Hepion Pharmaceuticals, Inc.
For the period ended Mar 31, 2025. Filed May 19, 2025.
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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.
Mar 31, 2025 · Filed May 19, 2025
HEPA$0.07-17.7%Stored close · as of Jul 8, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001493152-24-046002
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-19.
0001641172-25-011534
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 47 previous paragraphs and 48 current paragraphs.
20 unchanged; 15 reworded; 12 added; 12 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 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 (12)
Current report
We were developing rencofilstat as our lead molecule. Rencofilstat is a compound that binds and inhibits the function of a specific class of isomerase enzymes called cyclophilins that regulate protein folding, in addition to other activities. Many closely related isoforms of cyclophilins exist in humans. Cyclophilins A, B, and D are the best characterized cyclophilin isoforms. Inhibition of cyclophilins has been shown in scientific literature to have therapeutic effects in a variety of experimental models, including liver disease models.
Current report
On April 19, 2024, we announced that we have begun wind-down activities in our ASCEND- NASH clinical trial. We did not have access to sufficient funding to complete the study, as designed. The wind-down activities were implemented to halt further clinical activities other than those which would allow for an orderly and patient safety manner that would meet the minimum FDA requirements for safely closing a clinical trial. All clinical trial activities were completed and the trial was closed in August 2024.
Current report
On July 19, 2024, we along with Pharma Two B Ltd., a company organized under the laws of the State of Israel (“Parent”), and Pearl Merger Sub, Inc., a Delaware corporation and an indirect wholly owned subsidiary of Parent (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, among other things, on the terms and subject to the conditions set forth therein, Merger Sub will merge with and into us (the “Merger”), pursuant to which we would survive the Merger as an indirect wholly owned subsidiary of Parent.
Current report
Concurrently with the Merger, on July 19, 2024, we entered into a Securities Purchase Agreement (the “SPA”) with certain purchasers pursuant to which we sold an aggregate of $2.9 million in principal amount of our Original Issue Discount Senior Unsecured Nonconvertible Notes (the “Notes”). The Notes are due on the earlier of: (i) December 31, 2024, (ii) the date of the closing of the Merger, (iii) the date that the Merger is terminated pursuant to the terms of the Merger Agreement, or (iv) such earlier date as the Notes are required or permitted to be repaid as provided in the Note, as may be extended at the option of the holder of the Note as described in the Note.
Current report
On December 10, 2024, Parent informed us that Nasdaq would not exclude our historical losses from its burn rate calculation and as a result on December 10, 2024, we and Pharma Two B and Pearl entered into an agreement to terminate the Merger Agreement (the “Termination Agreement”). Pursuant to the Termination Agreement, the Merger Agreement was terminated.
Current report
On January 23, 2025, we consummated a best-efforts registered offering for 73,222 shares of common stock, Pre-Funded Warrants to purchase 480,624 shares of common stock, Series A Warrants to purchase 553,846 shares of common stock and Series B Warrant to purchase 553,846 shares of common stock for gross proceeds of $9,000,000. A portion of the net proceeds was used to repay the Notes along with accrued interest.
Current report
On May 9, 2025, we entered into a license agreement (the “License Agreement”) with New Day Diagnostics LLC (“New Day”) pursuant to which we in-licensed certain diagnostic tests for celiac disease, respiratory multiplex (Covid/Influenza A/B and RSV), helicobacter pylori (“H. pylori”) and hepatocellular carcinoma (“HCC”). The celiac, respiratory multiplex and H. pylori tests have CE marks and are eligible to be sold in Europe at the present time.
Current report
Pursuant to the License Agreement, we will pay $525,000 in cash to New Day along with $200,000 in shares of our common stock. In addition, we have agreed to pay New Day up to $17.15 million upon achievement of certain regulatory, sales and reimbursement milestones. In addition, we will pay New Day royalty rates in the upper single to low double digits based on net sales.
Current report
We had no revenues during the three months ended March 31, 2025 and 2024, because we do not currently have any commercial products. However, with the assets related to the New Day licensing agreement, there are three products that have CE marks and are eligible to be sold in Europe at the present time but we cannot guarantee when and how much revenue will be generated from those products.
Current report
On January 23, 2025, we consummated a best-efforts registered offering for 73,222 shares of common stock, Pre-Funded Warrants to purchase 480,624 shares of common stock, Series A Warrants to purchase 553,846 shares of common stock and Series B Warrant to purchase 553,846 shares of common stock for gross proceeds of $9,000,000. A portion of the net proceeds was used to repay the Notes along with accrued interest.
Current report
Our future capital requirements depend on many factors, including:
Current report
A change in the outcome of any of these or other variables with respect to the development of any of our current and future product candidates could significantly change the costs and timing associated with the development of that product candidate. Furthermore, our operating plans may change in the future, and we will need additional funds to meet operational needs and capital requirements associated with such operating plans.
