IMUNON, INC. The following discussion and analysis of our financial condition and results of
operations This discussion contains forward-looking statements that involve
risks and uncertainties. Our actual results may differ materially from those
discussed in forward-looking statements. Factors that might cause a difference
include, but are not limited to, those discussed above under "Cautionary Note
Regarding Forward-Looking Statements," and in Item 1A. Risk factors in our
Annual Report on Form 10-K for the fiscal year ended
Strategic and Clinical Overview
IMMUNO-ONCOLOGY Program
On
THERAPLAS Technology Platform
TheraPlas is a technology platform for the delivery of DNA and mRNA therapeutics via synthetic non-viral carriers and is capable of providing cell transfection for double-stranded DNA plasmids and large therapeutic RNA segments such as mRNA. There are two components of the TheraPlas system, a plasmid DNA or mRNA payload encoding a therapeutic protein, and a delivery system. The delivery system is designed to protect the DNA/mRNA from degradation and promote trafficking into cells and through intracellular compartments. We designed the delivery system of TheraPlas by chemically modifying the low molecular weight polymer to improve its gene transfer activity without increasing toxicity. We believe that TheraPlas may be a viable alternative to current approaches to gene delivery due to several distinguishing characteristics, including enhanced molecular versatility that allows for complex modifications to potentially improve activity and safety.
23
The design of the TheraPlas delivery system is based on molecular functionalization of polyethyleneimine (PEI), a cationic delivery polymer with a distinct ability to escape from the endosomes due to heavy protonation. The transfection activity and toxicity of PEI is tightly coupled to its molecular weight; therefore, the clinical application of PEI is limited. We have used molecular functionalization strategies to improve the activity of low molecular weight PEIs without augmenting their cytotoxicity. In one instance, chemical conjugation of a low molecular weight branched BPEI1800 with cholesterol and polyethylene glycol (PEG) to form PEG-PEI-Cholesterol (PPC) dramatically improved the transfection activity of BPEI1800 following in vivo delivery. Together, the cholesterol and PEG modifications produced approximately 20-fold enhancement in transfection activity. Biodistribution studies following intraperitoneal or subcutaneous administration of DNA/PPC nanocomplexes showed DNA delivery localized primarily at the injection site with only small amount escaping into the systemic circulation. PPC is the delivery component of our lead TheraPlas product, GEN-1, which is in clinical development for the treatment of ovarian cancer. The PPC manufacturing process has been scaled up from bench scale (1-2 g) to 0.6Kg, and several current Good Manufacturing Practice ("cGMP") lots have been produced with reproducible quality.
We believe that TheraPlas has emerged as a viable alternative to current
approaches due to several distinguishing characteristics such as strong
molecular versatility that may allow for complex modifications to potentially
improve activity and safety with little difficulty. The biocompatibility of
these polymers reduces the risk of adverse immune response, thus allowing for
repeated administration. Compared to naked DNA or cationic lipids, TheraPlas is
generally safer, more efficient, and cost effective. We believe that these
advantages place
Ovarian Cancer Overview
Ovarian cancer is the most lethal of gynecological malignancies among women with
an overall five-year survival rate of 45%. This poor outcome is due in part to
the lack of effective prevention and early detection strategies. There were
approximately 20,000 new cases of ovarian cancer in the
GEN-1 Immunotherapy
GEN-1 is a DNA-based immunotherapeutic product candidate for the localized treatment of ovarian cancer by intraperitoneally administering an Interleukin-12 ("IL-12") plasmid formulated with our proprietary TheraPlas delivery system. In this DNA-based approach, the immunotherapy is combined with a standard chemotherapy drug, which can potentially achieve better clinical outcomes than with chemotherapy alone. We believe that increases in IL-12 concentrations at tumor sites for several days after a single administration could create a potent immune environment against tumor activity and that a direct killing of the tumor with concomitant use of cytotoxic chemotherapy could result in a more robust and durable antitumor response than chemotherapy alone. We believe the rationale for local therapy with GEN-1 is based on the following:
? Loco-regional production of the potent cytokine IL-12 avoids toxicities and
poor pharmacokinetics associated with systemic delivery of recombinant IL-12;
? Persistent local delivery of IL-12 lasts up to one week and dosing can be
repeated; and
? Local therapy is ideal for long-term maintenance therapy.
