Filing summary
Issuer and period: The supplied filing is BioTime, Inc.’s Form 10-Q for the quarter ended September 30, 2012—not a filing identified as Lineage Cell Therapeutics, Inc. The source therefore does not establish that these results belong to Lineage.
Business context and financial performance
BioTime describes itself as a regenerative-medicine biotechnology company developing stem-cell research products, diagnostic and therapeutic candidates through subsidiaries, and licensing/royalty products including Hextend. Most potential therapies remained in early development; revenue was not sufficient to fund operating expenses.
| Metric | Q3 2012 | Q3 2011 | Nine months 2012 | Nine months 2011 |
|---|---|---|---|---|
| Total revenue | $1.00 million | $1.16 million | $2.69 million | $2.78 million |
| Revenue after cost of sales | $0.83 million | $1.14 million | $2.42 million | $2.72 million |
| Research and development | $4.55 million | $3.49 million | $13.32 million | $9.76 million |
| General and administrative | $2.23 million | $1.89 million | $7.04 million | $6.19 million |
| Operating loss | $(5.95) million | $(4.23) million | $(17.94) million | $(13.23) million |
| Net loss attributable to BioTime | $(4.96) million | $(3.74) million | $(15.39) million | $(11.15) million |
| Basic and diluted loss per share | $(0.10) | $(0.08) | $(0.31) | $(0.23) |
| Cash used in operating activities | Not presented separately for the quarter | Not presented separately for the quarter | $(14.68) million | $(9.75) million |
Gross margin, calculated as revenue after cost of sales divided by total revenue, was approximately 83% in Q3 and 90% for the nine-month period. Operating losses substantially exceeded revenue. No explicit debt balance is reported in the supplied filing text; listed liabilities were primarily payables, accrued costs, and deferred revenue.
Liquidity and material changes
- Cash and cash equivalents were $7.83 million at September 30, 2012, down from $22.21 million at December 31, 2011. Working capital was approximately $7.18 million; the current ratio was approximately 3.8.
- Nine-month operating cash use rose about 51% year over year. Investing activities provided $0.09 million, and financing activities provided $0.29 million, primarily from employee option exercises.
- Year-to-date revenue after cost of sales declined about 11% while R&D increased about 37%; attributable net loss widened about 38% compared with the prior-year period.
- Hextend royalties fell 23% in the quarter and 28% for the nine months, which management attributed to lower sales, pricing pressure, and hospitals shifting toward albumin products.
- The $4.72 million CIRM grant expired in August 2012. Management said it had applied for further grants but could not assure approval.
Outlook, risks, and unusual items
- Management said near-term revenue would depend on research-product sales, database subscriptions and advertising, Hextend royalties, and grants. These sources were insufficient to cover expenses; additional equity or debt financing might be needed.
- BioTime established a controlled equity offering allowing sales of up to $25 million of common shares through Cantor Fitzgerald. The filing gives no assurance that shares could be sold at acceptable prices and does not clearly report proceeds from sales under the agreement.
- Management’s stated targets included initiating Renevia clinical trials in the EU by early 2013 and seeking European launch of PanC-Dx by 2014. These were plans, not assured milestones or financial guidance.
- Key risks include clinical and regulatory uncertainty, dependence on future financing and grants, competition and Hextend market decline, patent and licensing risks, and possible dilution. Management reported no material litigation and stated disclosure controls were effective.
- Unusual items included the May 2012 XenneX acquisition by LifeMap, with $4.27 million preliminary purchase consideration largely allocated to intangible assets, and a $0.21 million reversal of previously recognized ESI revenue pending customer acceptance. BioTime also exchanged 420,000 of its shares for LifeMap shares, reducing its LifeMap ownership.
- After quarter-end, BioTime agreed to acquire additional Cell Cure shares using 906,735 BioTime shares; the agreement could require further share adjustments based on a later share-price test.
Important facts for investors to verify
- Confirm the issuer identity: this summary is based on a BioTime, Inc. filing, notwithstanding the Lineage Cell Therapeutics metadata.
- Check subsequent cash balances, operating cash burn, and any actual use of the $25 million at-the-market offering.
- Review the impact of the expired CIRM grant and whether replacement grants or other financing were secured.
- Verify progress and regulatory status for Renevia, PanC-Dx, and other development programs against the stated plans.
- Track Hextend sales and royalties, and changes in BioTime’s ownership of LifeMap and Cell Cure, including dilution and share-adjustment terms.