|
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
20-4864095
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
3201 Carnegie Avenue,
Cleveland, Ohio
|
|
44115-2634
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
|
Name of each exchange on which registered
|
Common Stock, par value $0.001 per share
|
|
NASDAQ Stock Market LLC
|
Large accelerated filer
|
☐
|
Accelerated filer
|
x
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
x
|
|
|
Emerging growth company
|
☐
|
|
ITEM 1.
|
BUSINESS
|
•
|
Advance our Lead Programs through Clinical Development to Registration and Commercialization
. We are focused on the design and execution of clinical studies, e.g., ischemic stroke, intended to enable product registration in major markets. We are also engaged in activities intended to enable effective commercialization, e.g., preparation for scaled, commercial manufacturing. We may partner with other companies to complete such development and preparation activities, and to market the product upon regulatory approval.
|
•
|
Efficiently Conduct Clinical Development to Establish Clinical Proof-of-Concept and Biological Activity for Other Product Candidates.
We conduct our clinical studies with the intent to establish safety and efficacy proof-of-concept and/or evidence of biological activity in a number of important disease areas where our cell therapies are expected to have benefit, such as we have done with ARDS. Our strategy is to conduct well-designed studies beginning early in the clinical development process, thus establishing a robust foundation for later-stage development, partnering activity and expansion into complementary areas. We are committed to a rigorous clinical and regulatory approach, which we believe has helped us to advance our programs efficiently, providing high quality, transparent communications and regulatory submissions. Our discussions with the FDA, EMA and PMDA have resulted in productive interactions and important designations that have helped to advance our programs efficiently.
|
•
|
Continue to Refine and Improve our Manufacturing and Related Processes and Deepen our Understanding of Therapeutic Mechanisms of Action.
A key aspect of MultiStem cell therapy is the
ex vivo
expansion capacity of the cells that comprise the product. This enables large-scale production of the clinical product, which is associated with greater consistency, specificity and cost of goods advantages over other cell therapies. We are building on this intrinsic biological advantage by advancing and optimizing our production and process development approaches, through our internal capabilities and efforts, and working with contract manufacturers. We are focused on development and optimization of new and proprietary manufacturing techniques and the pharmacy-to-bedside approach to support late-stage development and commercialization of the MultiStem product. Additionally, we will continue to refine our understanding of our products’ activities and mechanisms of action to prepare the foundation for product enhancements and next generation opportunities.
|
•
|
Enter into Arrangements with Business Partners to Accelerate Development and Create Value.
In addition to our internal development efforts, an important part of our strategy is to work with collaborators and partners to accelerate product development, reduce our development costs and broaden our commercial access. We have
|
•
|
Efficiently Explore New High Potential Therapeutic Applications, Leveraging Third-Party Research Collaborations and our Results from Related Areas.
Our MultiStem cell therapy has shown promise in many disease areas, including in treating neurological conditions, cardiovascular disease, inflammatory and immune disorders, certain pulmonary conditions and other conditions where the current standard of care is limited or inadequate for many patients. We are committed to exploring potential clinical indications where our therapies may achieve best-in-class profile and where we believe we can effectively address significant unmet medical needs. In order to achieve this goal, we established collaborative research relationships with investigators from many leading research and clinical institutions across the United States and Europe, including the Cleveland Clinic, Case Western Reserve University, University of Minnesota, the Medical College of Georgia at Augusta University, the University of Oregon Health Sciences Center, UTHealth, the University of Pittsburgh Medical Center, the Katholieke Universiteit Leuven, University of Regensburg, and other institutions. Through this network of collaborations, we have evaluated MultiStem cell therapy in a range of preclinical models that reflect various types of human disease or injury. These collaborative relationships have enabled us to cost effectively explore where MultiStem cell therapy may have relevance and how it may be utilized to advance treatment over current standard of care. Additionally, we have shown that we can leverage clinical safety data and preclinical results from some programs to support accelerated clinical development efforts in other areas, saving substantial development time and resources compared to traditional drug development where each program is separately developed.
|
•
|
Continue to Expand our Intellectual Property Portfolio.
We have a broad intellectual property estate that covers our proprietary products and technologies, as well as methods of production and methods of use. Our intellectual property is important to our business and we take significant steps to protect its value. We have ongoing research and development efforts, both through internal activities and through collaborative research activities with others, which aim to develop new technologies, applications and intellectual property and enable us to file patent applications that cover new applications of our existing technologies or product candidates, including MultiStem cell therapy and other opportunities. We currently have over 310 patents related to our technologies, providing protection in the United States, Europe, Japan and other areas.
|
•
|
Ischemic Stroke
: We launched our pivotal Phase 3 clinical trial of MultiStem cell therapy for the treatment of ischemic stroke, referred to as MASTERS-2, and enrollment commenced in the third quarter of 2018. We are initiating the study with a small number of high-enrolling sites and plan to bring on additional sites over time in line with clinical product supply and clinical operations objectives. The MASTERS-2 study has received several regulatory distinctions including SPA, Fast Track designation and RMAT from the FDA, as well as a Final Scientific Advice positive opinion from the EMA, described further below. We believe these designations could accelerate the development, regulatory review and subsequent commercialization of products like MultiStem cell therapy for ischemic stroke, if future clinical evaluation demonstrates appropriate safety and therapeutic effectiveness.
|
•
|
ARDS
: In January 2019, we announced summary results from our exploratory clinical study of the intravenous administration of MultiStem cell therapy to treat patients who are suffering from ARDS. The study results provide further confirmation of tolerability and a favorable safety profile associated with MultiStem treatment. Importantly, MultiStem subjects had lower mortality and a greater number of ventilator-free and ICU-free days in the first month following diagnosis compared to patients receiving placebo. Furthermore, analysis of initial biomarker data reflects lower levels of inflammatory markers/cytokines following MultiStem treatment, an expected mechanism of action in this patient population. We will continue to evaluate the data as the one-year follow-up period is completed for all patients in the trial and plan to present additional results after further analyses. Healios has a license to develop and commercialize ARDS in Japan and announced in November 2018 its plans to initiate in the first half of 2019 a clinical trial of MultiStem for patients with pneumonia-induced ARDS.
|
•
|
Trauma
: In 2018, we announced with UTHealth our plans to conduct a Phase 2 clinical trial evaluating MultiStem cell therapy for early treatment and prevention of complications after severe traumatic injury. This first-ever study of a cell therapy for treatment of a wide range of traumatic injuries is intended to be conducted at Memorial Hermann-Texas Medical Center, one of the busiest Level 1 trauma centers in the United States. The study has grant support from the Medical Technology Enterprise Consortium and the Memorial Hermann Foundation. We intend to provide the clinical product for the conduct of the trial, as well as regulatory and operational support. We and UTHealth are in the planning and preparation stage for this study and will provide further updates as preparations for the trial progress.
|
•
|
AMI
: We are conducting an ongoing Phase 2 clinical study in the United States for the administration of MultiStem cell therapy to patients that have suffered a heart attack. In a previously completed Phase 1 clinical study, the results
|
•
|
HSC Transplant / GvHD
: Currently, this program is staged for future registration-directed development, which depends on the success and impact of potential alternative therapies for treating the underlying conditions leading to transplant, as well as other business and financial considerations. Following our completed Phase 1 clinical study of the administration of MultiStem cell therapy to patients suffering from leukemia or certain other blood-borne cancers, in which patients undergo radiation therapy and then receive a HSC transplant, we were granted orphan drug designation by the FDA and the EMA for MultiStem treatment in the prevention of GvHD, and the MultiStem product was granted Fast Track designation by the FDA for prophylaxis therapy against GvHD following HSC transplantation. Subsequently, our registration study design received a positive Scientific Advice opinion from the EMA and a SPA designation from the FDA.
|
•
|
Broad plasticity and multiple potential mechanisms of action.