Removed paragraphs (12)
Previous report
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 report
In June 2023, we announced that the Data and Safety Monitoring Board (“DSMB”) met to review the current data for the ASCEND-NASH 2b study and has issued a “study may proceed without modification” clearance. This, the first planned DSMB meeting, occurred on schedule, and all labs, electrocardiogram’s, adverse events, and protocol deviations were reviewed, focusing on any potential safety signals from the placebo-controlled trial.
Previous report
In December 2023, the board of directors approved a strategic restructuring plan to preserve capital by reducing operating costs. We incurred a one-time restructuring charge of approximately $0.7 million in the fourth quarter of 2023. Additionally, we have initiated a process to explore a range of strategic and financing alternatives focused on maximizing stockholder value within the current financial environment and NASH drug development landscape. On April 19, 2024, we announced that we had begun wind-down activities in our ASCEND- NASH clinical trial. All clinical trial activities were completed and the trial was closed in August 2024.
Previous report
We are continuing efforts, to the extent that cash is available, to provide any value derived from rencofilstat to our shareholders.
Previous report
We had no revenues during the three months ended September 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 report
For the three months ended September 30, 2024, all of the research and development expenses were for clinical trial costs. For the three months ended September 30, 2023, $7.9 million of the $0.6 million was for clinical trial costs and $0.6 million was for pre-clinical costs. Hepion does not expect these expenses to continue after the Merger is completed.
Previous report
Comparison of the nine months ended September 30, 2024 and 2023:
Previous report
We had no revenues during the nine months ended September 30, 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.
Previous report
Research and development expenses for the nine months ended September 30, 2024 and 2023 was $12.4 million and $30.2 million, respectively. The decrease of $17.8 million was primarily due to a $15.6 million decrease in clinical trial costs primarily for our phase 2b study, a $1.8 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 report
For the nine months ended September 30, 2024, $11.6 million of the $12.4 million was for clinical trial costs and $0.8 million was for pre-clinical costs. For the nine months ended September 30, 2023, $28.4 million of the $30.2 million was for clinical trial costs and $1.8 million was for pre-clinical costs.
Previous report
General and administrative expenses for the nine months ended September 30, 2024 and 2023 was $5.7 million and $7.8 million, respectively. The decrease of $2.1 million was primarily due to a $0.9 million decrease in bonus, salaries and employee benefits, $0.6 million decrease in stock compensation, $0.2 million decrease in legal fees, $0.3 million in travel expenses, and $0.1 million decrease in insurance.
Previous report
Net cash used in investing activities was $600,000 for the nine months ended September 30, 2024 and nominal for 2023. The $600,000 in 2024 is primarily due to the note receivable from Pharma Two B.
Reworded paragraphs (15)
Previous 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.
Current wording
We are a biopharmaceutical company headquartered in Morristown, New Jersey, that was previously focused on the development of drug therapy for treatment of chronic 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
From inception through September 30, 2024, we have an accumulated deficit of $236.3 million and we have not generated any revenue from operations.
Current wording
From inception through March 31, 2025, we have an accumulated deficit of $243.4million and we have not generated any revenue from operations.
Previous wording
During the nine months ended September 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.
Current wording
During the three months ended March 31, 2025, 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, 2024.
Previous wording
Research and development expenses for the three months ended September 30, 2024 and 2023 was $2.8 million and $8.5 million, respectively. The decrease of $5.8 million was primarily due to a $4.3 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 $0.3 million in employee compensation costs due to reduced headcounts and other miscellaneous expenses, primarily due to the discontinuation of clinical trials.
Current wording
Research and development expenses for the three months ended March 31, 2025 and 2024 was $22,235 and $2.5 million, respectively. The decrease of $2.0 million was primarily due to a decrease in clinical trial costs primarily for our phase 2b study, Chemistry, Manufacturing and Controls costs, and $0.5 million in employee compensation costs due to reduced headcounts and other miscellaneous expenses, primarily due to the discontinuation of clinical trials.
Previous wording
General and administrative expenses for the three months ended September 30, 2024 and 2023 was $1.7 million and $2.1 million, respectively. The decrease of $0.5 million was primarily due to a decrease in salaries due to reduced headcount as a result of the discontinuation of clinical trials.
Current wording
General and administrative expenses for the three months ended March 31, 2025 and 2024 was $1.3 million and $2.6 million, respectively. The decrease of $1.3 million was primarily due to a $0.7 million in employee stock compensation expense and $0.7 million in employee salaries decrease in salaries due to reduced headcount.
Previous wording
We have funded our operations through September 30, 2024 primarily through the issuance of convertible preferred stock, the issuance and sale of shares of our common stock and subsequent issuances of shares of our common stock through at-the market offerings.