24
OVATION I Study. In
(i) identify a safe, tolerable and therapeutically active dose of GEN-1 by
recruiting and maximizing an immune response;
(ii) enroll three to six patients per dose level and evaluate safety and
efficacy; and
(iii) attempt to define an optimal dose for a follow-on Phase I/II study.
In addition, the OVATION I Study established a unique opportunity to assess how cytokine-based compounds such as GEN-1, directly affect ovarian cancer cells and the tumor microenvironment in newly diagnosed ovarian cancer patients. The study was designed to characterize the nature of the immune response triggered by GEN-1 at various levels of the patients' immune system, including:
? Infiltration of cancer fighting T-cell lymphocytes into primary tumor and
tumor microenvironment including peritoneal cavity, which is the primary site
of metastasis of ovarian cancer;
? Changes in local and systemic levels of immuno-stimulatory and
immunosuppressive cytokines associated with tumor suppression and growth,
respectively; and
? Expression profile of a comprehensive panel of immune related genes in
pre-treatment and GEN-1-treated tumor tissue.
We initiated the OVATION I Study at four clinical sites at the
? Of the fourteen patients treated in the entire study, two patients
demonstrated a complete response, ten patients demonstrated a partial response
and two patients demonstrated stable disease, as measured by RECIST criteria.
This translates to a 100% disease control rate and an 86% objective response
rate ("ORR"). Of the five patients treated in the highest dose cohort, there
was a 100% ORR with one complete response and four partial responses;
? Fourteen patients had successful resections of their tumors, with nine
patients (64%) having a complete tumor resection ("R0"), which indicates a
microscopically margin-negative resection in which no gross or microscopic
tumor remains in the tumor bed. Seven out of eight (88%) patients in the
highest two dose cohorts experienced a R0 surgical resection. All five
patients treated at the highest dose cohort experienced a R0 surgical
resection; and
? All patients experienced a clinically significant decrease in their CA-125
protein levels as of their most recent study visit. CA-125 is used to monitor
certain cancers during and after treatment. CA-125 is present in greater
concentrations in ovarian cancer cells than in other cells.
Key translational research findings from all evaluable patients are consistent with the earlier reports from partial analysis of the data and are summarized below:
? The intraperitoneal treatment of GEN-1 in conjunction with NACT resulted in
dose dependent increases in IL-12 and Interferon-gamma (IFN-?) levels that
were predominantly in the peritoneal fluid compartment with little to no
changes observed in the patients' systemic circulation. These and other
post-treatment changes including decreases in VEGF levels in peritoneal fluid
are consistent with an IL-12 based immune mechanism;
? Consistent with the previous partial reports, the effects observed in the IHC
analysis were pronounced decreases in the density of immunosuppressive T-cell
signals (Foxp3, PD-1, PDL-1, IDO-1) and increases in CD8+ cells in the tumor
microenvironment;
? The ratio of CD8+ cells to immunosuppressive cells was increased in
approximately 75% of patients suggesting an overall shift in the tumor
microenvironment from immunosuppressive to pro-immune stimulatory following
treatment with GEN-1. An increase in CD8+ to immunosuppressive T-cell
populations is a leading indicator and believed to be a good predictor of
improved OS; and
? Analysis of peritoneal fluid by cell sorting, not reported before, shows a
treatment-related decrease in the percentage of immunosuppressive T-cell
(Foxp3+), which is consistent with the reduction of Foxp3+ T-cells in the
primary tumor tissue, and a shift in tumor naïve CD8+ cell population to more
efficient tumor killing memory effector CD8+ cells.
