20-F: Chemomab Faces Going Concern Doubt Despite Positive PSC Trial Data

Chemomab Therapeutics Ltd. reported significant losses and a going concern warning, even as its lead drug nebokitug showed positive Phase 2 results for Primary Sclerosing Cholangitis and advanced to Phase 3 planning.

Summary

• Chemomab Therapeutics Ltd. is a clinical-stage biotechnology company focused on developing innovative therapeutics for fibrotic and inflammatory diseases, with a primary focus on neutralizing CCL24 signaling.
• The company's lead product candidate, nebokitug, is a first-in-class humanized monoclonal antibody being developed for Primary Sclerosing Cholangitis (PSC) and Systemic Sclerosis (SSc).
• Positive topline results from the Phase 2 SPRING clinical study in PSC patients were reported in July 2024, demonstrating nebokitug's safety, tolerability, and anti-fibrotic, anti-inflammatory, and anti-cholestatic effects.
• An End-of-Phase 2 meeting with the FDA in December 2024 resulted in alignment on the design for a single Phase 3 pivotal PSC trial, which could lead to full regulatory approval.
• The open-label extension of the PSC trial showed continued safety and activity of nebokitug over 48 weeks, with a significantly lower number of clinical events (4.8%) in treated patients compared to historical controls (25.8%).
• The SSc clinical program for nebokitug is Phase 2-ready with an open IND, but its initiation has been suspended to focus resources on the PSC program.
• A Phase 2a clinical study in MASH patients met its primary endpoint of safety and tolerability and showed positive activity across liver fibrosis biomarkers.
• The company reported a net loss of $8.995 million for the year ended December 31, 2025, an improvement from $13.945 million in 2024 and $24.221 million in 2023.
• Research and development expenses decreased by 49% to $5.833 million in 2025, primarily due to the completion of clinical trials in 2024.
• General and administrative expenses increased by 9% to $3.734 million in 2025, driven by higher share-based compensation and business development consulting.
• As of December 31, 2025, cash, cash equivalents, and short-term bank deposits totaled $10.4 million, which is estimated to fund operations through the end of the first quarter of 2027.
• The company has an accumulated deficit of $111.6 million as of December 31, 2025, and has incurred significant operating losses since inception, raising substantial doubt about its ability to continue as a going concern.
• Ongoing capital raising efforts include an At-the-Market (ATM) offering facility with LifeSci Capital, LLC, through which $5.8 million in net proceeds were raised from August 1 to December 31, 2025.
• The company relies on a sole third-party supplier for the manufacture of nebokitug, posing a supply chain risk.
• An ADS ratio change from 1 ADS to 20 ordinary shares to 1 ADS to 80 ordinary shares was effective in August 2025, acting as a one-for-four reverse ADS split.
• Two new patents covering nebokitug for liver diseases, including PSC, were issued in China and Russia in June 2025, providing coverage up to 2041.
• The FDA agreed to Chemomab's Chemistry, Manufacturing, and Controls (CMC) strategy and confirmed that additional animal toxicology testing could be conducted in parallel with the Phase 3 PSC trial.
• David M. Weiner, MD, rejoined as Interim Chief Medical Officer in April 2025, and John Lawler was named Chief Development Officer.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this filing with cautious optimism. While the positive Phase 2 PSC data and clear path to Phase 3 are significant scientific achievements, the explicit 'going concern' warning and ongoing need for substantial capital raise introduce considerable financial risk, tempering the positive clinical news.

