Item 1A. Risk Factors 30
Item 1B. Unresolved Staff Comments 61
Item 2. Properties 61
Item 3. Legal Proceedings 61
Item 4. Mine Safety Disclosures 61
Part II
Item 6. Selected Financial Data 62
Item 7A. Quantitative and Qualitative Disclosures about Market Risk 71
Item 8. Financial Statements and Supplementary Data 72
Item 9A. Controls and Procedures 107
Item 9B. Other Information 107
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 107
Part III
Item 10. Directors, Executive Officers, and Corporate Governance 108
Item 11. Executive Compensation 110
Item 14. Principal Accounting Fees and Services 123
Part IV
Item 15. Exhibits and Financial Statement Schedules 124
I
Summary
of Risk Factors
Below
is a summary of the material factors that make an investment in our common shares speculative or risky. This summary does not address
all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face,
can be found below under the heading “Risk Factors” in Item 1A of Part I of this Report and should be carefully considered,
together with other information in this Report and our other filings with the Securities and Exchange Commission (the “SEC”)
before making investment decisions regarding our common shares.
Risks
Related to Our Financial Condition and Capital Resources
Risks
Related to Our Relationship with Juvenescence
Risks
Related to Our Planned Restructuring
Risks
Related to Our Business Operations
Risks
Related to Our Industry
Risks
Related to our Dependence on Third Parties
Risks
Related to Intellectual Property
● The process of applying for and obtaining patents can be expensive and slow.
● Our patents may not protect our technologies or products from competition.
Risks
Pertaining to Our Common Stock
Special
Note Regarding Forward-Looking Statements
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 SEC. AgeX disclaims any intent or obligation to update these forward-looking
statements.
The
forward-looking statements in this Report include, among other things, statements about:
● the potential success of our research and development programs;
● the potential commercialization of our product candidates and technologies;
● our intellectual property position;
● the impact of government laws and regulations;
● our competitive position; and
Industry
and Market Data
This
Annual Report on Form 10-K (“Report”) 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.
Disposition
and Deconsolidation of LifeMap Sciences, Inc. Effective March 15, 2021
On
March 6, 2021, AgeX and its majority-owned subsidiary LifeMap Sciences, Inc. (“LifeMap Sciences”) entered into an Agreement
and Plan of Merger (the “LifeMap Merger Agreement”) with Atlas Capital Partners Limited, a British Virgin Islands company
limited by shares (“Atlas”), and GCLMS Acquisition Corporation (“GCLMS”), a Delaware corporation that was a wholly-owned
subsidiary of Atlas. On March 15, 2021, the merger was completed pursuant to the terms of the LifeMap Merger Agreement. As a result of
the merger, GCLMS merged into LifeMap Sciences and (a) the shares of LifeMap Sciences common stock outstanding at the time of the merger
entitled the holders of those shares to receive a pro rata portion of a $500,000 cash payment for all shares of LifeMap Sciences common
stock in the aggregate (the “LifeMap Merger Consideration”), with each LifeMap Sciences shareholder’s pro rata portion
of the LifeMap Merger Consideration to be determined in accordance with the number of shares of LifeMap Sciences common stock owned by
such shareholder as a percentage of shares of LifeMap Sciences common stock outstanding immediately before the effective date of the
merger, and (b) the outstanding shares of GCLMS common stock were converted into shares of LifeMap Sciences common stock so that Atlas
is now the sole shareholder of LifeMap Sciences.
AgeX
received approximately $466,400 in cash as its pro rata share of the LifeMap Merger Consideration in the merger. Prior to and as a condition
to the merger under the terms of the LifeMap Merger Agreement, $1,761,296 of LifeMap Sciences’ indebtedness to AgeX was converted
into shares of LifeMap Sciences common stock. LifeMap Sciences also paid AgeX $250,000 in cash to pay off a portion of LifeMap Sciences’
indebtedness to AgeX that was not converted into shares of LifeMap Sciences common stock.
