Hepion Pharmaceuticals Inc

Previous wording

We are a biopharmaceutical company headquartered in Edison, New Jersey, focused on the development of drug therapy for treatment of chronic liver diseases. This therapeutic approach targets fibrosis, inflammation, and shows potential for the treatment of hepatocellular carcinoma (“HCC”) associated with non-alcoholic steatohepatitis (“NASH”), viral hepatitis, and other liver diseases. Our cyclophilin inhibitor, rencofilstat (formerly CRV431), was being developed to offer benefits to address multiple complex pathologies related to the progression of liver disease.

Current wording

We are a biopharmaceutical company headquartered in Edison, New Jersey, previously focused on the development of drug therapy for treatment of chronic liver diseases. This therapeutic approach targets fibrosis, inflammation, and shows potential for the treatment of hepatocellular carcinoma (“HCC”) associated with non-alcoholic steatohepatitis (“NASH”), viral hepatitis, and other liver diseases. Our cyclophilin inhibitor, rencofilstat (formerly CRV431), was being developed to offer benefits to address multiple complex pathologies related to the progression of liver disease.

Previous wording

We have completed a number of Phase 1 and Phase 2 clinical trials. In May 2023, we announced that our Phase 2a study ("ALTITUDE-NASH") met its primary endpoint by demonstrating improved liver function and was well tolerated after four months of treatment with once daily oral rencofilstat administered to NASH subjects with stage 3 or greater fibrosis. All additional secondary efficacy and safety endpoints were also met. These observations provide further evidence that builds on previous findings from a shorter 28-day Phase 2a ("AMBITION") trial. Taken together, the AMBITION and ALTITUDE-NASH trials reinforce rencofilstat’s direct antifibrotic mode of action and increase our confidence level that we anticipate observing fibrosis reductions in our ongoing 12-month Phase 2b ("ASCEND-NASH") clinical trial.

Current wording

We have completed a number of Phase 1 and Phase 2 clinical trials. In May 2023, we announced that our Phase 2a study (“ALTITUDE-NASH”) met its primary endpoint by demonstrating improved liver function and was well tolerated after four months of treatment with once daily oral rencofilstat administered to NASH subjects with stage 3 or greater fibrosis. All additional secondary efficacy and safety endpoints were also met. These observations provide further evidence that builds on previous findings from a shorter 28-day Phase 2a (“AMBITION”) trial. Taken together, the AMBITION and ALTITUDE-NASH trials reinforced rencofilstat’s direct antifibrotic mode of action and increase our confidence level that we anticipated observing fibrosis reductions in our 12-month Phase 2b (“ASCEND-NASH”) clinical trial.

Previous wording

From inception through March 31, 2024, we have an accumulated deficit of $227.5 million and we have not generated any revenue from operations.

Current wording

From inception through June 30, 2024, we have an accumulated deficit of $231.4 million and we have not generated any revenue from operations.

Previous wording

During the three months ended March 31, 2024, there were no significant changes to our critical accounting estimates from those described in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in the Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

During the six months ended June 30, 2024, there were no significant changes to our critical accounting estimates from those described in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in the Annual Report on Form 10-K for the year ended December 31, 2023.

Previous wording

We had no revenues during the three months ended March 31, 2024 and 2023, respectively, because we do not have any commercial biopharmaceutical products and we do not expect to have such products for several years, if at all.

Current wording

We had no revenues during the three months ended June 30, 2024 and 2023, because we do not have any commercial biopharmaceutical products and we do not expect to have such products for several years, if at all.

Previous wording

Research and development expenses for the three months ended March 31, 2024 and 2023 was $2.5 million and $9.8 million, respectively. The decrease of $7.3 million was primarily due to a $4.4 million decrease in clinical trial costs primarily for our phase 2b study, a $1.1 million decrease of Chemistry, Manufacturing and Controls costs, a decrease of $0.6 million in employee compensation costs due to reduced headcounts, a $0.6 million decrease in consulting and outside services and $0.6 million of other miscellaneous expenses.

Current wording

Research and development expenses for the six months ended June 30, 2024 and 2023 was $9.7 million and $21.7 million, respectively. The decrease of $12.0 million was primarily due to a $10.7 million decrease in clinical trial costs primarily for our phase 2b study, a $0.9 million decrease of Chemistry, Manufacturing and Controls costs, a decrease of $0.4 million in employee compensation costs due to reduced headcounts, and decrease in consulting and outside services.

Previous wording

General and administrative expenses for the three months ended March 31, 2024 and 2023 was $2.6 million and $3.4 million, respectively. The decrease of $0.8 million was primarily due to a $0.4 million decrease in salaries and $0.4 million decrease of stock-based compensation costs.

Current wording

General and administrative expenses for the six months ended June 30, 2024 and 2023 was $4.0 million and $5.7 million, respectively. The decrease of $1.7 million was primarily due to a $0.4 million decrease stock compensation and $1.4 million decrease in salaries.

