Press Releases

Amarantus Provides Business Overview

NEW YORK, May 11, 2018 (GLOBE NEWSWIRE) -- Via OTC PR Wire -- Amarantus Bioscience Holdings, Inc. (OTC Pink:AMBS) (the "Company," or AMBS), a US-based JLABS-alumnus biotechnology holding company, developing first-in-class orphan neurologic, regenerative medicine and ophthalmic therapies and diagnostics through its subsidiaries, today provided a business update to the financial community regarding the business operations of the Company and its subsidiaries.

Overview of Amarantus Operations

In April 2017, Amarantus Bioscience Holdings ("AMBS" or the "Company") made the strategic decision to house our various assets in individual subsidiaries to raise focused capital in order to move the assets forward. The Company formed wholly-owned subsidiaries Elto Pharma, Inc. to house intellectual property (IP) rights to Eltoprazine which is moving into Phase 2b clinical development for the treatment of Parkinson's disease levodopa dyskinesia (PD-LID) and MANF Therapeutics, Inc. to house IP rights to mesencephalic astrocyte-derived neurotrophic factor ("MANF") which is moving into IND-enabling studies for the treatment of orphan ophthalmological diseases. The formation of Elto Pharma and MANF Therapeutics added to the already established wholly-owned subsidiary Cutanogen Corporation which is developing Engineered Skin Substitute (ESS) initially for the treatment of life-threatening pediatric severe burns. Taken together, these three subsidiaries of AMBS are developing orphan therapeutic assets that are in areas of neurology, regenerative medicine and ophthalmology where competition is limited, and where each program has the potential to become 'standard of care' for multiple indications.

In addition, on April 6th, 2018, AMBSannounced that it reacquired rights to Alzheimer's Blood Diagnostic LymPro Test and MS diagnostic MSPrecise, and subsequently on May 4th, 2018 entered into an exclusive option agreement with Leipzig University to gain access to additional IP and data rights surrounding the use of LymPro Test with amyloid PET imaging for the diagnosis of Alzheimer's disease. The Company is evaluating the formation of a neuro-diagnostics subsidiary to raise capital to move those diagnostic assets forward. As a result, the four primary assets of the Company are being positioned to move forward independently within their subsidiary, attract executive talent, and raise capital on their own to advance the programs, with Amarantus' primary focus being on protecting and growing the value of the shares AMBS holds in each of those subsidiaries. As these opportunities mature, become further de-risked and gain traction in the market, AMBS will evaluate the return of capital to Amarantus shareholders to drive AMBS's value and reward shareholder loyalty.

As the Company continues to work on the financing plan for each subsidiary, one of the primary reasons for raising capital into the subsidiaries is to limit AMBS's need for dilutive capital on an ongoing basis at the parent level. Going forward, each subsidiary is being populated with key executives and product development teams that have the experience and skillsets to drive these programs towards milestones that will improve their individual value as they achieve FDA milestones with guidance of AMBS' Chief Regulatory Advisor Brian Harvey. The companies will in turn have greater demand for partnering or acquisition from larger organizations with distribution capabilities. The quality of the slate of Chief Medical Advisors (CMAs) recently appointed to Elto Pharma (Paula Trzepacz, MD), Cutanogen Corporation (Richard Kagan, MD) and LymPro (Michael Ropacki, PhD) speaks to the soundness of the scientific and medical approach to each of these programs, and gives AMBS confidence that each subsidiary will be able to attract additional expertise, as well as the capital necessary to advance the programs. We believe executing this strategy provides the best opportunity for shareholder value creation.

Capital Raising Strategy for AMBS

AMBS is focused on utilizing regulations created under the JOBS Act to raise equity capital that will allow it to complete its recapitalization plan and focus on the business of managing its portfolio. The Company is in active discussions with key advisors and investment banking firms to advance this effort. In March, the Company completed the Tender Exchange which restructured outstanding securities that previously inhibited the Company's ability to raise equity capital, and in April retained counsel experienced in negotiating with accounts payable (AP) creditors to complete the AP settlement requirements under the Tender Exchange agreement, thereby releasing the liens on the Company's assets. Going forward, the Company is looking at the next equity raise under the JOBS Act as the turning point that will allow it to emerge from the recapitalization phase and return to normal business operations.

