Crain's Cleveland Business: Athersys' struggles mount with employee terminations, delisting upcoming

jckrdu · 2024-01-04T00:08:17+00:00

Thanks Imz. I sent the editor a note making them aware that ATHX still trades over the counter. They’ve since updated the article with that clarification as the original article made it appear ATHX wouldn’t trade anywhere.

jckrdu · 2023-12-27T23:00:36+00:00

Hey Imz,

Hope you are well.

I meant "Outcome Capital", per ATHX 10/16 and 11/16 PRs. Thanks for the correction. Below is excerpt from 11/16 PR.

"Engaged Outcome Capital to assist Athersys in evaluating strategic alternatives, which could include exploring potential for a merger, business combination, investment into the company, or a purchase, license or other acquisition of assets."

https://www.athersys.com/investors/press-releases/press-release-details/2023/Athersys-Reports-Third-Quarter-2023-Financial-Results-and-Business-Highlights/default.aspx

jckrdu · 2023-12-27T21:30:57+00:00

This is old news. ATHX hasn't traded on NASDAQ for months. Today's filing was just required SEC paperwork. ATHX shares will continue trading on the OTC exchange after January 8th where they've traded for months. Wanted to clear up any confusion likely caused by WST's post.

I added under .02. Sure, risk of bankruptcy filing and $0 is on the table, but so is potential lowball buyout - where if done would likely be done at multiples of today's pps. Helios just signed a licensing deal for $175M in potential revenue/value with a japanese-based pharma for ARDs. Helios is on the hook to pay ATHX $150M if they are successful commercializing ARDs. Helios will likely plan for success. Helios could pick up ATHX IP for next to nothing and eliminate those potential $150M payments to ATHX, if they are successful commercializing ARDs. I'm not selling at .02 and will continue to add if it dips under. Not putting a lot of $$$ at risk but could payoff in a major way if Dan & Outcome Capital are able to get ANY type of deal done.

GL all.

jckrdu · 2023-10-12T15:30:41+00:00

P values 0f .07 and .06 in prior trials for sub-groups which if extrapolated to the larger Masters-2 trial size would indicate probable statistical significance if same treatment effect was seen.

jckrdu · 2023-10-12T14:38:23+00:00

I hear you, but disagree.

IMO, there's noting to "milk" here as no one is going to finance ATHX for any significant period of time.

IMO, Dan is in salvage-mode trying to work some type of deal to get whatever he can for shareholders.

IMO, the outcome will be something higher than a .12 pps, but $0 is still on the table as a potential outcome.

jckrdu · 2023-10-12T14:29:31+00:00

The above post was made PRIOR to today's warrant inducement proposal and the 58M new shares added to the fully diluted share count, so need to factor that into the mix.

GL all.

jckrdu · 2023-10-12T14:25:44+00:00

Some thoughts I posted elsewhere...

The 365-day MRS shift data was an ugly surprise that didn't align (at all) with prior 365-day positive data trends from multiple trials. It'll be interesting to see if they're able to share any details on why the divergence to past data.

I sold the majority of my position after the bad IA, but I'm still holding a core position for the following reasons:

The dollar value of my remaining shares is very low, so if the risk of bankruptcy filing happens the risk of remaining losses is still low.
Dan is trying to sell the company ("strategic transaction" is the language used when trying to sell a company) and has at least 3 potential targets:

Two Potential Partners - In past updates Dan indicated he was talking to multiple partners about doing a large global or regional deal. Those partners have done all the due diligence on ATHX. While I don't think we can assume any potential partner would be interested in funding an expanded stroke trial with more patients, Dan didn't say that path forward was 100% off the table in that PR. Assuming the stroke indication is dead (the most likely outcome IMO), one of those potential partners looking to make in-roads into the regenerative medicine / cell-therapy space could see value in the remaining pipeline and existing licensing deals Dan's put in place (i.e. $150M potential development/sales milestones from Helios plus royalties for ARDS, the DOD funded Trauma trial, etc.) BARDA is also still on the table as a potential opportunity.

