FibroBiologics Inc
For the period ended Jun 30, 2024. Filed Aug 7, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 7, 2024
FBLG$0.98+2.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-14.
0001493152-24-019225
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0001493152-24-030603
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 79 previous paragraphs and 82 current paragraphs.
53 unchanged; 20 reworded; 9 added; 6 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
Psoriasis
Current report
We are completing an early phase project utilizing a psoriasis mouse model to assess the potential use of intravenous administration of fibroblast spheroids for the treatment of psoriasis. Results to date include that a single administration of fibroblast spheroids resulted in significant improvement in mice with moderate psoriasis, and that multiple administrations of fibroblast spheroids resulted in significant improvement in mice with severe psoriasis. We also compared fibroblast spheroid with single and multiple administration of an anti-IL-23 monoclonal antibody in treatment of mice with mild to moderate psoriasis. We noted that a single treatment of fibroblast spheroids was significantly better than single and multiple administration of an anti-IL-23 monoclonal antibody. Three anti-IL-23 monoclonal antibody treatments are approved by the FDA for the treatment of psoriasis, including Tremfya®, Illumya®, and Skyrizi®.
Current report
Extension of Life Applications
Current report
As part of our early phase project to develop a method to reverse the involution process of the thymus, we recently completed a proof-of-concept study in developing a fibroblast-based artificial thymus organoid (AOT) that behaves like a functioning thymus both in vivo and in vitro. Our in vitro data demonstrate that the thymus organoids can allow for the progression from a T cell progenitor (hematopoietic stem cell progenitor from the bone marrow) to an immature T cell that expresses a T cell receptor (TCR). The TCR is the primary functional receptor of the T cell that allows it to recognize targets such as cancer, virus infected cells or self vs non-self. This is a critical step in the T cell development pipeline and cells that fail to express a functional TCR will not survive. Our in vivo animal model study carried out in a severe combined immunodeficiency disease (SCID) mouse demonstrates that the thymus organoid harvested after only three days of culture can be injected/transplanted into immune deficient mice and give rise to fully mature T cells that express a TCR and differentiate into CD4 or CD8 T cells. The CD4 T helper cells and the CD8 cytotoxic T cells play very different roles in the body and therefore having both types present and functional is critical. In addition, our data indicate that the CD4 T cells further develop into regulatory T cells (FOXP3+), which protect the body against inflammation and autoimmune diseases. Additionally, our data indicate that the thymus organoid also gives rise to Gamma delta T cells, which are rare and found in the spleen, mucosal tissues, and skin.
Current report
Research and development expenses were $1.9 million and $1.0 million for the six months ended June 30, 2024 and 2023, respectively. The increase of $0.9 million was primarily due to:
Current report
General, administrative and other expenses were $4.7 million and $3.3 million for the six months ended June 30, 2024 and 2023, respectively. The increase of $1.3 million was primarily due to:
Current report
Change in fair value of liability instrument and warrant liability was a gain of $2.4 million and none for the six months ended June 30, 2024 and 2023, respectively.
Current report
Change in fair value of forward contract liability
Current report
Change in fair value of forward contract liability was $1.5 million and none for the three and six months ended June 30, 2024 and 2023, respectively. We issued a Draw Down Notice to GEM under the Share Purchase Agreement on June 27, 2024, which created the forward contract liability to sell shares to the investor at 90% of the average daily closing price per share over the Draw Down Pricing Period. The $1.5 million loss during the three months ended June 30, 2024 is based upon the estimated fair value of the forward contract liability for the Draw Down Notice issued, as remeasured at June 30, 2024, and will be marked to market upon receipt of the Closing Notice from the investor.