25
On
SCAs have the potential to revolutionize clinical trials in certain oncology indications and some other diseases where a randomized control is not ethical or practical. SCAs are formed by carefully selecting control patients from historical clinical trials to match the demographic and disease characteristics of the patients treated with the new investigational product. SCAs have been shown to mimic the results of traditional randomized controls so that the treatment effects of an investigational product can be visible by comparison to the SCA. SCAs can help advance the scientific validity of single arm trials, and in certain indications, reduce time and cost, and expose fewer patients to placebos or existing standard-of-care treatments that might not be effective for them.
On
OVATION 2 Study. The Company held an Advisory Board Meeting on
In the OVATION 2 Study, patients in the GEN-1 treatment arm will receive GEN-1 plus chemotherapy pre- and post-interval debulking surgery ("IDS"). The OVATION 2 Study will include up to 110 patients with Stage III/IV ovarian cancer, with 12 to 15 patients in the Phase I portion and up to 95 patients in Phase II. The study is powered to show a 33% improvement in the primary endpoint, PFS, when comparing GEN-1 with neoadjuvant + adjuvant chemotherapy versus neoadjuvant + adjuvant chemotherapy alone. The PFS primary analysis will be conducted after at least 80 events have been observed or after all patients have been followed for at least 16 months, whichever is later.
In
26
GEN-1 plus standard NACT produced positive dose-dependent efficacy results, with no dose-limiting toxicities, which correlates well with successful surgical outcomes as summarized below:
? Of the 15 patients treated in the Phase I portion of the OVATION 2 Study, nine
patients were treated with GEN-1 at a dose of 100 mg/m² plus NACT and six
patients were treated with NACT only. All 15 patients had successful
resections of their tumors, with eight out of nine patients (88%) in the GEN-1
treatment arm having an R0 resection, which indicates a microscopically
margin-negative complete resection in which no gross or microscopic tumor
remains in the tumor bed. Only three out of six patients (50%) in the NACT
only treatment arm had a R0 resection.
? When combining these results with the surgical resection rates observed in the
Company's prior Phase Ib dose-escalation trial (the OVATION 1 Study), a
population of patients with inclusion criteria identical to the OVATION 2
Study, the data reflect the strong dose-dependent efficacy of adding GEN-1 to
the current standard of care NACT:
% of
Patients
R0
Resections
0, 36, 47 mg/m² of GEN-1 plus NACT N =12 42 %
61, 79, 100 mg/m² of GEN-1 plus NACT N = 17 82 %
? The ORR as measured by Response Evaluation Criteria in Solid Tumors (RECIST)
criteria for the 0, 36, 47 mg/m² dose GEN-1 patients were comparable, as
expected, to the higher (61, 79, 100 mg/m²) dose GEN-1 patients, with both
groups demonstrating an approximate 80% ORR.
On
On
In
? 80% of patients treated with GEN-1 had a R0 resection, which indicates a
microscopically margin-negative complete resection in which no gross or
microscopic tumor remains in the tumor bed.
? 58% of patients in the control arm had an R0 resection.
? This interim data represents a 38% improvement in R0 resection rates for GEN-1
patients compared with control arm patients and is consistent with the
reported improvement in resection scores noted in the encouraging Phase I
OVATION I Study, the manuscript of which has been submitted for peer review
publication.
In
27
Through
PLACCINE DNA VACCINE TECHNOLOGY PLATFORM
In
PLACCINE is an extension of the Company's synthetic, non-viral TheraPlas
delivery technology currently in a Phase II trial for the treatment of
late-stage ovarian cancer with GEN-1.