Alzheimer's Blood Diagnostic LymPro Test Update

Amarantus continues to believe in LymPro. The feedback the Company received in 2015-16 surrounding the use of LymPro in clinical trials was quite positive as it related to the cell-cycle hypothesis of Alzheimer's that underpins LymPro, and the clinical data produced as of that time. However, prospective collaborators noted that what was missing from our initial dataset was the use of a reference standard that incorporated newly available biomarkers, such as PET imaging. In presenting final LP-002 LymPro data at the Alzheimer's Association International Conference (AAIC) in 2015, the Company showed equivalence between LymPro and the clinical diagnosis-only reference standard in distinguishing patients diagnosed with dementia of the Alzheimer's type from healthy controls, based on clinical diagnosis alone. Thereafter, Amarantus worked closely with Leipzig to design a clinical study that would overcome those previous shortcomings by evaluating LymPro's ability to discriminate patients with dementia of the Alzheimer's type from patients who suffer from other forms of dementia using clinical diagnosis in addition to various biomarkers, such as amyloid PET imaging. The Company is grateful to Leipzig for having financed the entirety of that study (LymPro PET 1), and for initiating a second, confirmatory study (LymPro PET 2) that is currently enrolling. For Amarantus shareholders, this means that while AMBS was unable to advance the LymPro asset over the last 3 years, LymPro was continuing to move forward at Leipzig and AMBS is now positioned to become the beneficiary of those efforts. A recent statement from Merck (below) in the New England Journal of Medicine conceded the widely held hypothesis of amyloid's causative role in Alzheimer's disease may itself be flawed, bringing even greater importance to the scientific hypotheses behind LymPro, which sit 'up-stream' to amyloid plaque:

"This suggests that once dementia is present, disease progression may be independent of A production or, alternatively, that the amyloid hypothesis of Alzheimer's disease may not be correct."

- N Engl J Med 2018; 378:1691-1703

Given the continued high failure rates in Alzheimer's clinical trials, major uncertainties emerging regarding the amyloid therapeutic hypothesis of Alzheimer's disease, and the wealth of scientific data continuing to emerge that supports the cell-cycle hypothesis of Alzheimer's disease (https://www.spandidos-publications.com/etm/15/1/103), the Company believes LymPro puts Amarantus squarely back in the center of emerging technologies that have the potential to make a significant impact in the development of new treatment paradigms for Alzheimer's. AMBS intends to bring in seasoned management to build a business around LymPro.

Elto Pharma Update

Based upon an independent 3rd party valuation of the PD-LID indication in the US and Europe alone, Eltoprazine is the most valuable asset in the Amarantus portfolio as measured by risk-adjusted net present value (rNPV), with a robust 9-figure valuation. This rNPV is primarily driven by the fact Eltoprazine:

  • Is in Phase 2b clinical development, with strong initial Phase 2a data;
    Is being developed to enter a growing market with little competition;
    Is treating a significant orphan drug-designated patient population (180,000+ in the US alone);
    Has recently approved competitive medicines in PD-LID that are beginning to demonstrate value to the payor community.

As a result, Amarantus is laser-focused on ensuring that Elto Pharma attracts long-term focused capital that will allow it to fulfill its initial mission to advance the PD-LID indication through Phase 2b. If successful, Elto Pharma could see secondary indications such as Agitation in Alzheimer's disease and Adult ADHD dramatically increase the program's rNPV as they re-enter mid-stage clinical development based on the strength of their initial Phase 2 data.

Based on this information, Elto Pharma is preparing to initiate a private round of financing, followed by preparations for a traditional initial public offering (IPO) that has seen comparable companies command valuations in the hundreds of millions. We believe that capital raising around Elto Pharma could drive the value of the Amarantus shares, based upon our then ownership position in that entity. The Company has begun working with domestic (NYSE or NASDAQ) and international advisors (Hong Kong, or others) to determine the best jurisdiction to list Elto Pharma. The Company intends to provide updates on Elto Pharma to Amarantus shareholders as progress is made.

Cutanogen Corporation Update

It is clear, based upon the data published in the Journal of Burn Care and Research in 2017, that Cutanogen's ESS has tremendous potential to dramatically improve the standard of care in the treatment of acute pediatric burns, as measured by a number of key trial endpoints:

  1. Reducing mortality vs. historical control;
    Reducing time to wound closure vs. historical control;
    Improving function post-treatment vs. historical control.

Based upon the strength of the data seen to date, the Company believes Cutanogen is ready to move into a pivotal study to bring this life-saving orphan treatment to market, making pediatric burns the first indication for which Cutanogen will be seeking approval for ESS. The opportunity for ESS, however, expands far beyond the treatment of acute pediatric burns.