Positives

• Nebokitug's Phase 2 SPRING trial in PSC met its primary endpoint of safety and tolerability, demonstrating anti-fibrotic, anti-inflammatory, and anti-cholestatic effects.
• Statistically significant improvements in liver stiffness, a key PSC disease marker, were observed after just 15 weeks of nebokitug treatment in moderate/advanced PSC patients.
• Nebokitug showed reductions in total bilirubin and pruritus, important markers of cholestasis and patient-relevant symptoms.
• The open-label extension of the PSC trial confirmed continued safety and activity over 48 weeks, with a significantly lower rate of clinical events (4.8%) compared to historical controls (25.8%).
• The FDA and Chemomab aligned on the design for a single Phase 3 pivotal PSC trial, providing a clear regulatory pathway.
• Nebokitug has been granted Orphan Drug Designation by the FDA and EMA for PSC, SSc, and IPF, and Fast Track designation for PSC, potentially accelerating development and providing market exclusivity.
• Two new patents covering nebokitug for liver diseases, including PSC, were issued in China and Russia in June 2025, extending intellectual property protection up to 2041.
• FDA agreement on the CMC strategy and parallel animal toxicology testing supports timely advancement of the Phase 3 program.

Negatives

• The company has incurred significant operating losses since inception, with an accumulated deficit of $111.6 million as of December 31, 2025.
• Substantial doubt exists regarding the company's ability to continue as a going concern, as current cash resources are only sufficient through Q1 2027.
• The SSc clinical program for nebokitug is Phase 2-ready but has been suspended to focus resources on the PSC program, delaying potential development in another orphan indication.
• The company relies on a sole third-party supplier for nebokitug manufacturing, which could lead to delays and higher costs if supply chain issues arise.
• Future capital raises may result in substantial dilution to shareholders or impose significant restrictions on operations if debt financing is pursued.
• The trading price of the ADSs has been highly volatile, with a significant decline from $2.7 on November 10, 2025, to $1.83 on March 13, 2026.

Risks

• Incurring significant losses since inception and anticipating continued increasing operating losses for the foreseeable future, with no certainty of achieving or sustaining profitability.
• Limited operating history and funding make it difficult to evaluate prospects and likelihood of success.
• High dependence on the success of nebokitug, with all programs requiring significant additional clinical development.
• The novel approach in fibrotic diseases (CCL24 antagonism) is unproven and may not result in marketable products.
• Potential for negative or inconclusive clinical study results, leading to additional trials or abandonment of product development programs.
• Difficulties enrolling patients in clinical studies, potentially delaying or adversely affecting clinical development activities.
• Ongoing and future clinical studies may reveal significant adverse events or immunogenicity-related responses, delaying or preventing regulatory approval or market acceptance.
• Failure to achieve projected development and commercialization goals in announced timeframes could delay commercialization and harm the business.
• Inability to maintain the benefits associated with Orphan Drug Designation, including market exclusivity, or to receive such designation for other indications.
• Expected significant growth in employee numbers and scope of operations, potentially leading to difficulties in managing growth and disrupting operations.
• Inability to protect patents or other proprietary rights, or infringement of others' rights, could materially damage competitiveness and business prospects.
• Risks related to operations in Israel, including military, political, and economic conditions, could adversely impact business, financial condition, and results of operations.
• Risks associated with operating internationally, including conflicting laws, regulatory requirements, and financial risks like currency fluctuations and inflation.
• Holders of ADSs are not treated as holders of ordinary shares and may not have the same voting rights or receive voting materials in time.
• The company is entitled to amend the deposit agreement or terminate it without prior consent of ADS holders.
• ADS holders may not be entitled to a jury trial for claims under the deposit agreement, potentially leading to less favorable outcomes.
• Inability to satisfy Sarbanes-Oxley Act requirements or ineffective internal control over financial reporting could negatively affect investor confidence and ADS price.
• Classification as a Passive Foreign Investment Company (PFIC) for U.S. shareholders could lead to adverse U.S. federal income tax consequences.
• Changes in patent laws or jurisprudence could diminish the value of patents, impairing the ability to protect product candidates.
• Lengthy, time-consuming, and unpredictable regulatory approval processes by the FDA and comparable foreign authorities.
• Obtaining regulatory approval in one jurisdiction does not guarantee success in others.
• Extensive and ongoing regulatory requirements and obligations even after approval, with potential for future development and regulatory difficulties.
• Disruptions at the FDA and other government agencies (e.g., funding shortages, global health concerns) could hinder timely development, approval, or commercialization.
• Substantial competition from major biopharmaceutical companies, specialty biopharmaceutical companies, and biotechnology companies.
• Failure of nebokitug or other product candidates to achieve market acceptance by physicians, patients, or third-party payors, even if approved.
• Complete reliance on third-party suppliers for manufacturing clinical drug supplies, with potential for delays due to raw material limitations or supplier issues.
• Inability to establish sales, marketing, and distribution capabilities, either independently or through collaborations, could hinder commercialization.
• Unfavorable pricing regulations or third-party coverage and reimbursement policies could make it difficult to sell products profitably.

