10-K
1
form10-k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended December 31, 2020
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from ___________ to __________
Commission
file number 1-38519
AgeX
Therapeutics, Inc.
(Exact
name of registrant as specified in its charter)
1101
Marina Village Parkway, Suite 201
Alameda,
California 94501
(Address
of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code (510) 671-8370
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol Name of exchange on which registered
Common Stock, par value $0.0001 per share AGE NYSE American
Securities
registered pursuant to Section 12(g) of the Act:
None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No
☒
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
No ☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit such files). Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☒
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided to Section 13(a) of the Exchange Act. ☒
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒
The
approximate aggregate market value of shares of voting common stock held by non-affiliates computed by reference to the price
at which shares of common stock were last sold as of June 30, 2020 was $19.6 million. Shares held by each executive officer and
director and by each person who beneficially owns more than 5% of the outstanding common stock have been excluded in that such
persons may under certain circumstances be deemed to be affiliates. This determination of affiliate status is not necessarily
a conclusive determination for other purposes.
As
of March 26, 2021, there were outstanding 37,935,088 shares of common stock, par value $0.0001 per share.
DOCUMENTS
INCORPORATED BY REFERENCE
None
AgeX
Therapeutics, Inc.
Table
of Contents
Page Number
Part I
Item 1. Business 4
Item 1A. Risk Factors 27
Item 1B. Unresolved Staff Comments 57
Item 2. Properties 57
Item 3. Legal Proceedings 57
Item 4. Mine Safety Disclosures 57
Part II
Item 6. Selected Financial Data 58
Item 7A. Quantitative and Qualitative Disclosures about Market Risk 68
Item 8. Financial Statements and Supplementary Data 71
Item 9A. Controls and Procedures 99
Item 9B. Other Information 99
Part III
Item 10. Directors, Executive Officers, and Corporate Governance 100
Item 11. Executive Compensation 102
Item 14. Principal Accounting Fees and Services 114
Part IV
Item 15. Exhibits, Financial Statement Schedules 115
PART
I
Certain
statements contained herein are forward-looking statements, within the meaning of the Private Securities Litigation Reform Act
of 1995, including, but not limited to, statements pertaining to future financial and/or operating results, future growth in research,
technology, clinical development, and potential opportunities for AgeX, along with other statements about the future expectations,
beliefs, goals, plans, or prospects expressed by management constitute forward-looking statements. Any statements that are not
historical fact (including, but not limited to statements that contain words such as “will,” “believes,”
“plans,” “anticipates,” “expects,” “estimates”) should also be considered to be
forward-looking statements. Forward-looking statements involve risks and uncertainties, including, without limitation, risks inherent
in the development and/or commercialization of potential products, uncertainty in the results of clinical trials or regulatory
approvals, need and ability to obtain future capital, and maintenance of intellectual property rights. Actual results may differ
materially from the results anticipated in these forward-looking statements and as such should be evaluated together with the
many uncertainties that affect the businesses of AgeX, particularly those mentioned in the cautionary statements found in AgeX’s
filings with the Securities and Exchange Commission. AgeX disclaims any intent or obligation to update these forward-looking statements.
References
to “ AgeX,” “our” or “us” mean AgeX Therapeutics, Inc.
The
description or discussion, in this Form 10-K, of any contract or agreement is a summary only and is qualified in all respects
by reference to the full text of the applicable contract or agreement.
INDUSTRY
AND MARKET DATA
This
Annual Report (“Report”) on Form 10-K contains market data and industry forecasts that were obtained from industry
publications, third-party market research and publicly available information. These publications generally state that the information
contained therein has been obtained from sources believed to be reliable. While we believe that the information from these publications
is reliable, we have not independently verified such information.
This
Report also contains estimates and other statistical data made by independent parties and by us relating to market size and growth
and other data about our industry. We obtained the industry and market data in this Report from our own research as well as from
industry and general publications, surveys and studies conducted by third parties, some of which may not be publicly available.
Such data involves a number of assumptions and limitations and contains projections and estimates of the future performance of
the industries in which we operate that are subject to a high degree of uncertainty. We caution you not to give undue weight to
such projections, assumptions and estimates.
Item
1. Business
Overview
of Business
We
are a biotechnology company focused on the development and commercialization of novel therapeutics targeting human aging and degenerative
diseases. Our mission is to apply our comprehensive experience in fundamental biological processes of human aging to a broad range
of age-associated medical conditions. We believe that demand for therapeutics addressing such conditions is on the rise, commensurate
with the demographic shift of aging in the United States and many other industrialized countries.