ESS is a cell & gene therapy skin platform technology that has a multitude of possible use cases in the medical field. Two examples of potential uses of this technology that have already been used in humans include:

  1. Re-grafting/revision surgeries covering large body surface areas;
    Giant Congenital Melanocytic Nevus management.

As Cutanogen builds out the commercial plan for ESS, and assesses the collective rNPV of each use case, it becomes clear that ESS could become a standard tool in acute treatment settings, but also in elective treatments where skin harvesting can be scheduled to meet a pre-defined timeline. Recent data published in Nature regarding the use of gene therapy on epidermal skin grafts for the treatment of an epidermolysis bullosa patient (https://www.nature.com/articles/nature24753) clearly points to the potential use of gene therapy with the ESS platform, which opens up the potential use of ESS to a wide range of rare pediatric skin diseases. Cutanogen has IP rights to the use of ESS in combination with gene therapy.

Beyond the use cases for ESS noted above, recent data published on improvements made to ESS (https://onlinelibrary.wiley.com/doi/full/10.1111/pcmr.12609) have added the potential to match the skin color of the graft to the skin color of the patient via the addition of melanocytes in the next generation version of the product (ESS 2.0). Consequently, the ESS 2.0 platform can expand beyond the treatment of acute catastrophic and rare pediatric conditions, and expand into cosmetic applications, significantly opening the market potential for this product. Taken together, the potential uses for the current ESS, ESS 2.0 and further generations of ESS have the potential to significantly drive the rNPV of the product based upon its fundamental scientific and medical characteristics.

What could further drive rNPV for ESS is the Rare Pediatric Disease Designation (RPDD) program at the FDA that provides incentives, in the form of Priority Review Vouchers (PRVs), to companies that develop treatments for rare diseases that primarily affect children. The Company believes ESS is likely to qualify for one or more RPDDs over time. As such, the key focus for Cutanogen is now on raising private financing so that it can prepare for its own IPO as a cell & gene therapy platform technology company that is moving into pivotal studies as a life-saving treatment option in a potential rare pediatric condition, for which few adequate treatment options, if any, exist.

MANF Therapeutics

MANF Therapeutics continues to amass a tremendous portfolio of intellectual property covering the use of MANF in the treatment of a range of disorders. While still in pre-clinical development, the next major step for this program is the appointment of a Chief Medical Advisor who can help finalize the selection of the initial indication for first-in-man studies with MANF, and drive the program towards the clinic. There is significant reason to believe that successful first-in-man studies with MANF could have a dramatic impact on the rNPV of the MANF asset, as positive efficacy in one indication likely increases the potential of a positive outcome in other, potentially larger, indications. Amarantus has continued to work with key groups, including the Snow Foundation focused on developing new treatments for Wolfram's Syndrome, to advance the science underpinning MANF so that upon proper capitalization this asset can be swiftly moved to complete IND-enabling studies in preparation for first-in-man. Amarantus continues to believe that MANF is potentially the most valuable asset in the Amarantus portfolio and the Company will continue to invest in the IP underpinning MANF until such time that MANF Therapeutics can independently finance its development. With potential disease-modifying applications in Glaucoma, Parkinson's disease, Alzheimer's disease, myocardial infarction and diabetes, human proof of concept with MANF in an orphan indication would significantly drive the rNPV for MANF by establishing a reasonable risk adjusted discount to its value in the event of success in these larger indications.

Summary

While certain risks remain as we complete the recapitalization of AMBS and the capital formation process for our subsidiaries, the Company has made tremendous progress in the last 6 months towards bringing these important scientific and medical breakthroughs back into development following a prolonged period of inactivity. The new members of the team have injected significant insight and energy to our efforts. Going forward, Amarantus is focused on completing the capitalization of the parent via the JOBS Act, privately capitalizing its subsidiaries, and then facilitating the advancements of our subsidiaries to build value for AMBS and its shareholders.

About Elto Pharma, Inc.

Elto Pharma, Inc. is developing eltoprazine, an oral small molecule 5HT1A/1B partial agonist in clinical development for the treatment of Parkinson's disease levodopa-induced dyskinesia (PD-LID), aggression in Alzheimer's disease and adult attention deficit hyperactivity disorder (adult ADHD). Eltoprazine has been evaluated in over 680 human subjects to date, was well-tolerated and showed promising efficacy results in both cognitive and movement disorders. Eltoprazine has received orphan drug designation (ODD) from the US FDA for the treatment of PD-LID.

Eltoprazine was originally developed by Solvay (now Abbvie) for aggression-related indications. The eltoprazine program was out-licensed to PsychoGenics, Inc. (PGI). PGI licensed eltoprazine to Amarantus in 2014 after a successful proof-of-concept trial in PD-LID.

In April 2017, Amarantus incorporated the wholly-owned subsidiary Elto Pharma, Inc. for the purpose of raising capital to finance the further clinical development of eltoprazine.