Future Outlook

The company estimates its current liquidity resources will fund operations through the end of the first quarter of 2027. It will require significant additional financing to fund future operations, including advancing nebokitug into Phase 3 clinical trials, obtaining regulatory approval, establishing commercial manufacturing capabilities, and commercializing products. The company plans to initiate the pivotal Phase 3 trial in PSC around year-end 2026, contingent on finalizing a strategic partnership or major financing. It also continues to evaluate partnership opportunities and explore additional inflammatory/fibrotic indications for nebokitug.

Management Comments

• Management believes that the company can raise additional funds to support its operations and continue as a going concern, though there can be no assurance of success or sufficiency.
• Management believes that the unique nebokitug platform, together with its knowledge and experience in inflammatory-fibrotic research, provides competitive advantages.
• Management views the broad and consistent stabilization and improvement in disease-related biomarkers for up to 48 weeks of nebokitug treatment in the OLE results, including reductions in the risk of disease progression as shown by the ELF score, as directly translatable and potentially derisking to the planned nebokitug PSC Phase 3 study.

Industry Context

StockSavvy.ai notes that the biopharmaceutical industry for fibrotic and inflammatory diseases is highly competitive, with significant investment and recent acquisitions highlighting the market's potential. Recent deals like Gilead's acquisition of Cymabay, Novo Nordisk's acquisition of Akero Therapeutics for efruxifermin ($5.2 billion), Roche's acquisition of 89bio for pegozafermin ($3.5 billion), and Glaxo SmithKline's acquisition of Boston Pharmaceuticals' efimosfermin alfa ($1.2 billion upfront) underscore the high valuation placed on promising assets in liver diseases, particularly MASH. Chemomab's focus on CCL24 antagonism is a novel approach, and while competitors exist, no other company is currently in clinical development with an anti-CCL24 monoclonal antibody. This unique mechanism could offer a differentiated profile in a field where existing treatments for PSC and SSc are limited or manage only symptoms.

Comparison to Industry Standards

• Chemomab's nebokitug is the first investigational drug for PSC to exhibit broad, clinically relevant effects on all three components of the disease (anti-fibrotic, anti-inflammatory, anti-cholestatic), establishing clinical proof-of-concept.
• In the PSC Phase 2 trial, nebokitug demonstrated significant improvements in liver stiffness, a key PSC disease marker, in a relatively short study, which is a notable achievement compared to the lack of FDA-approved disease-modifying therapies for PSC.
• While competitors like Dr. Falk Pharma (norUrso) and Ipsen Pharmaceuticals (Elafibranor) are in Phase 3 for PSC, their primary targets are cholestasis/liver metabolism, not directly anti-fibrotic and anti-inflammatory manifestations, suggesting nebokitug's unique 'disease-modifying potential' could differentiate it.
• For SSc, current FDA-approved treatments (nintedanib by Boehringer Ingelheim and tocilizumab by Hoffmann-La Roche) address interstitial lung disease, a manifestation of SSc, but there is no disease-modifying drug available for the overall condition. Chemomab believes nebokitug could offer disease-modifying potential.
• The company's preclinical and clinical data showing anti-fibrotic and anti-inflammatory effects in various organs (lung, liver, skin) positions nebokitug as a broad-acting therapy, potentially superior to single-mechanism approaches.

