Biostage running short on cash with IND looming
PHOTO/LAURA FINALDI
Biostage CEO Jim McGorry (left) and Chief Medical Officer Saverio La Francesca hold one of the company's synthetic scaffolds that have worked to regrow esophaguses in pigs.
Biostage, which develops bioengineered organ implants, reported it lost $3.8 million in the first quarter, leaving it with only enough cash through the end of the year, as expenses increased during the company’s transition into its clinical stage.
The Holliston company, which plans to file an investigational new drug (IND) application for its esophageal organ implant with the U.S. Food and Drug Administration in its third quarter, said it had about $6.6 million in cash as of March 31, which is enough to fund operations through most of 2017.
After being threatened with a NASDAQ delisting late last year, the company successfully raised $6.8 million in net proceeds from an $8 million public stock offering. Warrants issued through the offering have the potential to net an incremental $7.8 million in the future, according to the company.
Most of the first quarter was spent getting things ready for the IND, said CEO Jim McGorry. The company focused on building its regulatory, quality and manufacturing foundations, and designed and implemented the preclinical studies it needed to advance towards the filing.
Also in the first quarter, Biostage attended several scientific and medical conferences, where it presented data on its technology, according to a Thursday announcement. Stephen Badylak joined the company as co-chair of its Scientific Advisory Panel, and preclinical studies on pediatric esophageal atresia with Connecticut Children’s Medical Center continued.
The net loss of $3.8 million, or $0.14 per diluted share, was greater than the company’s loss of $2.5 million, or $0.18 per diluted share, for the period ending March 31, 2016. The company attributed the drop to an extra $800,000 in non-cash expense from the fair value of warrants and $700,000 in research and development costs. The loss was partially offset by a $100,000 decrease in selling general and administrative expenses.
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