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Bone Therapeutics reports half year 2020 results

Recruitment of JTA-004 phase III study in knee osteoarthritis on track to be completed by year-end
 
Phase IIb trial with ALLOB in tibial fractures approved in most countries ready to start in H2 2020
 
A total amount of EUR 15.0 million committed gross proceeds raised in two successful funding operations to support clinical progress
 
Broadening product portfolio from orthopedics into inflammatory conditions, leveraging Bone Therapeutics’ allogeneic MSC platform
 

• During the first wave of the global COVID-19 pandemic, Bone Therapeutics decided to reduce the recruitment activities of its studies to a minimum to support healthcare systems in the respective trial countries enabling them to concentrate on treating COVID-19 patients whilst necessary.
• Following the lifting of the COVID-19 lockdown measures, Bone Therapeutics initiated the recruitment of its pivotal phase III study with the next generation of viscosupplement, JTA-004, targeting osteoarthritic knee pain in mid-May 2020. The clinical trial has now been approved in all seven territories in which Clinical Trial Applications (CTA) of the study had been submitted, these being Belgium, Czech Republic, Denmark, Hong Kong, Moldavia, Poland and United Kingdom. Approximately 20% of the targeted assessable patients have been treated since the initiation of the trial.
• The phase IIb study of its allogeneic cell therapy product, ALLOB, in patients with difficult tibial fractures has received approval from regulatory authorities in the main six of the seven European countries in which the Company has applied for the study. Patient recruitment is expected to start in the second half of the year.
• In March, the company appointed Stefanos Theoharis, PhD as Chief Business Officer (CBO), further strengthening its management team. With more than 15 years of business development experience in the pharma and biotech industry, specifically in the cell and gene therapy space, Stefanos will be responsible for the company’s corporate development activities and the execution of its business strategy.
• Post period, in August, Bone Therapeutics was granted EUR 1.0 million in non-dilutive funding under the form of recoverable cash advances from the Walloon Region, Belgium. This funding will provide additional financial support to advance its current phase III clinical study with JTA-004.
• Also in August, the Company received two additional grants with a total value of EUR 0.6 million from the Walloon Region for research and initial preparatory steps towards clinical development of BT-20, its new allogeneic and off-the-shelf cell therapy product, leveraging its expertise in Mesenchymal Stromal Cell (MSC) biology to expand its portfolio from orthopedics and bone diseases to inflammatory conditions. Both grants, as well as the recoverable cash advances, are subject to conditions precedent. 

• In April, Bone Therapeutics announced that it secured EUR 11.00 million financing. The financing operation consisted of EUR 4.75 million bridge loans, EUR 1.26 million in equity private placement (through immediate conversion of convertible bonds (CBs)) by existing shareholders and, on an as-needed basis, a EUR 4.99 million in private placement of CBs.
• Subsequently, in May, Bone Therapeutics received an additional EUR 4.00 million of financing from existing investors in the form of subordinated bonds with the option to convert. The total amount of committed gross proceeds for both funding operations amount to EUR 15.00 million.
• The structure of the financing (mainly non-dilutive) combined with an operating loss for the period led to a negative shareholders’ equity of EUR 4.6 million at the end of June 2020.
• During the first six months of 2020, total operating income amounted to EUR 1.04 million, a slight decrease compared to the same period in 2019 (EUR 1.68 million).
• Operating loss for the period amounted to EUR 9.10 million, compared to EUR 5.44 million in H1 2019.
• The Company ended the first six months of 2020 with EUR 10.04 million in cash and cash equivalents. Cash used for the period amounted to EUR 8.86 million, excluding net proceeds obtained from financing activities, compared to EUR 5.12 million over the same period of 2019. 

• At the current recruitment rate, patient enrolment for the JTA-004 phase III study is on track to be completed before year-end. Bone Therapeutics anticipates reporting topline results on the 3-month primary endpoint and 6-month follow-up period in the second half of 2021.
• The Company expects to initiate clinical trial activities and patient recruitments for the ALLOB phase IIb study in patients with difficult tibial fractures in European clinical centers in the second half of 2020.
• As the evolution of the pandemic is uncertain and cannot be predicted at present, both studies may encounter a delay compared to the anticipated schedule. The situation in Europe and Hong Kong is actively and closely monitored on an ongoing basis.
• In November, Bone Therapeutics plans to initiate the first discussions with the US FDA (Food and Drug Administration) in preparation for the next steps in the clinical development of JTA-004 in the US, a large, important market.
• In the second half of 2020, the Company also expects to report results from the 2-year follow-up period of the phase IIa study with ALLOB in patients undergoing a spinal fusion procedure.
• Bone Therapeutics continues to hold discussions with potential partners to explore business opportunities. It also intends to prepare a fundraise in the second half of 2020. Existing shareholders have already taken a pre-commitment to participate.
• Good cost and cash management will remain a key priority, as already reflected in our operating expenses. Cash used for the full year 2020 is anticipated to amount to EUR 15.00-16.00 million, largely driven by external costs associated with increased clinical trial activities and costs associated with the JTA phase III and ALLOB phase IIb clinical studies. Taking into account the total committed gross proceeds of EUR 15 million raised through the Private Placements and in bridge loans in April and May of this year, the convertible bonds and the recoverable cash advances granted by the Walloon Region, the Company anticipates having sufficient cash to carry out its business objectives into Q2 2021. This assumes normal operation, as there may be further effects of the ongoing COVID-19 epidemic. Potential delay in patient recruitment in both studies could lower the expected cash burn and extend the anticipated cash runway further into 2021. 

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