Our
proprietary technology, based on telomerase-mediated cellular immortality and regenerative biology, allows us to utilize telomerase-expressing
regenerative pluripotent stem cell (“PSCs”) for the manufacture of cell-based therapies to regenerate tissues afflicted
with age-related chronic degenerative disease. We own or have licenses to a number of patents and patent applications used in
the generation of these product candidates, including intellectual property related to PSC-derived clonal embryonic progenitor
cell lines (PureStem® technology) and HyStem® delivery matrices. Our technology platform also includes
UniverCyteTM which uses the HLA-G gene to potentially confer low immune observability to cells, so as to suppress rejection
of transplanted cells and tissues. AgeX plans to use or license the use of this patented technology to produce genetically-modified
master cell banks of pluripotent stem cells that can then be differentiated into any young cell type of the human body that now
express the immune tolerogenic molecule.
Our
product candidates in the discovery stage include two cell-based therapies derived from telomerase-positive PSCs and two product
candidates derived from our proprietary induced Tissue Regeneration (iTRTM) technology. We are also sponsoring
a research program to derive neural stem cells from PSCs to treat degenerative diseases such as Huntington’s Disease. We
will need to conduct or sponsor research and development work, or license our technology to other biotechnology or pharma companies
interested in furthering research and development, as part of our plan to develop these cell- and drug-based therapies, each targeting
large unmet needs in age-related medicine.
Development
of Our Business
AgeX
was incorporated during 2017 as a subsidiary of Lineage Cell Therapeutics, Inc. (“Lineage”), formerly known as BioTime,
Inc. On August 17, 2017, we entered into an Asset Contribution and Separation Agreement (the “Asset Contribution Agreement”)
with Lineage pursuant to which Lineage contributed certain assets and cash to us in exchange for 28,800,000 shares of our common
stock.
The
assets contributed to us by Lineage included laboratory equipment, patents, patent applications, and certain human pluripotent
cell lines and human embryonic progenitor cell lines and shares of LifeMap Sciences, Inc. common stock representing a controlling
interest in that company. Concurrently with the contribution of assets to us by Lineage under the Asset Contribution Agreement,
we entered into a License Agreement with Lineage pursuant to which Lineage has licensed to us, with rights to sublicense, certain
intellectual property, including patents and patent applications and know-how for use in the development, manufacture and commercialization
of products or services for the prevention, treatment, amelioration, diagnosis or monitoring of all human and non-human animal
diseases and conditions except for the field of medical products, devices and services for the reserved Lineage fields of orthopedic,
ophthalmic, and medical aesthetic uses (the “Lineage Exclusive Field”). In addition, Lineage retains an option right,
on terms to be negotiated, to license iTR patents in research, development, manufacturing and commercialization of treatments
based on iTR in the Lineage Exclusive Field. The licensed patents and know-how relate generally to (a) PureStem® human
embryonic progenitor cell lines, and (b) methods of manufacturing and quality control analysis of cell based therapies
derived from pluripotent stem cells. We also received an option to license certain Lineage retained rights outside of orthopedic
indications unless a license grant would compete with a Lineage program or products in the Lineage Exclusive Field.
Lineage
and certain Lineage subsidiaries also entered into agreements pursuant to which they have licensed or sublicensed to us, on a
non-exclusive, world-wide, royalty bearing basis, certain additional patents and patent rights and know-how relating to HyStem®
hydrogel technology, human embryonic progenitor cell technology, and human pluripotent stem cell lines and technology
for use outside the Lineage Exclusive Fields, or in the case of certain sublicense rights, fields previously licensed to third
parties.
The
human embryonic progenitor cell lines, human pluripotent stem cell lines, and patents contributed or licensed or sublicensed to
us by Lineage and its subsidiaries include our initial product candidates AGEX-BAT1 brown adipocytes and AGEX-VASC1 young vascular
cells, and our foundation technologies PureStem®, HyStem® and induced tissue
regeneration or iTR technology.
Concurrently
with the acquisition of assets from Lineage, we sold 4,950,000 shares of common stock for $10.0 million in cash primarily to investors
other than Lineage. At the close of the financing, Lineage owned 85.4% of our issued and outstanding shares of common stock. On
June 7, 2018, we sold 2.0 million shares of common stock for $2.50 per share to Juvenescence Limited (“Juvenescence”)
for aggregate cash proceeds to us of $5.0 million. That financing along with the 2017 sales of shares of common stock and subsequent
sales of common stock purchase warrants to other private investors allowed us to focus our initial resources on our pre-clinical
research and development programs.
On
August 30, 2018, Lineage sold 14.4 million of its shares of AgeX common stock to Juvenescence. Upon completion of the transaction,
Lineage’s ownership in AgeX was reduced from 80.4% to 40.2% of our issued and outstanding shares of common stock, and Juvenescence’s
ownership in AgeX was increased from 5.6% to 45.8% of our issued and outstanding shares of common stock. As a result, beginning
on August 30, 2018, we were no longer considered a subsidiary of Lineage for financial reporting purposes, because on that date,
Lineage experienced a “loss of control” of a subsidiary, as defined by generally accepted accounting principles in
the United States.
