10-Q: Phio Pharmaceuticals Secures $12.1M, Advances PH-762 Trial

Phio Pharmaceuticals Corp. reports increased cash reserves and progress in its PH-762 clinical trial, bolstered by recent financing activities, while deferring its PH-894 program.

Summary

• Phio Pharmaceuticals Corp. is a clinical-stage biopharmaceutical company focused on immuno-oncology therapeutics using its proprietary INTASYL siRNA technology.
• The company reported a net loss of $2.392 million for the three months ended September 30, 2025, compared to $1.524 million for the same period in 2024.
• For the nine months ended September 30, 2025, the net loss was $6.327 million, an increase from $5.524 million in the prior year period.
• Cash and cash equivalents increased to $10.705 million as of September 30, 2025, from $5.382 million at December 31, 2024.
• Research and development expenses rose by $537,000 to $1.181 million for the three months ended September 30, 2025, primarily due to increased clinical trial and CMC costs for the PH-762 program and R&D personnel costs.
• General and administrative expenses increased by $400,000 to $1.324 million for the three months ended September 30, 2025, driven by outsourced professional services and RSU compensation.
• The Phase 1b clinical trial for PH-762 in cutaneous squamous cell carcinoma (cSCC), melanoma, and Merkel cell carcinoma showed promising results, with 100% tumor clearance in one of three patients in the fifth cohort, >90% in a second, and >50% in a third.
• Cumulative pathologic response in 16 cSCC patients included six with complete response (100% clearance), two with near complete response (>90%), and two with partial response (>50%).
• PH-762 has been well tolerated with no dose-limiting toxicities or clinically relevant treatment-emergent adverse effects reported.
• The company terminated its clinical co-development agreement with AgonOx in May 2024, settling all future obligations with a final payment of $34,320 in March 2025.
• IND-enabling studies for PH-894 are complete, but its IND submission has been deferred to prioritize the PH-762 clinical trial.
• The company has 59 issued patents, with 53 covering its INTASYL platform, and 23 pending patent applications, with expirations ranging from 2029 to 2044.
• A 1-for-9 reverse stock split was completed on July 5, 2024.
• As of November 11, 2025, Phio Pharmaceuticals Corp. had 10,764,428 shares of common stock outstanding.

Sentiment

Score: 7

Explanation: The company has significantly improved its liquidity position, alleviating going concern doubts, and reported encouraging early clinical data for its lead candidate PH-762. However, it continues to incur substantial losses, and the deferral of PH-894 indicates resource constraints and strategic prioritization.

Positives

• Cash and cash equivalents significantly increased to $10.705 million by September 30, 2025, from $5.382 million at December 31, 2024, further bolstered by a subsequent $12.1 million net capital raise.
• The company has alleviated previous 'going concern' doubts due to recent financing activities, providing sufficient cash to fund operations for at least 12 months.
• PH-762 Phase 1b clinical trial shows encouraging efficacy, with 100% tumor clearance in one patient and significant clearance in others within the fifth cohort, and a cumulative 6 complete responses in 16 cSCC patients.
• PH-762 demonstrated a favorable safety profile with no dose-limiting toxicities or clinically relevant treatment-emergent adverse effects.
• A drug substance development services agreement was signed in July 2025 for cGMP manufacture of PH-762 clinical supplies, indicating progress towards later-stage development.
• The company maintains a robust intellectual property portfolio with 59 issued patents and 23 pending applications, protecting its INTASYL platform and compounds.

Negatives

• Net loss increased to $2.392 million for the three months ended September 30, 2025, from $1.524 million in the prior year, and to $6.327 million for the nine months, from $5.524 million.
• Operating expenses increased significantly, with R&D up 83% and G&A up 40% for the three-month period, reflecting higher costs without corresponding revenue.
• The IND submission for PH-894 has been deferred due to reprioritization, potentially delaying the development of this pipeline candidate.
• Six cSCC patients and one metastatic melanoma patient in the PH-762 trial showed a pathologic non-response (<50% clearance).

Risks

• Dependence on the success of INTASYL technology and product candidates, which are unproven and may not lead to approved products.
• Product candidates are in early stages of development, with potential for significant delays, failure to advance, or inability to identify additional candidates.
• Disruptions at the FDA (e.g., workforce reduction, inadequate funding) could prevent normal functions, negatively impacting the business.
• Potential for delays or difficulties in identifying and enrolling subjects in clinical trials, leading to delays in data generation and regulatory approvals.
• Topline data may not accurately reflect or may materially differ from complete clinical trial results.
• Reliance on third parties for the manufacture of clinical supply for product candidates.
• Risk of computer system failures, cyberattacks, or cybersecurity deficiencies impacting business and operations.
• Dependence on owned patents and licensed technologies; failure to maintain patents or loss of licensing rights could harm product development.
• Requires substantial additional funds to complete research and development activities.
• Future financing may involve debt or equity issuance, potentially diluting stockholders or adversely affecting the business.
• Changes in U.S. and international trade policies may adversely impact business and operating results, including product supply disruptions and increased costs.
• Inability to maintain compliance with Nasdaq Capital Market continued listing requirements, particularly the minimum bid price, which could lead to delisting.
• The price of common stock has been and may continue to be volatile.