Current wording
We have funded our operations through March 31, 2025 primarily through the issuance of convertible preferred stock, warrants, the issuance and sale of shares of our common stock, and subsequent issuances of shares of our common stock through at-the market offerings.
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 September 30, 2024, we had an accumulated deficit of $236.2 million. We expect to continue to incur significant losses for the foreseeable future.
Current wording
We have no products approved for commercial sale in the United States. However, with the assets related to the New Day licensing agreement, there are three products that have CE marks and are eligible to be sold in Europe at the present time but we cannot guarantee when and how much revenue will be generated from those products. 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, 2025, we had an accumulated deficit of $243.4 million. We expect to continue to incur significant losses for the foreseeable future.
Previous wording
Since our inception, we have invested a significant portion of our efforts and financial resources in research and development activities for our non-replicating and replicating technologies and our product candidates derived from these technologies. We believe that we will continue to expend substantial resources for the foreseeable future in connection with our wind-down of the ASCEND-NASH Trial as well as our strategic alternatives strategy. In addition, other unanticipated costs may arise.
Current wording
Since our inception, we have invested a significant portion of our efforts and financial resources in research and development activities for our non-replicating and replicating technologies and our product candidates derived from these technologies. We believe that we will continue to expend substantial resources for the foreseeable future in connection with our anticipated acquisition of an asset in connection with our strategic alternatives strategy. In addition, other unanticipated costs may arise.
Previous wording
The condensed consolidated financial statements as of and for the nine months ended September 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.
Current wording
The condensed consolidated financial statements as of March 31, 2025 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
We will be required to raise additional capital to continue to fund operations. We cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact our ability to (i) seek collaborators for our product candidates on terms that are less favorable than might otherwise be available; or (ii) relinquish or otherwise dispose of rights to technologies, product candidates or products that we would otherwise seek to develop or commercialize on unfavorable terms.
Current wording
We will be required to raise additional capital to continue to fund operations. We cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact our ability to (i) acquire new product candidates; or (ii) relinquish or otherwise dispose of rights to technologies, product candidates or products that we would otherwise seek to develop or commercialize on unfavorable terms.
Previous wording
As of September 30, 2024, we had working capital of $0.8 million compared to working capital of $12.2 million as of December 31, 2023. The decrease of $11.4 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 nine months ended September 30, 2024.
Current wording
As of March 31, 2025, we had working capital of $5.4 million compared to working capital deficit of $1.5 million as of December 31, 2024. The increase of $3.9 million in working capital is primarily due to $8.2 million in net proceeds received from equity issuance offset by the $2.9 million related to settlement of a note payable, and the Company’s other operating costs for the three months ended March 31, 2025.
Previous wording
As of September 30, 2023, we had $19.3 million in cash. Net cash used in operating activities was $31.9 million for the nine months ended September 30, 2023 consisting primarily of our net loss of $37.9 million. Changes in non-cash operating activities was $1.1 million, primarily for stock-based compensation. Changes in working capital accounts had a positive impact of $4.9 million on cash primarily for a decrease in prepaid expenses and other assets of $3.5 million and an increase in accounts payable and accrued expenses of $1.4 million.
Current wording
As of March 31, 2025, we had $4.6 million in cash. Net cash used in operating activities was $1.1 million for the three months ended March 31, 2025 consisting primarily of our net loss of $6.1 million, adjusted non-cash charges of $4.8 million, including $20,783 for stock-based compensation, and $4.8 million in change in fair value of derivative warrants. Changes in working capital accounts had a positive impact of $0.2 million on cash primarily due to an increase in accounts payable and accrued expenses.
Previous wording
As of September 30, 2024, we had $0.8 million in cash. Net cash used in operating activities was $17.1 million for the nine months ended September 30, 2024 consisting primarily of our net loss of $11.6 million, adjusted for an increase in non-cash charges of $3.8 million, primarily for stock-based compensation, amortization of debt discount, and warrant related inducement expense, partially offset by $6.5 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 $2.7 million on cash primarily due to an increase in accounts payable, accrued expenses and prepaid expenses.
Current 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.
Previous wording
There was no cash provided by or used in financing activities for the nine months ended September 30, 2023.
Current wording
There was no cash provided by or used in investing activities during the three months ended March 31, 2025 and 2024.
Previous wording
Net cash provided by financing activities was $4.3 million for the nine months ended September 30, 2024, due primarily to proceeds received from the exercise of the warrants and equity issuance.
Current 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.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Net cash provided by financing activities was $5.3 million for the three months ended March 31, 2025, due primarily to proceeds received from the exercise of the warrants and equity issuance offset by $2.9 million payment on notes payable.