MultiStem cells have a demonstrated ability in animal models to form a range of cell types and also appear to be able to deliver therapeutic benefit by producing factors that protect tissues against damage and inflammation, as well as enhancing or playing a direct role in revascularization or tissue regeneration.
|
•
|
Large-scale production.
Unlike conventional stem cells, such as blood-forming or HSCs, mesenchymal stem cells or other cell types, MultiStem cells have the potential to be produced on a large scale, processed, and cryogenically preserved, and then used clinically in a rapid and efficient manner. Material obtained from a single donor may be used to produce hundreds of thousands, or even millions, of individual doses, representing a yield far greater than we believe other stem cell technologies have been able to achieve.
|
•
|
“Off-the-shelf” utility.
Unlike traditional bone marrow or HSC transplants that require extensive genetic matching between donor and recipient, MultiStem administration does not require tissue matching or administration of immune suppressive drugs. The MultiStem product is administered as a cryogenically-preserved allogeneic product, meaning that these cells are not genetically matched between donor and recipient. This feature, combined with the ability to establish large MultiStem banks, could make it practical for clinicians to efficiently deliver stem cell therapy to a large number of patients.
|
•
|
Safety.
Certain other stem cell types, such as undifferentiated embryonic stem cells or induced pluripotent stem cells have shown the capacity to form ectopic tissue or teratomas, which are tumor-like growths. These could pose serious safety risks to patients. In contrast, MultiStem cells have shown a consistent and favorable tolerability profile that has been compiled over many years of preclinical study in a range of animal models by a variety of investigators and that is supported by clinical data from multiple studies to date.
|
•
|
preclinical tests in animals that demonstrate a reasonable likelihood of safety and effectiveness (if possible) in human patients;
|
•
|
submission to the FDA of an IND, which must become effective before clinical trials in humans can commence. If Phase 1 clinical trials are to be conducted initially outside the United States, a different regulatory filing is required, depending on the location of the trial;
|
•
|
adequate and well controlled human clinical trials to establish the safety and efficacy of the drug or biologic product for the intended disease indication;
|
•
|
for drugs (including biologics), submission of a New Drug Application, or NDA, or a BLA with the FDA; and
|
•
|
FDA approval of the NDA or BLA before any commercial sale or shipment of the drug.
|
ITEM 1A.
|
RISK FACTORS
|
•
|
our ability to raise capital to fund our operations;
|
•
|
the progress, scope, costs and results of our clinical and preclinical testing of any current or future product candidates;
|
•
|
the possibility of delays in, adverse events of and excessive costs of the development process;
|
•
|
the cost of manufacturing our product candidates;
|
•
|
the cost of prosecuting, defending and enforcing patent claims and other intellectual property rights;
|
•
|
the time and cost involved in obtaining regulatory approvals;
|
•
|
expenses related to complying with GMP of therapeutic product candidates;
|
•
|
costs of financing or acquiring additional capital equipment and development technologies;
|
•
|
competing technological and market developments;
|
•
|
our ability to establish and maintain collaborative and other arrangements with third parties to assist in bringing our products to market and the cost of such arrangements;
|
•
|
the amount and timing of payments or equity investments that we receive from collaborators or changes in or terminations of future or existing collaboration and licensing arrangements and the timing and amount of expenses we incur to support these collaborations and license agreements;
|
•
|
costs associated with the integration of any new operation, including costs relating to future mergers and acquisitions with companies that have complementary capabilities;
|
•
|
expenses related to the establishment of sales and marketing capabilities for products awaiting approval or products that have been approved;
|
•
|
expenses related to establishing manufacturing capabilities;
|
•
|
the level of our sales and marketing expenses; and
|
•
|
our ability to introduce and sell new products.
|
•
|
delays in the ability to manufacture the product in quantities or in a form that is suitable for any required preclinical studies or clinical trials;
|
•
|
an inability to produce the product at an appropriate cost or to scale for commercialization;
|
•
|
delays in the design, enrollment, implementation or completion of required preclinical studies and clinical trials;
|
•
|
an inability to follow our current development strategy for obtaining regulatory approval from regulatory authorities because of changes in the regulatory approval process;
|
•
|
less than desired or complete lack of efficacy or safety in preclinical studies or clinical trials; and
|
•
|
intellectual property constraints that prevent us from making, using or commercializing the product candidate.
|
•
|
test short-term safety and tolerability;
|
•
|
study the absorption, distribution, metabolism and elimination of the product candidate;
|
•
|
study the biochemical and physiological effects of the product candidate and the mechanisms of the drug action and the relationship between drug levels and effect; and
|
•
|
understand the product candidate’s side effects at various doses and schedules.
|
•
|
we were the first to file patent applications or to invent the subject matter claimed in patent applications relating to the technologies or product candidates upon which we rely;
|
•
|
others will not independently develop similar or alternative technologies or duplicate any of our technologies;
|
•
|
others did not publicly disclose our claimed technology before we conceived the subject matter included in any of our patent applications;
|
•
|
any of our pending or future patent applications will result in issued patents;
|
•
|
any of our patent applications will not result in interferences or disputes with third parties regarding priority of invention;
|
•
|
any patents that may be issued to us, our collaborators or our licensors will provide a basis for commercially viable products or will provide us with any competitive advantages or will not be challenged by third parties;
|
•
|
we will develop additional proprietary technologies that are patentable;
|
•
|
the patents of others will not have an adverse effect on our ability to do business; or
|
•
|
new proprietary technologies from third parties, including existing licensors, will be available for licensing to us on reasonable commercial terms, if at all.
