Worcester Business Journal

www.wbjournal.com August 1, 2016 • Worcester Business Journal 15 Client: Webster W.S.#: WEB26267 File Name: WEB26267_Business Location: Art Quarter: Q2_15 Artist: Ki AE/AC: ALL/SM Media: WBJ Size: 9" Color: 4C Date: 5/2015 Request for WorkZone AE/AC: PDF uploaded Holding Tank Revisions: Artist: • Free Elite Business Checking • Business Debit/Credit Cards • Vehicle/Equipment Loans • Merchant Services • Remote Deposit • SBA Loans • Real Estate Investment • Construction Loans • Lines of Credit • Bill Pay Service Webster First Federal Credit Union commercial services include: Our Business is Helping Your Business Succeed Webster First Federal Credit Union offers a variety of commercial services designed to help businesses meet their unique financial goals. Our dedicated commercial services team provides each business relationship with exceptional customer service and professional advice. WebsterFirst.com | 800.962.4452 Facebook.com/WebsterFirst @WebsterFirstFCU >> S M A L L B U S I N E S S & E N T R E P R E N E U R S and receivables, SEC filings show. "The company has evolved, if you will, from a bioreactor to a biotechnolo- gy company," McGorry said. Biostage will incur operating losses and negative operating cash flow for the foreseeable future, according to SEC fil- ings, because the company is investing its resources in development and com- mercialization of its regenerative prod- ucts. The company's first quarter, end- ing March 31, showed an operating loss of nearly $2.5 million, a figure equal to its operating expenses. However, the company estimates that total revenue opportunity for all three Cellspan implants, once commercialized, could exceed $1.5 billion. In May, Biostage announced, in a joint project with the Mayo Clinic, it had successfully used its Cellspan esophageal implants to regenerate a sec- tion of esophagus in Yucatan pigs – big- ger than mini swine and more compa- rable to adults. The pigs appeared healthy, with no evidence of leakage or infection at surgery sites. The company had hoped the announcement would build some momentum on the stock market. However, despite the encouraging results, Biostage's stock traded down 15 percent after the announcement, due to what McGorry said were fund- ing concerns surrounding the compa- ny's $4.8-million cash position as of March 31. After evaluating several financial avenues, the company decid- ed to negotiate a $5-million at-the- market offering in an effort to secure its cash position so it could execute short-term plans. These are some of the challenges small, research-driven companies face as they seek regulatory approval for their products, McGorry said. "I'm a 31-year healthcare guy, but first-time CEO. Do I think there's a big difference between value of the compa- ny and the value of stock price? Absolutely," McGorry said. "We're just trying to get some continued visibility around some of the patient advocacy groups, the Mayo Clinic and Connecticut Children's." Management revolution McGorry started as CEO in summer 2015. He came in from big biotech companies like Genzyme and Baxter Healthcare, but was drawn to the small, research-driven company, because he has experience bringing things to the market and finds that exciting. "This is true innovation. So many things are 'Me, too' – they're just trying to make a better mousetrap. This is total unmet medical need," he said. "This is what breakthroughs are all about, and that's what I'm attracted to, to really make a difference." Most of the management team is brand new, as the company solidifies the expertise and experience it needs to advance Cellframe to commercializa- tion. Vice President of Regulatory Affairs Laura Mondano, a former Genzyme colleague of McGorry's, joined in March, and Ginger Abraham- Freel joined as director of quality and operations in April from Diagnostics for All, Inc., where she was director of quality and head of manufacturing. Harout DerSimonian, a healthcare veteran with more than 20 years of experience in immunotherapy and cell therapy program development, joined as chief science officer in June. With them, La Francesca, and Chief Financial Officer Tom McNaughton, McGorry said the right team is in place. "We're helping the body heal itself," McGorry said. "The body knows how to heal itself when given the right clues." n Biostage CEO Jim McGorry (left) and Chief Medical Officer Saverio La Francesca hold one of the company 's synthetic scaffolds that have worked to regrow esophaguses in pigs. P H O T O / L A U R A F I N A L D I

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