Phio Pharmaceuticals Corp
For the period ended Jun 30, 2024. Filed Aug 14, 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 14, 2024
PHIO$0.80+0.2%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 2024-05-09.
0001683168-24-003175
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001683168-24-005706
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 42 previous paragraphs and 52 current paragraphs.
31 unchanged; 9 reworded; 11 added; 2 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 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 (11)
Current report
We anticipate our research and development expenses will remain relatively consistent for the remainder of 2024.
Current report
General and administrative expenses for the six months ended June 30, 2024 decreased 20% as compared with the six months ended June 30, 2023. The decrease in general and administrative expenses was primarily due to decreases in salary-related expenses for our President & CEO of $120,000 and in professional fees for a total of $364,000 related to consulting, legal and patent expenses as compared to the prior year period.
Current report
We anticipate our general and administrative expenses will remain relatively consistent for the remainder of 2024.
Current report
On May 16, 2024, we entered into a purchase agreement (the “Purchase Agreement”) with Triton Funds LP (“Triton”), pursuant to which we agreed to sell, and Triton agreed to purchase, upon our request in one or more transactions, up to 95,833 shares of our common stock at a purchase of $6.48 per share (the “Purchase Price”), for aggregate gross proceeds of up to $621,000. On July 3, 2024, we terminated the Purchase Agreement with Triton effective immediately. No shares of common stock were sold by us pursuant to the Purchase Agreement prior to termination.
Current report
In July 2024, we entered into inducement letter agreements (the “July 2024 Inducement Letter Agreements”) with certain holders of certain of our existing warrants to purchase up to an aggregate of 545,286 shares of the Company’s common stock. The existing warrants were originally issued in February 2020 through December 2023, having exercise prices between $324.00 and $9.72 per share. Pursuant to the July 2024 Inducement Letter Agreements, these warrants were exercised for cash at a reduced exercise of $5.45 per share in consideration of our agreement to issue new unregistered five and one-half year term Series C warrants to purchase up to 583,098 shares of common stock at an exercise price of $5.45 and new unregistered eighteen month term Series D warrants to purchase up to 507,474 shares of common stock at an exercise price of $5.45, both issued and sold at a price of $0.125 per warrant share (the “July 2024 Financing”). The net proceeds to us from the July 2024 Financing are approximately $2,600,000, after deducting placement agent fees and offering expenses.
Current report
There were no investing activities for the six months ended June 30, 2024 as compared with $5,000 for the six months ended June 30, 2023. The decrease in net cash used in investing activities was primarily due to laboratory and computer equipment purchases for our facility during the prior year period.
Current report
Net cash used in financing activities was $4,000 for the six months ended June 30, 2024 as compared with net cash provided by financing activities of $5,010,000 for the six months ended June 30, 2023. The decrease was primarily due to the completion of our financing activities during the prior year period.
Current report
Future Funding Requirements
Current report
At June 30, 2024, we had cash and cash equivalents of$4,698,000 and received estimated net proceeds of $2,600,000 from our July 2024 Financing. We expect that our cash and cash equivalents will enable us to fund our current operating plan into Q2 2025. Due to the difficulty and uncertainty associated with the design and implementation of preclinical studies and clinical trials, we will continue to assess our cash and cash equivalents and future funding requirements. However, there is no assurance that additional funding will be achieved and that we will succeed in our future operations. We expect to continue to incur substantial additional operating losses for at least the next several years as we continue to develop our product candidates and seek marketing approval and, subject to obtaining such approval, the eventual commercialization of our product candidates. If we obtain marketing approval for any of our product candidates, we will incur significant sales, marketing and manufacturing expenses. We also expect to continue to incur significant costs to comply with corporate governance, internal controls and similar requirements associated with operating as a public reporting company.
Current report
Actual cash requirements could differ from management’s projections due to many factors including additional investments in research and development programs, clinical trial expenses for PH-762, competing technological and market developments, general and administrative expenses, and the costs of any strategic acquisitions and/or development of complementary business opportunities.
Current report
We expect to seek additional funding to sustain our future operations and while we have successfully raised capital in the past, the ability to raise capital in future periods is not assured. We do not know if additional capital will be available when needed or on terms favorable to us or our stockholders. Collaboration, licensing or other agreements may not be available on favorable terms, or at all. If we seek to sell our equity securities, we do not know whether and to what extent we will be able to do so, or on what terms. If available, additional equity financing may be dilutive to stockholders, debt financing may involve restrictive covenants or other unfavorable terms and dilute our existing stockholders’ equity, and funding through collaboration, licensing or other commercial agreements may be on unfavorable terms, including requiring us to relinquish rights to certain of our technologies or products. If adequate financing is not available if and when needed, we may delay, reduce the scope of, or eliminate research or development programs, if any, postpone or cancel the pursuit of product candidates, or otherwise significantly curtail our operations to reduce our cash requirements and extend our capital.
Removed paragraphs (2)
Previous report
There were no net cash flows from investing activities for the three months ended March 31, 2024 and 2023.