The
results of operations and cash flows for LifeMap Sciences are reported as discontinued operations for all periods presented in our consolidated
financial statements.
As
a result of the completion of the cash-out merger on March 15, 2021, LifeMap Sciences is no longer a subsidiary of AgeX. Effective March
15, 2021, AgeX deconsolidated LifeMap Sciences’ consolidated financial statements and consolidated results of operations from those
of AgeX under applicable accounting principles generally accepted in the United States of America due to the disposition of LifeMap Sciences
on that date.
The
sale of LifeMap Sciences was a taxable transaction to AgeX; however, no income tax was payable as the transaction resulted in a taxable
loss primarily due to AgeX’s tax basis in the subsidiary.
AgeX’s
consolidated balance sheets at December 31, 2022 and 2021 do not include LifeMap Sciences’ consolidated assets and liabilities
due to the deconsolidation of LifeMap Sciences on March 15, 2021.
AgeX’s
consolidated statements of operations for the year ended December 31, 2021 include LifeMap Sciences’ consolidated results for the
period through March 15, 2021 rather than the day immediately preceding the deconsolidation due to the conversion of $1,761,296 of LifeMap
Sciences’ indebtedness to AgeX into shares of LifeMap Sciences common stock on March 15, 2021, followed by the completion of the
cash-out merger on the same day.
The
deconsolidation of LifeMap Sciences is also referred to as the “LifeMap Deconsolidation” in this Report.
For
further discussion, see Notes to the Consolidated Financial Statements and Management’s Discussion and Analysis of Financial
Condition and Results of Operations included elsewhere in this report.
PART
I
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.
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 have also sponsored 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 iTRTM 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 for aggregate cash proceeds to us of $5.0 million.
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 accounting principles generally accepted in the United States of America (“US
GAAP”).
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.
During
March 2021, AgeX disposed of its interest in LifeMap Sciences pursuant to the terms of the LifeMap Merger Agreement.
In
connection with our sponsored Huntington’s Disease research program at the University of California at Irvine (“UCI”),
we and certain researchers who contributed to the Huntington’s Disease research work formed a new subsidiary, of which we are presently
the majority shareholder, to pursue clinical studies of the use of derived neural stem cell to treat that disease. The new subsidiary
is still in the organizational stage and commencement of clinical study work will depend on its ability to obtain financing through grants
or third-party investment.
During
March 2023, we borrowed $10,000,000 from Juvenescence under the terms of a Secured Convertible Promissory Note (the “$10 Million
Secured Note”) and used the loan proceeds to make a $10,000,000 loan to Serina, in order to provide financing to Serina in contemplation
of corporate restructuring plans that include a potential merger between AgeX and Serina in which AgeX would be the surviving company.
AgeX’s restructuring plans also include a potential spinoff of AgeX’s subsidiary Reverse Bio through a distribution of some
or all of the shares of capital stock of Reverse Bio held by AgeX to AgeX stockholders following a financing of Reverse Bio through the
sale of shares of Reverse Bio common stock to private investors (the “Reverse Bio Financing”). If the Reverse Bio spinoff
is completed, Reverse Bio would become a separate publicly traded company.
Serina
has developed a proprietary drug delivery polymer technology based upon the polymer poly (2-oxazoline), or POZTM, and is developing
a pipeline of proprietary and partnered programs applying this platform to Parkinson’s disease, cannabinoids, cancer, and pain.
Serina has recently applied POZ technology to developing a lipid nanoparticle (LNP) for use across multiple indications such as SARS-CoV-2
and influenza, and gene therapy and cancer immunotherapy. No definitive agreement regarding a merger between AgeX and Serina has been
negotiated or executed nor has the merger been approved by the respective boards of directors of AgeX and Serina. Further, a merger cannot
be consummated unless approved by the stockholders of AgeX and Serina. Accordingly, there is no assurance that AgeX and Serina will reach
agreement on the terms of a merger or that, if such an agreement is reached, the stockholders of AgeX and Serina will approve the merger.
