20-F: Chemomab Therapeutics Ltd. Files 20-F Annual Report, Outlines Financials and Clinical Progress

Chemomab Therapeutics Ltd. releases its 20-F filing, detailing financial results, clinical trial updates, and future strategies for its lead product candidate, CM-101.

Summary

• Chemomab Therapeutics Ltd., a clinical-stage biotechnology company, has filed its 20-F annual report.
• The report highlights the company's focus on developing innovative therapeutics for fibrotic and inflammatory diseases, particularly with its lead product candidate, CM-101.
• CM-101 is a monoclonal antibody designed to block CCL24 activity, targeting diseases like primary sclerosing cholangitis (PSC) and systemic sclerosis (SSc).
• The company completed patient recruitment for a Phase 2 clinical study of CM-101 in PSC, with topline results expected midyear 2024.
• Chemomab has suspended initiation of a Phase 2 clinical trial of CM-101 in SSc to focus resources on the PSC trial.
• The company's cash, cash equivalents, and deposits were approximately $19.9 million as of December 31, 2023, expected to fund operations through March 31, 2025.
• Chemomab has incurred net losses in each year since its inception, with an accumulated deficit of $88.7 million as of December 31, 2023.
• The company anticipates increasing operating losses over the next several years.
• Chemomab has been granted Orphan Drug Designation for CM-101 in connection with three indications and may seek Orphan Drug Designation for other indications or product candidates.
• The company received FDA Fast Track Designation for CM-101 for the Treatment of Primary Sclerosing Cholangitis.
• The company is subject to risks related to operations in Israel, including the recent attack by Hamas and other terrorist organizations from the Gaza Strip and Israels war against them.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While there are positive developments in clinical trials and regulatory designations, the company's financial situation and operational risks temper the overall outlook.

Positives

• CM-101 has demonstrated the potential to treat multiple severe and life-threatening fibrotic and inflammatory diseases.
• The company completed patient enrollment in the Phase 2 SPRING trial assessing CM-101 as a treatment for PSC and moved up expected topline readout to midyear 2024.
• The company received FDA Fast Track Designation for CM-101 for the Treatment of Primary Sclerosing Cholangitis.
• The company has been granted Orphan Drug Designation for CM-101 in connection with three indications and may seek Orphan Drug Designation for other indications or product candidates.
• The company completed a Phase 2a clinical study in patients with liver fibrosis due to NASH.
• The company believes that CM-101 could have disease-modifying potential in this poorly treated condition.

Negatives

• The company has incurred net losses in each year since its inception, with an accumulated deficit of $88.7 million as of December 31, 2023.
• The company anticipates increasing operating losses over the next several years.
• The company is subject to risks related to operations in Israel, including the recent attack by Hamas and other terrorist organizations from the Gaza Strip and Israels war against them.
• The trading price of the ADSs has been highly volatile, and is expected to continue to be volatile.
• The company has not paid dividends in the past and do not expect to pay dividends in the future, and, as a result, any return on investment may be limited to the value of the ADSs.

Risks

• The company's limited operating history and funding may make it difficult to evaluate its prospects and likelihood of success.
• The company's business is highly dependent on the success of its lead product candidate, CM-101.
• The company may encounter difficulties enrolling patients in its clinical studies.
• The company's ongoing and future clinical studies may reveal significant adverse events or immunogenicity-related responses.
• The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable.
• The company may be subject to cyber-attacks or other disruptions to or breaches of its information technology, systems or networks.
• Conditions in Israel, including the recent attack by Hamas and other terrorist organizations from the Gaza Strip and Israels war against them, may affect the company's operations.
• The company will need to raise additional capital to fund its operations, which may be unavailable to it on acceptable terms or at all, or may cause dilution or place significant restrictions on its ability to operate its business.
• If the company fails to continue to meet all applicable Nasdaq requirements, Nasdaq may delist the ADSs, which could have an adverse impact on the liquidity and market price of the ADSs.

Future Outlook

The company expects to report topline data from the Phase 2 SPRING trial in PSC midyear 2024 and plans to initiate a Phase 2 clinical trial of CM-101 in SSc following the successful completion of the PSC study and available resources.

Management Comments

• Chemomab management noted that acceleration of these timelines was enabled by the enthusiastic response of both clinicians and patients to our PSC clinical trial.

Industry Context

The report notes that successful treatment of fibrotic disorders has in large part remained elusive, primarily due to incomplete understanding of the complexity and multi-mechanism contributions to disease progression. The report also notes that there is significant and growing industry interest given the associated unmet medical need and the continuing opportunity to identify better therapeutic targets.

Comparison to Industry Standards

• The report notes that most drug approvals in this space have been focused on fibrosis of the lungs i.e., idiopathic pulmonary fibrosis, or IPF, interstitial lung disease, or ILD, and pulmonary arterial hypertension, or PAH.
• The report notes that most approved anti-fibrotic products target extracellular components, given their biological accessibility, and inhibition of receptors and ligands preventing downstream signaling is considered to be a potentially effective option for alleviating fibrosis.
• The report notes that PDGF and TGFare commonly studied targets in fibrosis and there are two approved products that target these pathways, pirfenidone and nintedanib.
• The report notes that both pirfenidone and nintedanib are approved for the treatment of IPF, with nintedanib also recently approved for treatment of systemic sclerosis associated interstitial lung disease and chronic fibrosing interstitial lung diseases.
• The report notes that tocilizumab, a monoclonal antibody targeting IL-6R, was recently approved for the treatment of ILD associated with systemic sclerosis.
• The report notes that in 2024 Gilead acquired Cymabay for its PPAR agonist in Primary biliary cirrhosis.
• The report notes that in 2019 Novartis completed two transactions related to the treatment of NASH, a liver metabolic fibrotic disease.
• The report notes that in 2020, Roche acquired Promedior for a $390 million upfront payment and total potential consideration of $1 billion in milestones for its Phase 2 product in pulmonary fibrosis, and Bayer partnered with Recursion Pharmaceuticals to develop and commercialize preclinical-stage small molecule treatments for fibrotic conditions for a $30 million upfront payment and total potential consideration of $1 billion.
• The report notes that Boehringer Ingelheim also acquired Enleofen Bio in a deal potentially worth $1 billion for its NASH and ILD anti-IL11 platform.
• The report notes that Mediar, a high-profile start-up targeting novel mechanisms for fibrotic diseases, reported a $105 million Series A financing.

Management Changes

Corporate Governance

Legal Proceedings

• The company is involved in a VAT audit by the Israeli Tax Authority, with an appeal to the assessment pending before the Israeli district court.

Related Party Transactions

• The company repurchased 582,023 ADSs from the Co-Founders at a price of $2.0848 and for total consideration of approximately $1,218,000.
• The company sold 582,023 ADSs which were held in treasury for consideration of approximately $580 thousand.

Stakeholder Impact

• Shareholders face potential dilution from future capital raises.
• Employees may be affected by the company's ability to secure funding and continue operations.
• Patients may benefit from the successful development and commercialization of CM-101.
• Suppliers and creditors are subject to risks associated with the company's financial stability.

Next Steps

• The company expects a topline data readout from the Phase 2 SPRING trial in PSC midyear 2024.
• The company plans to initiate a Phase 2 clinical trial of CM-101 in SSc following the successful completion of the PSC study and available resources.

Key Dates

Keywords

CM-101, CCL24, fibrosis, inflammation, clinical trials, PSC, SSc, Chemomab, biotechnology, therapeutics