|
•
|
health concerns, whether actual or perceived, or unfavorable publicity regarding our stem cell products or those of our competitors;
|
•
|
the timing of market entry as compared to competitive products;
|
•
|
the rate of adoption of products by our collaborators and other companies in the industry;
|
•
|
any product labeling that may be required by the FDA or other United States or foreign regulatory agencies for our products or competing or comparable products;
|
•
|
convenience and ease of administration;
|
•
|
pricing;
|
•
|
perceived efficacy and side effects;
|
•
|
marketing;
|
•
|
availability of alternative treatments;
|
•
|
levels of reimbursement and insurance coverage; and
|
•
|
activities by our competitors.
|
•
|
changes and limits in import and export controls;
|
•
|
increases in custom duties and tariffs;
|
•
|
changes in currency exchange rates;
|
•
|
economic and political instability;
|
•
|
changes in government regulations and laws;
|
•
|
absence in some jurisdictions of effective laws to protect our intellectual property rights; and
|
•
|
currency transfer and other restrictions and regulations that may limit our ability to sell certain products or repatriate profits to the United States.
|
•
|
we may have to issue convertible debt or equity securities to complete an acquisition, which would dilute our stockholders and could adversely affect the market price of our common stock;
|
•
|
an acquisition may negatively impact our results of operations because it may require us to incur large one-time charges to earnings, amortize or write down amounts related to goodwill and other intangible assets, or incur or assume substantial debt or liabilities, or it may cause adverse tax consequences, substantial depreciation or deferred compensation charges;
|
•
|
we may encounter difficulties in assimilating and integrating the business, technologies, products, personnel or operations of companies that we acquire;
|
•
|
certain acquisitions may disrupt our relationship with existing collaborators who are competitive to the acquired business;
|
•
|
acquisitions may require significant capital infusions and the acquired businesses, products or technologies may not generate sufficient revenue to offset acquisition costs;
|
•
|
an acquisition may disrupt our ongoing business, divert resources, increase our expenses and distract our management;
|
•
|
acquisitions may involve the entry into a geographic or business market in which we have little or no prior experience; and
|
•
|
key personnel of an acquired company may decide not to work for us.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 3A.
|
EXECUTIVE OFFICERS OF THE REGISTRANT
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Consolidated Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Contract revenue
(1)
|
$
|
23,737
|
|
|
$
|
2,843
|
|
|
$
|
16,238
|
|
|
$
|
10,298
|
|
|
$
|
286
|
|
Grant revenue
|
554
|
|
|
865
|
|
|
1,109
|
|
|
1,650
|
|
|
1,337
|
|
|||||
Total revenues
|
24,291
|
|
|
3,708
|
|
|
17,347
|
|
|
11,948
|
|
|
1,623
|
|
|||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
38,656
|
|
|
27,841
|
|
|
24,838
|
|
|
21,316
|
|
|
23,366
|
|
|||||
General and administrative
|
10,442
|
|
|
8,466
|
|
|
7,835
|
|
|
7,536
|
|
|
6,909
|
|
|||||
Depreciation
|
855
|
|
|
684
|
|
|
382
|
|
|
267
|
|
|
360
|
|
|||||
Total costs and expenses
|
49,953
|
|
|
36,991
|
|
|
33,055
|
|
|
29,119
|
|
|
30,635
|
|
|||||
Gain from insurance proceeds, net
|
617
|
|
|
—
|
|
|
682
|
|
|
—
|
|
|
—
|
|
|||||
Loss from operations
|
(25,045
|
)
|
|
(33,283
|
)
|
|
(15,026
|
)
|
|
(17,171
|
)
|
|
(29,012
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (expense) from change in fair value of warrants
|
—
|
|
|
728
|
|
|
(557
|
)
|
|
772
|
|
|
6,591
|
|
|||||
Other income (expense), net
|
762
|
|
|
314
|
|
|
209
|
|
|
(61
|
)
|
|
86
|
|
|||||
Loss before income taxes
|
(24,283
|
)
|
|
(32,241
|
)
|
|
(15,374
|
)
|
|
(16,460
|
)
|
|
(22,335
|
)
|
|||||
Income tax benefit
|
|
|
|
|
37
|
|
|
38
|
|
|
253
|
|
|||||||
Net loss
|
$
|
(24,283
|
)
|
|
$
|
(32,241
|
)
|
|
$
|
(15,337
|
)
|
|
$
|
(16,422
|
)
|
|
$
|
(22,082
|
)
|
Net loss per share, basic
|
$
|
(0.18
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.18
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.29
|
)
|
Weighted average shares outstanding, basic
|
136,641
|
|
|
112,053
|
|
|
84,715
|
|
|
82,144
|
|
|
76,955
|
|
|||||
Net loss per share, diluted
|
$
|
(0.18
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.18
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.31
|
)
|
Weighted average shares outstanding, diluted
|
136,641
|
|
|
112,053
|
|
|
84,715
|
|
|
82,851
|
|
|
78,541
|
|
|
December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
51,059
|
|
|
$
|
29,316
|
|
|
$
|
14,753
|
|
|
$
|
23,027
|
|
|
$
|
26,127
|
|
Working capital, excluding note payable (2016 and prior)
|
42,365
|
|
|
21,107
|
|
|
9,405
|
|
|
19,251
|
|
|
22,556
|
|
|||||
Total assets
|
61,730
|
|
|
33,593
|
|
|
19,060
|
|
|
25,129
|
|
|
28,718
|
|
|||||
Warrant liabilities and note payable
|
—
|
|
|
—
|
|
|
1,004
|
|
|
839
|
|
|
3,131
|
|
|||||
Total stockholders’ equity
|
43,116
|
|
|
23,376
|
|
|
11,181
|
|
|
19,724
|
|
|
20,895
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
our ability to raise capital to fund our operations;
|
•
|
the timing and nature of results from our MultiStem clinical trials, including the MASTERS-2 Phase 3 clinical trial and the Healios TREASURE clinical trial in Japan;
|
•
|
the possibility of delays in, adverse results of, and excessive costs of the development process;
|
•
|
our ability to successfully initiate and complete clinical trials of our product candidates;
|
•
|
the possibility of delays, work stoppages or interruptions in manufacturing by third parties or us, such as due to material supply constraints or regulatory issues, which could negatively impact our trials and the trials of our collaborators;
|
•
|
uncertainty regarding market acceptance of our product candidates and our ability to generate revenues, including MultiStem cell therapy for the treatment of ischemic stroke, ARDS, AMI and trauma, and the prevention of GvHD and other disease indications;
|
•
|
changes in external market factors;
|
•
|
changes in our industry’s overall performance;
|
•
|
changes in our business strategy;
|
•
|
our ability to protect and defend our intellectual property and related business operations, including the successful prosecution of our patent applications and enforcement of our patent rights, and operate our business in an environment of rapid technology and intellectual property development;
|
•
|
our possible inability to realize commercially valuable discoveries in our collaborations with pharmaceutical and other biotechnology companies;
|
•
|
our ability to work with Healios to reach an agreement for an option to license certain indications in China;
|
•
|
our ability to meet milestones and earn royalties under our collaboration agreements, including the success of our collaboration with Healios;
|
•
|
our collaborators’ ability to continue to fulfill their obligations under the terms of our collaboration agreements and generate sales related to our technologies;
|
•
|
the success of our efforts to enter into new strategic partnerships and advance our programs, including, without limitation, in North America, Europe and Japan;
|
•
|
our possible inability to execute our strategy due to changes in our industry or the economy generally;
|
•
|
changes in productivity and reliability of suppliers;
|
•
|
the success of our competitors and the emergence of new competitors; and
|
•
|
the risks mentioned elsewhere in this annual report on Form 10-K under Item 1A, “Risk Factors.”
