Harvard Apparatus Regenerative Technology Reports Third Quarter 2023 Financial Results

Holliston, MA, Nov. 13, 2023 (GLOBE NEWSWIRE) -- Harvard Apparatus Regenerative Technology, Inc. (OTCQB: HRGN) (“Harvard Apparatus Regenerative Technology” or the “Company”), a clinical-stage biotechnology company developing the technology to regenerate organs inside the body to treat severe diseases, today announced its financial results for the three and nine months ended September 30, 2023.

Operating Highlights

We activated the second clinical trial site with the University of Michigan in August 2023 to expand the screening of patients. We have contracted with IQVIA, a leading global provider of advanced analytics, technology solutions and clinical research services to the life sciences industry, as the contract research organization (CRO) to manage our first clinical trial. We are actively recruiting clinical trial patients at both the Mayo Clinic and University of Michigan.

We received approval of an Orphan Disease Application for our lead product, the Cellspan Esophageal Implant by the European Medicines Agency (EMA). The EMA is the centralized regulatory agency for the review and approval of new medicines in the European Union.

In the third quarter of 2023, the Company’s subsidiary in Hong Kong, Harvard Apparatus Regenerative Technology Limited, or HRGN LTD, launched its longevity product business in Asia, generating $40,000 in sales. The Longevity Product business will include a broad range of products focused on longevity dietary supplements, which complements our regenerative medicine business. These products are marketed to the general public and initially targeted at consumers in the Greater China region through eCommerce (online sales).

“The Longevity Product business is a great way to generate additional revenue and operating cash flow from China without distracting our R&D and clinical trial efforts in the US.” Commented Mr. He.

Summary of Financial Results

For the three months ended September 30, 2023, the Company reported a net loss of $1.6 million, ($0.12) per share, compared to a net loss of $1.1 million, ($0.10) per share, for the three months ended September 30, 2022. The $0.5 million year-over-year net loss increase was due primarily to share-based compensation expense of $0.3 million from the vesting of time-based awards in the third quarter of 2023 and increased headcount related costs of approximately $0.2 million.

For the nine months ended September 30, 2023, the Company reported a net loss of $7.2 million, ($0.54) per share, compared to a net loss of $4.7 million, ($0.42) per share, for the nine months ended September 30, 2022. The $2.5 million year-over-year net loss increase was due to clinical trial activities resulting in our activation of two sites, increased headcount costs and an increase in share-based compensation expense from the vesting of performance-based awards in 2023.

Balance Sheet and Cash and Cash Equivalents

At September 30, 2023, the Company had operating cash and short-term investments on-hand as of $1.5 million.

During the nine-month period ended September 30, 2023, the Company used net cash in operations of $5.7 million and received $6.0 million from financing activities representing proceeds from private placement transactions that resulted in the issuance of 1,000,967 shares of our common stock to investors.

About Harvard Apparatus Regenerative Technology, Inc.

We are a clinical-stage biotechnology company developing regenerative-medicine treatments for disorders of the gastro-intestinal system and other organs resulting from cancer, trauma or birth defects. Our technology is based on our proprietary cell-therapy platform that uses a patient’s own stem cells to regenerate and restore function to damaged organs. We believe that our technology represents a next-generation solution for restoring organ function because it allows the patient to regenerate their own organ, thus eliminating the need for human donor or animal transplants, the sacrifice of another of the patient’s own organs or permanent artificial implants.

We conducted the world’s first successful regeneration of the esophagus in a patient with esophageal cancer in August 2017. This surgery was performed by Dr. Dennis Wigle, Chair of Thoracic Surgery at the Mayo Clinic. The results were published in the Journal of Thoracic Oncology Clinical and Research Reports in August 2021. The procedure demonstrated that our technology was able to successfully regenerate esophageal tissue, including the mucosal lining, to restore the integrity, continuity and functionality of the esophageal tube. 

HRGN has 13 issued U.S. patents, 2 issued in China, 1 issued in Japan, 2 issued in Europe and 2 orphan-drug designations which can provide seven years of market exclusivity once we won the market approval.

For more information, please visit www.hregen.com and connect with the Company on LinkedIn.

Forward-Looking Statements

Some of the statements in this press release are “forward-looking” and are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These “forward-looking” statements in this press release include, but are not limited to, statements relating to the capabilities and performance of our products and product candidates; development expectations and regulatory approval of any of the Company’s products, by the U.S. Food and Drug Administration, the European Medicines Agency or otherwise, which expectations or approvals may not be achieved or obtained on a timely basis or at all; and success with respect to any collaborations, clinical trials and other development and commercialization efforts of the Company’s products, which such success may not be achieved or obtained on a timely basis or at all. These statements involve risks and uncertainties that may cause results to differ materially from the statements set forth in this press release, including, among other things, the Company’s inability to obtain needed funds in the immediate future; the Company's ability to obtain and maintain regulatory approval for its products; plus other factors described under the heading “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 or described in the Company’s other public filings. The Company’s results may also be affected by factors of which the Company is not currently aware. The forward-looking statements in this press release speak only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to such statements to reflect any change in its expectations with regard thereto or any changes in the events, conditions or circumstances on which any such statement is based.

