OVERVIEW
The following discussion should be read in conjunction with the unaudited
condensed financial statements and notes thereto set forth in Item 1 of this
Quarterly Report on Form 10-Q and the audited financial statements and notes
thereto included in our Annual Report on Form 10-K for the year ended
Except for the historical information contained herein, the matters discussed in this Quarterly Report on Form 10-Q may be deemed to be forward-looking statements that involve risks and uncertainties. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. In this Quarterly Report on Form 10-Q, words such as "believe", "estimate", "expect", "anticipate", "will", "may", "intend" and other similar expressions, are intended to identify forward-looking statements. We caution that forward-looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors that are, in many instances, beyond our control. Actual results, performance or achievements may differ materially from those contemplated, expressed or implied by the forward-looking statements.
Although we believe that the expectations reflected in our forward-looking statements are reasonable as of the date we make them, actual results could differ materially from those currently anticipated due to a number of factors, including risks relating to:
? uncertainties about the exploration and evaluation of strategic alternatives,
including that they may not result in a definitive transaction or enhance
shareholder value and may create a distraction or uncertainty that may
adversely affect our operating results, business, or investor perceptions;
? uncertainties about the paths of our programs and our ability to evaluate and
identify a path forward for those programs, particularly given the constraints
we have as a small company with limited financial, personnel and other
operating resources;
? the impact of the COVID-19 pandemic on the economy, our industry, and our
financial condition and results of operations, as well as our ability to enter
into and complete a strategic transaction;
? our understandings and beliefs regarding the role of certain biological
mechanisms and processes in cancer;
? our product candidates being in early stages of development, including in
preclinical development;
? our ability to successfully and timely complete clinical trials for our drug
candidates in clinical development;
? uncertainties related to the timing, results and analyses related to our drug
candidates in preclinical development;
? our ability to obtain the necessary
for our drug candidates; 21
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? our reliance on third-party contract research organizations and other
investigators and collaborators for certain research and development services;
? our ability to maintain or engage third-party manufacturers to manufacture,
supply, store and distribute supplies of our drug candidates for our clinical
trials;
? our ability to form strategic alliances and partnerships with pharmaceutical
companies and other partners for development, sales and marketing of certain of
our product candidates;
? demand for and market acceptance of our drug candidates;
? the scope and validity of our intellectual property protection for our drug
candidates and our ability to develop our candidates without infringing the
intellectual property rights of others;
? our lack of profitability and the need for additional capital to operate our
business; and
? other risks and uncertainties, including those set forth herein and in the 2019
Form 10-K under the caption "Risk Factors" and those detailed from time to time
in our filings with the
These forward-looking statements are made only as of the date hereof, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
We are a clinical stage biopharmaceutical company developing innovative therapies to improve patient outcomes in cancers that are difficult to treat. Our pipeline features two clinical-stage product candidates and additional compounds in preclinical development.
? RX-3117 is a novel, investigational oral, small molecule nucleoside compound.
Once intracellularly activated (phosphorylated) by the enzyme UCK2, it is
incorporated into the DNA or RNA of cells and inhibits both DNA and RNA
synthesis, which induces apoptotic cell death of tumor cells. RX-3117 is the
subject of a Phase 2a clinical trial in combination with Celgene's Abraxane®
(paclitaxel protein-bound particles for injectable suspension) as a first-line
treatment in patients newly diagnosed with metastatic pancreatic cancer. The
trial reached its target enrollment in
overall response rate of 23% had been observed in 40 patients that had at least
one scan on treatment. Preliminary and unaudited data indicates that the
median progression free survival for patients in the study is approximately 5.4
months. Complete data from the trial is expected to be available in 2020. We
do not plan to conduct or sponsor any additional trials with RX-3117.
