10-K: Genprex, Inc. Outlines Progress in Gene Therapy Programs and Financial Position in Annual Report

Genprex, Inc.'s annual report details advancements in its oncology and diabetes gene therapy programs, along with recent financial activities including a reverse stock split and registered direct offering.

Summary

• Genprex, Inc. is a clinical-stage gene therapy company focused on developing treatments for cancer and diabetes.
• The company's lead oncology candidate, REQORSA, is being evaluated in combination with other cancer drugs in Phase 1/2 and Phase 2 clinical trials for non-small cell lung cancer (NSCLC) and small cell lung cancer (SCLC).
• The Acclaim-1 trial, combining REQORSA with Tagrisso, has moved into Phase 2a expansion, with 66 patients expected to enroll.
• The Acclaim-2 trial, combining REQORSA with Keytruda, is in Phase 1 dose escalation, with enrollment expected to complete in the second half of 2024.
• The Acclaim-3 trial, combining REQORSA with Tecentriq, is in Phase 1 dose escalation, with Phase 2 expansion expected to begin in the second half of 2024.
• Genprex's diabetes program, GPX-002, is in preclinical development, with a focus on transforming alpha cells into insulin-producing beta-like cells for Type 1 diabetes and rejuvenating exhausted beta cells for Type 2 diabetes.
• The company submitted a request to meet with the FDA in December 2023 to obtain guidance on nonclinical studies needed to file an Investigational New Drug (IND) application.
• Genprex completed a 1-for-40 reverse stock split on February 2, 2024.
• The company completed a registered direct offering on March 21, 2024, raising approximately $5.8 million in net proceeds.
• As of March 25, 2024, there were 1,910,441 shares of the company's common stock outstanding.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While there are positive developments in the clinical programs and recent capital raises, the company's financial situation and dependence on future funding create significant uncertainty.

Positives

• The company has received multiple Fast Track Designations from the FDA for REQORSA, indicating potential for expedited development and review.
• The company has received Orphan Drug Designation for REQORSA for the treatment of SCLC, which provides market exclusivity upon approval.
• Preclinical data for GPX-002 in a non-human primate model of Type 1 diabetes showed promising results.
• The company has successfully raised additional capital through a registered direct offering.
• The company has a robust manufacturing process for REQORSA and has successfully transferred the technology to CDMOs.

Negatives

• The company has a history of recurring losses and has never been profitable.
• The company has a limited operating history and expects operating results to fluctuate.
• The company is dependent on third-party manufacturers and suppliers.
• The company has experienced delays in the past in the production of REQORSA.
• The company has identified material weaknesses in its internal controls over financial reporting.

Risks

• The company will require substantial additional funding, which may not be available on acceptable terms.
• The company's recurring losses from operations have raised substantial doubt regarding its ability to continue as a going concern.
• The company has never been profitable and has not generated any revenue from product sales.
• The company's success depends greatly on the success of its development of REQORSA and GPX-002.
• The company faces competition from other biotechnology and pharmaceutical companies.
• The company may not be able to obtain or maintain orphan drug designation or exclusivity for its product candidates.
• The company may not be able to obtain regulatory approval for its product candidates.
• The company may be subject to product liability claims.
• The company may be subject to security breaches and other disruptions.
• The company may be subject to health epidemics and outbreaks, including COVID-19, which could significantly disrupt its preclinical studies and clinical trials.

Future Outlook

The company expects to continue to incur losses for the foreseeable future and will require substantial additional capital to continue its preclinical and clinical development and commercialization readiness activities. The company expects to finance its operating activities through a combination of equity offerings, drawdowns on its ATM, debt financings, and strategic collaborations.

Management Comments

• The company believes that its ONCOPREX Delivery System may be applicable to delivery of a range of therapeutic and prophylactic plasmid DNA and RNA interference constructs and shows efficacy in cancers beyond lung cancer.
• The company believes that the manufacturing methods it has developed for REQORSA may be useful for a wide array of disease treatments.
• The company believes that its data in NHPs demonstrate the potential for its gene therapy treatment to eliminate the need for insulin replacement therapy for Type 1 and Type 2 diabetic patients.

Industry Context

The document highlights Genprex's position in the competitive biotechnology and pharmaceutical industries, particularly in the rapidly evolving fields of gene therapy and immuno-oncology. The company is developing novel approaches to address unmet medical needs in cancer and diabetes, which are areas of significant research and development activity. The document also notes the presence of numerous competitors, including major pharmaceutical companies and research institutions, emphasizing the need for Genprex to effectively compete and secure its position in the market.

Comparison to Industry Standards

• The document compares Genprex's REQORSA treatment to existing therapies for NSCLC, such as EGFR TKIs (Tagrisso, Tarceva, Iressa) and immunotherapies (Keytruda, Tecentriq), highlighting REQORSA's potential to overcome resistance and improve outcomes.
• The document references the FLAURA study for Tagrisso, noting the median time to tumor progression of approximately 18 months, and compares this to the extended PFS seen in some patients in Genprex's Acclaim-1 trial.
• The document also compares the progression-free survival (PFS) of 2.6 months after starting maintenance Tecentriq in ES-SCLC patients to the goal of prolonging PFS and survival with the combination of REQORSA and Tecentriq.
• The document compares the response rate and disease control rate observed in the Phase 2 portion of the Phase 1/2 Combination Tarceva Trial to the response rate and disease control rate reported for a clinical trial of the EGFR TKI afatinib (Gilotrif) in the LUX-Lung 1 clinical trial.
• The document notes that many gene therapies require complex procedures, such as removal of cells from a patient and modification of those cells which are then reinfused into the patient, and many, unlike REQORSA, lead to permanent changes in a patients DNA, highlighting the unique systemic delivery of REQORSA.
• The document notes that many approved cancer therapeutics target only single molecules or a single specific genetic abnormality related to driving the proliferation and survival of cancer cells, in contrast to REQORSA's multimodal mechanism of action.

Related Party Transactions

• The company has a royalty obligation to IRI, a company controlled by the company's CEO, of 1% on sales of products licensed under the 1994 MD Anderson License Agreement.

Stakeholder Impact

• Shareholders face the risk of dilution from future equity offerings.
• Employees may be affected by potential changes in the company's operations due to financial constraints.
• Patients may benefit from the development of new treatments for cancer and diabetes.
• Creditors face the risk of non-payment if the company is unable to secure additional funding.

Next Steps

• Complete enrollment in the Phase 2a expansion portion of the Acclaim-1 trial by the end of 2024.
• Complete enrollment in the Phase 1 dose escalation portion of the Acclaim-2 trial in the second half of 2024.
• Complete the Phase 1 dose escalation portion of the Acclaim-3 trial in the second half of 2024 and start the Phase 2 expansion portion in the second half of 2024.
• Continue with planned additional nonclinical studies for GPX-002 before requesting regulatory guidance in 2024 for the IND-enabling studies.
• Continue to explore how REQORSA may be administered with targeted therapies and immunotherapies in other solid tumors.
• Continue research into other cancer fighting genes, such as NPRL2.

Key Dates

Keywords

gene therapy, cancer, diabetes, REQORSA, GPX-002, NSCLC, SCLC, clinical trials, FDA, ONCOPREX, TUSC2, immunotherapy, Type 1 diabetes, Type 2 diabetes