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Brooklyn ImmunoTherapeutics Announces Third Quarter 2021 Financial Results

11/09/2021

NEW YORK, Nov. 09, 2021 (GLOBE NEWSWIRE) -- Brooklyn ImmunoTherapeutics, Inc. (Nasdaq:BTX) (“Brooklyn”), a biopharmaceutical company focused on exploring the role that cytokine, gene editing, and cell therapy can have in treating patients with cancer, blood disorders, and monogenic diseases, today announced financial results for the quarter ended September 30, 2021.

Financial and corporate highlights for the quarter ended September 30, 2021 and subsequently include the following:

  • Transitioned from the NYSE American to the Nasdaq Global Market to better align with industry peers
  • Completed the acquisition of Novellus Therapeutics
  • Appointed Roger Sidhu, M.D. as chief medical officer, Jay Sial as chief administrative officer and Kevin D’Amour, Ph.D. as chief scientific officer.

Howard Federoff, M.D., Ph.D., Brooklyn’s President and Chief Executive Officer, commented, “We continue evolving Brooklyn ImmunoTherapeutics into a platform company with a pipeline of next-generation engineered cellular, gene editing and cytokine products. The acquisition of Novellus has provided us with the full range of MSCs to combine with our licensed mRNA-based cell reprogramming and gene editing technology from Factor Bioscience. We believe this platform technology will yield product candidates in varying stages of development from target selection to research and preclinical, including one in the respiratory area that is in the IND-enabling stage.”

Dr. Federoff continued, “With the addition of key personnel, including both a chief medical officer and a chief scientific officer, we are now appropriately positioned to execute on our ambitious agenda and to begin using our technology to its fullest extent. We believe our future new drug candidates are best suited to address a variety of underserved medical conditions. In addition, we can go confidently about our work knowing that we have also placed a chief administrative officer within the Company to ensure that the business is run with the same precision as the science.”

“We also continue to benefit from a strong balance sheet and a growing in-licensed intellectual property portfolio,” said Dr. Federoff. “As I have indicated before, following the Novellus acquisition, we had approximately $25 million of cash on hand, which we estimate will fund our operations and expansion into 2023. In the meantime, we believe that the transition from the NYSE American to the Nasdaq Global Markets will place us among more of our industry peers, and as a result, attract additional investors who might be more likely to be seeking to invest in a company such as ours.”

“Finally, as we await the readout of our Phase 2b trial for neoadjuvant head and neck cancer with our original asset, IRX-2 (a human-derived mixed cytokine product), during the first half of 2022, we continue investigator-driven trials in a number of additional cancer types and look forward to sharing these outcomes as appropriate,” concluded Dr. Federoff.

Financial Results for Quarter Ended September 30, 2021

Operating expenses for the quarter ended September 30, 2021 were $86.3 million, including $80.5 million of acquired in-process research and development expense related to the Novellus acquisition, compared to $2.0 million of operating expenses for the quarter ended September 30, 2020.

Research and development expenses, excluding the acquired in-process research and development, were $1.5 million for the quarter ended September 30, 2021 compared to $0.9 million in the quarter ended September 30, 2020. Research and development expenses increased due to increased headcount and non-cash stock-based compensation resulting from the issuance of equity awards. Brooklyn expects research and development expenses to continue to grow as it expands its clinical trial activities and gene-editing cell therapy research.

General and administrative expenses were $4.3 million in the third quarter of 2021 compared to $1.1 million during the same period in 2020. The quarter-over-quarter increase in general and administrative expense was primarily related to increased legal, accounting and consulting fees associated with merger and acquisition activity, costs associated with being a publicly traded company, increased headcount, increased insurance expense and increased non-cash stock-based compensation. Brooklyn expects general and administrative expenses to continue to increase in future periods as it increases its business activities and incurs costs associated with being a publicly traded company.

Net loss for the quarter ended September 30, 2021 was $86.1 million, as compared to a net loss of $2.0 million for the quarter ended September 30, 2020.

As of September 30, 2021, Brooklyn had approximately $24.4 million in cash.

About Brooklyn ImmunoTherapeutics

Brooklyn is focused on exploring the role that cytokine, gene editing, and cell therapy can have in treating patients with cancer, blood disorders, and monogenic diseases.