On
November 28, 2018 (the “Distribution Date”) Lineage distributed to its shareholders, on a pro rata basis, 12,697,028
shares of the AgeX common stock it then held (the “Distribution”). Immediately after the Distribution, Lineage retained
1,718,972 shares of AgeX common stock, representing approximately 4.8% of the common stock then issued and outstanding. Following
the Distribution, our common stock began publicly trading on the NYSE American under the symbol “AGE”.
During
August 2018, we expanded our technology platforms by acquiring from Escape Therapeutics, Inc. patents and patent applications
related to HLA-G-modified cells and methods of generating allogeneic cells with reduced risk of being rejected by patients regardless
of the HLA class I haplotype. These patents are the foundation for our UnivercyteTM technology platform.
On
March 2, 2021, we announced that AgeX and LyGenesis, Inc. (“LyGenesis”), a privately held biotechnology company developing
cell therapies that enable organ regeneration, will proceed to negotiate an agreement for a merger of the two companies. LyGenesis
recently received U.S. Food and Drug Administration clearance for its Investigational New Drug application to conduct a Phase
2a clinical trial on the safety, tolerability, and efficacy of its lead cell therapy for patients with end-stage liver disease,
with study initiation planned for 2021.
Based
on the terms currently being discussed, a newly formed subsidiary of AgeX would merge into LyGenesis. At the closing of the merger,
AgeX would issue to LyGenesis stockholders a number of shares of AgeX common stock representing two-thirds of the total number
of shares of AgeX common stock to be outstanding immediately following the consummation of the merger on a fully diluted basis,
but prior to the issuance of additional shares in a contemplated capital raising transaction following the execution of a merger
agreement and contingent on the closing of the merger. Under the terms being discussed, if the merger is completed, AgeX’s
pre-merger stockholders would receive an 80% economic interest in AgeX’s induced tissue regeneration or iTR technology;
the terms and structure of such economic interest have not yet been determined.
There
can be no assurance that the negotiations between AgeX and LyGenesis will result in the execution of a definitive merger agreement
on the terms being discussed or at all, or, if a merger agreement is entered into, that the merger will be consummated. The completion
of any merger would be subject to approval by a special independent committee of the AgeX Board of Directors and by the respective
Boards of Directors of both companies. The merger would also be subject to approval by AgeX stockholders and LyGenesis stockholders,
including in each case approval by both a majority of the outstanding shares and by the holders of a majority of the shares not
held by Juvenescence Limited.
Juvenescence,
the largest shareholder of AgeX, is also the largest shareholder of LyGenesis. Juvenescence beneficially owns approximately 52.7%
of the AgeX common stock determined as disclosed in its most recent amendment to its Schedule 13D filed with the Securities and
Exchange Commission, and owns approximately 48% of the common stock of LyGenesis (assuming the conversion of its convertible debt
into equity). The Chairman of AgeX’s Board of Directors, Dr. Gregory Bailey, is the Chief Executive Officer of Juvenescence.
Two directors of LyGenesis, James Mellon and David Ellam, are the Chairman and the Chief Financial Officer of Juvenescence, respectively.
On
March 15 2021, AgeX disposed of its interest in its majority-owned subsidiary LifeMap Sciences, Inc. through a cash-out merger.
See Note 9 to our consolidated financial statements included elsewhere in this Report.
Additional
Information
AgeX
is incorporated in the State of Delaware. Our common shares trade on the NYSE American under the symbol “AGE.” Our
principal executive offices are located at 1101 Marina Village Parkway, Suite 201, Alameda, CA 94501, and our phone number at
that address is (510) 671-8370. Our website address is www.agexinc.com. The information on, or that can be accessed through our
website is not part of this Report. We make available, free of charge through our website, our most recent annual report on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, as soon as reasonably
practicable after the reports are electronically filed with or furnished to the Securities and Exchange Commission (the “SEC”).
iTRTM,
and UniverCyteTM, are trademarks of AgeX Therapeutics, Inc. HyStem® and PureStem® are
registered trademarks of Lineage Cell Therapeutics, Inc.
