Athersys and HEALIOS KK Announce Advancement of Their MultiStem Commercial Partnership

CLEVELAND & TOKYOâ€"(BUSINESS WIRE)â€"Athersys, Inc. (NASDAQ: ATHX) and HEALIOS K.K. (Healios) (TSE Mothers: 4593) jointly announced today an expansion and deepening of their partnership to optimize and better align the collaboration structure to drive therapeutic reach and commercial success in Japan for the MultiStem® (invimestrocel) product following potential regulatory approval. The changes and new agreements reflect improved clarity regarding Japanese regulatory, manufacturing, and commercial requirements gained in recent years and better enable the optimal investments and efforts in manufacturing and commercialization. The agreements will facilitate the regulatory approval process for MultiStem in Japan, prepare the companies for commercial manufacturing and supply and expand the overall scope of collaboration between the companies.

“We are happy to have reached this comprehensive agreement with Healios which strengthens the alignment, commitment, and motivation of both companies and improves the potential for MultiStem commercial success in Japan,” stated Mr. William (B.J.) Lehmann, Jr., President, and Interim CEO of Athersys. “This is an important step for us as it brings us closer to achieving our first regulatory approval and providing supply for commercialization in a key market and meeting our goal of bringing life-saving therapies to patients worldwide.”

Dr. Hardy TS Kagimoto, Chairman and CEO of Healios, commented, “We have come a long way in building a stronger, mutually beneficial, win-win partnership between Athersys and Healios. With the improved relationship and clarification of the roles, responsibilities, and incentives as reflected in the new agreements, we aim to accelerate the development, regulatory approval, and delivery of life-saving treatments for patients. We are committed to achieving our mission: ‘Life Explosion!’ by delivering cures for patients with unmet medical needs.”

“I would like to compliment and express my appreciation to the boards and management of both Healios and Athersys for their dedication and commitment in working through challenging issues to achieve this important milestone for the benefit of patients dealing with severe medical issues such as acute respiratory distress syndrome and stroke and for the benefit of shareholders of both Athersys and Healios,” added Dr. Ismail Kola, Chairman of the Board of Athersys. “This is truly a win-win enhancement to the partnership.”

Key elements of the improved collaboration include:

Providing Healios access to Athersys’s manufacturing technology to enable Healios to manufacture MultiStem products, using a qualified manufacturer, for a potential commercial launch in Japan and allow Athersys to focus resources on advanced commercial manufacturing development.

Clarifying Athersys’s role in providing support services necessary for regulatory approvals, manufacturing readiness, and commercial launch in Japan.

Sharing investment in commercial preparation and product supply through planned investment by Healios in certain manufacturing preparation activities and additional production capacity for Japan and, through deferrals and certain adjustments to financial terms of the license agreement, including milestones and royalties, during the early commercial phase.

Expanding Healios’ license in Japan to include two new additional indications under certain conditions to enable Healios to further leverage its investment in MultiStem while providing Athersys the opportunity for additional revenues from this market.

Increasing alignment between the companies and creating incentives for accelerated execution and investment, through $8 million in new milestone payments available to Athersys tied to certain Japan commercial manufacturing activities and the establishment of large scale manufacturing relevant to Japan, and through warrants issued to Healios to purchase up to a total of 10 million shares of Athersys common stock at a premium to the current market price and exercisable for 60 days following regulatory approval for ARDS and ischemic stroke, respectively.

About Athersys

Athersys is a biotechnology company engaged in the discovery and development of therapeutic product candidates designed to extend and enhance the quality of human life. The Company is developing its MultiStem® cell therapy product, a patented, adult-derived “off-the-shelf” stem cell product, initially for disease indications in the neurological, inflammatory and immune, cardiovascular, and other critical care indications and has several ongoing clinical trials evaluating this potential regenerative medicine product. Athersys has forged strategic partnerships and a broad network of collaborations to further advance MultiStem cell therapy toward commercialization. More information is available at www.athersys.com. Follow Athersys on Twitter at www.twitter.com/athersys.