Brooklyn’s most advanced program is IRX-2, a human cell-derived cytokine therapy, studying the safety and efficacy of IRX-2 in patients with head and neck cancer in Phase 2B. In a Phase 2A clinical trial in head and neck cancer, IRX-2 demonstrated an overall survival benefit. Additional studies are either underway or planned in other solid tumor cancer indications.

Brooklyn has multiple next-generation cell and gene-editing therapies in preclinical development for various indications including acute respiratory distress syndrome, solid tumor indications, as well as in vivo gene-editing therapies for rare genetic diseases. For more information about Brooklyn and its clinical programs, please visit www.BrooklynITx.com.

FINANCIAL TABLES FOLLOW


BROOKLYN IMMUNOTHERAPEUTICS, INC.
 CONDENSED CONSOLIDATED BALANCE SHEETS

    September 30, 2021     December 31,  2020  
ASSETS   (unaudited)        
Current assets:            
Cash   $ 24,381,831     $ 1,630,455  
Tax receivable     23,303       -  
Prepaid expenses and other current assets     1,353,183       102,322  
Total current assets     25,758,317       1,732,777  
Property and equipment, net     547,006       594,106  
Right-of-use assets - operating leases     2,665,828       2,092,878  
Goodwill     2,043,747       2,043,747  
In-process research and development     6,860,000       6,860,000  
Investment in NoveCite     1,000,000       -  
Security deposits and other assets     519,467       453,252  
Total assets   $ 39,394,365     $ 13,776,760  
                 
LIABILITIES AND STOCKHOLDERS’ AND MEMBERS’ EQUITY (DEFICIT)                
Current liabilities:                
Accounts payable   $ 996,262     $ 1,275,223  
Accrued expenses     2,128,493       1,051,020  
Loans payable     410,000       410,000  
PPP loan, current     -       115,972  
Operating lease liabilities, current     408,125       273,217  
Other current liabilities     617,661       -  
Total current liabilities     4,560,541       3,125,432  
Contingent consideration     19,360,000       20,110,000  
Operating lease liabilities, non-current     2,410,667       1,905,395  
PPP loan, non-current     -       193,933  
Other liabilities     22,863       22,863  
Total liabilities     26,354,071       25,357,623  
                 
Stockholders’ and members’ equity (deficit):                
Class A membership units     -       23,202,005  
Class B membership units     -       1,400,000  
Class C membership units     -       1,000,000  
Common units     -       197,873  
Series A convertible preferred stock     781       -  
Common stock, $0.005 par value, 100,000,000 shares authorized; 52,043,818 issued and outstanding at September 30, 2021; no shares issued and outstanding at December 31, 2020.     260,219       -  
Additional paid-in capital     164,010,804       -  
Accumulated deficit     (151,231,510 )     (37,380,741 )
Total stockholders’ and members’ equity (deficit)     13,040,294       (11,580,863 )
Total liabilities and stockholders’ and members’ equity (deficit)   $ 39,394,365     $ 13,776,760  


BROOKLYN IMMUNOTHERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

    Three months ended September 30,     Nine months ended September 30,  
    2021     2020     2021     2020  
Operating expenses:                        
Research and development     1,466,652       923,529       8,379,062       2,299,669  
Acquired in-process research and development     80,537,551       -       80,537,551       -  
General and administrative     4,258,178       1,084,057       10,515,088       2,741,652  
Transaction costs     -       -       5,765,407       -  
Change in fair value of contingent consideration     70,000       -       (750,000 )     -  
Total operating expenses     86,332,381       2,007,586       104,447,108       5,041,321  
Loss from operations     (86,332,381 )     (2,007,586 )     (104,447,108 )     (5,041,321 )
Other income (expenses):                                
Loss on sale of NTN assets     -       -       (9,648,173 )     -  
Other income (expense), net     277,069       (12,559 )     252,318       (31,482 )
Total other income (expenses), net     277,069       (12,559 )     (9,395,855 )     (31,482 )
Net loss     (86,055,312 )     (2,020,145 )     (113,842,963 )     (5,072,803 )
Series A convertible preferred stock dividend     -       -       (7,806 )     -  
Net loss attributable to common stockholders   $ (86,055,312 )   $ (2,020,145 )   $ (113,850,769 )   $ (5,072,803 )
Net loss per common share - basic and diluted   $ (1.70 )   $ (0.11 )   $ (2.82 )   $ (0.29 )
Weighted average shares outstanding - basic and diluted     50,543,982       17,626,806       40,362,440       17,570,973  