COVID-19 Vaccine Overview
Emerging data from the recent literature indicates that the quality of the immune response as opposed to its absolute magnitude is what dictates SARS-CoV-2 viral clearance and recovery and that an ineffective or non-neutralizing enhanced antibody response might actually exacerbate disease. The first-generation COVID-19 vaccines were developed for rapid production and deployment and were not optimized for generating cellular responses that result in effective viral clearance. Though early data has indicated some of these vaccines to be over 95% effective, these first-generation vaccines were primarily designed to generate a strong antibody response and, while they have been shown to provide prophylactic protection against disease, the durability of this protection is currently unclear. The vast majority of these vaccines have been specifically developed to target the SARS-CoV-2 Spike (S) protein (antigen), though it is known that restricting a vaccine to a sole viral antigen creates selection pressure that can serve to facilitate the emergence of viral resistance. Indeed, even prior to full vaccine rollout, it has been observed that the S protein is a locus for rapid evolutionary and functional change as evidenced by the D614G, Y453F, 501Y.V2, and VUI-202012/01 mutations/deletions. This propensity for mutation of the S protein leads to future risk of efficacy reduction over time as these mutations accumulate.
Our Next Generation Vaccine Initiative
28
Future vaccine technology will need to address viral mutations and the challenges of efficient manufacturing, distribution, and storage. We believe an adaptation of our TheraPlas technology, PLACCINE, has the potential to meet these challenges. Our approach is described in our provisional patent filing and is summarized as a DNA vaccine technology platform characterized by a single plasmid DNA with multiple coding regions. The plasmid vector is designed to express multiple pathogen antigens. It is delivered via a synthetic delivery system and has the potential to be easily modified to create vaccines against a multitude of infectious diseases, addressing:
? Viral Mutations: PLACCINE may offer broad-spectrum and mutational resistance
(variants) by targeting multiple antigens on a single plasmid vector.
? Durable Efficacy: PLACCINE delivers a DNA plasmid-based antigen that could
result in durable antigen exposure and a robust vaccine response to viral
antigens.
? Storage & Distribution: PLACCINE allows for stability that is compatible with
manageable vaccine storage and distribution.
? Simple Dosing & Administration: PLACCINE is a synthetic delivery system that
should require a simple injection that does not require viruses or special
equipment to deliver its payload.
We are conducting preliminary research associated with our recently announced proprietary DNA vaccine platform provisional patent filing. At the same time, we are redoubling our efforts and R&D resources in our immuno-oncology and next generation vaccine program.
On
On
In
In the murine model, our multivalent PLACCINE vaccine targeted against two different variants showed to be immunogenic as determined by the levels of IgG, neutralizing antibodies, and T-cell responses. Additionally, our multivalent vaccine was equally effective against two different variants of the COVID-19 virus while the commercial mRNA vaccine appeared to have lost some activity against the newer variant. The Company continues to evaluate our technology and look forward to the results from our ongoing proof-of-concept non-human primate study evaluating our PLACCINE vaccine against the challenge from live SARS-CoV-2 virus in the second quarter, with durability results available in the second half of this year.
29
THERMODOX® - DIRECTED CHEMOTHERAPY
Liposomes are manufactured submicroscopic vesicles consisting of a discrete
aqueous central compartment surrounded by a membrane bilayer composed of
naturally occurring lipids. Conventional liposomes have been designed and
manufactured to carry drugs and increase residence time, thus allowing the drugs
to remain in the bloodstream for extended periods of time before they are
removed from the body. However, the current existing liposomal formulations of
cancer drugs and liposomal cancer drugs under development do not provide for the
immediate release of the drug and the direct targeting of organ specific tumors,
two important characteristics that are required for improving the efficacy of
cancer drugs such as doxorubicin. A team of research scientists at
OPTIMA Study
The OPTIMA Study represents an evaluation of ThermoDox® in combination with a
first line therapy, RFA, for newly diagnosed, intermediate stage HCC patients.