Removed paragraphs (6)
Previous report
CYWC628 for Wound Healing
Previous report
For our Phase 5 pre-clinical study, using a diabetic mouse model (BKS.Cg-Dock7m), we studied the impact of multiple administrations of CYWC628 spheroids and Grafix™ on a chemically induced chronic wound often used to mimic diabetic foot ulcers in animal models. The CYWC628 spheroids were administered on Day 0, Day 4, Day 8 and Day 12. The results of our study with this mouse model of a chronic wound indicated (i) a 34.8% reduction in wound area four days after the first administration (day 4) of CYWC628 as compared to 28.6 % for Grafix™ (p > 0.05), which was not statistically significant, and 10.2% for the untreated saline control group (p < 0.05); (ii) a 43.4% reduction in wound area four days after the second administration (day 8) of CYWC628 as compared to 37.6 % for Grafix™ (p > 0.05), which was not statistically significant, and 21.7% for the untreated saline control group (p < 0.05); (iii) a 69.3% reduction in wound area four days after the third administration (day 12) of CYWC628 as compared to 47.13% for Grafix™ (p < 0.05), which was statistically significant, and 36.4% for the untreated saline control group (p < 0.05), which was also statistically significant.; and (iv) an 83.8% reduction in wound area four days after the fourth administration (Day 19) of CYWC628 as compared to 66% for Grafix™ (p< 0.05), which was statistically significant, and 55.2% for the untreated saline control group (p<0.01), which was also statistically significant. Grafix™ results as compared to saline control were not statistically significant at any of the measured timepoints, whereas CYWC628 as compared to saline control was statistically significant at all measured timepoints.
Previous report
The following graph and chart summarize the results of our Phase 5 pre-clinical study.
Previous report
Effective wound healing is not only determined by the efficiency of wound closure, but also by the quality of the healed wound. For our multiple CYWC628 administration study, we also looked at several metrics essential to the quality of wound healing. These metrics are re-epithelialization, granulation, cell proliferation, neo-vascularization, and fibroblast recruitment. The results of the study indicated that at day 19 after the final treatment, CYWC628 had a significantly improved epithelization, granulation, cell proliferation (as measured using Ki67), neo-vascularization (as measured by CD31 and VEGF), and fibroblast recruitment (as measured by αSMA and IL-6) compared to control and Grafix™.
Previous report
Manufacturing
Previous report
We are planning to complete a technology transfer of our cell manufacturing processes to a contract development and manufacturing organization, or CDMO, and conduct feasibility studies for our fibroblast spheroid-based drug product, with the intent to enter into a master services agreement with that CDMO to supply drug product for clinical trials. We expect to produce a master cell bank, working cell bank, and drug product for use in clinical trials by year end 2024.
Reworded paragraphs (20)
Previous wording
We are a clinical-stage cell therapy company focused on developing and commercializing fibroblast-based therapies for patients suffering from chronic diseases with significant unmet medical needs, including wound healing, multiple sclerosis, degenerative disc disease, psoriasis and certain cancers, and potential extension of life applications including thymic and splenic involution reversal. At present, our novel manufacturing process entails collecting excess tissue from surgical procedures and using the allogeneic fibroblasts to grow a cell bank for use in our procedures. Our most advanced product candidates are CybroCell™ and CYMS101.
Current wording
We are a clinical-stage biotechnology company focused on developing and commercializing fibroblast-based therapies for patients suffering from chronic diseases with significant unmet medical needs, including wound healing, multiple sclerosis (MS), degenerative disc disease, psoriasis and certain cancers, and potential extension of life applications including thymic and splenic involution reversal. At present, our novel manufacturing process entails collecting excess tissue from surgical procedures and using the allogeneic fibroblasts to grow a cell bank for use in our procedures. Our most advanced product candidates are CYWC628, CYMS101 and CybroCell™ .