On
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? RX-5902 is a potential first-in-class small molecule modulator of the
Wnt/beta-catenin pathway which plays a key role in cancer cell proliferation
and tumor growth. In
Collaboration and Supply Agreement (the "Collaboration Agreement") with Merck
anti-PD-1 therapy, KEYTRUDA® (pembrolizumab) in a Phase 2 trial in patients
with metastatic triple negative breast cancer ("TNBC"). On
notified Merck that we were terminating the Collaboration Agreement, effective
immediately, in connection with our determination to discontinue development of
RX-5902 for the treatment of TNBC. We are evaluating development options for
RX-5902 and may or may not sponsor additional clinical trials with the
compound.
? RX-0301 is a potential best-in-class, potent inhibitor of the synthesis of the
protein kinase Akt-1, which we believe plays a critical role in cancer cell
proliferation, survival, angiogenesis, metastasis, and drug resistance.
RX-0301 is currently in preclinical development by Zhejiang HaiChang
(Archexin®) using HaiChang's proprietary QTsome™ technology On
2020, we entered into an exclusive license agreement with HaiChang (the
"HaiChang License Agreement") pursuant to which we granted HaiChang an
exclusive (even as to us), royalty-bearing, sublicensable worldwide license to
research, develop and commercialize RX-0201 and RX-0301. The HaiChang License
Agreement supersedes a prior agreement with HaiChang to develop RX-0301 under
which HaiChang was to conduct certain preclinical and clinical activities
through completion of a Phase 2a proof-of-concept clinical trial in
hepatocellular carcinoma.
We have no product sales to date, and our major sources of working capital have
been proceeds from various private and public financings and licensing and
collaboration agreements with our partners. In
The outbreak of the COVID-19 disease, which the
Results of Operations
Comparison of the Three Months Ended
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We recorded revenues of
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and related expenses for executive, finance and other administrative personnel, recruitment expenses, professional fees, and other corporate expenses, including business development, investor relations, and general legal activities.
General and administrative expenses decreased approximately
Research and Development Expenses
Research and development costs are expensed as incurred. These costs consist primarily of salaries and related personnel costs, and amounts paid to contract research organizations, hospitals and laboratories for the provision of services and materials for drug development and clinical trials. Our research and development expenses are currently related to our oncology drug candidates.
Research and development expenses decreased approximately
The table below summarizes the approximate amounts incurred in each of our research and development projects for the three months endedMarch 31, 2020 and 2019: For the Three Months Ended March 31, 2020 2019 Clinical Candidates: RX-3117$ 326,900 $ 1,078,400 RX-5902 4,200 342,400 RX-0201 1,800 115,800 Preclinical, Personnel and Overhead 123,890 705,629
We expect total research and development expenses to decrease in the remainder
of 2020 as compared to the three months ended
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Interest income decreased approximately
Unrealized (Loss) Gain on Fair Value of Warrants
Our warrants are recorded as liabilities at fair value, and the warrants are
valued using a lattice model. Changes in the fair value of warrants are
recorded as an unrealized gain or loss in our statement of operations. During
the three months ended
Net Loss
As a result of the above, net loss for the three months ended
Liquidity and Capital Resources
Current and Future Financing Needs
We have incurred negative cash flow from operations since we started our
business. We expect to continue to incur negative cash flow and operating
losses as we explore strategic alternatives. We have spent, and subject to our
exploration of strategic alternatives, expect to continue to spend, substantial
amounts in connection with implementing our business strategy, including our
planned product development efforts, our clinical trials and our research and
development efforts. Subject to the result of our exploration of strategic
alternatives, we will need to raise additional capital through public or private
equity or debt offerings or through arrangements with strategic partners or
other sources in order to continue to develop our drug candidates. In
conjunction with our exploration of strategic alternatives, we are exploring
opportunities to extend our resources. We believe that our cash and cash
equivalents of approximately
Cash Flows
Cash used in operating activities was approximately
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Cash provided by investing activities was
There was no cash provided by financing activities for the three months ended
Contractual Obligations
We have a variety of contractual obligations, as more fully described in the
2019 Form 10-K. These obligations include, but are not limited to, contractual
obligations in connection with license agreements (including related milestone
payments), lease payments, employee compensation and incentive program expenses,
and contracts with various vendors for services. As of
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