10-Q: Genprex Reports Q3 2025 Loss, Raises Capital Amid Nasdaq Concerns

Genprex, a clinical-stage gene therapy company, reported a reduced net loss in Q3 2025 but faces significant liquidity challenges, Nasdaq listing compliance issues, and continues to raise capital through equity offerings.

Summary

• Genprex reported a net loss of $3.8 million for the three months ended September 30, 2025, a 12% decrease from $4.3 million in the same period of 2024.
• The net loss for the nine months ended September 30, 2025, was $12.4 million, a 26% decrease from $16.8 million in the prior year period.
• Research and development expenses decreased by 20% to $2.2 million for the three months and 6% to $7.2 million for the nine months ended September 30, 2025, primarily due to reduced clinical trial enrollment and R&D staff.
• General and administrative expenses decreased by 26% to $1.2 million for the three months and 48% to $4.8 million for the nine months ended September 30, 2025, due to expense reduction strategies and reduced headcount.
• The company has substantial doubt about its ability to continue as a going concern, with current cash and cash equivalents of $1.1 million expected to fund operations only into March 2026.
• Genprex is not in compliance with Nasdaq's minimum bid price and stockholders' equity requirements and was granted an extension until October 31, 2025, to regain compliance.
• A 1-for-50 reverse stock split was effected on October 21, 2025, to address the Nasdaq bid price requirement.
• The company entered into a $12.5 million Equity Line of Credit (ELOC) with Lincoln Park Capital Fund, LLC in June 2025, and has raised significant capital through this facility and an At-The-Market (ATM) offering.
• Subsequent to September 30, 2025, Genprex completed two registered direct offerings in October 2025, raising approximately $5.6 million in net proceeds and potentially an additional $11.5 million from warrant exercises.
• The Acclaim-1 (NSCLC) and Acclaim-3 (ES-SCLC) clinical trials are currently enrolling patients in their Phase 2a/2 expansion portions, with interim analyses expected in the second half of 2026.
• Enrollment for the Acclaim-2 (NSCLC) trial was ceased in August 2024 due to challenges and resource prioritization.
• The diabetes gene therapy program (GPX-002) is in preclinical studies, with plans to submit a request to the FDA for IND-enabling studies by the end of 2025.
• A wholly-owned subsidiary, Convergen Biotech, Inc., was formed in February 2025 to separate the diabetes program.

Sentiment

Score: 3

Explanation: The company faces severe financial distress, including a going concern warning and Nasdaq delisting risks, despite some progress in clinical trials and cost reductions. The continuous, highly dilutive capital raises indicate a precarious financial state and significant uncertainty for investors.

Positives

• Net loss decreased by 12% for the three months and 26% for the nine months ended September 30, 2025, compared to the prior year periods, indicating some cost control.
• Research and development expenses decreased by 20% for the three months and 6% for the nine months ended September 30, 2025, reflecting reduced clinical trial enrollment and staff.
• General and administrative expenses significantly decreased by 26% for the three months and 48% for the nine months ended September 30, 2025, due to expense reduction strategies and headcount reduction.
• Acclaim-1 (NSCLC) and Acclaim-3 (ES-SCLC) clinical trials are actively enrolling patients in Phase 2a/2 expansion portions, with Fast Track Designation for both and Orphan Drug Designation for Acclaim-3.
• Phase 1 of Acclaim-1 showed promising results with three patients having prolonged progression-free survival, including one patient maintaining partial remission for approximately 39 months.
• The recommended Phase 2 dose (RP2D) of REQORSA (0.12 mg/kg) was determined for both Acclaim-1 and Acclaim-3 with no dose-limiting toxicities (DLTs) in Phase 1 studies.
• Preclinical data for GPX-002 in a non-human primate model of Type 1 diabetes showed decreased insulin requirements, increased c-peptide levels, and improved glucose tolerance.
• New exclusive license agreements were secured for REQORSA in mesothelioma (NYU), glioblastoma (UTHealth Houston), and in combination with ALK-inhibitors for lung cancer (University of Michigan), expanding potential indications.
• The formation of Convergen Biotech, Inc. aims to focus and potentially accelerate the development and commercialization of the diabetes program.

Negatives

• The company continues to incur substantial net losses, with an accumulated deficit of $167.2 million as of September 30, 2025.
• Cash and cash equivalents decreased to $1.1 million as of September 30, 2025, from $1.6 million at December 31, 2024.
• The company has substantial doubt about its ability to continue as a going concern, with current cash projected to last only into March 2026.
• Genprex is not in compliance with Nasdaq's minimum bid price ($1.00) and minimum stockholders' equity ($2.5 million) requirements, risking delisting.
• Significant dilution has occurred and will continue from ongoing equity raises, including the ELOC, ATM facility, and recent registered direct offerings.
• The Acclaim-2 clinical trial was ceased due to enrollment challenges and delays, indicating difficulties in patient recruitment for certain indications.
• The company has identified material weaknesses in its internal controls over financial reporting, specifically regarding segregation of duties and insufficient in-house accounting personnel for complex transactions.
• Other financing costs of $455,549 were incurred for both the three and nine months ended September 30, 2025, related to the ELOC derivative liability.