Previous wording
We are in the late pre-clinical stages of developing CYWC628 as an allogeneic fibroblast cell-based therapy for wound healing. Our studies are presently focused on utilizing fibroblasts and fibroblast-derived cells to treat wounds in diabetic mice. The results of our studies to date have shown statistically significant acceleration in the rate of wound closure in comparison with both a marketed wound care product and control, and improved quality of healed wounds. For our remaining pre-clinical studies, we will investigate multiple administrations of CYWC628 on a chemically induced chronic wound NONcNZO10/LtJ mouse model, complete a dose titration study to provide information on effective dose range of CYWC628, and complete an acute and chronic toxicity study. We expect to complete these studies in the 3rd quarter of 2024. Based upon our results achieved to date and the expected timing of these additional preclinical studies, we are planning to initiate a Phase 1/2 clinical trial in Australia for treatment of diabetic foot ulcers in 2025 with results expected in the third quarter of 2025.
Current wording
We are in the late pre-clinical stages of developing CYWC628 as an allogeneic fibroblast cell-based therapy for wound healing. Our studies are presently focused on utilizing fibroblasts and fibroblast-derived cells to treat wounds in diabetic mice. The results of our studies to date have shown statistically significant acceleration in the rate of wound closure in comparison with both a marketed wound care product and control, and improved quality of healed wounds. For our remaining pre-clinical studies, we will investigate multiple administrations of CYWC628 on a chemically induced chronic wound NONcNZO10/LtJ mouse model, complete a dose titration study to provide information on effective dose range of CYWC628, and complete an acute and chronic toxicity study. We expect to complete these studies in the 3rd quarter of 2024. Based upon our results achieved to date and the expected timing of these additional preclinical studies, we are planning to initiate a twelve-week Phase 1/2 clinical trial in Australia for treatment of diabetic foot ulcers in 2025 as funding allows.
Previous wording
We are developing CYMS101 as an allogeneic fibroblast cell-based therapy to treat MS. After completing animal studies using CYMS101 (allogeneic fibroblast cells), we received approval to conduct clinical investigations in Mexico using the fibroblast cell composition for patients with MS and have completed a Phase 1 study. The study was conducted in five participants. The primary objective of the study was to assess safety, and the secondary objective was to assess efficacy. We are currently conducting further research to determine the mode of action of fibroblasts in oligodendrocyte expansion and expect to file an IND application for a Phase 2 clinical trial in MS as funding allows. We will likely seek a strategic partner to collaborate with us on the development of CYMS101 either before initiating the Phase 2 clinical trial, or after its completion, if successful, and prior to commencing with a Phase 3 clinical trial.
Current wording
We are developing CYMS101 as an allogeneic fibroblast cell-based therapy to treat MS. After completing animal studies using CYMS101, we received approval to conduct clinical investigations in Mexico using the fibroblast cell composition for patients with MS and have completed a Phase 1 study. The study was conducted in five participants. The primary objective of the study was to assess safety and the secondary objective was to assess efficacy. We are currently conducting further research to determine the mode of action of fibroblasts in oligodendrocyte expansion and expect to file an IND application for a Phase 1/2 clinical trial in MS as funding allows. We will likely seek a strategic partner to collaborate with us on the development of CYMS101 either before initiating the Phase 1/2 clinical trial, or after its completion, if successful, and prior to commencing with a Phase 3 clinical trial.
Previous wording
We currently purchase our cell therapy product candidates from a CDMO. If our product candidates receive marketing approval, we will evaluate the longer-term feasibility of building our own cGMP manufacturing facility or continuing to outsource production to a CDMO for clinical testing and commercial sales.
Current wording
We currently utilize a CDMO to manufacture our cell therapy product candidates. If our product candidates receive marketing approval, we will evaluate the longer-term feasibility of building our own cGMP manufacturing facility or continuing to outsource production to a CDMO for clinical testing and commercial sales.
Previous wording
We have incurred net losses since inception and expect to incur losses in the future as we continue our research and development activities. To date, we have funded our operations primarily through investment from FibroGenesis, the issuance of $5.6 million of our convertible promissory notes that were issued from December 2021 through April 2022, the issuance of $18.6 million of preferred stock, and the issuance of $2.8 million of common stock.