The OPTIMA Study was designed to enroll up to 550 patients globally at
approximately 65 clinical sites in the
In
On
On
30
On
Investigator-Sponsored Studies with ThermoDox®
Business Plan
Since inception, the Company has incurred substantial operating losses,
principally from expenses associated with the Company's research and development
programs, clinical trials conducted in connection with the Company's product
candidates, and applications and submissions to the
The Company expects its operating losses to continue for the foreseeable future as it continues its product development efforts, and when it undertakes marketing and sales activities. The Company's ability to achieve profitability is dependent upon its ability to obtain governmental approvals, manufacture, and market and sell its new product candidates. There can be no assurance that the Company will be able to commercialize its technology successfully or that profitability will ever be achieved. The operating results of the Company have fluctuated significantly in the past.
In
The Company's ability to raise additional capital may be adversely impacted by
potential worsening global economic conditions and the recent disruptions to,
and volatility in, financial markets in the
31
The actual amount of funds the Company will need to operate is subject to many factors, some of which are beyond the Company's control. These factors include the following:
? the progress of research activities;
? the number and scope of research programs;
? the progress of preclinical and clinical development activities;
? the progress of the development efforts of parties with whom the Company has
entered into research and development agreements;
? the costs associated with additional clinical trials of product candidates;
? the ability to maintain current research and development licensing
arrangements and to establish new research and development and licensing
arrangements;
? the ability to achieve milestones under licensing arrangements;
? the costs involved in prosecuting and enforcing patent claims and other
intellectual property rights; and
? the costs and timing of regulatory approvals.
On
Since 2018, the Company has annually submitted applications to sell a portion of
the Company's
In
With
The Company has based its estimates on assumptions that may prove to be wrong. The Company may need to obtain additional funds sooner or in greater amounts than it currently anticipates. Potential sources of financing include strategic relationships, public or private sales of the Company's shares or debt, the sale of the Company's New Jersey NOLs and other sources. If the Company raises funds by selling additional shares of common stock or other securities convertible into common stock, the ownership interest of existing stockholders may be diluted.
32 Financing Overview
Equity, Debt and Other Forms of Financing
On
During 2021 and 2022 through the date of this Quarterly Report filed on Form
10-Q, we issued a total of 4.4 million shares of common stock as discussed below
for an aggregate
? OnDecember 4, 2018 , the Company entered into the Capital on Demand Agreement with JonesTrading, pursuant to which the Company may offer and sell, from time to time, through JonesTrading shares of Common Stock having an aggregate offering price of up to$16.0 million . During 2021, the Company sold 0.5 million shares under the Capital on Demand Agreement, receiving approximately$6.9 million in gross proceeds under the Capital on Demand Agreement. ? OnJanuary 22, 2021 , the Company entered into a Securities Purchase Agreement (the "January 2021 Purchase Agreement") with several institutional investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering (the "January 2021 Offering"), an aggregate of 1,728,395 shares of the Company's common stock at an offering price of$20.25 per share for gross proceeds of approximately$35 million before the deduction of theJanuary 2021 Placement Agents (as defined below) fee and offering expenses. TheJanuary 2021 Purchase Agreement contains customary representations, warranties and agreements by the Company and customary conditions to closing. The closing of theJanuary 2021 Offering occurred onJanuary 26, 2021 . In connection with theJanuary 2021 Offering, the Company entered into a placement agent agreement with A.G.P./Alliance Global Partners ("AGP" and together withBrookline Capital Markets , the "January 2021 Placement Agents") pursuant to which the Company agreed to pay theJanuary 2021 Placement Agents a cash fee equal to 7% of the aggregate gross proceeds raised from the sale of the securities sold in theJanuary 2021 Offering and reimburse theJanuary 2021 Placement Agents for certain of their expenses in an amount not to exceed$82,500 . ? OnMarch 31, 2021 , the Company entered into a Securities Purchase Agreement (the "March 2021 Purchase Agreement") with several