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
51,059
|
|
|
$
|
29,316
|
|
Accounts receivable
|
262
|
|
|
586
|
|
||
Accounts receivable from Healios
|
1,108
|
|
|
153
|
|
||
Unbilled accounts receivable from Healios
|
3,620
|
|
|
—
|
|
||
Prepaid expenses and other
|
1,791
|
|
|
1,135
|
|
||
Total current assets
|
57,840
|
|
|
31,190
|
|
||
Equipment, net
|
3,002
|
|
|
2,206
|
|
||
Deposits and other
|
888
|
|
|
197
|
|
||
Total assets
|
$
|
61,730
|
|
|
$
|
33,593
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
9,163
|
|
|
$
|
4,469
|
|
Accrued compensation and related benefits
|
1,901
|
|
|
1,065
|
|
||
Accrued clinical trial related costs
|
1,276
|
|
|
1,453
|
|
||
Accrued expenses
|
461
|
|
|
425
|
|
||
Accrued license fee expense
|
—
|
|
|
1,900
|
|
||
Deposit from Healios
|
2,000
|
|
|
—
|
|
||
Deferred revenue - Healios
|
674
|
|
|
521
|
|
||
Deferred revenue
|
—
|
|
|
250
|
|
||
Total current liabilities
|
15,475
|
|
|
10,083
|
|
||
Advance from Healios
|
3,139
|
|
|
134
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, at stated value; 10,000,000 shares authorized, and no shares issued and outstanding at December 31, 2018 and 2017
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value; 300,000,000 shares authorized; 144,292,739 and 122,077,453 shares issued and outstanding at December 31, 2018 and 2017, respectively
|
144
|
|
|
122
|
|
||
Additional paid-in capital
|
416,014
|
|
|
373,884
|
|
||
Accumulated deficit
|
(373,042
|
)
|
|
(350,630
|
)
|
||
Total stockholders’ equity
|
43,116
|
|
|
23,376
|
|
||
Total liabilities and stockholders’ equity
|
$
|
61,730
|
|
|
$
|
33,593
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenues
|
|
|
|
|
|
||||||
Contract revenue from Healios
|
$
|
22,276
|
|
|
$
|
918
|
|
|
$
|
16,238
|
|
Royalty and other contract revenue
|
1,461
|
|
|
1,925
|
|
|
—
|
|
|||
Grant revenue
|
554
|
|
|
865
|
|
|
1,109
|
|
|||
Total revenues
|
24,291
|
|
|
3,708
|
|
|
17,347
|
|
|||
Costs and expenses
|
|
|
|
|
|
||||||
Research and development (including stock compensation expense of $1,609, $1,232 and $1,192 in 2018, 2017 and 2016, respectively)
|
38,656
|
|
|
27,841
|
|
|
24,838
|
|
|||
General and administrative (including stock compensation expense of $2,240, $1,812 and $1,676 in 2018, 2017 and 2016, respectively)
|
10,442
|
|
|
8,466
|
|
|
7,835
|
|
|||
Depreciation
|
855
|
|
|
684
|
|
|
382
|
|
|||
Total costs and expenses
|
49,953
|
|
|
36,991
|
|
|
33,055
|
|
|||
Gain from insurance proceeds, net
|
617
|
|
|
—
|
|
|
682
|
|
|||
Loss from operations
|
(25,045
|
)
|
|
(33,283
|
)
|
|
(15,026
|
)
|
|||
Income (expense) from change in fair value of warrants, net
|
—
|
|
|
728
|
|
|
(557
|
)
|
|||
Other income, net
|
762
|
|
|
314
|
|
|
209
|
|
|||
Loss before income taxes
|
(24,283
|
)
|
|
(32,241
|
)
|
|
(15,374
|
)
|
|||
Income tax benefit
|
—
|
|
|
—
|
|
|
37
|
|
|||
Net loss and comprehensive loss
|
$
|
(24,283
|
)
|
|
$
|
(32,241
|
)
|
|
$
|
(15,337
|
)
|
Net loss per common share, basic and diluted
|
$
|
(0.18
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.18
|
)
|
Weighted average shares outstanding, basic and diluted
|
136,641
|
|
|
112,053
|
|
|
84,715
|
|
|
Preferred Stock
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Total
Stockholders’
Equity
|
||||||||||||||||
|
Number
of Shares
|
|
Stated
Value
|
|
Number
of Shares
|
|
Par
Value
|
|
|||||||||||||||||
Balance at January 1, 2016
|
—
|
|
|
$
|
—
|
|
|
83,720,154
|
|
|
$
|
84
|
|
|
$
|
322,582
|
|
|
$
|
(302,942
|
)
|
|
$
|
19,724
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,868
|
|
|
—
|
|
|
2,868
|
|
|||||
Issuance of common stock from warrant exercises
|
—
|
|
|
—
|
|
|
161,366
|
|
|
—
|
|
|
163
|
|
|
—
|
|
|
163
|
|
|||||
Issuance of common stock and warrants, net of issuance costs
|
—
|
|
|
—
|
|
|
2,191,418
|
|
|
2
|
|
|
4,228
|
|
|
—
|
|
|
4,230
|
|
|||||
Issuance of common stock under equity compensation plans
|
—
|
|
|
—
|
|
|
556,364
|
|
|
1
|
|
|
(468
|
)
|
|
—
|
|
|
(467
|
)
|
|||||
Net and comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,337
|
)
|
|
(15,337
|
)
|
|||||
Balance at December 31, 2016
|
—
|
|
|
—
|
|
|
86,629,302
|
|
|
87
|
|
|
329,373
|
|
|
(318,279
|
)
|
|
11,181
|
|
|||||
Cumulative effect of accounting change
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(110
|
)
|
|
(110
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,154
|
|
|
—
|
|
|
3,154
|
|
|||||
Issuance of common stock from warrant exercises
|
—
|
|
|
—
|
|
|
1,843,363
|
|
|
2
|
|
|
1,860
|
|
|
—
|
|
|
1,862
|
|
|||||
Issuance of common stock, net of issuance costs
|
—
|
|
|
—
|
|
|
33,172,300
|
|
|
33
|
|
|
39,780
|
|
|
—
|
|
|
39,813
|
|
|||||
Issuance of common stock under equity compensation plans
|
—
|
|
|
—
|
|
|
432,488
|
|
|
—
|
|
|
(283
|
)
|
|
—
|
|
|
(283
|
)
|
|||||
Net and comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,241
|
)
|
|
(32,241
|
)
|
|||||
Balance at December 31, 2017
|
—
|
|
|
—
|
|
|
122,077,453
|
|
|
122
|
|
|
373,884
|
|
|
(350,630
|
)
|
|
23,376
|
|
|||||
Cumulative effect of accounting change
|
|
|
|
|
|
|
|
|
|
|
1,871
|
|
|
1,871
|
|
||||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,849
|
|
|
—
|
|
|
3,849
|
|