Previous report
Net cash used in financing activities for the three months ended March 31, 2024 decreased 89% as compared to the three months ended March 31, 2023, primarily due to the amount of payments made for taxes on the net share settlements of RSUs.
Reworded paragraphs (9)
Previous wording
This management’s discussion and analysis of financial condition as of March 31, 2024 and results of operations for the three months ended March 31, 2024 and 2023 should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the Securities and Exchange Commission (the “SEC”) on April 1, 2024 (the “2023 Form 10-K”).
Current wording
This management’s discussion and analysis of financial condition as of June 30, 2024 and results of operations for the three and six months ended June 30, 2024 and 2023 should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the Securities and Exchange Commission (the “SEC”) on April 1, 2024 (the “2023 Form 10-K”).
Previous wording
PH-762 is currently being evaluated in a U.S. multi-center Phase 1b dose-escalating clinical trial through the intratumoral injection of PH-762 for the treatment of patients with cutaneous squamous cell carcinoma, melanoma and Merkel cell carcinoma. The trial is designed to evaluate the safety and tolerability of neoadjuvant use of intratumorally injected PH-762, assess the tumor response, and determine the dose or dose range for continued study of PH-762 and is expected to enroll up to 30 patients. In November 2023, we announced the dosing of the first patient under a previously cleared Investigational New Drug (“IND”) application by the U.S. Food and Drug Administration. The first two patients enrolled in our first cohort have completed treatment with PH-762 with no reported adverse events. The trial is currently open for the continued enrollment of patients and expects to complete enrollment of patients in the second quarter of 2025.
Current wording
PH-762 is currently being evaluated in a U.S. multi-center Phase 1b dose-escalating clinical trial through the intratumoral injection of PH-762 for the treatment of patients with cutaneous squamous cell carcinoma, melanoma and Merkel cell carcinoma. The trial is designed to evaluate the safety and tolerability of neoadjuvant use of intratumorally injected PH-762, assess the tumor response, and determine the dose or dose range for continued study of PH-762 and is expected to enroll up to 30 patients. In November 2023, we announced the dosing of the first patient under a previously cleared Investigational New Drug (“IND”) application by the U.S. Food and Drug Administration. In May 2024, a safety monitoring committee reviewed data from the first dose cohort treated and recommended the escalation to the next dose concentration. The trial is open for the continued enrollment of patients and expects to complete enrollment of patients in the second quarter of 2025.
Previous wording
In February 2021, we entered into a clinical co-development collaboration agreement (the “Clinical Co-Development Agreement”) with AgonOx to develop a T cell-based therapy using PH-762 and AgonOx’s DP TIL. Under the Clinical Co-Development Agreement, we had agreed to reimburse AgonOx up to $4 million in expenses incurred to conduct a Phase 1 clinical trial of PH-762 treated DP TIL in patients with advanced melanoma and other advanced solid tumors. We were also eligible to receive certain future development milestones and low single-digit sales-based royalty payments from AgonOx’s licensing of its DP TIL technology.
Current wording
In February 2021, we entered into a clinical co-development collaboration agreement (the “Clinical Co-Development Agreement”) with AgonOx to develop a T cell-based therapy using PH-762 and AgonOx’s DP TIL. Under the Clinical Co-Development Agreement, we and AgonOx were working to develop a T cell-based therapy using the our lead product candidate, PH-762, and AgonOx’s DP TIL technology. We had agreed to reimburse AgonOx up to $4 million in expenses incurred to conduct a Phase 1 clinical trial of PH-762 treated DP TIL in patients with advanced melanoma and other advanced solid tumors. We were also eligible to receive certain future development milestones and low single-digit sales-based royalty payments from AgonOx’s licensing of its DP TIL technology.
Previous wording
On May 8, 2024, we terminated the Clinical Co-Development Agreement with AgonOx, effective immediately. Effective as of the date of the termination, the Clinical Co-Development Agreement and our continuing obligations and those of AgonOx thereunder will be terminated in their entirety. We will no longer be required to provide financial support for the development costs incurred under the Clinical Co-Development Agreement or be entitled to certain future development milestones and low single-digit sales-based royalty payments from AgonOx’s licensing of its DP TIL technology. We will pay to AgonOx all payment obligations that have accrued prior to the termination of the Clinical Co-Development Agreement. We intend to pay to AgonOx future fees to be incurred for patients that were treated in the Phase 1 clinical trial as of the date of termination. We estimate that such payments to be made to AgonOx will amount to approximately $388,000, which primarily relate to our accrued obligations under the Clinical Co-Development Agreement as of March 31, 2024, as well as future fees to be incurred for patients that were treated in the Phase 1 clinical trial and other miscellaneous costs as of the date of termination. Pursuant to the terms of the Clinical Co-Development Agreement, we and AgonOx shall meet and discuss the orderly wind-down of the Phase 1 clinical trial. Each of us and AgonOx shall be responsible for its own costs and expenses incurred in connection with the wind-down of the Phase 1 clinical trial. See Item 5. Other Information included elsewhere in this Quarterly Report for further information.