institutional investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering (the "March 2021 Offering"), an aggregate of 769,230 shares of the Company's common stock, at an offering price of$19.50 per share for gross proceeds of approximately$15 million before the deduction of the placement agents fee and offering expenses. The shares were offered by the Company pursuant to the 2021 Registration Statement. The closing of the offering occurred onApril 5, 2021 . In connection with theMarch 2021 Offering, the Company entered into a placement agent agreement with AGP, as lead placement agent (together withJonesTrading Institutional Services LLC andBrookline Capital Markets , a division ofArcadia Securities, LLC , serving as co-placement agents, the "March 2021 Placement Agents"), pursuant to which the Company agreed to pay theMarch 2021 Placement Agents an aggregate cash fee equal to 7% of the aggregate gross proceeds raised from the sale of the securities sold in the offering and reimburse the Placement Agents for certain of their expenses in an amount not to exceed$82,500 . ? OnJanuary 10, 2022 , the Company entered into the Preferred Stock Purchase Agreement with several institutional investors, pursuant to which the Company agreed to issue and sell, in the Preferred Offerings, (i) 50,000 shares of Series A Preferred Stock, and (ii) 50,000 shares of Series B Preferred Stock, in each case at an offering price of$285 per share, representing a 5% original issue discount to the stated value of$300 per share, for gross proceeds of each Preferred Offering of$14.25 million , or approximately$28.50 million in the aggregate for the Preferred Offerings, before the deduction of the Placement Agent's (as defined below) fee and offering expenses. The shares of Series A Preferred Stock had a stated value of$300 per share and were convertible, at a conversion price of$13.65 per share, into 1,098,901 shares of common stock (subject in certain circumstances to adjustments). The shares of Series B Preferred Stock had a stated value of$300 per share and were convertible, at a conversion price of$15.00 per share, into 1,000,000 shares of common stock (subject in certain circumstances to adjustments). The closing of the Preferred Offerings occurred onJanuary 13, 2022 . The Company held a special meeting of stockholders to consider an amendment (the "Amendment") to the Company's Certificate of Incorporation, as amended, to effect a reverse stock split of the outstanding shares of common stock ("Common Stock") by a ratio to be determined by the Board of Directors of the Company (the "Reverse Stock Split"). The investors have agreed in the Purchase Agreement to not transfer, offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of the shares of the Preferred Stock until the Reverse Stock Split, to vote the shares of the Series A Preferred Stock purchased in the Preferred Offerings in favor of such Amendment and to vote the shares of the Series B Preferred Stock purchased in the Preferred Offerings in a manner that "mirrors" the proportions on which the shares of Common Stock (excluding any shares of Common Stock that are not voted) and Series A Preferred Stock are voted on the Reverse Stock Split and the Amendment. 33 The holders of Preferred Stock were entitled to dividends, on an as-if converted basis, equal to dividends actually paid, if any, on shares of Common Stock. The Preferred Stock was convertible into shares of Common Stock at a rate of$13.65 per share for the Series A Preferred Stock and$15.00 per share for the Series B Preferred Stock, subject to adjustment. The Preferred Stock was convertible at the option of the holder at any time after the Company had received stockholder approval for the Reverse Stock Split and filed the requisite Amendment with theDelaware Secretary of State's office to effectuate the Reverse Stock Split (the "Reverse Stock Split Date"), subject to beneficial ownership limitations set forth in the applicable Certificate of Designation. In addition, on or after the Reverse Stock Split Date, and subject to the satisfaction of certain conditions, the Company had the right to cause the holders of the Preferred Stock to convert their shares of Preferred Stock, subject to such beneficial ownership limitations. Each holder of the Preferred Stock had the right to cause the Company to redeem all or part of their shares of the Preferred Stock from the earlier of receipt of stockholder approval of the Reverse Stock Split or of 90 days following the original issue date until 120 days following the original issue date, the "Redemption Date," in cash at a redemption price equal to 105% of the stated value plus an amount equal to accumulated but unpaid dividends, if any, on such shares (whether or not earned or declared, but excluding interest on such dividends) up to, but excluding, the Redemption Date. In connection