|||||
Issuance of warrant to Healios at fair value
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,080
|
|
|
—
|
|
|
1,080
|
|
|||||
Issuance of common stock, net of issuance costs
|
—
|
|
|
—
|
|
|
9,658,582
|
|
|
9
|
|
|
16,619
|
|
|
—
|
|
|
16,628
|
|
|||||
Issuance of common stock to Healios, net of issuance costs
|
—
|
|
|
—
|
|
|
12,000,000
|
|
|
12
|
|
|
20,983
|
|
|
—
|
|
|
20,995
|
|
|||||
Issuance of common stock under equity compensation plan
|
—
|
|
|
—
|
|
|
556,704
|
|
|
1
|
|
|
(401
|
)
|
|
—
|
|
|
(400
|
)
|
|||||
Net and comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,283
|
)
|
|
(24,283
|
)
|
|||||
Balance at December 31, 2018
|
—
|
|
|
$
|
—
|
|
|
144,292,739
|
|
|
$
|
144
|
|
|
$
|
416,014
|
|
|
$
|
(373,042
|
)
|
|
$
|
43,116
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net loss
|
$
|
(24,283
|
)
|
|
$
|
(32,241
|
)
|
|
$
|
(15,337
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
||||||
Depreciation
|
855
|
|
|
684
|
|
|
382
|
|
|||
Gain from forgiveness of note payable
|
—
|
|
|
—
|
|
|
(190
|
)
|
|||
Stock-based compensation
|
3,849
|
|
|
3,044
|
|
|
2,868
|
|
|||
Discount on revenue from issuance of warrant
|
1,080
|
|
|
—
|
|
|
—
|
|
|||
Other
|
—
|
|
|
(22
|
)
|
|
2
|
|
|||
Stock–based patent license and settlement expense
|
315
|
|
|
3,150
|
|
|
—
|
|
|||
Gain from insurance proceeds, net
|
(617
|
)
|
|
—
|
|
|
(682
|
)
|
|||
Change in fair value of warrant liabilities
|
—
|
|
|
(728
|
)
|
|
557
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
324
|
|
|
12
|
|
|
(237
|
)
|
|||
Accounts receivable from Healios - billed and unbilled
|
(4,545
|
)
|
|
(153
|
)
|
|
—
|
|
|||
Prepaid expenses and other
|
(1,346
|
)
|
|
(206
|
)
|
|
(462
|
)
|
|||
Accounts payable and accrued expenses
|
4,269
|
|
|
1,537
|
|
|
2,413
|
|
|||
Advances and deposits from Healios
|
4,889
|
|
|
134
|
|
|
—
|
|
|||
Deferred revenue - Healios
|
2,110
|
|
|
—
|
|
|
—
|
|
|||
Deferred revenue
|
(250
|
)
|
|
771
|
|
|
(245
|
)
|
|||
Net cash used in operating activities
|
(13,350
|
)
|
|
(24,018
|
)
|
|
(10,931
|
)
|
|||
Investing activities
|
|
|
|
|
|
||||||
Purchase of available-for-sale securities
|
—
|
|
|
—
|
|
|
(16,343
|
)
|
|||
Sales of available-for-sale securities
|
—
|
|
|
—
|
|
|
16,305
|
|
|||
Proceeds from insurance, net
|
617
|
|
|
—
|
|
|
682
|
|
|||
Purchases of equipment
|
(1,532
|
)
|
|
(285
|
)
|
|
(1,711
|
)
|
|||
Net cash used in investing activities
|
(915
|
)
|
|
(285
|
)
|
|
(1,067
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Proceeds from issuance of common stock, net
|
15,415
|
|
|
37,287
|
|
|
4,028
|
|
|||
Proceeds from issuance of common stock to Healios, net
|
20,995
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from exercise of warrants
|
—
|
|
|
1,862
|
|
|
163
|
|
|||
Shares retained for withholding tax payments on stock-based awards
|
(402
|
)
|
|
(283
|
)
|
|
(467
|
)
|
|||
Net cash provided by financing activities
|
36,008
|
|
|
38,866
|
|
|
3,724
|
|
|||
Increase (decrease) in cash and cash equivalents
|
21,743
|
|
|
14,563
|
|
|
(8,274
|
)
|
|||
Cash and cash equivalents at beginning of year
|
29,316
|
|
|
14,753
|
|
|
23,027
|
|
|||
Cash and cash equivalents at end of year
|
$
|
51,059
|
|
|
$
|
29,316
|
|
|
$
|
14,753
|
|
|
Balance at December 31, 2017
|
Adjustments Due to Topic 606
|
Balance at January 1, 2018
|
||||||
Assets
|
|
|
|
||||||
Accounts receivable - Healios
|
$
|
153
|
|
$
|
30
|
|
$
|
183
|
|
Contractual right to consideration from Healios
|
—
|
|
1,436
|
|
1,436
|
|
|||
|
|
|
|
||||||
Liabilities
|
|
|
|
||||||
Deferred revenue - Healios
|
(521
|
)
|
521
|
|
—
|
|
|||
Advance from Healios
|
(134
|
)
|
(116
|
)
|
(250
|
)
|
|||
|
|
|
|
||||||
Stockholders' Equity
|
|
|
|
||||||
Accumulated deficit
|
$
|
(350,630
|
)
|
$
|
1,871
|
|
$
|
(348,759
|
)
|
|
As of December
31, 2018
|
||||||||
|
As Reported
|
Balances without Adoption of Topic 606
|
Effect of Change
|
||||||
Assets
|
|
|
|
||||||
Unbilled accounts receivable from Healios
|
$
|
3,620
|
|
$
|
—
|
|
$
|
3,620
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
||||||
Deferred revenue - Healios
|
(674
|
)
|
(2,154
|
)
|
1,480
|
|
|||
|
|
|
|
||||||
Stockholders' Equity
|
|
|
|
||||||
Accumulated deficit
|
$
|
(373,042
|
)
|
$
|
(378,142
|
)
|
$
|
(5,100
|
)
|
|
Twelve months ended December
31, 2018
|
||||||||
|
As Reported
|
Balances without Adoption of Topic 606
|
Effect of Change
|
||||||
Revenues
|
|
|
|
||||||
Contract revenues from Healios
|
$
|
22,276
|
|
$
|
19,047
|
|
$
|
3,229
|
|
|
|
|
|
||||||
Net loss
|
(24,283
|
)
|
(27,512
|
)
|
(3,229
|
)
|
|||
|
|
|
|
||||||
Net loss per common share
|
|
|
|
||||||
Basic and diluted
|
$
|
(0.18
|
)
|
$
|
(0.20
|
)
|
$
|
0.02
|
|
|
December 31,
|
||||||
Equipment consists of (in thousands):
|
2018
|
|
2017
|
||||
Laboratory equipment
|
$
|
7,444
|
|
|
$
|
6,262
|
|
Office equipment and leasehold improvements
|
3,043
|
|
|
3,039
|
|
||
Process development equipment not yet in service
|
822
|
|
|
363
|
|
||
|
11,309
|
|
|
9,664
|
|
||
Accumulated depreciation
|
(8,307
|
)
|
|
(7,458
|
)
|
||
|
$
|
3,002
|
|
|
$
|
2,206
|
|
Level 1
|
Unadjusted quoted prices in active markets for identical assets or liabilities.