Future Outlook

The company expects to continue incurring substantial operating losses for several years as it develops product candidates and seeks marketing approval. It anticipates significant sales, marketing, and manufacturing expenses if product candidates receive approval. The company will also incur costs related to corporate governance and public reporting. Additional funding will be required to sustain future operations, and while past capital raises have been successful, future availability and terms are not assured. The company will continue to assess cash and funding requirements due to the uncertainties of preclinical and clinical development. The IND submission for PH-894 has been deferred to prioritize the PH-762 clinical trial.

Management Comments

• We are committed to discovering and developing innovative cancer treatments for patients by creating new pathways toward a cancer-free future.
• Expense reductions have been redirected to funding the Phase 1b clinical trial with PH-762.
• We believe these data further support the potential for PH-762 to provide a strong local immune response without the dose immune-related adverse effects seen with systemic antibody therapy.
• Due to INTASYL's ease of administration, we have shown that our compounds can easily be incorporated into current Adoptive Cell Therapy (ACT) manufacturing processes.
• We believe our INTASYL compounds can improve these immune cells to make them more effective in killing cancer.
• What sets PH-894 apart is its dual mechanism: PH-894 suppression of BRD4 in T cells results in T cell activation, and suppression of BRD4 in tumor cells results in tumors becoming more sensitive to being killed by T cells.
• These preclinical data indicate that PH-894 can reprogram T cells and other cells in the tumor microenvironment to provide enhanced immunotherapeutic activity.
• We expect that our cash and cash equivalents will enable us to fund our current operating plan for at least 12 months from the date these financial statements are issued.

Industry Context

Phio Pharmaceuticals operates in the highly competitive and capital-intensive immuno-oncology space, leveraging its proprietary INTASYL siRNA technology. The focus on PH-762, designed to reduce PD-1 expression, aligns with the clinically validated target of PD-1 in cancer immunotherapy, a significant area of research and development. The deferral of PH-894, while a strategic reprioritization, highlights the challenges smaller biopharmaceutical companies face in balancing multiple pipeline assets against limited resources. The company's ability to secure substantial financing, despite recurring losses, indicates investor confidence in its technology and clinical progress, a common trend for promising early-stage biotech firms.

Comparison to Industry Standards

• The company's PH-762 Phase 1b trial results, showing complete or near-complete tumor clearance in a significant portion of cSCC patients, are encouraging for an early-stage immunotherapy, especially given the absence of dose-limiting toxicities. While direct comparisons to specific competitor trials are not provided, such early-stage efficacy and safety data are critical for advancing drug candidates in the competitive immuno-oncology landscape.
• The company's reliance on frequent equity and warrant financings is typical for clinical-stage biopharmaceutical companies that have not yet generated product revenue. The terms of these financings, including reduced exercise prices for warrants and issuance of new warrants, reflect common strategies to attract capital in the biotech sector, often leading to significant shareholder dilution.
• The termination of the AgonOx collaboration, while ending financial obligations, also means the company foregoes potential future development milestones and royalty payments, which is a common outcome in early-stage biotech partnerships that do not meet initial expectations or strategic shifts occur.

Management Changes

Stakeholder Impact

• **Shareholders:** Experience significant dilution from multiple equity and warrant financings, but the capital raises have alleviated going concern risk and extended the cash runway. Positive early clinical data for PH-762 could increase long-term value, but continued losses and deferral of PH-894 present ongoing risks.
• **Employees:** Headcount reduction by greater than 50% in discovery research personnel as part of a cost rationalization program. Stock-based compensation remains a component of overall compensation.
• **Customers (future patients):** Potential benefit from the development of PH-762 as an innovative cancer treatment, with promising early safety and efficacy data.
• **Creditors:** Improved liquidity position reduces immediate credit risk, but recurring losses indicate continued reliance on external funding.
• **Suppliers/Manufacturers:** Engagement with a U.S. manufacturing company for PH-762 clinical supplies indicates ongoing business, but changes in trade policies could impact foreign vendors.

Next Steps

• Continue to screen and treat additional patients as part of the fifth cohort in the PH-762 Phase 1b clinical trial.
• Advance the PH-762 program, including ongoing analytical and process development and cGMP manufacture of clinical supplies.
• Finalize study reports required for an IND submission for PH-894, with the submission currently deferred.
• Seek additional funding to sustain future operations, potentially through equity, debt, or strategic partnerships.
• Monitor and maintain compliance with Nasdaq Capital Market listing requirements.

Key Dates

Recommendation

Phio Pharmaceuticals has demonstrated promising early clinical data for PH-762 and significantly improved its liquidity through recent financings, alleviating immediate going concern risks. This provides a runway for continued development. However, the company still faces substantial operating losses, ongoing dilution from capital raises, and the deferral of its PH-894 program. While the PH-762 data is encouraging, it is still early-stage, and the path to commercialization is long and uncertain. The stock remains speculative, suitable for investors with a high-risk tolerance who believe in the long-term potential of the INTASYL platform, but the current stage of development and financial profile warrant a 'hold' rather than a 'buy' for broader investment portfolios, awaiting further clinical milestones and a clearer path to profitability.

Keywords

Phio Pharmaceuticals, INTASYL, siRNA, Immuno-oncology, Cancer treatment, PH-762, Clinical trial, Phase 1b, Cutaneous squamous cell carcinoma, Melanoma, Merkel cell carcinoma, PH-894, BRD4, Warrants, Capital raise, SEC filing, Biopharmaceutical, Drug development, Nasdaq