About Cutanogen Corporation

Engineered Skin Substitute (ESS) is a tissue-engineered skin prepared from autologous (patient's own) skin cells. It is a combination of cultured epithelium and a collagen-dermal fibroblast implant that produces a skin substitute which contains both epidermal and dermal components. This model has been shown in preclinical studies to generate a functional skin barrier. Most importantly, because ESS is composed of a patient's own cells, it is less likely to be rejected by the immune system of the patient, unlike porcine or cadaver grafts in which immune system rejection is a possibility. A non-GMP version ESS has been used in investigator-initiated and compassionate-use clinical study settings in over 150 human subjects, primarily pediatric patients, for the treatment of severe burns up to 95% of total body surface area. The non-GMP version has also been used in the treatment of two patients with Giant Congenital Melanocytic Nevi (GCMN).

In July 2015, Amarantus acquired Lonza Walkersville's wholly-owned subsidiary Cutanogen Corporation, the sole licensor of intellectual property rights to ESS from Cincinnati's Shriners Hospitals for Children and the University of Cincinnati. Cutanogen Corporation is a wholly-owned subsidiary of Amarantus.

About MANF Therapeutics, Inc.

MANF (mesencephalic-astrocyte-derived neurotrophic factor) is believed to have broad potential because it is a naturally-occurring protein produced by the body to reduce/prevent apoptosis (cell death) in response to injury or disease, via the unfolded protein response. By administering exogenously produced MANF the body, Amarantus is seeking to use a regenerative medicine approach to assist the body with higher quantities of MANF when needed. Amarantus is the frontrunner and primary holder of intellectual property around MANF, and is initially focusing on the development of MANF-based protein therapeutics.

In April 2017, Amarantus incorporated the wholly-owned subsidiary MANF Therapeutics, Inc. to focus on the preclinical and clinical development of MANF. MANF's lead indication is retinitis pigmentosa, and additional indications including Parkinson's disease, diabetes and Wolfram's syndrome are envisioned. Further applications for MANF may include Alzheimer's disease, traumatic brain injury, myocardial infarction, antibiotic-induced ototoxicity and certain other orphan diseases.

About LymPro Test

The Lymphocyte Proliferation Test (LymPro Test) is a diagnostic blood test that determines the ability of peripheral blood lymphocytes (PBLs) and monocytes to withstand an exogenous mitogenic stimulation that induces them to enter the cell cycle. It is believed that certain diseases, most notably Alzheimer's disease, are the result of compromised cellular machinery that leads to aberrant cell cycle re-entry by neurons which then leads to apoptosis. LymPro is unique in the use of peripheral blood lymphocytes as a surrogate for neuronal cell function, suggesting a common relationship between PBLs and neurons in the brain.

About Amarantus Bioscience Holdings, Inc.

Amarantus Bioscience Holdings (AMBS) is a JLABS alumnus biotechnology company developing treatments and diagnostics for diseases in the areas of neurology, regenerative medicine and orphan diseases through its subsidiaries. AMBS' wholly-owned subsidiary Elto Pharma, Inc. has development rights to eltoprazine, a Phase 2b-ready small molecule indicated for Parkinson's disease levodopa-induced dyskinesia, Alzheimer's aggression and adult attention deficit hyperactivity disorder, commonly known as ADHD. AMBS acquired the rights to the Engineered Skin Substitute program, a regenerative medicine-based approach for treating severe burns with full-thickness autologous skin grown in tissue culture that is being pursued by AMBS' wholly-owned subsidiary Cutanogen Corporation. AMBS' wholly-owned subsidiary MANF Therapeutics, Inc. owns key intellectual property rights and licenses from a number of prominent universities related to the development of the therapeutic protein known as mesencephalic astrocyte-derived neurotrophic factor ("MANF"). MANF Therapeutics, Inc. is developing MANF-based products as treatments for brain and ophthalmic disorders. MANF was discovered by the Company's Chief Scientific Officer John Commissiong, PhD. Dr. Commissiong discovered MANF from AMBS' proprietary discovery engine PhenoGuard. The Company also re-acquired rights to the Alzheimer's blood diagnostic LymPro Test, MSPrecise and NuroPro.

For further information please visit www.Amarantus.com, or connect with the Amarantus on Facebook, LinkedIn, Twitter and Google+.

Amarantus Investor and Media Contact:

Howard Gostfrand

American Capital Ventures, Inc.

Office: 305-918-7000

Email: hg@amcapventures.com

Source: Amarantus Bioscience Holdings, Inc.

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Source: Amarantus Bioscience Holdings, Inc.