|
|
|
Level 2
|
Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.
|
|
|
Level 3
|
Unobservable inputs for the asset or liability.
|
|
Twelve months ended December
31, 2018
|
|||||
|
Point in Time
|
Over Time
|
||||
Contract revenue from Healios:
|
|
|
||||
License fee revenue
|
$
|
17,682
|
|
$
|
—
|
|
Product supply revenue
|
1,445
|
|
—
|
|
||
Service revenue
|
—
|
|
3,149
|
|
||
Other contract revenue
|
251
|
|
—
|
|
||
Total disaggregated revenues
|
$
|
19,378
|
|
$
|
3,149
|
|
|
December 31
|
||||
|
2018
|
|
2017
|
||
Stock-based compensation plans
|
16,096
|
|
|
16,952
|
|
Healios Warrants to purchase common stock
|
18,500
|
|
|
—
|
|
Shares issuable upon patent milestone
|
—
|
|
|
500
|
|
|
34,596
|
|
|
17,452
|
|
|
Number
of Options
|
|
Weighted
Average
Exercise
Price
|
|||
Outstanding January 1, 2016
|
7,052,642
|
|
|
$
|
3.05
|
|
Granted
|
2,840,000
|
|
|
2.13
|
|
|
Exercised
|
(164,827
|
)
|
|
1.56
|
|
|
Forfeited / Expired
|
(491,587
|
)
|
|
3.57
|
|
|
Outstanding December 31, 2016
|
9,236,228
|
|
|
2.76
|
|
|
Granted
|
2,596,480
|
|
|
1.47
|
|
|
Exercised
|
(136,056
|
)
|
|
1.50
|
|
|
Forfeited / Expired
|
(2,777,539
|
)
|
|
4.76
|
|
|
Outstanding December 31, 2017
|
8,919,113
|
|
|
1.78
|
|
|
Granted
|
2,434,732
|
|
|
2.26
|
|
|
Exercised
|
(112,484
|
)
|
|
1.57
|
|
|
Forfeited / Expired
|
(285,853
|
)
|
|
2.62
|
|
|
Outstanding December 31, 2018
|
10,955,508
|
|
|
$
|
1.87
|
|
Vested during 2018
|
2,045,058
|
|
|
$
|
1.83
|
|
Vested and exercisable at December 31, 2018
|
6,630,228
|
|
|
$
|
1.83
|
|
|
|
December 31, 2018
|
||||||||||||||||
|
|
Options Outstanding
|
|
Options Vested and Exercisable
|
||||||||||||||
Exercise Price
|
|
Number
of
Options
|
|
Weighted
Average
Remaining
Contractual
Life
|
|
Weighted
Average
Exercise
Price
|
|
Number
of
Options
|
|
Weighted
Average
Remaining
Contractual
Life
|
|
Weighted
Average
Exercise
Price
|
||||||
$1.01 – $1.71
|
|
5,634,994
|
|
|
6.7 years
|
|
$
|
1.50
|
|
|
4,058,842
|
|
|
4.4 years
|
|
$
|
1.52
|
|
$1.81 – $2.31
|
|
5,031,451
|
|
|
8.3 years
|
|
$
|
2.19
|
|
|
2,287,573
|
|
|
3.4 years
|
|
$
|
2.14
|
|
$2.45 – $5.28
|
|
289,063
|
|
|
2.1 years
|
|
$
|
3.53
|
|
|
283,813
|
|
|
2.1 years
|
|
$
|
3.55
|
|
|
|
10,955,508
|
|
|
|
|
|
|
6,630,228
|
|
|
|
|
Number
of
Restricted
Stock Units
|
|
Weighted
Average
Fair Value
|
|||
Outstanding January 1, 2016
|
1,069,100
|
|
|
$
|
1.55
|
|
Granted
|
933,552
|
|
|
2.19
|
|
|
Vested-common stock issued
|
(732,720
|
)
|
|
1.71
|
|
|
Forfeited / Expired
|
(68,773
|
)
|
|
1.90
|
|
|
Outstanding December 31, 2016
|
1,201,159
|
|
|
1.92
|
|
|
Granted
|
1,054,720
|
|
|
1.46
|
|
|
Vested-common stock issued
|
(571,118
|
)
|
|
1.75
|
|
|
Forfeited / Expired
|
(35,775
|
)
|
|
1.82
|
|
|
Outstanding December 31, 2017
|
1,648,986
|
|
|
1.69
|
|
|
Granted
|
787,968
|
|
|
2.31
|
|
|
Vested-common stock issued
|
(741,424
|
)
|
|
1.81
|
|
|
Forfeited / Expired
|
(38,842
|
)
|
|
1.74
|
|
|
Outstanding December 31, 2018
|
1,656,688
|
|
|
$
|
1.93
|
|
Vested/Issued cumulative at December 31, 2018
|
4,569,865
|
|
|
$
|
1.73
|
|
|
Percent of Income
before Income Taxes
|
||||
|
2018
|
|
2017
|
||
Statutory federal income tax rate
|
21.0
|
%
|
|
34.0
|
%
|
State income taxes - net of federal tax benefit
|
0.9
|
%
|
|
0.8
|
%
|
Other permanent differences
|
(3.7
|
)%
|
|
(5.5
|
)%
|
Valuation allowances
|
(29.2
|
)%
|
|
24.1
|
%
|
Federal rate change
|
—
|
%
|
|
(57.9
|
)%
|
Research and development - U.S.