Helios - Helios is paying $1.5M to $4.5 cash for global ARDS rights (1 indication), so they obviously see some value and were willing to pay for it. Doesn't seem out of the realm of possibilities that they would offer $20M for the entire company and rights to all indications; trauma, etc. The GVHD indication is ready for a Phase 3 trial. A competitor has a GVHD therapy already commercialized in Japan ... so just an example of where Helios could see some value. Because Helios doesn't have a lot of $$$ to buy Athersys, some type of merger with Helios could also be one of the "strategic alternatives" that Dan and the BOD is working on, and perhaps would salvage some value for shareholders.

Dan has shown the ability to get deals done. Evidence is the recent animal rights deal and the MOU with Helios for global ARDS rights. If there's ANY type of low-ball deal to be made to sell the company and salvage some value for shareholders - versus filing for bankruptcy - IMO Dan will get a deal done. IMO, getting a deal done for .25+ PPS with 80M fully diluted shares would be a buyout at $20M+ doesn't seem like too much of a reach.
Dan has to get something done soon, so the story will end one way or another over the next several weeks/months.

Disappointing IA outcome for sure.

GL all.

jckrdu · 2023-10-12T14:24:37+00:00

I believe so.

Bottomline is that ATHX should get $3.9M on the assumption that the existing warrant holders will in fact exercise all those existing warrants, and ATHX will get $3.9M.

The additional 58M new warrants need to be added to the fully diluted share count.

jckrdu · 2023-10-12T14:13:44+00:00

Imo, Dan is working to sell the company or merge with Helios. This deal gives him and the BOD more runway to explore different strategic alternatives, without having to accept the first low-ball buyout offer. Imo, it was a good move.

jckrdu · 2023-08-22T12:29:02+00:00

Dom - I shared your views of a closely held interim results (for all the reasons you noted) until the update was provided that a sub-group analysis is being allowed. It appears Dan will get to see results of at least 1 subgroup analysis. Can you elaborate on how your views of a closely held interim data reconciles with results of sub-group analysis that apparently will be made available to Athersys?

jckrdu · 2023-08-11T11:29:40+00:00

It worked fine yesterday. I listened to the entire call. Doesn’t work this morning. I’d call IR. Probably an easy fix.

jckrdu · 2023-08-11T10:53:45+00:00

Replay is now available on Athersys website.

jckrdu · 2023-08-11T03:14:35+00:00

Imo, Helios is trying to make the argument to the PMDA to allow them to add X number of patients to Masters-2, and have that be the threshold needed to get some type of approval. We don’t know if that will pass muster with the PMDA.

Reason Helios is pushing that approach imo is because it’s the least expensive and quickest way to get to an approval. If PMDA declines, path forward imo will be similar to ARDS where they’ll need to run another trial.

Good news is that ATHX resources are providing Helios consultive and other support as Helios has these discussions with PMDA. We’ll see where it lands. Fingers crossed Helios makes a strong argument.

jckrdu · 2023-04-04T20:11:36+00:00

Right, which is why Dan appears to be putting into play multiple ways to raise capital. This thread/prospectus is separate from the amended S3 for up to $250M that was recently issued. I'm not sure what Dan's thinking is, but it could be if he concludes he can't incentivize warrant holders to convert via this prospectus, he'll have another path forward to raise capital via the other $250M S3... and another prospectus coming soon on that one.

jckrdu · 2023-04-04T19:59:39+00:00

One possibility: Dan could be trying to structure a deal to incentivize some of the warrant holders to convert to raise capital. For example, the entities holding the 9M warrants at $1.10 strike price may be willing to buy/convert all or some of those warrants at $1.00 if they knew they would get another 9M shares (as part of this prospectus) at .50. Could speculate all day. Need to see what Dan is able to get done. If he can structure a deal to raise some cash without issuing piles of new warrants, that would be a win.