Emerging
Growth Company
We
are an “emerging growth company” under the Jumpstart our Business Startups Act of 2012 or the JOBS Act. As an emerging
growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable, in
general, to public companies that are not emerging growth companies. These provisions include:
● reduced disclosure about our executive compensation arrangements;
We
will remain an “emerging growth company” until the earliest of: (i) the last day of the fiscal year in which we have
total annual gross revenues of $1.07 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of
the date of the first sale of our common equity securities pursuant to an effective registration statement under the Securities
Act of 1933, as amended (the “Securities Act”); (iii) the date on which we have issued more than $1.0 billion in nonconvertible
debt securities during the previous three years; or (iv) the date on which we are deemed to be a “large accelerated filer”
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
The
JOBS Act permits an emerging growth company to take advantage of an extended transition period to comply with new or revised accounting
standards applicable to public companies. However, we have elected to comply with newly adopted or revised accounting standards
when they become applicable to public companies because our financial statements were previously consolidated with those of our
former parent company Lineage Cell Therapeutics, Inc. which is not an emerging growth company under the JOBS Act and is therefore
not permitted to delay the adoption of new or revised accounting standards that become applicable to public companies. This election
under the JOBS Act to not delay the adoption of new or revised accounting standards is irrevocable.
Overview
of Our Opportunity in Age-Related Diseases
To
date, conventional pharmaceutical approaches to the chronic degenerative conditions associated with aging have provided limited
benefit. Often the approaches offer merely relief from the symptoms of ageing and age-related disease, rather than targeting
underlying disease processes. We believe this is about to change through harnessing the power of new cellular and molecular technologies.
We aim to lead this coming revolution with our pioneering technologies to restore tissue and organ function. Our cell therapy
approach is focused on generating and delivering new cells to patients. Our iTR approach is focused on reversing the age of cells
already in the body, where our research team in February 2020 published that they had converted the cells of a 114-year-old
to young pluripotent stem cells in the lab [J. Lee et al., Induced pluripotency and spontaneous reversal of cellular aging
in supercentenarian donor cells, Biochemical and Biophysical Research Communication, https://doi.org/10.1016/j.bbrc.2020.02.092].
Aging
is one of the most significant demographic trends of our time. As shown in Figure 1, the U.S. Census Bureau projects a sharp rise
in the number of Americans over 80 years of age, with an acceleration occurring between the years 2020 and 2030.
Figure
1. Projected increase in the numbers of the U.S. population over 80 years of age (U.S. Census Bureau)
This
demographic shift associated with 76 million aging baby boomers poses a significant challenge to our healthcare system and our
economy as a whole. The unsolved problem relates to the fact that chronic conditions account for about 80% of total health care
expenditures in the United States, with the elderly having a higher prevalence of chronic degenerative disease than the young.
Approximately 80% of older adults have one chronic disease, and 68% have two or more.
Our
technology platforms reflect over 25 years of research and development in cell immortality and regenerative medicine. It is designed
to address some of the largest unmet needs of an aging population by translating state-of-the-art laboratory science relating
to aging into meaningful therapeutic biologicals and drugs.
Overview
of Our Product Candidates
Our
product pipeline includes two cell-based and two iTR-based product candidates in development.
Our
lead cell-based therapeutic candidates in development are AGEX-BAT1 and AGEX-VASC1:
Our
lead small molecule drug-based therapeutic candidate for induced Tissue Regeneration (iTR) in discovery is AGEX-iTR1547 and our
lead biologic candidate for iTR is AGEX-iTR1550:
Our
currently marketed research products include cGMP ES Cells (human embryonic stem or “hES”) cells produced under current
good manufacturing practices (or “cGMP”) and PSC-derived cells for research:
Overview
of Our Technology Platforms
The
technology underlying our product development programs is based on telomerase-mediated cellular immortality and regenerative
biology. By “telomerase-mediated cellular immortality” we refer to the fact that cells that express sufficient
levels of a protein called telomerase are capable of replicating without limit. By “regenerative biology,” we
refer to novel methods to regenerate tissues afflicted with age-related chronic degenerative disease such as peripheral
vascular disease and ischemic heart disease as well as age-related metabolic disorders such as those associated
with Type II diabetes and obesity, as well as others. We utilize telomerase-expressing regenerative Pluripotent Stem
Cells, or PSCs, for the manufacture of cell-based therapies. We own or have licensed numerous patents and patent applications
covering methods and compositions relating to this technology platform.
Our core technology platforms provide us with a strong foundation for successfully addressing many of the diseases of ageing
by focusing on broad therapeutic applicability and commercially scalable technologies:
1.
PureStem: AgeX’s allogeneic cell derivation and manufacturing platform, based on human embryonic progenitors,
which are cells in state of development between embryonic stem cells and adult cells. We believe PureStem has the
potential to solve several major challenges faced by the cell therapy industry by generating cellular therapeutics which would:
● be commercialized as “off-the-shelf” products
● be pure and industrially scalable
● have lower cost of goods per unit
● be amenable to traditional pharma supply chain logistics
In addition,
we believe PureStem cells may have advantages over mesenchymal stem cells (MSCs), which may only survive transiently in the body
and exert any short-term benefit by releasing paracrine factors, which may limit their potential of MSCx.
