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Cellect Biotechnology Ltd Provides Corporate Update and Reports Third Quarter 2016 Financial Results

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TEL AVIV, Israel, Nov. 28, 2016 (GLOBE NEWSWIRE) -- Cellect Biotechnology Ltd. (NASDAQ: APOP) (TASE:APOP), a developer of innovative technology which enables the functional selection of stem cells, today provided a corporate update and announced financial results for the third quarter ended September 30, 2016.

Dr. Shai Yarkoni, Chief Executive Officer, said, "During the third quarter, we were pleased to receive the Israeli Ministry of Health's approval to begin a Phase I/II clinical trial in leukemia patients to evaluate the safety and efficacy of Cellect's cell selection technology, ‘Powered by Cellect'. We believe Cellect's transformative approach to cell selection represents a significant breakthrough in the ability to produce selective destruction of mature cell populations, thus reducing the significant risks associated with bone marrow transplantation."

"We look forward to beginning to enroll patients into this study, which is the first of its kind in leukemia patients in need of bone marrow transplantation, shortly," continued Dr. Yarkoni. "With this continued development progress, and our recent U.S. IPO, Cellect has never been in a stronger operating position. Our focus remains on creating long-term shareholder value."

Recent Corporate Highlights:

  • Received the Israeli Ministry of Health's approval to begin a Phase I/II clinical trial in leukemia patients. The trial, which Cellect expects will be initiated shortly, will be conducted in the bone marrow transplantation unit of Rambam Hospital, and led by Clinical Assistant Professor, Zila Zuckerman, the Director of the unit.
  • Priced an initial public offering (IPO) in the U.S., resulting in gross proceeds of $8.4 million ($7.6 million net of underwriters' fees and discounts).
  • Filed an urgent request with the Court in Israel to approve the convening of a Special General Meeting of its Shareholders and its Series 1 Warrant Holders to approve the extension of the term of the Company's Series 1 Warrants until November 21, 2017. On November 9, 2016, the Court approved the extension until February 15, 2017, as temporary relief. Additionally, Cellect's Board of Directors resolved to approve an extension of the term of the additional unregistered warrants issued on March 8, 2016, pursuant to a private placement, until March 7, 2018. This potential extension is subject to certain corporate actions.

Third Quarter 2016 Financial Results:

  • Research and development (R&D) expenses for the third quarter of 2016 were $0.55 million, compared to $0.5 million in the second quarter of 2016 and $0.4 million in the third quarter of 2015. The slight increase in the third quarter of 2016 as compared to the second quarter was primarily due to an increase in pre-clinical expenses (primarily payroll and related expenses), offset by a slight decrease in Intellectual Property expenses.
  • General and administrative (G&A) expenses for the third quarter of 2016 were $0.75 million, compared to $0.4 million in the second quarter of 2016 and $0.3 million in the third quarter of 2015. The increase in the third quarter of 2016 as compared to the second quarter was primarily due to increases of $0.15 million in professional services, including investor relations and other Nasdaq-related expenses, and $0.2 million in payroll-related expenses.  
  • Finance expenses for the third quarter of 2016 were $0.2 million, compared to an insignificant amount in the second quarter of 2016 and the comparable period of 2015. The increase was primarily due to $0.15 million of expenses related to fair value of the tradable warrants granted on the U.S. IPO.
  • Net loss for the third quarter of 2016 was $1.5 million, or $0.015 per share, compared to $0.8 million, or $0.01 per share, in the second quarter of 2016, and $0.7 million, or $0.008 per share, in the third quarter of 2015.

Balance Sheet Highlights:

  • Cash and cash equivalents (including marketable securities and short terms deposits) totaled $9.4 million as of September 30, 2016, compared to $3.1 million on December 31, 2015, and $3.8 million on September 30, 2015. The increase compared to December 31, 2015, was primarily due to net proceeds of $7.6 million (after deducting underwriters' fees) raised through the IPO in the U.S, priced on July 29, 2016,and additional net proceeds of approximately $2 million raised through a private placement completed in March 2016, offset by cash used in operations during the period.
  • Tradable warrants exercisable into shares totaled $0.8 million as of September 30, 2016, and represented, according to the international financial reporting standards (IFRS), the fair value of the tradable warrants granted in the U.S. IPO which closed on August 3, 2016.
  • Shareholders' equity totaled $8.4 million as of September 30, 2016, compared to $2.8 million on December 31, 2015, and $3.6 million on September 30, 2015.

* For the convenience of the reader, the amounts have been translated from NIS into U.S. dollars, at the representative rate of exchange on September 30, 2016 (U.S. $1 = NIS 3.75).

About Cellect Biotechnology Ltd.
Cellect Biotechnology is traded on both the NASDAQ and Tel Aviv Stock Exchange (NASDAQ: APOP) (NASDAQ:APOPW) (TASE:APOP). The Company is developing an innovative technology which enables the functional selection of stem cells based on their sensitivity to apoptosis. This functional-based selection is a breakthrough technology in the ability to isolate stem cells from any given tissue, and may improve a variety of stem cells applications.

The Company's first planned product line is expected to include unique containers for cell selection in an apoptosis-inducing microenvironment. Cellect's first planned commercial product candidate is a medical kit designed for the cancer treatment bone marrow transplantations market, as well as other markets which require cell selection. The Company plans that in the future its technology will be integrated in many production procedures of stem cell-based products.

