BTX & OCX
BioTime Reports Pro Forma Gain on Deconsolidation of OncoCyte Subsidiary
Feb 21, 2017 06:45:00 (ET)
ALAMEDA, Calif.--(BUSINESS WIRE)--February 21, 2017-- BioTime, Inc. (NYSE MKT:BTX), a clinical-stage biotechnology company developing and commercializing products addressing degenerative diseases, today announced the deconsolidation of OncoCyte Inc.'s financial statements from BioTime's consolidated financial statements effective February 17, 2017. As a result of the deconsolidation, BioTime will report a pro forma, non-cash gain of approximately $56 million. The actual amount of the gain will be determined and recorded during the quarter ending March 31, 2017.
The deconsolidation occurred due to the exercise of 625,000 warrants by certain OncoCyte warrant holders on February 17, 2017. As a result of the warrant exercises, OncoCyte's shares outstanding increased, so that BioTime no longer owns a majority of OncoCyte's shares. BioTime owns 14,674,244 OncoCyte common shares, which currently represent approximately 49.9% of OncoCyte's common stock outstanding. The OncoCyte shares that BioTime holds had a market value of approximately $71 million at the close of trading on February 17, 2017.
"We continue to simplify BioTime, both in terms of corporate structure and investor transparency," said Russell Skibsted, Chief Financial Officer. "Following the deconsolidation, BioTime's future financial statements will more clearly reflect our operations and cash utilization as we no longer will report OncoCyte's cash burn as part of BioTime's results. We will now report the value of our remaining ownership position in OncoCyte as a single line item on our balance sheet at the end of each quarter based on the closing price of OncoCyte common stock as quoted on the NYSE MKT (under ticker "OCX"). This accounting treatment is the same as for our ownership position in Asterias Biotherapeutics, which was deconsolidated in May 2016. The successful development of both Asterias and OncoCyte into independent public companies with strong product pipelines addressing large medical market opportunities illustrates the potential value of the technology platforms we are developing within BioTime. We are actively exploring additional approaches to further execute our corporate simplification strategy while building additional shareholder value."
The impact, including the actual gain, of this deconsolidation will be recognized in BioTime's quarterly report on Form 10-Q to be filed with the Securities and Exchange Commission for the quarter ending March 31, 2017. BioTime filed the pro forma effects of this deconsolidation to its consolidated financial statements today in a separate Form 8-K.
About BioTime
BioTime, Inc. is a clinical-stage biotechnology company focused on developing and commercializing novel therapies developed from what the company believes to be the world's premier collection of pluripotent cell assets. The foundation of BioTime's core therapeutic technology platform is pluripotent cells that are capable of becoming any of the cell types in the human body. Pluripotent cells have potential application in many areas of medicine with large unmet patient needs, including various age-related degenerative diseases and degenerative conditions for which there presently are no cures. Unlike pharmaceuticals that require a molecular target, therapeutic strategies based on the use of pluripotent cells are generally aimed at regenerating or replacing affected cells and tissues, and therefore may have broader applicability than pharmaceutical products.
In addition to the development of therapeutics, BioTime's research and other activities have resulted, over time, in the creation of other subsidiaries that address other non-therapeutic market opportunities such as cancer diagnostics, drug development and cell research products, and mobile health software applications.
BioTime common stock is traded on the NYSE MKT and TASE under the symbol BTX. For more information, please visit www.biotimeinc.com or connect with the company on Twitter, LinkedIn, Facebook, YouTube, and Google+.
Forward-Looking Statements
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OncoCyte Receives $2 Million in Proceeds from Early Exercise of Warrants
Completes Sample Collection and Processing for the 300-Patient Study of its Lung Cancer Diagnostic Test
ALAMEDA, Calif., Feb. 21, 2017 (GLOBE NEWSWIRE) -- OncoCyte Corporation (NYSE MKT:OCX), a developer of novel, non-invasive tests for the early detection of cancer, today announced the receipt of $2,031,250 through the early exercise of 625,000 common stock purchase warrants. Each warrant was exercised to purchase one share of common stock for $3.25 per share. The warrants were issued during August 2016 through a private placement of 3,246,153 units, with each unit consisting of one share of common stock and one warrant to purchase one share of common stock.