MSCs
neither engraft nor become specialized cells. On the other hand, cells derived from PureStem progenitors will be young, not prone
to the disadvantages associated with older cells, and are expected to become permanently engrafted in the body to deliver a true
regenerative outcome. To date, AgeX has isolated more than 200 cell types from PureStem.
2.
UniverCyteTM: AgeX’s pioneering technology to genetically modify allogeneic donor cells to potentially become
hypoimmunogenic/universal, so they can potentially be transplanted into all patients in an off-the- shelf manner, without the
normal need for human leukocyte antigen (HLA) matching between donor and receipt or immunosuppression. UniverCyte utilizes a potent
molecule called HLA-G. HLA is a group of related proteins that helps the immune system distinguish the body’s own proteins
from proteins made by foreign invaders such as viruses and bacteria. HLA-G’s only known physiological role
in nature is to prevent destruction of a semi-allogeneic fetus by the maternal immune system. UniverCyte could potentially avoid immune rejection of transplanted
cells, solving a major challenge facing the allogeneic cell therapy industry. In addition to utilizing UniverCyteTM for its
own future cell therapy products, AgeX may make UniverCyteTM available to other cell therapy companies through licensing
arrangements.
3.
HyStem®: Delivery technology to stably engraft cells or slowly release small molecules in the body for greater
safety and efficacy. The key advantages of HyStem® over competitors may include: (1) higher cell
retention, survival, proliferation and engraftment; (2) biodegradability which can be fine-tuned; (3) non-immunogenicity; (4)
immunosuppressive in nature; (5) ease of usage; and (6) scalability.
4.
Induced Tissue Regeneration (iTRTM): The aim of iTR is to return aged cells back to a youthful state, thereby inducing
a capacity for scarless regeneration characteristic of early developing tissues, without reverting cells to pluripotency. This
technology is sometimes referred to as “partial reprogramming” or “epigenetic reprogramming of aging”.
This novel approach may trigger complete regeneration of cells, and potentially even complex tissues, damaged as a result of age-related
degenerative processes or trauma. The premise behind iTR is that aging, and in turn degenerative diseases of old age, are a result
of the loss of two characteristics of cells; namely, replicative immortality and regenerative capacity. These two characteristics
are present in embryonic cells but are lost at the embryonic to fetal transition (EFT). With this loss, humans can no longer generate
new cells or repair damaged cells scarlessly and in sufficient numbers to maintain health. We discovered that cells begin expressing
the gene COX7A1 at the EFT when regeneration is commonly lost. Therefore the gene may be a key inhibitor of cellular regeneration.
For example, we have discovered that restoring a regenerative pattern of COX7A1 gene expression may facilitate hair regeneration
in mouse models. In addition, we have invented multiple platforms for delivering iTR using small molecules as well as biologic
strategies such as those using gene therapy to transiently express reprogramming factors. We have filed patent applications on
the use of iTR in a wide array of degenerative conditions including cancer.
5.
ESI cell lines: AgeX has six clinical-grade human embryonic stem cell lines, they are distinguished as the first clinical-grade
human pluripotent stem cell lines created under current Good Manufacturing Practice as described in Cell Stem Cell (2007;1:490-4).
They are listed on the National Institutes of Health (NIH) Stem Cell Registry in the USA and are among the best characterized
and documented stem cell lines in the world. ESI-053 is among only a few pluripotent stem cell lines from which a derived cell
therapy product candidate has been granted FDA IND clearance for human studies. The FDA cleared an IND application from ImStem
Biotechnology, one of our sublicensees, for a MSC product derived from ESI-053 for multiple sclerosis. This was believed to be
the first MSC product derived from an pluripotent stem line to be accepted for a human trial by the FDA. The ESI cell lines are
available as research or clinical grade product, and have been offered since 2006.
Business
Strategy
Each
of our four proprietary platform technologies, PureStem® for cell derivation and manufacturing, UniverCyteTM
for generation of hypoimmunogenic cells, iTRTM for reversing the age of cells already in the body and HyStem®
for cell or small molecule-based iTR delivery, presents AgeX with a multiplicity of attractive opportunities which
we may pursue. Given these platform technologies may be highly desirable to multiple academic and biopharma companies due to their
broad applicability and potentially important clinical and commercial benefits, AgeX plans to pursue different business models
for these platforms:
Each
of these models may provide particular benefits to AgeX in terms of financing and efficiency of operations. However, each alternative
has potential disadvantages as well. If AgeX out-licenses its technology it will avoid the costs and risks of research and development,
clinical trials, regulatory approval, manufacturing, and commercialization of product candidates, but the revenues AgeX would
receive from commercialization of products developed under those arrangements would likely be limited to royalties on product
sales and potentially licensing fees and milestone payments representing a relatively small portion of total product revenues.