Current wording
We have incurred net losses since inception and expect to incur losses in the future as we continue our research and development activities. To date, we have funded our operations primarily through investment from FibroGenesis, the issuance of $5.6 million of our convertible promissory notes from December 2021 through April 2022, the issuance of $18.6 million of preferred stock, and the issuance of $6.4 million of common stock.
Previous wording
As of March 31, 2024, we had cash and cash equivalents of approximately $8.2 million. Since our inception, we have incurred significant operating losses. We incurred net losses of approximately $8.5 million and $2.4 million for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, we had an accumulated deficit of approximately $32.8 million. We expect to continue to incur significant expenses and operating losses for the next several years. See “—Funding Requirements” below.
Current wording
As of June 30, 2024, we had cash and cash equivalents of approximately $6.0 million. Since our inception, we have incurred significant operating losses. We incurred net losses of approximately $7.6 million and $4.6 million for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, we had an accumulated deficit of approximately $31.9 million. We expect to continue to incur significant expenses and operating losses for the next several years. See “—Funding Requirements” below.
Previous wording
Comparison of Three Months Ended March 31, 2024 and 2023
Current wording
Comparison of Three and Six Months Ended June 30, 2024 and 2023
Previous wording
The following table sets forth our results of operations for the three months ended March 31, 2024 and 2023.
Current wording
The following tables set forth our results of operations for the three and six months ended June 30, 2024 and 2023.
Previous wording
General, administrative and other expenses were $2.5 million and $1.8 million for the three months ended March 31, 2024 and 2023, respectively. The increase of $0.7 million was primarily due to:
Current wording
General, administrative and other expenses were $2.2 million and $1.5 million for the three months ended June 30, 2024 and 2023, respectively. The increase of $0.7 million was primarily due to:
Previous wording
Change in fair value of liability instrument
Current wording
Change in fair value of liability instrument and warrant liability
Previous wording
Change in fair value of liability instrument was $3.1 million and none for the three months ended March 31, 2024 and 2023, respectively. The liability instrument to investors under the Share Purchase Agreement among us, GEM Global Yield LLC SCS, or GEM, and GEM Yield Bahamas Limited, or GYBL, dated November 12, 2021, or the GEM SPA, was comprised of the contingent warrant liability and contingent put option. The $3.1 million loss during the three months ended March 31, 2024 resulted from the mark to market of the warrant liability, which will occur at the end of each reporting period as long as the warrants are outstanding and classified as a liability.
Current wording
Change in fair value of liability instrument and warrant liability was a gain of $5.5 million and none for the three months ended June 30, 2024 and 2023, respectively. The liability instrument to investors under the Share Purchase Agreement among us, GEM Global Yield LLC SCS, or GEM, and GEM Yield Bahamas Limited, or GYBL, dated November 12, 2021, or the GEM SPA, was comprised of the contingent warrant liability and contingent put option. The $5.5 million gain during the three months ended June 30, 2024 resulted from the mark to market of the warrant liability, which will occur at the end of each reporting period as long as the warrants are outstanding and classified as a liability.
Previous wording
Commitment fee expense was $1.9 million and none for the three months ended March 31, 2024 and 2023, respectively. A $2 million commitment fee pursuant to the GEM SPA became payable to GEM upon completion of the Direct Listing in January 2024. The commitment fee is payable to GEM as drawdown notices are issued, with any remaining balance payable one year after public listing. We sold $3.0 million of common stock to GEM under the GEM SPA during the three months ended March 31, 2024, which made approximately $0.1 million of the commitment fee payable immediately. This $0.1 million portion of the commitment fee was netted against the proceeds received in additional paid-in capital. The remaining $1.9 million was expensed immediately because we are planning to raise funds through other sources and have no plans to issue further draw downs to GEM prior to the one-year anniversary of our public listing when this remaining amount will be due.