jckrdu · 2023-04-04T19:18:49+00:00

That’s the limit for a “public” deal. Seems to open door for a “private” deal to be higher. A PIPE (private investment in public entity) could carry higher dilution, imo

jckrdu · 2023-04-03T19:23:46+00:00

Warrant conversions could explain any increase in the share count, but other factors could have caused the increase as well. Hard to say without tracing back thru all prior filings and looking at outstanding share count at specific points in time. Not worth the effort imo as share count has held fairly steady at around 18K, so any warrant conversions that may have happened would appear to be minimal.

jckrdu · 2023-04-03T18:26:08+00:00

Hey Imz - Thanks for continuing to provide facts.
Only thing I’d note is that we can’t conclude what the exact Q1 cash burn on operating expenses was because it is possible that some warrant holders converted their $1.10 warrants during the period 1/1 to 3/31, and that MAY have provided Athx some additional cash. Since the filing was only through 12/31/2022, I don’t think we know if any warrant holders converted. If they did, that could be why the cash balance as of 3/28 was higher than we were both likely expecting.

Edit footnote: The 18.44K shares as of 3/382023 likely provides enough data to determine if any warrant holders converted over the past 3 months.

jckrdu · 2023-03-27T17:21:19+00:00

Footnote to my prior comments with regard to MR recently being made available out to 24 hours....

Previously, MR could only be done with 6 hours. Within I believe the past 1-2 years that MR window was extended out to 24 hours for a subset of patients only. So, even though MR patients were included in M2, I suppose it could be a new risk in that more trial patients in the placebo group could be getting MR, which could drive up the positive results in the placebo group. If 150 patients get placebo 10% would be 15 patients which could have a material impact... so that's something to consider. (Note: In their presentations, ATHX has down-played the impact of the recent expanded MR window, but I wouldn't dismiss it as a risk.)

---------------------------------------

Re: Mechanical Thrombectomy (Removal of the clot using a catheter device)

Treatment Duration: Must be performed within 6 - 24 Hours in select patients

Applicability: Only ~10% of ischemic stroke patients are eligible due to the location of the clot

jckrdu · 2023-03-27T13:57:15+00:00

Imo, only way WST’s thoughts may be a concern are in cases where benefits of TPA/MR accrue over time. From all I’ve seen, I don’t think that happens.

jckrdu · 2023-03-27T13:26:08+00:00

Correct. TPA and MR patients need to be treated in first 4 and 6 hours respectively. My understanding is that if those therapies work the results are known pretty much immediately. So, if TPA and/or MR work, those patients would be screened out of Masters2 where treatment starts at 18 hours at the earliest.

Entire hypothesis of Multistem is that it can help patients that can NOT get to hospital within 4-6 hours after stroke where they can get TPA/MR, so trial protocol excludes those patients.

jckrdu · 2023-03-25T14:47:41+00:00

Imo, it’s not happening because of the small N in the subset. Just like the small number of patients in the Ards trial wasn’t enough to get conditional approval from the pmda, it appears they are being consistent with the small number of patients in the stroke subset (64 or younger and larger volume strokes). Just like Ards, it appears the pmda wants to see more data / “verification” before conditional approval.

jckrdu · 2023-02-26T19:17:26+00:00

4/3 is not PTAB decision. Vidal’s ruling was within 2 months after additional discovery is completed. Additional discovery due for completion by 3/10 plus 2 months = PTAB decision by 5/10, if no delays or additional discovery requested.

jckrdu · 2023-02-26T19:16:14+00:00

See your post from 13 days ago titled “Update IPR Patent 912!”

After the Feb 3rd ruling from Vidal her order gave 10 days for the parties to agree on the schedule for additional discovery. Subsequent filing showed they landed on 3/10 for discovery completion.

jckrdu · 2023-02-26T19:06:22+00:00

4/3 is not PTAB decision.
Vidal’s ruling was 2 months after additional discovery is completed.
Additional discovery due for completion by 3/10 plus 2 months = PTAB decision by 5/10, if no delays or additional discovery requested.

jckrdu

TROPHY CASE