with the Preferred Offerings, the Company entered into a placement agent agreement (the "Placement Agent Agreement") with AGP in which the Company paid$1,000,000 as a placement agent fee and$110,000 to reimburse AGP for certain expenses related to the Preferred Stock offering. OnMarch 3, 2022 , the Company redeemed for cash at a price equal to 105% of the$300 stated value per share all of its 50,000 outstanding shares of Series A Preferred Stock and its 50,000 outstanding Series B Preferred Stock. As a result, all shares of the Preferred Stock have been retired and are no longer outstanding andCelsion's only class of outstanding stock is its common stock. Each share of common stock entitles the holder to one vote. The Series A Preferred Stock and Series B Preferred Stock were recorded as a liability on the condensed consolidated balance sheet during the first quarter of 2022 until the preferred shares were redeemed during the same quarter. The Company recognized$4,551,567 as interest expense for the preferred shares during the first quarter of 2022, which was composed of: (a)$3,000,000 as the difference between the redemption price for the preferred shares and the net proceeds received from the issuance of the preferred shares, (b)$1,110,000 paid to AGP as a placement agent fee and reimbursement for certain expenses, and (c) $441,567 in legal fees recognized in the first quarter that were attributed to the preferred shares. ? OnApril 6, 2022 , the Company entered into a Securities Purchase Agreement (the "April 2022 Purchase Agreement") with several institutional investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering (the "April 2022 Offering"), an aggregate of 1,328,274 shares of the Company's common stock at an offering price of$5.27 per share for gross proceeds of$7.0 million before the deduction of theApril 2022 Placement Agent (as defined below) fees and offering expenses. TheApril 2022 Purchase Agreement contains customary representations, warranties and agreements by the Company and customary conditions to closing. The closing of theApril 2022 Offering occurred onApril 8, 2022 . In connection with theApril 2022 Offering, the Company entered into a placement agent agreement with A.G.P./Alliance Global Partners (the "April 2022 Placement Agent") pursuant to which the Company agreed to pay theApril 2022 Placement Agent a cash fee equal to 6.5% of the aggregate gross proceeds raised from the sale of the securities sold in theApril 2022 Offering and reimburse theApril 2022 Placement Agent for certain of their expenses in an amount not to exceed$50,000 .
Significant Accounting Policies
Our significant accounting policies are more fully described in Note 1 to our
consolidated financial statements included in our 2021 Annual Report on Form
10-K for the year ended
As a clinical stage biopharmaceutical company, our business, and our ability to execute our strategy to achieve our corporate goals are subject to numerous risks and uncertainties. Material risks and uncertainties relating to our business and our industry are described in "Item 1A. Risk Factors" under "Part II: Other Information" included herein.
34
FINANCIAL REVIEW FOR THE THREE MONTHS ENDED
Results of Operations
For the three months ended
With$48.1 million in cash and cash equivalents, short-term investments, interest receivable and restricted cash, coupled with approximately$3.5 million of future planned sales of the Company'sState of New Jersey net operating losses, the Company believes it has sufficient capital resources to fund its operations into 2025. Three Months Ended June 30, Change Increase (In thousands) (Decrease) 2022 2021 Licensing Revenue:$ 125 $ 125 $ - - % Operating Expenses: Clinical Research 1,505 1,210 295 24.4 %
Chemistry, Manufacturing and Controls (CMC) 1,721 1,383 338 24.4 % Research and development expenses
3,226 2,593 633 24.4 %
General and administrative expenses 2,877 2,603 274 10.5 %
Total operating expenses 6,103 5,196 907 17.5 %
Loss from operations $ (5,978 ) $ (5,071 ) $ (907 ) 17.9 %
Licensing Revenue
In
Research and Development Expenses
Research and development ("R&D") expenses were
General and Administrative Expenses
General and administrative expenses were
Impairment of IPR&D Liability
Due to the continuing deterioration of public capital markets in the biotech
industry and its impact on market capitalization rates in this section, IPR&D
related to the ovarian cancer indication was reviewed for impairment during the
second quarter of 2022. Based on the Company's analysis of the IPR&D, the
Company has concluded that it is not more than likely that the asset had been
impaired as of
35
Change in Earn-out Milestone Liability
As of
Investment income and interest expense
The Company recognized interest expense of
Investment income from its short-term investments was insignificant in the second quarter of 2021 and 2022.