|
11.0
|
%
|
|
4.5
|
%
|
Research and development - Foreign
|
—
|
%
|
|
—
|
%
|
Effective tax rate for the year
|
—
|
%
|
|
—
|
%
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Net operating loss carryforwards
|
$
|
38,813
|
|
|
$
|
35,409
|
|
Research and development credit carryforwards
|
9,979
|
|
|
7,301
|
|
||
Compensation expense
|
1,552
|
|
|
652
|
|
||
Other
|
1,166
|
|
|
1,467
|
|
||
Total deferred tax assets
|
51,510
|
|
|
44,829
|
|
||
Valuation allowance for deferred tax assets
|
(51,510
|
)
|
|
(44,829
|
)
|
||
Net deferred tax assets
|
$
|
—
|
|
|
$
|
—
|
|
|
2018
|
||||||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Full Year
|
||||||||||
Revenues (1)
|
$
|
1,066
|
|
|
$
|
19,391
|
|
|
$
|
2,321
|
|
|
$
|
1,513
|
|
|
$
|
24,291
|
|
Income (loss) from operations
|
(10,262
|
)
|
|
6,745
|
|
|
(9,976
|
)
|
|
(11,552
|
)
|
|
(25,045
|
)
|
|||||
Net income (loss)
|
(10,155
|
)
|
|
6,933
|
|
|
(9,740
|
)
|
|
(11,321
|
)
|
|
(24,283
|
)
|
|||||
Basic and diluted net loss per common share
|
$
|
(0.08
|
)
|
|
$
|
0.05
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.18
|
)
|
|
2017
|
||||||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Full Year
|
||||||||||
Revenues (1)
|
$
|
1,470
|
|
|
$
|
669
|
|
|
$
|
399
|
|
|
$
|
1,170
|
|
|
$
|
3,708
|
|
Loss from operations
|
(6,398
|
)
|
|
(6,338
|
)
|
|
(7,332
|
)
|
|
(13,215
|
)
|
|
(33,283
|
)
|
|||||
Net loss
|
(5,631
|
)
|
|
(6,267
|
)
|
|
(7,243
|
)
|
|
(13,100
|
)
|
|
(32,241
|
)
|
|||||
Basic and diluted net loss per common share (2)
|
$
|
(0.06
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.29
|
)
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
Title
|
|
Target
Bonus
|
|
Weighting on
Corporate Goals
|
||
Chief Executive Officer
|
|
60
|
%
|
|
100
|
%
|
President & Chief Operating Officer
|
|
45
|
%
|
|
80
|
%
|
Executive Vice President & Chief Scientific Officer
|
|
45
|
%
|
|
80
|
%
|
Senior Vice President of Finance
|
|
35
|
%
|
|
60
|
%
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED SHAREHOLDER MATTERS
|
Plan Category
|
|
Number of
securities
to be issued
upon
exercise of
outstanding
awards
|
|
Weighted-
average
exercise
price
of
outstanding
awards
|
|
Number of
securities
remaining
available for
future
issuance
under equity
compensation
plans
(excluding
securities
reflected
in column
(a))
|
||||
|
|
(a) (1)
|
|
(b) (2)
|
|
(c) (1)
|
||||
Equity compensation plan approved by security holders
|
|
10,024,515
|
|
|
$
|
1.90
|
|
|
3,483,912
|
|
Equity compensation plan not approved by security holders (3)
|
|
930,993
|
|
|
$
|
1.58
|
|
|
—
|
|
Total
|
|
10,955,508
|
|
|
|
|
3,483,912
|
|
(1)
|
Included in column (a) and (c) are both stock option and RSU awards under our equity compensation plans.
|
(2)
|
Reflects the weighted-average exercise price of outstanding stock options only, as opposed to RSUs that do not have an exercise price. The weighted average exercise price of all outstanding stock option awards under our plans is $
1.87
and the weighted average remaining term is
7.32
years.
|
(3)
|
The shares of common stock included in this plan category are issuable pursuant to outstanding awards under the Athersys, Inc. Equity Incentive Compensation Plan. This plan expired on June 8, 2017; therefore, no new awards can be issued under this plan.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
(In thousands)
|
Balance at
Beginning
of Year
|
|
Additions
|
|
Deductions
|
|
Balance at
End of Year
|
|
||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
Deducted from asset accounts:
|
|
|
|
|
|
|
|
|
||||||||
Tax valuation allowances
|
$
|
44,829
|
|
|
$
|
6,681
|
|
|
$
|
—
|
|
|
$
|
51,510
|
|
(A)
|
Total 2018
|
$
|
44,829
|
|
|
$
|
6,681
|
|
|
$
|
—
|
|
|
$
|
51,510
|
|
|
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
Deducted from asset accounts:
|
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts-note receivable
|
$
|
376
|
|
|
$
|
—
|
|
|
$
|
(376
|
)
|
|
$
|
0
|
|
(B)
|
Tax valuation allowances
|
54,772
|
|
|
—
|
|
|
(9,943
|
)
|
|
44,829
|
|
(A)
|
||||
Total 2017
|
$
|
55,148
|
|
|
$
|
—
|
|
|
$
|
(10,319
|
)
|
|
$
|
44,829
|
|
|
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Deducted from asset accounts:
|
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts-note receivable
|
$
|
363
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
376
|
|
(B)
|
Tax valuation allowances
|
48,921
|
|
|
5,851
|
|
|
—
|
|
|
54,772
|
|
(A)
|
||||
Total 2016
|
$
|
49,284
|
|
|
$
|
5,864
|
|
|
$
|
—
|
|
|
$
|
55,148
|
|
|
Exhibit No.
|
|
Exhibit Description
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
10.1*
|
|
|
|
|
|
10.2*
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4*
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6
|
|
|
|
|
|
10.7†
|
|
|
|
|
|
10.8†
|
|
|
|
|
|
10.9†
|
|
|
|
|
|
10.10†
|
|
10.11†
|
|
|
|
|
|
10.12†
|
|
|
|
|
|
10.13†
|
|
|
|
|
|
10.14†
|
|
|
|
|
|
10.15†
|
|
|
|
|
|
10.16†
|
|
|
|
|
|
10.17†
|
|
|
|
|
|
10.18†
|
|
|
|
|
|
10.19†
|
|
|
|
|
|
10.20†
|
|
|
|
|
|
10.21†
|
|
|
|
|
|
10.22†
|
|
|
|
|
|
10.23*
|
|
|
|
|
|
10.24
|
|
|
|
|
|
10.25*
|
|
|
|
|
|
10.26†
|
|
|
|
|
|
10.27†
|
|
|
|
|
|
10.28†
|
|
|
|
|
|
10.29†
|
|
|
|
|
|
10.30†
|
|
|
|
|
|
10.31†
|
|
|
|
|
|
10.32
|
|
|
|
|
|
10.33†
|
|
|
|
|
|
10.34†
|
|
|
|
|
|
10.35
|
|
|
|
|
|
10.36
|
|
|
|
|
|
10.37
|
|
|
|
|
|
10.38
|
|
|
|
|
|
10.39
|
|
|
|
|
|
10.40
|
|
|
|
|
|
10.41
|
|
|
|
|
|
10.42 *
|
|
|
|
|
|
10.43
|
|
|
|
|
|
10.44
|
|
|
|
|
|
10.45
|
|
|
|
|
|
21.1
|
|
|
|
|
|
23.1
|
|
|
|
|
|
24.1
|
|
|
|
|
|
31.1
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Confidential treatment requested as to certain portions, which portions have been filed separately with the SEC
|
†
|
Indicates management contract or compensatory plan, contract or arrangement in which one or more directors or executive officers of the registrant may be participants
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
ATHERSYS, INC.
