Athersys - Continue the Discussion

imz72, is this a new slide? Your post coincided with an end of the day run up.

I don't have a ton of optimism for my $ATHX shares but I have been holding onto these lottery tickets for too long to sell now. Healios should release results in the next couple of weeks.

IMZ, what is your take on the 3 year wait for "accepted version" of the article posted there? Why so long.

www.repository.cam.ac.uk/handle/1810/330172

It's a whole new presentation with regard to the design. I posted the slide that seems most "tantalizing" to me. I think that the statement that they are targeting approximately 40% of ischemic strokes is new.

In case you missed this @reddit...

"BARDA INDUSTRY DAY - Virtual Event - (Wed. - Thur.) November 3-4, 2021" - link

twenty2

Thank You, for noticing, eitherhalf...And, Thank You, guru (Zim), for all your help and reporting...



Thread at Reddit: UPDATES: BARDA INDUSTRY DAY - Virtual Event - (Wed. - Thur.) November 3-4, 2021 - link

twenty2

PR released by ATHX: eresearch.fidelity.com/eresearch/evaluate/news/basicNewsStory.jhtml?symbols=ATHX&storyid=202111120600BIZWIRE_USPR_____BW5433&provider=BIZWIRE_&product=USPR____&sb=1

It seems investors wanted data sooner than Q2 2022 and some are selling this AM.

Agree. 
Disappointing.
Longer-term - Outlook still looks good given higher odds 365 data is statistically significant, so less risk holding thru the data release, imo.
Shorter-term - They're getting a bit low on cash. I want to hear how they plan to fund the company thru the 365-day Treasure data release.

Some thoughts on cash position using ballpark numbers:

Only have to worry about meeting cash needs thru 1st half of 2022 as Treasure results should be released by June/July 2022. If Treasure data is good, pps will be much higher and they can raise capital after. If data is bad, who cares about cash position as there would be bigger problems.

So, need to focus on cash needs thru 1st half 2022.

Starting Cash - Ballpark cash at end of last Qtr - June 2021 - $60M (Double check the financials to validate).
Ballpark Cash Needs - Per Ivor, I believe he recently estimated/ballparked the burn-rate at approximately $80K for the next year, so let's go with that ballpark.

So, that leaves a ballpark negative $20M by end of June 2022.

What are the sources of cash? In the recent past, ATHX has relied on the Aspire ATM, and deliberately decided to slow-walk the partnership discussions. Perhaps that strategy made sense before the 90-day Treasure data release delay. I'm sure Ivor and BJ are re-thinking the overall strategy, especially with the pps very close to $1.00. IMO, Ivor and BJ are/will have contingency plans ready to be executed if the pps drops below $1 and Aspire can no longer be tapped.

Sources of Cash

• Aspire ATM (July/Aug/Sept 2021) - We'll find out how much the raised during this timeframe on Monday (11/15) when the latest financials are released. HOPEFULLY, they tapped the 12M Aspire share limit per qtr hard (I assume that 12M share limit is correct as it was posted by IMZ) at a ballpark pps of $1.50ish to raise close to $20M. The problem is, during this timeframe their overall expectation was that they were going to be seeing positive Treasure data in Q4 and then partner to raise cash, so they may not have tapped Aspire to the full extent allowed during this QTR. IMO, this is a key factor in the cash analysis. This question will be answered on Monday.

• Aspire ATM (Oct/Nov/Dec 2021) - Assume worst case scenario and they raise $12M at $1
• Aspire ATM (Jan/Feb/Mar 2022) - Assume worst case scenario and they raise $12M at $1.
• Aspire ATM (Apr/May/Jun 2022) - Assume worst case scenario and they raise $12M at $1.

• Partnership with Upfront Cash - I'll be listening on Monday to see if BJ is now pursuing the closure of a partnership before Treasure data. In light of the 90-day data release delay, a regional deal (EU only) for 1 indication (ARDS) seems to make the most sense, imo.
  