BROOKLYN IMMUNOTHERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

    For the nine months ended
September 30,
 
    2021     2020  
Cash flows used in operating activities:            
Net loss   $ (113,842,963 )   $ (5,072,803 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Depreciation and amortization     92,754       72,909  
Stock-based compensation     3,301,697       68,202  
Amortization of right-to-use asset     242,849       -  
Transaction costs - shares to Financial Advisor     5,765,407       -  
Loss on sale of NTN assets     9,648,173       -  
Loss on disposal of fixed assets     12,626       -  
Gain on forgiveness of PPP loan     (309,905 )     -  
Acquired in-process research and development     80,537,551       -  
Change in fair value of contingent consideration     (750,000 )     -  
Changes in operating assets and liabilities:                
Account receivable     4,680       -  
Prepaid expenses and other current assets     (1,109,270 )     (69,240 )
Security deposits and other non-current assets     (31,496 )     (84,914 )
Accounts payable and accrued expenses     5,881       (1,392,925 )
Operating lease liability     (225,618 )     (2,356 )
Other liabilities     -       17,842  
Net cash used in operating activities     (16,657,634 )     (6,463,285 )
Cash flows used in investing activities:                
Purchase of property and equipment     (6,860 )     (26,177 )
Purchase of NTN, net of cash acquired     147,262       -  
Purchase of Novellus, net of common stock issued and cash acquired     (22,853,608 )     -  
Proceeds from the sale of NTN assets, net of cash disposed     118,594       -  
Net cash used in investing activities     (22,594,612 )     (26,177 )
Cash flows provided by financing activities:                
Net proceeds of common stock issued to Lincoln Park     52,025,414       -  
Proceeds from the exercise of stock options     10,202       -  
Proceeds from loans payable     -       309,905  
Proceeds from the collection of subscription receivable     -       275,000  
Repayment of NTN’s PPP loan     (531,994 )     -  
Proceeds from sale of members’ equity     10,500,000       3,858,750  
Net cash provided by financing activities     62,003,622       4,443,655  
Net increase (decrease) in cash and cash equivalents     22,751,376       (2,045,807 )
Cash and cash equivalents at beginning of period     1,630,455       5,100,819  
Cash and cash equivalents at end of period   $ 24,381,831     $ 3,055,012  

Forward-Looking Statements

The third through sixth paragraphs of this release and the second and third paragraphs under the heading “Financial Results for Quarter Ended September 30, 2021” contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are any statements that are not statements of historical fact and may be identified by terminology such as “believe,” “could,” “estimate,” “expect,” “plan,” “possible,” “potential,” “project,” “will” or other similar words. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Actual results could differ materially from those stated or implied in any forward-looking statement as a result of various factors, including, but not limited to, uncertainties related to: (i) the evolution of Brooklyn’s business model into a platform company focused on cellular, gene editing and cytokine programs; (ii) Brooklyn’s ability to successfully, cost-effectively and efficiently develop its technology and products; (iii) Brooklyn’s ability to successfully commence clinical trials of any products on a timely basis or at all; (iv) Brooklyn’s ability to successfully fund and manage the growth of its development activities; (v) Brooklyn’s ability to obtain regulatory approvals of its products for commercialization; and (vi) uncertainties related to the impact of the COVID-19 pandemic on the business and financial condition of Brooklyn, including on the timing and cost of its clinical trials. You should not rely upon forward-looking statements as predictions of future events. The forward-looking statements made in this communication speak only as of the date on which they were made, and Brooklyn does not undertake any obligation to update the forward-looking statements contained herein to reflect events that occur or circumstances that exist after the date hereof, except as may be required by applicable law or regulation.  Factors that may impact Brooklyn's success are more fully disclosed in Brooklyn's periodic public filings with the U.S. Securities and Exchange Commission, particularly under the heading “Risk Factors” in Brooklyn’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021.

Investor Relations Contact:
CORE IR
516-222-2560
investors@brooklynitx.com

Media Contact:
Jules Abraham
CORE IR
917-885-7378
julesa@coreir.com 

 


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