Current wording
Commitment fee expense was $1.9 million and none for the six months ended June 30, 2024 and 2023, respectively. A $2 million commitment fee pursuant to the GEM SPA became payable to GEM upon completion of the Direct Listing in January 2024. The commitment fee is payable to GEM as drawdown notices are issued, with any remaining balance payable one year after public listing. We sold $3.0 million of common stock to GEM under the GEM SPA during the three months ended March 31, 2024, which made approximately $0.1 million of the commitment fee payable immediately. This $0.1 million portion of the commitment fee was netted against the proceeds received in additional paid-in capital. The remaining $1.9 million was expensed immediately because we were planning to raise funds through other sources and had no plans to issue further Draw Down Notices to GEM prior to the one-year anniversary of our public listing when this remaining amount will be due.
Previous wording
Interest expense was $0.0 million and $0.1 million for the three months ended March 31, 2024 and 2023, respectively. The decrease of $0.1 million was due to the maturities and conversions of the notes during the year ended December 31, 2023. Interest expense was recorded in 2023 for the nominal interest rate of 6.0% plus the amortization of the discount on the 2022 convertible notes.
Current wording
Interest expense was $0.0 million and $0.1 million for the six months ended June 30, 2024 and 2023, respectively. The decrease of $0.1 million was due to the maturities and conversions of the notes during the year ended December 31, 2023. Interest expense was recorded in 2023 for the nominal interest rate of 6.0% plus the amortization of the discount on the 2022 convertible notes.
Previous wording
To date, we have financed our operations primarily with investment from FibroGenesis, proceeds from borrowings under our convertible loan agreements, and proceeds from the issuance of preferred stock and common stock. From inception through March 31, 2024, we have received net proceeds of approximately $5.6 million from sales of our convertible notes, $18.6 million from the issuance of preferred stock, and $2.8 million from the issuance of common stock. As of March 31, 2024, we had cash and cash equivalents of approximately $8.2 million and an accumulated deficit of approximately $32.8 million. As of March 31, 2024, we had no outstanding debt.
Current wording
To date, we have financed our operations primarily with investment from FibroGenesis, proceeds from borrowings under our convertible loan agreements, and proceeds from the issuance of preferred stock and common stock. From inception through June 30, 2024, we have received net proceeds of approximately $5.6 million from sales of our convertible notes, $18.6 million from the issuance of preferred stock, and $2.8 million from the issuance of common stock. As of June 30, 2024, we had cash and cash equivalents of approximately $6.0 million and an accumulated deficit of approximately $31.9 million. As of June 30, 2024, we had no outstanding debt.
Previous wording
The following table sets forth a summary of our cash flows for the three months ended March 31, 2024 and 2023.
Current wording
The following table sets forth a summary of our cash flows for the six months ended June 30, 2024 and 2023.
Previous wording
Net cash used in operating activities was $4.3 million and $2.0 million for the three months ended March 31, 2024 and 2023, respectively, and consisted primarily of net losses of $8.5 million and $2.4 million, respectively. Noncash expenses of change in fair value of liability instrument of $3.1 million, change in commitment fee payable of $2.0 million, stock-based compensation expense of $0.5 million, and amortization of operating lease right-of-use asset of $0.1 million partially offset the net loss, while an increase in prepaid expenses of $0.7 million, a decrease in accounts payable and accrued expenses of $0.6 million, a decrease in payable to Parent of $0.1 million, and a decrease in operating lease liability of $0.1 million added to the cash used in operations in the three months ended March 31, 2024. Noncash expenses of stock-based compensation of $0.4 million, amortization of operating lease right-of-use asset of $0.1 million, and amortization of convertible notes debt discount of $0.1 million, and an increase in accounts payable and accrued expenses of $0.2 million partially offset the net loss, while an increase in other current assets of $0.1 million and a decrease in operating lease liability of $0.1 million added to the cash used in operations in the three months ended March 31, 2024.
