Filing summary
Entity and period: The supplied filing is Cellect Biotechnology Ltd.’s annual Form 20-F for the fiscal year ended December 31, 2020, filed March 29, 2021. It is not a Quoin Pharmaceuticals filing and does not report a standalone 2020 fourth quarter. Cellect reports under IFRS, with NIS as its functional and reporting currency; U.S. dollar figures are convenience translations.
Business context
Cellect was a development-stage biotechnology company developing ApoGraft, a functional cell-selection technology intended to improve outcomes in stem-cell transplantation. It had no product revenue or commercial operations. Its lead program was in early clinical development for allogeneic hematopoietic stem-cell transplantation (HSCT).
Financial performance and position
| Metric | FY 2020 | FY 2019 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | NIS 5.9 million ($1.8 million) | NIS 12.1 million ($3.5 million) |
| General and administrative expense | NIS 8.1 million ($2.5 million) | NIS 10.2 million ($3.0 million) |
| Operating loss | NIS 14.0 million ($4.4 million) | NIS 22.3 million ($6.5 million) |
| Net/comprehensive loss | NIS 18.1 million ($5.6 million) | NIS 16.8 million ($4.9 million) |
| Basic and diluted loss per share | NIS 0.049 ($0.015) | NIS 0.079 |
| Net cash used in operating activities | NIS 15.5 million ($4.8 million) | NIS 20.3 million ($5.9 million) |
At year-end, cash and cash equivalents were NIS 17.0 million ($5.3 million), total assets NIS 19.6 million ($6.1 million), total liabilities NIS 4.6 million ($1.4 million), and shareholders’ equity NIS 15.0 million ($4.7 million). Working capital was reported as NIS 14.3 million ($4.4 million). The balance sheet showed no conventional borrowing; liabilities included lease obligations and warrants classified as financial liabilities. Lease liabilities were NIS 0.8 million ($0.2 million). The filing reports no revenue-based margins.
Changes versus prior year
- Operating expenses declined 37% in NIS, mainly reflecting reduced research activity and lower staffing and share-based compensation.
- Operating cash use improved to NIS 15.5 million from NIS 20.3 million, primarily due to lower R&D spending.
- Despite the lower operating loss, the total loss increased 8% to NIS 18.1 million, chiefly reflecting NIS 4.1 million of net finance expense in 2020 versus net finance income in 2019. The filing attributes warrant fair-value movements and foreign-exchange effects to finance results.
- Cash declined by NIS 1.1 million during 2020. The company raised funds through a January 2020 ADS offering and warrant exercises; financing cash inflow totaled NIS 13.4 million.
Outlook, risks and notable items
- Funding and going concern: The auditor highlighted substantial doubt about Cellect’s ability to continue as a going concern. Management said funds were sufficient for the next 12 months but additional capital would be needed to reach profitability; financing might not be available on acceptable terms or at all. The company had an accumulated deficit of NIS 118.9 million ($37.0 million).
- Clinical development and COVID-19: The Israeli Phase I/II study had treated 11 patients, but recruitment of the final patient was delayed. The U.S. Phase I trial at Washington University, initiated in October 2020, had recruited no patients by the filing date. COVID-19 disrupted recruitment, logistics and materials availability. Management’s clinical and manufacturing plans were forward-looking, not assured outcomes.
- Other development risks: ApoGraft remained investigational; safety and efficacy, regulatory approval, scalable manufacturing, market acceptance and reimbursement were uncertain. Cellect also cited dependence on a single FasL supplier, competition, intellectual-property risks and potential dilution from future financing.
- Portfolio and partnerships: Cellect had suspended its mesenchymal stem-cell program to conserve resources and focus on HSCT. It reported a 2020 collaboration with XNK Therapeutics and said a COVID-19 development consortium did not proceed as planned.
- Subsequent transactions: After year-end, Cellect announced a definitive merger agreement with Quoin Pharmaceuticals, with Quoin shareholders expected to own approximately 75% of the combined company before a committed $25 million Altium Capital investment. Cellect also agreed to sell its subsidiary and existing assets to EnCellX for contingent value rights. Both transactions were subject to closing conditions; the filing expected closing by the end of Q2 2021.
Important facts for investors to verify
- Confirm the issuer: this document is Cellect Biotechnology Ltd.’s 20-F, notwithstanding the request metadata naming Quoin Pharmaceuticals.
- Review the audited financial statements and going-concern disclosures, and reconcile management’s stated 12-month funding sufficiency with the auditor’s substantial-doubt conclusion.
- Check subsequent filings for the status and final terms of the Quoin merger, Altium financing, and EnCellX asset sale.
- Verify updated cash, operating burn, financing needs, share count and potential dilution after year-end transactions and warrant or option activity.
- Track clinical-trial enrollment, outcomes and regulatory developments; reported interim and preclinical results do not establish efficacy or approval.