Similarly, co-development and marketing or similar arrangements would permit AgeX to share costs and risks but would also require
AgeX to share revenues from the product candidates that may be successfully developed and commercialized. See “Risk Factors”
elsewhere in this Report for information about certain risks associated with reliance on arrangements with third parties for research,
product development, clinical trials, manufacturing, and commercializing product candidates.
We
may finance our iTR research and development through Reverse Bio. To the extent that such financing is obtained through the sale
of capital stock or other equity securities to investors or other biopharma companies by Reverse Bio, or the sale of Reverse Bio
shares held by AgeX, our equity interest in Reverse Bio and its iTR business would be diluted.
Background
of Human Aging
Cell
Immortality
There
is a growing consensus in the scientific community that human aging is due in large part to the aging of individual cells in the
various tissues of the body (somatic cells). In contrast, the reproductive lineage of cells (germ-line) perpetuate the human species
from generation-to-generation without limit and continue to generate new people over the millennia.
In
1961, Dr. Leonard Hayflick first reported that normal human cells in the body (unlike the germ-line) can proliferate for only
a finite number of times (typically fewer than 100 times). This phenomenon, known as the “Hayflick Limit”, “cell
mortality”, or “cellular aging”, is a normal property of somatic cells. In the 1990s, our CEO, Dr. Michael D.
West, founded a biotechnology company called Geron Corporation, where his team isolated for the first time the human gene called
“Telomerase Reverse Transcriptase” or “telomerase.” In 1998, Geron scientists in collaboration with scientists
at the University of Texas Southwestern Medical Center at Dallas, published the result that telomerase could stop the aging of
human cells, or could “immortalize” them.
Figure
2. The Germ-line/soma dichotomy wherein germ-line cells express telomerase, maintain telomere length, and exhibit replicative
immortality, while body (somatic) cells lack telomerase, showing progressive telomere shortening until they reach the Hayflick
limit.
In
1994, Dr. West’s group demonstrated through an assay for measuring telomerase activity that nearly 90% of cancer cell types
cultured in the laboratory or tumors surgically removed from patients abnormally express telomerase. This broke the then dogma
that there was no common mechanism at work in cancer. Scientists have concluded that cell mortality, while being detrimental in
old age, benefits us early in life by helping to repress cancer cell growth. Figure 2 illustrates this dichotomy wherein immortal
cells such as the germ-line cells that perpetuate the species are immortal through telomerase activity while body (somatic) cells
lack telomerase expression, and as a result show progressive telomere shortening and a finite lifespan (are mortal).
The
Weismann Barrier
Early
in the evolution of life, primitive unicellular and even multicellular organisms may have lacked programmed aging as a result
of the potential of their cells having the potential for both replicative immortality and regeneration. However, in more complex
animals such as mammals, somatic cells lose not only replicative immortality, but after most organ systems are formed during embryonic
development, they also lose full regenerative potential. This repression of both telomerase-mediated cell immortality and regeneration
potential is called the “Weismann Barrier” (see Figure 3).
Figure
3. The Weismann Barrier coincides with the loss of both replicative immortality and regeneration. Levels of expression of the
gene COX7A1 provide a useful marker of the loss of regenerative potential.
PSCs
represent the earliest stages of human development and are the first normal human cells cultured in the laboratory that display
both telomerase-mediated replicative immortality and regenerative potential. Therefore, our scientists utilized these cells as
well as the primitive regenerative cells derived from them, called “PureStem®” cell lines, in research
where they were compared to diverse adult cells on the mortal side of the Weismann barrier to uncover the mechanisms regulating
the loss of regenerative potential. Artificial intelligence algorithms were used to parse millions of gene expression data points
and the results were published in late 2017. Figure 3 shows the Weismann Barrier and the associated rise of a gene expression
marker of the non-regenerative state designated COX7A1. This proprietary marker, along with other insights obtained from
the research, provides us with a window into this biology and a means of screening for agents capable of restoring a regenerative
state to old nonregenerative cells. It is anticipated that such agents may not only reset the pattern of gene expression in adult
cells back to that their regenerative counterparts but may also induce tissue regeneration when applied in vivo in the
context of age-related degenerative disease. Since the previously mentioned 2017 publication described the re-emergence of the
regenerative phenotype in the majority of cancer cell lines, the discoveries may open the door to potentially important diagnostic
and therapeutic implications as well.
Pluripotent
Stem Cells (PSCs)
Figure
4. Pluripotent Stem Cells (PSCs) possess both telomerase-mediated replicative immortality and regenerative potential, capable
of producing all human cell types.
