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Athersys (ATHX) Q1/13 Results – SELL Until It Settles And Then Re-enter!

Net loss for of $9.4 million or $0.18 per share

Net loss for of $9.4 million or $0.18 per share compared to a net loss of $4.3 million or $0.17 per share for Q1/12.

Total revenues were $300 K compared to $2.7 million in Q1/12, reflecting a $2.4 million decrease in Pfizer contract revenues. The Pfizer-related contract revenues included the amortization of collaboration payments over an estimated performance period that ended in 6/12. Grant revenue remained relatively consistent for the periods presented, but may fluctuate from period to period based on the timing of grant-related activities and the award of new grants.

R&D expenses were $5.6 million for both Q1/13 and Q1/12, with clinical and preclinical development and personnel costs also remaining consistent. G&A expenses increased to $1.5 million compared to $1.3 million in Q1/12, due to increases in legal and professional fees. Net other income (expense) was $17 K, compared to expense of $800 K for Q1/12 was primarily related to milestone payments to former lenders that were concluded in 2012. The change in the fair value of warrant liabilities resulted in expense of $2.6 million, compared to income of $600 K in Q1/12, due to the re-pricing of warrants issued in 3/12 financing and increases in share pricing.

Net cash used in operating activities was $6.1 million, compared to $5.4 million in Q1/12 which was offset by $2 million in proceeds from equity sales <usage>pursuant to Aspire Capital Fund equity purchase agreement. Shares used in computing the net loss were 53.45 million versus 25.54 million in Q1/12.

  • ATHX ended with $21.3 million in cash and cash equivalents, compared to $25.5 million at 12/31/12.

Q1/13 Highlights:

  • Authorization from the U.K. Medicines and Healthcare products Regulatory Agency ("MHRA") authorizing the inclusion of UK stroke centers in ongoing P2 clinical study of MultiStem(NYSE:R) cell therapy to treat ischemic stroke;
  • Continued P2 clinical study with partner, Pfizer (NYSE:PFE), involving administration of MultiStem cells to patients suffering from ulcerative colitis. Initial results from this double blind, placebo-controlled trial are expected in Q4/13;
  • Published 2 articles in peer-reviewed scientific journals, Journal of Immunology and Circulation, demonstrating relevance of MultiStem for autoimmune disease, transplantation and vascular disease;
  • Continued partnering discussions focused on 5HT2c agonist program for potential treatment of obesity and other conditions such as schizophrenia, and on certain cell therapy programs.

The Bottom Line: ATHX's focus remains MultiStem for ulcerative colitis with PFE and MultiStem for ischemic stroke.

Research and support commitments under the PFE-RTI collaborations are essentially complete - absent any new business collaboration, ATHX contract revenue will be reduced as we saw in Q1/13.

ATHX has 2 ongoing MultiStem P2b clinical trials, a study in ulcerative colitis in collaboration with PFE and an ischemic stroke study. ATHX have several other programs, which we could move forward in the mid to late stage clinical development, including the proposed P2 & 3 study evaluating MultiStem to prevent GvHD currently being reviewed by the FDA and also a potential P2 study in the cardiovascular area - however, ATHX is not planning moving studies ahead until they secure additional proceeds.

What did I hear new - nothing - radio silence - same message working on all fronts in multiple and proposed efforts!

ATHX closed at $2.12 after running the gamut in the May period and mid-April. ATHX was DOWN -5.7% on 27 K shares in yesterday's after-market and today's indication is DOWN in the range $1.92 to $2.06. Earnings usually drop the shares post the vent until they work their way through the trader's sandbox

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.