Investor Relations Contacts

Joseph Damasio
Chief Financial Officer
774-233-7330
[e-mail]

HARVARD APPARATUS REGENERATIVE TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value and share data)

		September 30,				December 31,
		2023				2022
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	269			$	1,241
Short-term investments			1,232				—
Accounts receivable			3				—
Inventory			56				—
Prepaid research and development			210				274
Prepaid expenses and other current assets			120				79
Total current assets			1,890				1,594
Property, plant and equipment, net			31				49
Right-of-use assets, net			103				147
Deferred financing costs			544				610
Long-term prepaid contracts			1,214				—
Total assets		$	3,782			$	2,400
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable		$	424			$	682
Accrued and other current liabilities			539				582
Operating lease liability, current			92				99
Total current liabilities			1,055				1,363
Operating lease liability, net of current portion			11				48
Total liabilities			1,066				1,411
Commitments and contingencies
Series E convertible preferred stock, par value $0.01 per share, 5,000 shares authorized; 0 and 4,180 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively			—				4,180
Stockholders’ equity (deficit):
Common stock, par value $0.01 per share, 60,000,000 shares authorized; 13,882,060 and 12,174,467 issued and outstanding at September 30, 2023 and December 31, 2022, respectively			139				122
Additional paid-in capital			92,707				79,698
Accumulated deficit			(90,130	)			(83,011	)
Total stockholders’ equity (deficit)			2,716				(3,191	)
Total liabilities and stockholders’ equity (deficit)		$	3,782			$	2,400

HARVARD APPARATUS REGENERATIVE TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2023				2022				2023				2022
Product revenue		$	40			$	—			$	40			$	—
Operating expenses:
Cost of sales			13				—				13				—
Research and development			339				369				2,414				998
Sales and marketing			143				—				198				—
General and administrative			1,169				711				4,577				3,662
Total operating expenses			1,664				1,080				7,202				4,660
Operating loss			(1,624	)			(1,080	)			(7,162	)			(4,660	)
Other income, net:
Sublease (expense) income			(5	)			26				(5	)			87
Other income (expense), net			14				(2	)			48				(5	)
Total other income, net			9				24				43				82
Net loss			(1,615	)			(1,056	)			(7,119	)			(4,578	)
Preferred stock dividends			—				(77	)			(77	)			(95	)
Net loss attributable to common stockholders		$	(1,615	)		$	(1,133	)		$	(7,196	)		$	(4,673	)
Basic and diluted net loss per share		$	(0.12	)		$	(0.10	)		$	(0.54	)		$	(0.42	)
Weighted average common shares, basic and diluted			13,882,060				11,615,642				13,297,391				11,205,477

HARVARD APPARATUS REGENERATIVE TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)

		Nine Months Ended
		September 30,
		2023				2022
OPERATING ACTIVITIES
Net loss		$	(7,119	)		$	(4,578	)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation expense			2,854				756
Depreciation			29				40
Amortization of right-of-use assets			44				81
Change in fair value of warrant liability			—				(2	)
Changes in operating assets and liabilities:
Accounts receivable			(3	)			—
Inventory			(56	)			—
Prepaid research and development			64				—
Prepaid expenses and other current assets			(41	)			83
Deferred financing costs			66				(311	)
Long-term prepaid contracts			(1,214	)			—
Accounts payable			(258	)			206
Operating lease liabilities			(44	)			(81	)
Accrued and other current liabilities			(43	)			433
Net cash used in operating activities			(5,721	)			(3,373	)
INVESTING ACTIVITIES
Purchases of short-term investments			(2,523	)			—
Redemption of short-term investments			1,291				—
Purchases of property, plant, and equipment			(11	)			(8	)
Net cash used in investing activities			(1,243	)			(8	)
FINANCING ACTIVITIES
Proceeds from issuance of common stock			5,992				5,060
Net cash provided by financing activities			5,992				5,060
Net (decrease) increase in cash and cash equivalents			(972	)			1,679
Cash and cash equivalents at the beginning of the year			1,241				1,292
Cash and cash equivalents at the end of the period		$	269			$	2,971
Supplemental disclosure of non-cash activities:
Settlement of contingency matter		$	—			$	(3,250	)
Settlement of due to Harvard Bioscience included in accrued and other current liabilities		$	—			$	(750	)
Issuance of Series E convertible preferred stock		$	—			$	4,000
Purchases of property and equipment in accounts payable or accrued expenses		$	3			$	—
Preferred stock dividends		$	77			$	95
Conversion of preferred stock into common stock		$	4,257			$	—