In
an effort to utilize telomerase-mediated immortality and regenerative biology in the development of novel therapeutics, in the
mid-1990s, Dr. West, organized a collaboration with Drs. James Thomson, John Gearhart, and Roger Pedersen that led to the first
isolation of PSCs. In contrast to other types of cells, PSCs are unique by at least two important criteria. The first criterion
relates to the ability of pluripotent cells to proliferate, or make more copies of themselves, indefinitely, that is to say, they
are “immortal”. The second relates to the ability of PSCs to differentiate into any of the hundreds of specialized
cell types in the body. This replicative immortality of PSCs facilitates the industrial scalability of product. We believe that
many of these cell types have potential for regenerating function in tissues damaged by degenerative diseases when transplanted.
A small sampling of these cell types is shown in Figure 4. Unlike PSCs, adult stem cells typically have severely-reduced scale-up
potential (are mortal unlike immortal PSCs), and have passed the Weismann Barrier, and are therefore limited in their ability
to regenerate normal tissue when transplanted in vivo. Therefore, we believe that PSC-based cellular therapeutics
have significant competitive advantages over cell-based therapeutics being developed by many adult stem cell companies.
Our
Technology Platforms
PureStem®
Technology
Regulatory
approval of cell- and tissue-based products require high standards of quality control. In the case of stem cell-derived products,
there is a high standard for insuring the known identity, purity, and reproducibility of the cells to be administered. PSCs provide
certain advantages over adult stem cell products when used in the manufacture of cell-based therapeutics for the treatment of
age-related disease. These advantages include:
PureStem®
technology is based on the observation that embryonic anlagen of many tissues in the human body are naturally comprised
of highly proliferative cells with relatively long telomere length. Therefore, it is possible to generate clonal lineages of these
cells in vitro. Cells derived from adult tissues commonly permanently cease to divide after a certain number of doublings,
a condition known as senescence. In addition, adult and even fetal tissues largely contain differentiated cells often with limited
or no capacity of replication in vitro. As a result, the clonal expansion of human embryonic progenitor cell types allows
not only a novel and more facile point of scalability but also generates populations of cells that are multipotent instead of
pluripotent, and therefore markedly easier to define identity, purity, and potency.
We
have studied the fate of over 200 diverse PureStem cell lines in thousands of differentiation conditions. This was accomplished
by thawing individual cryopreserved PureStem cell lines, culturing them in the laboratory, and then exposing the cells to factors
that differentiate cells such as protein growth and differentiation factors, hormones, and small molecules implicated in causing
cells to change from one type of cell into another (differentiation). Using individual cells from the over 200 diverse PureStem
cell lines previously isolated and cryopreserved, we treated the diverse cells with thousands of differentiation conditions, prepared
RNA, and determined the gene expression pattern of the cells using gene expression microarrays. These experiments have shown that
the PureStem cell lines display site-specific markers that identify not only the type of cells, but also where in the body the
cells would normally reside. Therefore, in the example of cartilage cells, it was possible to produce diverse types of cartilage
in this manner. We have licensed from our former parent company Lineage Cell Therapeutics, Inc. (“Lineage”) PureStem
applications outside of orthopedics, medical aesthetics, and certain ophthalmological applications.
We
have chosen two PureStem applications for our initial product development based on unmet medical need along with other factors.
The first product candidates are AGEX-BAT1, brown adipose tissue or BAT cells for the treatment of metabolic disorders such as
obesity or Type II diabetes, and AGEX-VASC1, vascular endothelial progenitors for the treatment of age-related ischemic disease
such as that leading to peripheral vascular disease and ischemic heart disease. These cells will be formulated
in a delivery matrix designated HyStem® to promote viability of the graft as well as to localize the cells to the
intended site in the body.
HyStem®
Delivery Technology
HyStem®
is a patented biomaterial that mimics the extracellular matrix that is the structural network of macromolecules surrounding
cells in the body. The extracellular matrix is essential for normal cellular function and survival of transplanted cells. Many
tissue engineering and regenerative cell-based therapies are expected to benefit from the delivery of therapeutic cells in a matrix
for precise localized delivery and survival. HyStem is a unique hydrogel that has been shown to support cellular attachment in
vivo. Current research at medical institutions has shown that HyStem is compatible with a wide variety of cells and tissue
types including those of the brain, bone, skin, cartilage, vascular system and heart. The technology underlying HyStem hydrogels
was developed at the University of Utah and was been exclusively licensed to Lineage for human therapeutic applications and sublicensed
to AgeX for certain fields. The HyStem technology is based on a unique thiol cross-linking chemistry to prepare hyaluronan-based
matrices as hydrogels. Since the first published report in 2002, there have been numerous academic scientific publications supporting
the biocompatibility of thiol cross-linked hyaluronan-based matrices and their applications as medical devices and in cell culture,
tissue engineering, and animal models of cell-based therapies.