The exercise transactions were negotiated with certain warrant holders as a means of raising additional near term working capital. In consideration for the early exercise of the warrants, one warrant holder received one new warrant with an exercise price of $3.25 for every two warrants exercised, while the other warrant holders received one new warrant with an exercise price of $5.50 for each warrant exercised. Following the exercise of the warrants, there are 29,361,616 shares of common stock outstanding and an aggregate of 3,033,653 warrants outstanding, including both warrants issued during August 2016 and the new warrants, with exercise prices ranging from $3.25 to $5.50.
The proceeds from the early warrant exercise will be used for general working capital purposes to strengthen OncoCyte's balance sheet, which reflected cash on hand of approximately $10.2 million as of December 31, 2016.
"The early exercise of warrants by some of our largest shareholders provides a strong vote of confidence in OncoCyte and our progress towards the development of our innovative, non-invasive tests for the early detection of cancer. The capital provided to us increases our resources as we prepare for CLIA certification of our laboratory and the hiring of our launch team," said William Annett, President & CEO. "The warrant exercise and commensurate purchase of shares results in BioTime, Inc.'s ownership of our company falling below 50%. This is an important step in OncoCyte's evolution into an independent company."
Completes Sample Collection and Processing for Lung Cancer Diagnostic Test
OncoCyte has completed sample collection for the 300-patient study of its lung cancer diagnostic test and now has all of the benign and malignant samples necessary to complete the study. Processing of the samples has been completed and an analysis of the results is underway. The Company expects to complete the study and announce the results in March.
As the analysis of the samples is carried out, OncoCyte is continuing to work on completing the steps necessary to obtain CLIA certification of a diagnostic laboratory. OncoCyte plans to apply for CLIA certification of the lab subsequent to the completion of its current lung cancer test study. After CLIA certification of the laboratory, OncoCyte will conduct a clinical validation study of its lung cancer diagnostic test using the finalized processing algorithm and operational procedures on a new set of a minimum of 300 blinded patient blood samples.
"Completion of sample collection, processing the samples and analyzing the results are three key elements in developing our lung cancer diagnostics test," said Mr. Annett. "If the results of the 300 sample study are favorable, our next steps will be to begin the final clinical validation study and finalize our commercialization plans."
The development of the test builds on research that began a decade ago at the Wistar Institute and has proceeded at OncoCyte and in collaboration with several key opinion leaders in the field of lung cancer diagnosis. OncoCyte recently announced that its abstract on interim data from its current lung cancer diagnostic test study has been selected for presentation in a poster discussion session at the 2017 American Thoracic Society (ATS) International Conference in Washington, D.C. The discussion will be led by Dr. Anil Vachani, an Associate Professor of Medicine at the Hospital of the University of Pennsylvania and the Veteran's Administration Medical Center. The analysis "Multi-Gene Classifier for the Diagnosis of Benign Versus Malignant Pulmonary Nodules" will be discussed in the "Pulmonary Nodules and Thoracic Surgery: Working Across the Aisle" session to take place at 2:15 p.m. on Monday, May 22nd.
About OncoCyte Corporation
OncoCyte is focused on the development and commercialization of novel, non-invasive blood and urine ("liquid biopsy") diagnostic tests for the early detection of cancer to improve health outcomes through earlier diagnoses, to reduce the cost of care through the avoidance of more costly diagnostic procedures, including invasive biopsy and cystoscopic procedures, and to improve the quality of life for cancer patients.
While current biopsy tests use invasive surgical procedures to provide tissue samples in order to determine if a tumor is benign or malignant, OncoCyte is developing a next generation of diagnostic tests that will be based on liquid biopsies using blood or urine samples. OncoCyte's pipeline products are intended to be confirmatory diagnostics for lung, bladder and breast cancer. OncoCyte's diagnostic tests are being developed using proprietary sets of genetic and protein biomarkers that are differentially expressed in specific types of cancer. For more information visit www.oncocyte.com.
Forward-Looking Statements
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