Definitive
agreements regarding the Reverse Bio Financing and a Reverse Bio spinoff have not yet been executed, nor has AgeX’s board of directors
approved the Reverse Bio spinoff. Accordingly, there is a risk that the Reverse Bio Financing and the Reverse Bio spinoff may never be
consummated.
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 SEC.
iTRTM,
UniverCyteTM, RenelonTM, and EPROTM are trademarks of AgeX Therapeutics, Inc. HyStem® and PureStem®
are registered trademarks of Lineage Cell Therapeutics, Inc. POZTM is a trademark of Serina 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 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 iTRTM in discovery is AGEX-iTR1547 and our lead biologic candidate
for iTR is AGEX-iTR1550:
Our
research related to the reprogramming of aging has also led to novel insights into cancer. We have filed patent applications on inventions
that relate to these discoveries. These technologies may provide novel targets for cancer therapy and diagnosis. One such cancer therapeutic
in the early stages of development is designated “EPROTM” (embryonic promoter-regulated oncolysis). EPRO is an
oncolytic gene therapy strategy that may provide a novel means of selectively destroying an array of different types of cancer cells.
Successful development of EPRO will be dependent, in part, on the availability of financing and licensing or joint development opportunities.
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 a 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 iTRTM 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
plan to finance our iTRTM and AGEX-BAT1 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 our iTRTM and AGEX-BAT1 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 ensuring 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 has 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
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 were tested, HyStem and a 3-D silk scaffold. We consider
this work to be an early stage study and expect to conduct or sponsor additional research on the potential therapeutic benefits of AGEX-BAT1.
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
in human cells. In 2010, our scientists while at Lineage demonstrated the reversal of the developmental aging of human cells using transcriptional
reprogramming technology. In 2017, we published certain markers of the Weismann barrier, and the high prevalence of a reversion back
before the Weismann barrier in diverse cancer cell types cultured in vitro.
We
extended this research to determine whether reprogramming can be modified to only reverse the aging of cells back before the Weismann
Barrier, not back to pluripotency. We have utilized for example the gene COX7A1 as a marker of cells that have lost regenerative
potential (crossed the Weismann Barrier). As shown in Figure 8, our proprietary formulation AGEX-iTR1547 has demonstrated initial capability
of reducing the expression of the marker gene COX7A1 back to before the Weismann Barrier without reverting the cells to pluripotency.
When implemented in vivo, this partial reprogramming, or iTR, would be expected to induce tissue regeneration, and when combined
with telomerase, could modulate both cellular immortality and regenerative biology for therapeutic effect. In addition to the small molecule
product candidate designated iTR1547, we have invented biological interventions based, for example, on gene therapy. Our inventions relating
to iTR biologics disclose both DNA and RNA-based strategies. Our gene delivery iTR product candidate is designated iTR1550. We are performing
research to optimize AGEX-iTR1547 and in parallel a gene delivery formulation designated AGEX-iTR1550 in order to initiate preclinical
studies of one or both of the agents on the scarless regeneration of the skin.
Figure
8. PSCs such as ES Cells and PureStem EP Cells display a regenerative capacity like cells that have not cross the Weismann Barrier. During
pre- and post-natal development, skin cells become increasingly incapable of scarless regeneration as reflected in increasing COX7A1
expression. iPS cell reprograming reverts cells back to pluripotency, while AgeX-iTR1547 reverts cells back only to a point prior
to the Weismann Barrier (regenerative state).
Status
and Development Plan
The
product candidates we have chosen are in the discovery stage of development. Prior to filing an Investigational New Drug (IND) application
for the initiation of clinical trials of our initial product candidates, AGEX-BAT1, AGEX-VASC1, and AGEX-ITR1547/AGEX-iTR1550 a number