FINANCIAL REVIEW FOR THE SIX MONTHS ENDED
Results of Operations
For the six months ended
Six Months Ended June 30,
Change Increase
(In thousands) (Decrease)
2022 2021
Licensing Revenue: $ 250 $ 250 $ - - %
Operating Expenses:
Clinical Research 2,826 2,364 462 19.5 %
Chemistry, Manufacturing and
Controls (CMC) 3,496 2,801 695 24.8 %
Research and development expenses 6,322 5,165 1,157 22.4 %
General and administrative expenses 5,748 5,540 208 3.8 %
Total operating expenses 12,070 10,705 1,365 12.8 %
Loss from operations $ (11,820 ) $ (10,455 ) $ (1,365 ) 13.1 %
Licensing Revenue
In
Research and Development Expenses
Research and development ("R&D") expenses were
36
General and Administrative Expenses
General and administrative expenses were
Impairment of IPR&D Liability
Due to the continuing deterioration of public capital markets in the biotech
industry and its impact on market capitalization rates in this section, IPR&D
related to the ovarian cancer indication was reviewed for impairment during the
first half of 2022. Based on the Company's analysis of the IPR&D, the Company
has concluded that it is not more than likely that the asset had been impaired
as of
Change in Earn-out Milestone Liability
As of
Investment income and interest expense
The Company recognized interest expense of
As more fully discussed in Note 10, in
Investment income from its short-term investments was insignificant in the first half of 2021 and 2022.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Since inception we have incurred significant losses and negative cash flows from
operations. We have financed our operations primarily through the net proceeds
from the sales of equity, credit facilities and amounts received under our
product licensing agreement with
At
Net cash used in operating activities for the first six months of 2022 was
37
We expect to seek additional capital through further public or private equity offerings, debt financing, additional strategic alliance and licensing arrangements, collaborative arrangements, potential sales of our net operating losses, or some combination of these financing alternatives. If we raise additional funds through the issuance of equity securities, the percentage ownership of our stockholders could be significantly diluted, and the newly issued equity securities may have rights, preferences, or privileges senior to those of the holders of our common stock. If we raise funds through the issuance of debt securities, those securities may have rights, preferences, and privileges senior to those of our common stock. If we seek strategic alliances, licenses, or other alternative arrangements, such as arrangements with collaborative partners or others, we may need to relinquish rights to certain of our existing or future technologies, product candidates, or products we would otherwise seek to develop or commercialize on our own, or to license the rights to our technologies, product candidates, or products on terms that are not favorable to us. The overall status of the economic climate could also result in the terms of any equity offering, debt financing, or alliance, license, or other arrangement being even less favorable to us and our stockholders than if the overall economic climate were stronger. We also will continue to look for government sponsored research collaborations and grants to help offset future anticipated losses from operations and, to a lesser extent, interest income.
If adequate funds are not available through either the capital markets, strategic alliances, collaborators, or sales of our net operating losses, we may be required to delay or, reduce the scope of, or terminate our research, development, clinical programs, manufacturing, or commercialization efforts, or effect additional changes to our facilities or personnel, or obtain funds through other arrangements that may require us to relinquish some of our assets or rights to certain of our existing or future technologies, product candidates, or products on terms not favorable to us.
Off-Balance Sheet Arrangements and Contractual Obligations
None.
© Edgar Online, source