About Healios:

Healios is Japan’s leading clinical-stage biotechnology company harnessing the potential of stem cells for regenerative medicine. It aims to offer new therapies for patients suffering from diseases without effective treatment options. Healios is a pioneer in the development of regenerative medicines in Japan, where it leverages its proprietary, gene-edited “universal donor” induced pluripotent stem cell (iPSC) platform technology to develop next-generation regenerative treatments across several domains. Healios combines its deep iPSC and gene editing expertise to make innovative engineered cell therapeutics including HLCN061, its functionally enhanced NK cell product candidate to treat solid cancer indications. Healios’ near-term pipeline includes the somatic stem cell product HLCM051 (MultiStem), which is currently being evaluated in Japan in Phase 2/3 and Phase 2 clinical trials for ischemic stroke and acute respiratory distress syndrome, respectively. Healios was established in 2011, has over 140 people in its Tokyo and Kobe operations, and has been listed on the Tokyo Stock Exchange since 2015 (TSE Mothers: 4593). https://www.healios.co.jp/en.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These forward-looking statements relate to, among other things, the expected timetable for development of our product candidates, our growth strategy, and our future financial performance, including our operations, economic performance, financial condition, prospects, and other future events. We have attempted to identify forward-looking statements by using such words as “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “should,” “suggest,” “will,” or other similar expressions. These forward-looking statements are only predictions and are largely based on our current expectations. A number of known and unknown risks, uncertainties, and other factors could affect the accuracy of these statements. Some of the more significant known risks that we face are the risks and uncertainties inherent in the process of discovering, developing, and commercializing products that are safe and effective for use as therapeutics, including the uncertainty regarding market acceptance of our product candidates and our ability to generate revenues. The following risks and uncertainties may cause our actual results, levels of activity, performance, or achievements to differ materially from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements: our ability to raise capital to fund our operations, including but not limited to, the timing and nature of results from MultiStem clinical trials, including the MASTERS-2 Phase 3 clinical trial evaluating the administration of MultiStem for the treatment of ischemic stroke, and the Healios TREASURE and ONE-BRIDGE clinical trials in Japan evaluating the treatment in stroke and ARDS patients, respectively; the success of our MACOVIA clinical trial evaluating the administration of MultiStem for the treatment of COVID-19 induced ARDS, and the MATRICS-1 clinical trial being conducted with The University of Texas Health Science Center at Houston evaluating the treatment of patients with serious traumatic injuries; the impact of the COVID-19 pandemic on our ability to complete planned or ongoing clinical trials; the possibility that the COVID-19 pandemic could delay clinical site initiation, clinical trial enrollment, regulatory review and the potential receipt of regulatory approvals, payment of milestones under our license agreements and commercialization of one or more of our product candidates, if approved; the availability of product sufficient to meet commercial demand shortly following any approval, such as in the case of accelerated approval for the treatment of COVID-19 induced ARDS; the impact on our business, results of operations and financial condition from the ongoing and global COVID-19 pandemic, or any other pandemic, epidemic or outbreak of infectious disease in the United States; the possibility of delays in, adverse results of, and excessive costs of the development process; our ability to successfully initiate and complete clinical trials of our product candidates; the impact of the COVID-19 pandemic on the production capabilities of our contract manufacturing partners and our MultiStem trial supply chain; the possibility of delays, work stoppages or interruptions in manufacturing by third parties or us, such as due to material supply constraints, contamination, operational restrictions due to COVID-19 or other public health emergencies, labor constraints, regulatory issues or other factors which could negatively impact our trials and the trials of our collaborators; uncertainty regarding market acceptance of our product candidates and our ability to generate revenues, including MultiStem cell therapy for neurological, inflammatory and immune, cardiovascular and other critical care indications; changes in external market factors; changes in our industry’s overall performance; changes in our business strategy; our ability to protect and defend our intellectual property and related business operations, including the successful prosecution of our patent applications and enforcement of our patent rights, and operate our business in an environment of rapid technology and intellectual property development; our possible inability to realize commercially valuable discoveries in our collaborations with pharmaceutical and other biotechnology companies; our ability to meet milestones and earn royalties under our collaboration agreements, including the success of our collaboration with Healios; our collaborators’ ability to continue to fulfill their obligations under the terms of our collaboration agreements and generate sales related to our technologies; the success of our efforts to enter into new strategic partnerships and advance our programs, including, without limitation, in North America, Europe and Japan; our possible inability to execute our strategy due to changes in our industry or the economy generally; changes in productivity and reliability of suppliers; the success of our competitors and the emergence of new competitors; and the risks mentioned elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2020 under Item 1A, “Risk Factors” and our other filings with the SEC. You should not place undue reliance on forward-looking statements contained in this press release, and we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise

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