Current wording
In May 2024, we terminated the Clinical Co-Development Agreement with AgonOx, which such termination was effective immediately. Effective as of the date of termination, the Clinical Co-Development Agreement and our continuing obligations and those of AgonOx thereunder were terminated in their entirety. We are no longer required to provide financial support for the development of costs incurred under the Clinical Co-Development Agreement, and we are no longer entitled to future development milestones or royalty payments from AgonOx’s licensing of its DP TIL technology. We will pay to AgonOx all payment obligations that accrued prior to the termination of the Clinical Co-Development Agreement. Remaining payments to be made to AgonOx as of June 30, 2024 total $344,000, which primarily relate to accrued obligations for patient fees and other miscellaneous costs as of the date of termination. Pursuant to the terms of the Clinical Co-Development Agreement, we and AgonOx are coordinating the orderly wind-down of the Phase 1 clinical trial. Each of us and AgonOx shall be responsible for its own costs and expenses incurred in connection with the wind-down of the Phase 1 clinical trial.
Previous wording
Comparison of the Three Months Ended March 31, 2024 and 2023
Current wording
Comparison of the Three and Six Months Ended June 30, 2024 and 2023
Previous wording
Research and development expenses for the three months ended March 31, 2024 decreased 46% as compared with the three months ended March 31, 2023. The decrease in research and development expenses was primarily driven by our cost rationalization measures in transitioning from a research company to a product development company resulting in a decrease of $305,000 of expense due to the wind-down of preclinical studies, $170,000 in salary-related costs, including stock-based compensation expense, and $108,000 in lab supplies associated with the reduction in headcount, in addition to a decrease in clinical consulting fees of $225,000 incurred in connection with our IND filing for PH-762 in the prior period and a decrease of $131,000 in manufacturing fees for PH-762.
Current wording
Research and development expenses for the six months ended June 30, 2024 decreased 43% as compared with the six months ended June 30, 2023. The decrease in research and development expenses was primarily driven by our cost rationalization measures in transitioning from a research company to a product development company resulting in a decrease of $321,000 of expense due to the wind-down of preclinical studies, $470,000 in salary-related costs, including stock-based compensation expense, and $182,000 in lab supplies associated with the reduction in headcount, in addition to a decrease in clinical consulting fees of $335,000 incurred in connection with our IND filing for PH-762 in the prior period and a decrease of $176,000 in manufacturing fees for PH-762.
Previous wording
General and administrative expenses for the three months ended March 31, 2024 decreased 28% as compared with the three months ended March 31, 2023. The decrease in general and administrative expenses was primarily due to decreases in consulting expenses of $102,000 and legal expenses of $211,000 as compared to the prior year period.
Current wording
General and administrative expenses for the three months ended June 30, 2024 decreased 10% as compared with the three months ended June 30, 2023. The decrease in general and administrative expenses was primarily due to decreases in salary-related expenses for our President & CEO of $78,000 and in professional fees of $60,000 related to consulting expenses as compared to the prior year period.
Previous wording
Historically, our primary source of funding has been through the sale of our securities. In the future, we will be dependent on obtaining funding from third parties, such as proceeds from the issuance of debt, sale of equity or strategic opportunities, in order to maintain our operations. We have reported recurring losses from operations since inception and expect that we will continue to have negative cash flows from our operations for the foreseeable future. At March 31, 2024, we had cash of $6,475,000 as compared with $8,490,000 at December 31, 2023.
Current wording
Historically, our primary source of funding has been through the sale of our securities. In the future, we will be dependent on obtaining funding from third parties, such as proceeds from the issuance of debt, sale of equity or strategic opportunities, in order to maintain our operations. We have reported recurring losses from operations since inception and expect that we will continue to have negative cash flows from our operations for the foreseeable future. At June 30, 2024, we had cash of $4,698,000 as compared with $8,490,000 at December 31, 2023.
Previous wording
Net cash used in operating activities for the three months ended March 31, 2024 decreased 26% as compared to the three months ended March 31, 2023, primarily due to a decrease in net loss of $1,448,000, a decrease in non-cash related items of $89,000 primarily related to reduced stock-based compensation expense, and a decrease in the changes in operating assets and liabilities of $662,000 primarily as a result of liabilities owed to support our IND filing for PH-762 and manufacturing fees related to the fill/finish of PH-762 drug product in the prior year period.
Current wording
Net cash used in operating activities was $3,788,000 for the six months ended June 30, 2024 as compared with $5,479,000 for the six months ended June 30, 2023. The decrease was primarily due to a decrease in net loss of $2,151,000, a decrease in non-cash related items of $214,000 primarily related to reduced stock-based compensation expense, and a decrease in the changes in operating assets and liabilities of $246,000 primarily as a result of liabilities owed for the completion of preclinical studies in the prior year period.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Research and development expenses for the three months ended June 30, 2024 decreased 37% as compared with the three months ended June 30, 2023. The decrease in research and development expenses was primarily driven by our cost rationalization measures in transitioning from a research company to a product development company resulting in a decrease of $246,000 in salary-related costs, including stock-based compensation expense, and $74,000 in lab supplies associated with the reduction in headcount, in addition to a decrease in clinical consulting fees of $110,000 incurred in connection with our IND filing for PH-762 in the prior period.