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 the anticipated Phase I/II clinical trial in leukemia patients and the potential of our technology and its proposed uses. 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: changes in technology and market requirements; we may encounter delays or obstacles in launching and/or successfully completing our clinical trials; our products may not be approved by regulatory agencies, our technology may not be validated as we progress further and our methods may not be accepted by the scientific community; we may be unable to retain or attract key employees whose knowledge is essential to the development of our products; unforeseen scientific difficulties may develop with our process; our products may wind up being more expensive than we anticipate; results in the laboratory may not translate to equally good results in real clinical settings; results of preclinical studies may not correlate with the results of human clinical trials; our patents may not be sufficient; our products may harm recipients; changes in legislation; inability to timely develop and introduce new technologies, products and applications, which could cause the actual results or performance of the Company to differ materially from those contemplated in such forward-looking statements. 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 final prospectus dated July 29, 2016 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 period filings with the SEC and the Tel-Aviv Stock Exchange.  

 
Cellect Biotechnology Ltd
Consolidated Statement of Operation
 
  Convenience        
  translation        
  Nine months
ended
 Nine months ended Three months ended
  September 30, September 30, September 30,
   2016   2016  2015 2016  2015 
  Unaudited Unaudited
  U.S. dollars NIS
  (In thousands, except share and per
share data)
           
Research and development expenses  1,527   5,738  4,073 2,059  1,517 
           
General and administrative expenses  1,696   6,372  2,369 2,825  1,022 
           
Other income  (75)  (280) - -  - 
           
Operating loss  3,148   11,830  6,442 4,884  2,539 
           
Financial expenses due to warrants exercisable into shares  142   532  - 532  - 
           
Other financial expenses (income), net  52   198  45 175  (15)
           
Total comprehensive loss  3,342   12,560  6,487 5,591  2,524 
           
Loss per share:          
           
Basic and diluted loss per share  0.039   0.147  0.088 0.057  0.033 
           
Weighted average number of shares outstanding used to compute basic and diluted loss per share  85,583,252   85,583,252  73,962,752 98,494,725  75,989,903 




  
Cellect Biotechnology Ltd 
Consolidated Balance Sheet Data 
ASSETS 
  
 Convenience      
 translation      
 September 30, September 30, December 31,  
  2016   2016   2015  
 Unaudited Unaudited Audited 
 U.S. dollars NIS 
 (In thousands, except share and per
share data)
 
CURRENT ASSETS:      
Cash and cash equivalents 2,596   9,756   3,913  
Short term deposits 5,225   19,635   -  
Marketable securities 1,599   6,007   7,829  
Accounts receivable 307   1,155   412  
       
  9,727   36,553   12,154  
NON-CURRENT ASSETS:      
Restricted cash 5   20   20  
Property, plant and equipment, net 361   1,356   1,187  
       
  366   1,376   1,207  
       
  10,093   37,929   13,361  
 

LIABILITIES AND
SHAREHOLDERS' EQUITY

 
 
CURRENT LIABILITIES:      
Trade payables 270   1,014   466  
Other accounts payable 510   1,916   2,394  
  780   2,930   2,860  
NON-CURRENT LIABILITIES:      
Warrants exercisable into shares 824   3,096   -  
       
EQUITY:      
Ordinary shares of no par value:
Authorized: 500,000,000 shares at December 31, 2015, September 30, 2015 and 2016; Issued and outstanding: 75,949,888*) at December 31, 2015 and September 30, 2015 and 107,583,485*) at September 30, 2016.
 -   -   -  
Share premium 17,972   67,539   36,725  
Share-based payments 1,796   6,751   3,603  
Treasury shares (2,508)  (9,425)  (9,425) 
Accumulated deficit (8,771)  (32,962)  (20,402) 
       
  8,489   31,903   10,501  
       
  10,093   37,929   13,361  

*) Net of 2,686,693 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, 
   2016  2016   2015   2016   2015  
  UnauditedUnaudited 
  U.S. dollarsNIS 
  (In thousands) 
Cash flows from operating activities:          
Net loss  (3,342) (12,560)  (6,487)  (5,591)  (2,524) 
           
Adjustments to reconcile net loss to net cash used in operating activities:          
Financial expenses, net  39  146   36   137   (22) 
Loss (gain) from revaluation of financial assets presented at fair value through profit and loss  6  21   (3)  22   -  
Depreciation  58  218   40   38   14  
Capital loss from sell of property, plant and equipment  2  9   -   -   -  
Changes in fair value of warrants liability exercisable into shares  (20) (77)  -   (77)  -  
Share-based payment  555  2,086   774   576   242  
Decrease (increase) in accounts receivable  (197) (743)  (184)  17   (184) 
Increase (decrease) in accounts payable  158  595   313   1,090   121  
Interest received  -  -   1   -   -  
Net cash used in operating activities  (2,741) (10,305)  (5,510)  (3,788)  (2,353) 
           
Cash flows from investing activities:          
Proceeds from the sale of property, plant and equipment  25  95   77   -   -  
Short term deposits  (5,225) (19,635)  -   (19,515 )  -  
Sale (purchase) of marketable securities measured at fair value through profit and loss  479  1,801   3,430   -   2,000  
Purchase of property, plant and equipment  (315) (1,183)  (49)  (59)  (42) 
Net cash provided by investing activities  (5,036) (18,922)  3,458   (19,574)  1,958  
Cash flows from financing activities:          
Exercise of stock options  2  7   104   -   -  
Issue of share capital, net of issue costs  9,369  35,209   6,292   27,745   -  
Net cash provided by financing activities  9,371  35,216   6,396   27,745   -  
Exchange differences on balances of cash and cash equivalents  (39) (146)  (37)  (137)  22  
Increase (decrease) in cash and cash equivalents  1,555  5,843   4,307   4,246   (373) 
Balance of cash and cash equivalents at the beginning of the period  1,041  3,913   2,122   5,510   6,802  
Balance of cash and cash equivalents at the end of the period  2,596  9,756   6,429   9,756   6,429  
U.S. Investor Contact: Bob Yedid Managing Director LifeSci Advisors, LLC bob@lifesciadvisors.com (646) 597-6989

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