
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