Athersys (ATHX) Stock: Heading Higher On Earnings

Athersys ATHX stock newsAthersys, Inc. (NASDAQ: ATHX) is having yet another strong start to the trading session in the market today after announcing earnings. This comes after yesterday’s early morning announcement surrounding the expansion of MultiStem®. Of course, the financial results proved to be positive, leading to further excitement that’s sending the stock higher in the market this morning. Today, we’ll talk about the financial results, what we’re seeing from the stock, and what we’ll be watching for with regard to ATHX ahead.

ATHX Reports Strong Financial Results

As mentioned above, Athersys is having an incredibly strong start to the trading session in the pre-market today, following up on gains that we saw from the stock yesterday. While yesterday’s gains were the result of an announcement of significant expansion to an existing collaboration with Healios, today’s gains are the result of the release of positive financial results for the fourth quarter. Here’s what we saw:

  • Revenue Showed Impressive Growth – During the fourth quarter, ATHX saw strong year over year growth in terms of revenue. During the quarter, the company generated $1.2 million in revenue. This is well ahead the figure in the same quarter 1 year earlier when the company generated $1 million in revenue.
  • Growth In Net Loss – While revenue growth was a positive, net loss was somewhat negative. During the quarter, ATHX generated a net loss of $13.1 million. That compares to a net loss of $7.1 million in the same quarter one year earlier. However, the company eased the minds of investors explaining that the increase in net loss was the result of settlement and license fees as well as a $1.1 million gain in the fourth quarter 1 year ago related to the fair value of warrant liabilities. At the moment, there is no corresponding warrant activity in the fourth quarter of 2017 as all warrants were exercised or expired in early 2017.

While net loss was a slight concern, the company made some serious progress in the fourth quarter. Here are some key highlights the company offered along with earnings:

  • Expansion of Healios Collaboration – Just yesterday, the company announced the expansion of the existing Healios collaboration. With the expansion, a $1.1 million equity investment will be made with Athersys. Not to mention $10 million in guaranteed license fees as well as other potential revenue over time surrounding MultiStem®.
  • .MASTERS-2 – The company also announced that it has advanced preparations for the MASTERS-2 Phase 3 registration study for ischemic stroke in order to move forward with initiation of the study.
  • Equity Facility – In February, the company also announced a new equity facility, giving rights to sell up to $100 million of common stock to Aspire Capital, LLC over the course of 3 years and providing access to much needed capital to support further operations at ATHX.

In a statement, Dr. Gil Van Bokkelen, CEO at ATHX, had the following to offer:

As we announced today in a separate press release, we have entered into a letter of intent to expand our collaboration with Healios, and we are actively working with them to complete the broader collaboration expansion by April 30, 2018, as we disclosed earlier today. In doing so, this would result in committed capital in the amount of $56.1 million, of which $31.1 million is already committed, in the form of the initial equity investment and license fee payments. Importantly, the broadened collaboration would lead to increased development of MultiStem treatment in Asia and provide us with capital to support our pivotal registration study for ischemic stroke, Masters-2, in the United States and Europe, as well as other important activities.

What We’re Seeing From The Stock 

One of the first things that we learn when we start to work in the market is that the news causes movements. In this particular case, the news was positive. While net loss data hit some hiccups, Athersys did incredibly well when it came to revenue. At the same time, the company highlighted a few key accomplishments that seem to be leading to excitement. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (7:59), ATHX is trading at $1.93 per share after a gain of $0.09 per share or 4.89% thus far today.

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on ATHX. In particular, we’re interested in following the continued story surrounding MultiStem and the extended collaboration with Healios. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!

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