Organ regeneration specialist Biostage (NSDQ:BSTG), formerly know as Harvard Apparatus Regenerative Technology, announced that it will offer $5 million worth of common stock May 19 to fund its ongoing R&D efforts.
BSTG shares closed down -3.5% at $1.65 apiece yesterday on the news.
The offering comes on the heels of word that the Holliston, Mass.-based company successfully regenerated part of an esophagus in a pre-clinical collaboration with the Mayo Clinic. During an animal study, full regeneration of the esophagus apparently occurred in 2.
Biostage’s Cellspan esophageal implants consist of “proprietary biocompatible synthetic scaffold seeded with the recipient animal’s own stem cells,” the company said in a press release. The scaffold was removed via the animal’s mouth in a non-surgical procedure. Previous efforts at organ regeneration have used non-retrievable implants, which resulted in an immune response from the body, the company said.
“Beyond the unparalleled evidence of tissue regeneration, we are also very encouraged that there has been no evidence of leakage or infection at the surgery sites in any of the animals studied so far. Such issues pose regular and life-threatening dangers for esophageal cancer patients surgically treated with the existing standards of care. These results represent a dramatic step forward in our quest to bring new solutions to patients with life-threatening conditions,” chief medical officer Dr. Saverio La Fancesca said in prepared remarks.
The company believes the pre-clinical data are sufficient to commence Good Clinical Laboratory studies, which a precursor to filling an Investigative New Drug application with the FDA. Biostage said it plans to finalize its IND application by the end of the year.
Biostage last week reported a net loss of -$2.5 million for the 1st quarter of 2016. The company did not earn any revenues, and had quarterly R&D expenses of $1.4 million. Its cash holding are worth $4.8 million.