Figure
5. AgeX plans to utilize the HyStem technology for the delivery of cell-based therapeutics.
Due
to the unique cross-linking chemistry, HyStem matrices have the ability to be safely combined with living cells and subsequently
injected or applied locally as a hydrogel which allows the gel to conform to the three-dimensional contour of a tissue. Building
upon this platform, we initially plan to use HyStem for cell-based therapy.
The
building blocks for HyStem hydrogels may vary with the application but typically include combinations of hyaluronan, gelatin,
or heparin, each of which has been thiol-modified. Hydrogels are formed by cross-linking mixtures of these thiolated macromolecules
with polyethylene glycol diacrylate (PEGDA). The rate of gelation and the hydrogel stiffness can be controlled by varying the
amount of cross-linker. An important attribute of HyStem hydrogels is their large water content, over 98%. As a result, these
hydrogels have a high permeability for oxygen, nutrients, and other water-soluble metabolites.
UniverCyteTM
Our
UniverCyteTM technology uses a proprietary, novel, modified form of HLA-G and is intended to permit donor cells
to be transplanted into patients without donor-patient tissue matching and without administering immunosuppressant medication.
Immunosuppressive drugs can reduce patient resistance to infectious diseases and cancers as well as cause organ and other toxicities.
Reducing or eliminating the need for immunosuppressants after cell transplantation by use of hypoimmunogenic cells may make therapies
universally available. We plan to use or license the use of this patented technology to produce genetically-modified master cell
banks of pluripotent stem cells that can then be differentiated into any young cell type of the human body that now express the
immune tolerogenic molecule.
Products
and Product Candidates
Our
Therapeutic Product Candidates
AGEX-BAT1
- Brown Adipose Tissue (BAT) Progenitors
Brown
adipose tissue (BAT) is abundant early in life but lost precipitously with age. This tissue is believed to generate heat through
expression of a gene called UCP1. In addition, the high levels of glucose and lipid uptake by the tissue is believed to
balance metabolism in young people. In contrast, central obesity and Type II diabetes has been correlated with low levels of BAT.
Figure
6. Human tissue-derived BAT cells (left) stained red for the presence of UCP1 show a minority of cells being true BAT cells. PureStem-derived
AGEX-BAT1 cells are uniformly UCP1 positive.
The
demonstration in published literature in the public domain that the transplantation of BAT from young mice to obese diabetic mice
resulted in weight loss and increased insulin sensitivity has led to a search for a source of industrially-scalable clinical grade
BAT cells as well as an appropriate matrix for lipotransfer. There currently is no FDA-approved matrix for cell transplantation.
However, Lineage has obtained a CE Mark for the marketing of HyStem (Renevia) for cell-assisted lipotransfer procedures in Europe.
Therefore, we believe HyStem can be used for the delivery of BAT cells produced using PureStem technology. As shown in Figure
6, the AGEX-BAT1 progenitors strongly express the BAT marker UCP1 when induced to differentiate and show a relatively high
degree of purity compared to human tissue-derived BAT.
We
have entered into a Sponsored Research Agreement with Ohio State University using AGEX-BAT1 in mice to determine whether transplantation
of AgeX-BAT1 cells may lead to improvements in diet-induced obesity, metabolic health including glucose metabolism, and cardiac
function. For purposes of this proof of concept work, two different cell transplant matrices will be tested, HyStem and a 3-D
silk scaffold.
AGEX-VASC1
- Vascular Progenitors
PureStem
technology can also yield highly purified embryonic vascular components. As shown below, select clonal lines express markers
such as VE-Cadherin (CDH5) and PECAM1, as well as VWF and other markers of venous, arterial, and lymphatic endothelium. Flow cytometry
shows purity indistinguishable from 100%.
In
addition to vascular endothelial cells, we have characterized vascular smooth muscle cell progenitors. This makes it possible
for us to construct two of the key cellular components of arterial vessels, such as those compromised in coronary artery disease.
Figure
7. PureStem-derived vascular endothelial cell lines are capable of regenerating young vasculature (bottom left) and appear to
have essentially 100% purity by FACs analysis.
HyStem
hydrogels have been successfully used in cell transplantation research in animal models and in a CE marked product developed
by Lineage for autologous adipose tissue preparations to restore and/or augment facial volume as a treatment of facial lipoatrophy
after subcutaneous fat volume loss. AgeX’s near term goal is to optimize process development for planned animal preclinical
testing of AgeX-VASC1 formulated in HyStem for delivery into ischemic heart tissue to regenerate collateral circulation.
AGEX-iTR1547
— Induced Tissue Regeneration (iTRTM)
Leveraging
our assets in pluripotency and bioinformatics, we have performed research manipulating cellular immortality and regenerative biology