|
|
|
|
|
|
By:
|
/s/ Gil Van Bokkelen
|
|
|
Gil Van Bokkelen
|
|
|
Title: Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
/s/ Gil Van Bokkelen
|
|
Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)
|
|
March 14, 2019
|
Gil Van Bokkelen
|
|
|
||
|
|
|
|
|
/s/ Laura K. Campbell
|
|
Senior Vice President of Finance (Principal Financial Officer and Principal Accounting Officer)
|
|
March 14, 2019
|
Laura K. Campbell
|
|
|
||
|
|
|
|
|
*
|
|
Executive Vice President, Chief Scientific Officer and Director
|
|
March 14, 2019
|
John J. Harrington
|
|
|
||
|
|
|
|
|
*
|
|
|
|
|
Hardy TS Kagimoto
|
|
Director
|
|
March 14, 2019
|
|
|
|
|
|
*
|
|
|
|
|
Lorin J. Randall
|
|
Director
|
|
March 14, 2019
|
|
|
|
|
|
*
|
|
|
|
|
Jack L. Wyszomierski
|
|
Director
|
|
March 14, 2019
|
|
|
|
|
|
*
|
|
|
|
|
Lee E. Babiss
|
|
Director
|
|
March 14, 2019
|
|
|
|
|
|
*
|
|
|
|
|
Ismail Kola
|
|
Director
|
|
March 14, 2019
|
*
|
Gil Van Bokkelen, by signing his name hereto, does hereby sign this Form 10-K on behalf of each of the above named and designated directors of the Company pursuant to Powers of Attorney executed by such persons and filed with the Securities and Exchange Commission.
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By:
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/s/ Gil Van Bokkelen
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Gil Van Bokkelen
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Attorney-in-fact
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Title
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Target
Bonus
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Weighting on
Corporate Goals
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Chief Executive Officer
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60
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%
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100
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%
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President & Chief Operating Officer
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45
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%
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80
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%
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Executive Vice President & Chief Scientific Officer
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45
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%
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80
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%
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Senior Vice President of Finance
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35
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%
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60
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%
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ABT HOLDING COMPANY
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By:
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/s/ Gil Van Bokkelen
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Name: Gil Van Bokkelen
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Title: Chairman & CEO
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ATHERSYS, INC.
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By:
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/s/ Gil Van Bokkelen
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Name: Gil Van Bokkelen
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Title: Chairman & CEO
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HEALIOS K.K.
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By:
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/s/ Hardy TS Kagimoto
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Name: Hardy TS Kagimoto, MD
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Title: Chairman & CEO
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ABT HOLDING COMPANY
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By:
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/s/ William O. Lehmann, Jr.
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Name: William O. Lehmann, Jr.
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Title: President
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ATHERSYS, INC.
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By:
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/s/ William O. Lehmann, Jr.
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Name: William O. Lehmann, Jr.
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Title: President
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HEALIOS K.K.
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By:
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/s/ Hardy TS Kagimoto
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Name: Hardy TS Kagimoto, MD
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Title: Chairman & CEO
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Name of Subsidiary
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Jurisdiction
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ABT Holding Company (formerly Athersys, Inc.)
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Delaware
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Advanced Biotherapeutics, Inc.
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Delaware
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Athersys GK
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Japan
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Athersys Limited
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United Kingdom
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ReGenesys LLC
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Delaware
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ReGenesys BVBA
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Belgium
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ReGenesys EU NV
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Belgium
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(1)
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Registration Statement (Form S-3, No. 333-222828) dated February 13, 2018,
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(2)
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Registration Statement (Form S-3, No. 333-216626) dated March 21, 2017,
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(3)
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Registration Statement (Form S-3MEF, No. 333-215772) dated January 27, 2017,
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(4)
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Registration Statement (Form S-8, No. 333-212119) dated June 20, 2016 pertaining to the Amended and Restated 2007 Long-Term Incentive Plan,
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(5)
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Registration Statement (Form S-3, No. 333-208629) dated January 13, 2016,
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(6)
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Registration Statement (Form S-8, No. 333-189406) dated June 18, 2013 pertaining to the Athersys, Inc. Long-Term Incentive Plan,
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(7)
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Registration Statement (Form S-8, No. 333-175023) dated June 20, 2011 pertaining to the Athersys, Inc. Long-Term Incentive Plan,
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(8)
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Registration Statement (Form S-8, No. 333-147379) dated November 14, 2007 pertaining to the Athersys, Inc. Equity Incentive Compensation Plan, and
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(9)
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Registration Statement (Form S-8, No. 333-147380) dated November 14, 2007 pertaining to the Athersys, Inc. Long-Term Incentive Plan;
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/s/ ERNST & YOUNG LLP
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Cleveland, Ohio
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March 14, 2019
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Signature
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Title
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/s/ Gil Van Bokkelen
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Chief Executive Officer and Chairman of the Board of Directors
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Gil Van Bokkelen
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/s/ Laura K. Campbell
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Senior Vice President of Finance
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Laura K. Campbell
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/s/ John J. Harrington
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Executive Vice President, Chief Scientific Officer and Director
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John J. Harrington
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/s/ Lorin J. Randall
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Director
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Lorin J. Randall
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/s/ Jack L. Wyszomierski
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Director
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Jack L. Wyszomierski
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/s/ Ismail Kola
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Director
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Ismail Kola
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/s/ Lee E. Babiss
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Director
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Lee E. Babiss
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/s/ Hardy T.S. Kagimoto
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Director
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Hardy T.S. Kagimoto
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1.
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I have reviewed this annual report on Form 10-K of Athersys, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Gil Van Bokkelen
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Gil Van Bokkelen
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Chief Executive Officer and
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Chairman of the Board of Directors
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1.
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I have reviewed this annual report on Form 10-K of Athersys, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Laura K. Campbell
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Laura K. Campbell
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Senior Vice President of Finance
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
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/s/ Gil Van Bokkelen
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Name: Gil Van Bokkelen
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Title: Chairman and Chief Executive Officer
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/s/ Laura K. Campbell
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Name: Laura K. Campbell
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Title: Senior Vice President of Finance
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