  Note: I didn't include any milestone payments from Helios as a source of cash because IMO, even if Helios submits the ARDS NDA in Dec/Jan timeframe, we (meaning ATHX) can't assume the PMDA will approve before June 2022... and thus Ivor won't be using any milestone payments as an locked/expected source of cash before June 2022 in his cash plan, imo.

Summary:

Scenario 1 - So (assuming the pps stays around $1 AND assuming they raised $20M last Qtr), it looks like they'd be able to meet their cash needs thru June 2022 with a ballpark $36M cash balance at June 30, 2022, by just using Aspire.

Scenario 2 - Same as scenario 1, but assume they didn't raise any significant cash last QTR. Subtracting that $20M out would leave a small/ballpark $16M at June 2022, and IMO would require other sources of cash beyond Aspire to keep the company funded thru June 2022.... as a $16M balance would be cutting it too close. Note: Ivor does have some tools to reduce spending, so perhaps those tools come into play if we're in this scenario.

Other Scenarios at Higher PPS - Obviously, a higher pps (perhaps achieved IMO by stating that ATHX has re-engaged with BARDA and plans to re-submit an application by X date) would perhaps help solve the problem as ATHX ran from $1ish to $3+ before on BARDA expectations. Just playing around with the ballpark numbers above under the different scenarios would allow for raising sufficient cash via Aspire, and still allow them to delay a full/global partnership for all indications until post-Treasure data, when they believe it would be more lucrative. Besides positive news on the BARDA front or a partnership, I'm not seeing any other major & near-term catalysts to drive the PPS higher. IMO, news of Helios' ARDS application will be good to see, but the application alone is not going to translate into a sustained increased pps, IMO, as they'll be an unknown period of time to get the response from the regulatory authorities.

Last Thoughts:

They can probably limp by using Aspire until June 2022 (even if pps stays close to $1) if they tapped Aspire hard last Qtr and raised that $20M. Their options narrow otherwise.

However, because they know that ultimately they can't control the pps, BJ and Ivor are probably planning for the worst case scenario in case the pps goes under $1 and they can't use Aspire. An equity raise at a discounted pps would be required, and is a risk. There are other more drastic options... but no need to mention those now.

I'm sure we'll get more guidance/answers on Monday, and the cash plans will come into better focus.

A few notes:

- Athersys ended Q2 with $56.7 million of cash and cash equivalents.

- The current agreement with Aspire is for up to 40 million shares, and I believe that they have already started using this facility in Q3, meaning there are currently less than 40 million shares available under the current agreement. Of course, a new agreement is always an option.

- Healios CFO Richard Kincaid mentioned in his recent Q3 briefing that Healios spends $40-50 million yearly and has currents assets of $160 million which are sufficient for more than 3 years.
I wonder if this strong financial position could be used to alleviate Athersys problems: For instance, Healios can give Athersys a loan and get something in return - maybe reduced royalties for a certain indication. In my opinion it will be much better than making a European partnership now with low royalties.
There can be also other solutions, and I hope that Athersys managment is creative enough to find them. We shall see tomorrow.

FYI since I've posted a lot about ATHX in the past:

Longer-term: My outlook is still very positive for this company and stock. I'm very bullish that the Treasure data release in the May/June/July 2022 timeframe will be excellent / statistically significant and Athersys will land a significant partnership later in 2022.

Shorter-term: I have concerns with the lack of major near-term catalysts and their plans to continue using Aspire near-term, and then start "engaging with institutional investors in the coming months", per Ivor on 11/15/2021. While Helios' submission of the ARDS application in Q4/Q1 will be good to see, I don't see the application itself having a major sustained impact to the pps. Of course I could be wrong. BJ's decision NOT to aggressively pursue BARDA funding in the near-term was also disappointing to hear. While I'm sure he has valid reasons, BARDA "hopium" is what took the stock from the $1s to the $3s before, and without that potential opportunity keeping shareholders actively engaged, there's a risk, imo, that the steady Aspire selling will carry the day.

As such, I took a good chunk off the table today on the move higher.
Will look to re-enter in 1st QTR 2022.

GL all.