PolarityTE Reports Fiscal Year 2021 Financial Results and Provides Business Update

March 31, 2022

SALT LAKE CITY, March 30, 2022 /PRNewswire/ — PolarityTE, Inc. (Nasdaq: PTE) a biotechnology company developing regenerative tissue products and biomaterials, today provided a business update and reported financial results for the twelve-month period ended December 31, 2021.

• In the first quarter of 2022, PolarityTE received approval from the U.S. Food and Drug Administration (FDA) for its investigational new drug (IND) application for the evaluation of SkinTE^® for the treatment of chronic cutaneous ulcers. As of this week, the Company has several clinical trial sites actively identifying patients for enrollment in its first pivotal study under IND, a multi-center, randomized controlled trial evaluating SkinTE in the treatment of Wager 2 diabetic foot ulcers (DFUs) entitled “Closure Obtained with Vascularized Epithelial Regeneration for DFUs with SkinTE,” or “COVER DFUs.” The company expects to have its first patient treated with SkinTE in April and to have up to 16 sites fully operational by the end of May.
• The Company reported final results from a non-IND randomized controlled trial evaluating treatment of venous leg ulcers (VLU) with its investigational product SkinTE plus standard of care (SOC) vs SOC alone (NCT03881267). The trial met the primary endpoint of wound closure at 12 weeks and secondary endpoint of Percent Area Reduction (PAR) at 4, 6, 8, 10, and 12 weeks.
  • Primary Endpoint: 71% (10/14) of participants receiving SkinTE plus SOC had wound closure at 12 weeks versus 33% (5/15) of participants receiving SOC alone (p=0.046)
  • Secondary Endpoint: Percent Area Reduction (PAR) assessed at 4, 6, 8, 10, and 12 weeks was significantly greater for the SkinTE plus SOC treatment group vs SOC alone (p=0.000035)
  • 93% (13/14) of SkinTE plus SOC treated participants received a single application of SkinTE
• PolarityTE raised $5.0m in gross proceeds through a registered direct offering of preferred stock on March 16, 2022.
• Cash used in operations for the twelve months ended December 31, 2021, was $22.6 million, or an average of $1.9 million per month, compared to $37.8 million of cash used in operations for the twelve months ended December 31, 2020, or an average of $3.2 million per month.
• Operating loss for the fiscal year ended December 31, 2021, was $33.7 million, an improvement of 27% from the operating loss of $45.9 million for 2020.
• The Company had cash and cash equivalents of $19.4 million and working capital of $17.7 million at December 31, 2021.

Richard Hague, Chief Executive Officer, commented, “We are pleased to have reached the significant milestone of IND acceptance and look forward to our next crucial milestone of treating patients in our first pivotal study under IND in the near future.  In less than one year since announcing we would wind down commercial operations for SkinTE as a 361 HCT/P, we have made substantial progress to position the Company for long-term growth and opportunities by submitting our IND, resolving the CMC issues that FDA identified, and being on track to see SkinTE used in the clinic once again in subjects who are suffering from hard-to-treat wounds.  Our confidence in SkinTE’s ability to address wounds such as the Wagner 2 DFUs that will be treated in the COVER DFU Phase III pivotal study is borne out of our extensive clinical experience with the product and our steadfast belief that SkinTE can provide meaningful relief to patients with limited treatment options available to them currently.”

PolarityTE is a clinical stage biotechnology company developing regenerative tissue products and biomaterials.  PolarityTE has also historically operated a pre-clinical research business.  PolarityTE’s first regenerative tissue product is SkinTE, which is intended for the repair, reconstruction, replacement, and supplementation of skin in patients who have a need for treatment of acute or chronic wounds, burns, surgical reconstruction events, scar revision, or removal of dysfunctional skin grafts.

Since the beginning of 2017, PolarityTE has incurred substantial operating losses and its operations have been financed primarily by public equity financings.  The clinical trials for SkinTE and the regulatory process will likely result in an increase in PolarityTE’s expenses.  PolarityTE will continue to incur substantial operating losses as it pursues an IND and BLA, and PolarityTE expects to seek financing from external sources over the foreseeable future to fund its operations.

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