Current wording
Net cash used in operating activities was $6.2 million and $3.7 million for the six months ended June 30, 2024 and 2023, respectively, and consisted primarily of net losses of $7.6 million and $4.6 million, respectively. Noncash losses on change in fair value of forward contract liability of $1.5 million, stock-based compensation expense of $1.1 million, amortization of operating lease right-of-use asset of $0.2 million, and depreciation expense of $0.1 million and change in commitment fee payable of $1.5 million partially offset the net loss, while noncash gain on change in fair value of liability instrument of $2.4 million, an increase in prepaid expenses of $0.5 million, a decrease in accounts payable and accrued expenses of $0.2 million, a decrease in payable to Parent of $0.1 million, and a decrease in operating lease liability of $0.2 million added to the cash used in operations in the six months ended June 30, 2024. Noncash expenses of stock-based compensation of $0.9 million, amortization of operating lease right-of-use asset of $0.2 million, and amortization of convertible notes debt discount of $0.1 million, and an increase in accounts payable and accrued expenses of $0.2 million partially offset the net loss, while an increase in other current assets of $0.3 million and a decrease in operating lease liability of $0.2 million added to the cash used in operations in the six months ended June 30, 2024.
Previous wording
Net cash used in investing activities was approximately $0.0 million and $0.1 million for the three months ended March 31, 2024 and 2023, respectively. The decrease was due to the timing of laboratory equipment purchases.
Current wording
Net cash used in investing activities was approximately $0.1 million and $0.1 million for the six months ended June 30, 2024 and 2023, respectively, and consist primarily of laboratory equipment purchases.
Previous wording
Net cash provided by financing activities was approximately $3.3 million and $14.6 million for the three months ended March 31, 2024 and 2023, respectively. During the three months ended March 31, 2024, we entered into a $0.6 million short-term borrowing agreement to finance the D&O insurance policy premiums and repaid $0.1 million of the principal borrowed, and we raised $2.8 million of net proceeds from the sale of common stock under the GEM SPA. During the three months ended March 31, 2023, we paid to FibroGenesis $0.3 million under the ROFN Agreement, and we received $14.9 million in total net proceeds from the issuance of Series B Preferred Stock and Series B-1 Preferred Stock.
Current wording
Net cash provided by financing activities was approximately $3.1 million and $12.9 million for the six months ended June 30, 2024 and 2023, respectively. During the six months ended June 30, 2024, we entered into a $0.6 million short-term borrowing agreement to finance the D&O insurance policy premiums and repaid $0.3 million of the principal borrowed, and we raised $2.8 million of net proceeds from the sale of common stock under the GEM SPA. During the six months ended June 30, 2023, we paid to FibroGenesis $2.6 million under the ROFN Agreement, we received $0.3 million from FibroGenesis’ repayment of its note payable to us, and we received $15.2 million in total net proceeds from the issuance of Series B Preferred Stock and Series B-1 Preferred Stock.
Previous wording
The financial statements have been prepared as though we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have incurred operating losses and negative cash flows from operations since inception. As of March 31, 2024, we had an accumulated deficit of approximately $32.8 million. Management expects to continue to incur operating losses and negative cash flows.
Current wording
The financial statements have been prepared as though we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have incurred operating losses and negative cash flows from operations since inception. As of June 30, 2024, we had an accumulated deficit of approximately $31.9 million. Management expects to continue to incur operating losses and negative cash flows.
Previous wording
Material contractual obligations arising in the normal course of business primarily consist of operating leases. Future minimum lease payments under non-cancellable leases as of March 31, 2024, were approximately $1.9 million, of which $0.5 million is due within one year. We generally expect to satisfy these commitments with cash on hand and cash provided by financing activities.
Current wording
Material contractual obligations arising in the normal course of business primarily consist of operating leases. Future minimum lease payments under non-cancellable leases as of June 30, 2024, were approximately $1.8 million, of which $0.5 million is due within one year. We generally expect to satisfy these commitments with cash on hand and cash provided by financing activities.