Management Changes

Corporate Governance

Legal Proceedings

• The company is not presently a party to any litigation the outcome of which, if determined adversely, would individually or taken together have a material adverse effect on its business, operating results, cash flows, or financial condition.
• In 2022, the Israeli Tax Authority (ITA) initiated a routine VAT audit for tax years 2017-2022, raising claims regarding VAT recoverability and company classification. A settlement agreement was reached on December 29, 2024, for $538 thousand, which was paid in January 2025.

Related Party Transactions

• Expenses related to related parties included in research and development were $1,014 thousand in 2025, $1,228 thousand in 2024, and $1,324 thousand in 2023.
• Expenses related to related parties included in general and administrative were $1,312 thousand in 2025, $1,237 thousand in 2024, and $3,069 thousand in 2023.
• Balances due to related parties included in employee and related expenses were $458 thousand as of December 31, 2025, and $531 thousand as of December 31, 2024.
• Balances due to related parties included in accrued expenses were $74 thousand as of December 31, 2025, and $75 thousand as of December 31, 2024.
• Share-based compensation expenses related to related parties were $389 thousand in 2025, $427 thousand in 2024, and $1,304 thousand in 2023.
• In November 2022, the company repurchased 145,506 ADSs from co-founders Dr. Adi Mor and Professor Kobi George for approximately $1,218,000 to help them pay Israeli tax liabilities, and these treasury shares were subsequently sold in November 2023 for $580 thousand.

Stakeholder Impact

• **Shareholders:** Face significant dilution risk from ongoing and future equity capital raises due to the company's going concern status and need for funding. The ADS ratio change (reverse split) also impacts the number of ADSs held. Volatility in ADS price is expected to continue.
• **Employees:** The company expects significant growth in employee numbers and scope of operations, particularly in product candidate development, regulatory affairs, and sales/marketing, indicating potential job opportunities and career development. However, the going concern warning introduces uncertainty regarding long-term job security.
• **Customers/Patients:** Potential for a novel, disease-modifying treatment (nebokitug) for PSC, a severe disease with high unmet needs. The suspension of the SSc program delays potential treatment options for those patients.
• **Suppliers/Creditors:** The company's reliance on a sole supplier for nebokitug manufacturing creates a critical dependency. The going concern status may raise concerns for creditors regarding the company's ability to meet future obligations.

Next Steps

• Initiate a single Phase 3 pivotal PSC trial around year-end 2026, contingent on securing strategic partnership or major financing.
• Finalize a strategic partnership or major financing to fund future operations and the Phase 3 PSC trial.
• Continue to evaluate partnership opportunities to advance nebokitug development in PSC and SSc, and potentially additional indications.
• Explore opportunities for nebokitug in additional inflammatory/fibrotic indications beyond PSC and SSc.
• Strengthen the intellectual property portfolio by seeking, maintaining, and defending patent rights.
• Assess ways to leverage the dual anti-inflammatory and anti-fibrotic activity of nebokitug in new disease areas and form additional collaborations.

Key Dates

Recommendation

While Chemomab Therapeutics has demonstrated promising clinical data for nebokitug in PSC, with a clear path to Phase 3 and strong intellectual property, the explicit 'going concern' warning and the immediate need for substantial capital raise introduce significant financial uncertainty. The suspension of the SSc program, while a strategic focus on PSC, also limits diversification. A seasoned investor would acknowledge the clinical potential but would 'hold' due to the high financial risk and wait for concrete evidence of successful financing and progress in the pivotal Phase 3 trial before considering further investment. The recent volatility in ADS price further supports a cautious approach.

Keywords

Chemomab Therapeutics, Biotechnology, Clinical-stage, Fibrotic diseases, Inflammatory diseases, Nebokitug, CM-101, CCL24 antagonist, Primary Sclerosing Cholangitis, PSC, Systemic Sclerosis, SSc, MASH, Orphan Drug Designation, Fast Track Designation, Phase 3 trial, Monoclonal antibody, Drug development, SEC filing, 20-F, Going concern, Capital raise, Biopharmaceutical