Previous wording

We have no products approved for commercial sale. To date, we have devoted substantially all of our resources to organizing and staffing our company, business planning, raising capital, undertaking preclinical studies and clinical trials of our product candidate. As a result, we are not profitable and have incurred losses in each period since our inception in 2013. As of March 31, 2024, we had an accumulated deficit of $227.5 million. We expect to continue to incur significant losses for the foreseeable future.

Current wording

We have no products approved for commercial sale. To date, we have devoted substantially all of our resources to organizing and staffing our company, business planning, raising capital, undertaking preclinical studies and clinical trials of our product candidate. As a result, we are not profitable and have incurred losses in each period since our inception in 2013. As of June 30, 2024, we had an accumulated deficit of $231.4 million. We expect to continue to incur significant losses for the foreseeable future.

Previous wording

The condensed consolidated financial statements as of and for the three months ended March 31, 2024 have been prepared under the assumption that we will continue as a going concern within one year after the financial statements are issued. Due to our accumulated deficit and our recurring and expected continuing losses from operations, we have concluded there is substantial doubt in our ability to continue as a going concern without additional capital becoming available to attain further operating efficiencies and, ultimately, to generate revenue. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Current wording

The condensed consolidated financial statements as of and for the six months ended June 30, 2024 have been prepared under the assumption that we will continue as a going concern within one year after the financial statements are issued. Due to our accumulated deficit and our recurring and expected continuing losses from operations, we have concluded there is substantial doubt in our ability to continue as a going concern without additional capital becoming available to attain further operating efficiencies and, ultimately, to generate revenue. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Previous wording

As of March 31, 2024, we had working capital of $12.9 million compared to working capital of $12.2 million as of December 31, 2023. The increase of $0.7 million in working capital is primarily due to $3.0 million in proceeds received from sales of our state NOLs offset by the company's operating costs for the three months ended March 31, 2024.

Current wording

As of June 30, 2024, we had working capital of $4.5 million compared to working capital of $12.2 million as of December 31, 2023. The decrease of $7.7 million in working capital is primarily due to $3.0 million in proceeds received from sales of our state NOLs offset by the Company’s operating costs for the six months ended June 30, 2024.

Previous wording

As of March 31, 2024, we had $13.1 million in cash. Net cash used in operating activities was $3.6 million for the three months ended March 31, 2024 consisting primarily of our net loss of $2.9 million, adjusted for an increase in non-cash charges of $1.4 million, primarily for stock-based compensation and warrant related inducement expense, partially offset by change in fair value of contingent consideration and the change in fair value of derivative warrants. Changes in working capital accounts had a negative impact of $2.1 million on cash primarily due to an increase in accrued expenses.

Current wording

As of June 30, 2024, we had $2.1 million in cash. Net cash used in operating activities was $14.5 million for the six months ended June 30, 2024 consisting primarily of our net loss of $9.9 million, adjusted for an increase in non-cash charges of $3.2 million, primarily for stock-based compensation and warrant related inducement expense, partially offset by $3.1 million in change in fair value of contingent consideration and the change in fair value of derivative warrants. Changes in working capital accounts had a negative impact of $4.6 million on cash primarily due to an increase in accounts payable, accrued expenses and prepaid expenses.

Previous wording

As of March 31, 2023, we had $43.0 million in cash. Net cash used in operating activities was $8.2 million for the three months ended March 31, 2023 consisting primarily of our net loss of $13.3 million. Changes in non-cash operating activities was $2.0 million, primarily for stock-based compensation. Changes in working capital accounts had a positive impact of $3.0 million on cash primarily for a decrease in prepaid expenses and other assets of $2.5 million.

Current wording

As of June 30, 2023, we had $30.5 million in cash. Net cash used in operating activities was $20.7 million for the six months ended June 30, 2023 consisting primarily of our net loss of $27.3 million. Changes in non-cash operating activities was $0.9 million, primarily for stock-based compensation. Changes in working capital accounts had a positive impact of $5.8 million on cash primarily for a decrease in prepaid expenses and other assets of $3.0 million and an increase in accounts payable and accrued expenses of $2.8 million.

Previous wording

There was no cash provided by or used in investing activities during the three months ended March 31, 2024 and 2023.

Current wording

Net cash used in investing activities was nominal for the six months ended June 30, 2024 and 2023.

Previous wording

Net cash provided by financing activities was $1.8 million for the three months ended March 31, 2024, due primarily to proceeds received from the exercise of the warrants.

Current wording

Net cash provided by financing activities was $1.8 million for the six months ended June 30, 2024, due primarily to proceeds received from the exercise of the warrants.

Previous wording

There was no cash provided by or used in financing activities for the three months ended March 31, 2023.

Current wording

There was no cash provided by or used in financing activities for the six months ended June 30, 2023.