Risks

• Inability to raise additional future financing and possible lack of financial and other resources to support and fund pre-clinical and clinical development programs and business growth.
• Uncertainty regarding the ability to continue as a going concern.
• Failure to regain and maintain compliance with Nasdaq's continued listing requirements, leading to potential delisting and negative impact on stock price and access to capital markets.
• The announcement and implementation of reverse stock splits could negatively affect the price and liquidity of common stock.
• Inability to develop marketable products or obtain regulatory approvals.
• Dependence on third-party suppliers or manufacturers to supply or manufacture products on a timely, consistent, and scalable basis.
• Delays in regulatory review and approval of current and future product candidates.
• The success of clinical trials through all phases of clinical development, including the ability of third-party suppliers or manufacturers to meet clinical trial timing and fulfillment considerations.
• Competition from larger and/or better-financed biotechnology and pharmaceutical companies.
• Involvement in patent, trademark, and other intellectual property litigation.
• Lack of market acceptance for products, if approved.
• Changes in government regulation affecting product candidates.
• Changes in third-party reimbursement policies could adversely affect potential future sales.

Future Outlook

Genprex expects to complete enrollment of the first 19 patients for interim analysis in the Phase 2a expansion portion of the Acclaim-1 study in the first half of 2026, with the interim analysis expected in the second half of 2026. Similarly, enrollment of the first 25 patients for interim analysis in the Phase 2 expansion portion of the Acclaim-3 study is expected in the first half of 2026, with the interim analysis in the second half of 2026. For its diabetes program, the company plans to submit a request to the FDA to meet regarding IND-enabling studies by the end of 2025. The company believes its current cash and cash equivalents will be sufficient to fund expenditure requirements into March 2026, but will need to raise additional funds to continue funding development and operations.

Management Comments

• We believe REQORSA's unique attributes position it to provide treatments that improve on current therapies for patients with NSCLC, SCLC, and possibly other cancers.
• We continue to believe that the combination of REQORSA and Keytruda could be beneficial, despite closing the Acclaim-2 study due to slow enrollment.
• We are currently working with the University of Pittsburgh on species analyses for the animal models as well as on other regulatory and clinical strategic planning for the diabetes program.
• We believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented, despite identified material weaknesses in internal controls.

Industry Context

Genprex operates in the highly competitive and capital-intensive gene therapy and oncology/diabetes sectors. The company's focus on non-viral ONCOPREX Delivery System for tumor suppressor genes and pancreatic cell transformation for diabetes represents innovative approaches. The challenges in clinical trial enrollment (as seen with Acclaim-2) are common in competitive therapeutic areas, especially for late-stage cancer, where many trials vie for eligible patients. The ongoing need for significant capital raises is typical for clinical-stage biotech companies without commercialized products, highlighting the high burn rate and long development timelines inherent in the industry.

Comparison to Industry Standards

• NA

Management Changes

Corporate Governance

Legal Proceedings

• Management is not aware of any pending matters, either individually or in the aggregate, that are reasonably likely to have a material impact on the company's financial condition, results of operations or liquidity.

Related Party Transactions

• Introgen Research Institute (IRI), a Texas-based technology company formed and previously solely officered by Rodney Varner (former CEO), has an Assignment and Collaboration Agreement with Genprex. IRI is owned by trusts of which Mr. Varner's descendants are the sole beneficiaries. No amounts were incurred or due under this agreement at September 30, 2025, and December 31, 2024.

Stakeholder Impact

• Shareholders face significant dilution from ongoing and future equity offerings, as well as the risk of delisting from Nasdaq, which could severely impact stock liquidity and value.
• Employees and executives may benefit from the amended equity incentive plan, but the company's going concern warning and cost-cutting measures (including headcount reductions) introduce job security concerns.
• Patients in clinical trials (Acclaim-1, Acclaim-3) may benefit from the continued development of REQORSA, but the cessation of Acclaim-2 highlights the inherent risks and potential delays in drug development.
• Creditors and suppliers face increased risk due to the company's precarious financial position and reliance on future capital raises to meet obligations.
• Regulatory bodies (FDA, Nasdaq) are actively involved, with FDA Fast Track and Orphan Drug designations being positive, while Nasdaq's delisting notices indicate significant compliance challenges.

Next Steps

• Complete enrollment of the first 19 patients for interim analysis in the Phase 2a expansion portion of the Acclaim-1 study in the first half of 2026.
• Conduct interim analysis for the Acclaim-1 study in the second half of 2026.
• Complete enrollment of the first 25 patients for interim analysis in the Phase 2 expansion portion of the Acclaim-3 study in the first half of 2026.
• Conduct interim analysis for the Acclaim-3 study in the second half of 2026.
• Submit a request to the FDA to meet regarding IND-enabling studies for the diabetes program by the end of 2025.
• Continue to implement remediation efforts to address material weaknesses in internal controls over financial reporting.
• Monitor stockholders' equity and consider options to regain compliance with Nasdaq's Minimum Stockholders Equity Requirement.
• Continue to utilize the 2025 ELOC Facility and 2023 ATM Facility for capital raising.

Key Dates

Recommendation

Genprex faces severe financial instability, evidenced by a 'going concern' warning, rapidly depleting cash reserves (expected to last only into March 2026), and persistent non-compliance with Nasdaq listing requirements, leading to a recent 1-for-50 reverse stock split and ongoing delisting risk. The company relies heavily on continuous, highly dilutive equity financing, which has significantly increased the share count and will likely continue to depress per-share value. While there is some clinical progress with Acclaim-1 and Acclaim-3, and cost reductions have been implemented, these positives are overshadowed by the fundamental financial precariousness and the high uncertainty inherent in clinical-stage gene therapy development. The cessation of the Acclaim-2 trial due to enrollment issues further highlights operational challenges. For a seasoned investor, the substantial risks, including potential delisting, severe dilution, and the long, uncertain path to commercialization, make this a 'strong sell' position.

Keywords

Gene Therapy, Oncology, Diabetes, REQORSA, NSCLC, SCLC, Clinical Trials, Biotechnology, Nasdaq Compliance, Capital Raise, Reverse Stock Split, GPX-002, TUSC2, EGFR mutations, ES-SCLC, IND-enabling studies