10-Q: Theriva Biologics Reports First Quarter 2024 Results, Provides Clinical Pipeline Update

Theriva Biologics reported its first quarter 2024 financial results and provided an update on its clinical development programs, including its lead oncology candidate VCN-01.

Summary

• Theriva Biologics, a clinical-stage company, is focused on developing therapeutics for cancer and related diseases.
• The company's lead product candidate, VCN-01, is an oncolytic adenovirus currently in a Phase 2 clinical trial for pancreatic cancer.
• The company is also developing SYN-004 (ribaxamase) and SYN-020 for gastrointestinal diseases, but is exploring strategic options for these assets.
• For the three months ended March 31, 2024, the company reported a net loss of $5.2 million, or $0.30 per share.
• Research and development expenses increased to $3.5 million for the quarter, primarily due to clinical trial expenses.
• The company's cash and cash equivalents totaled $18.3 million as of March 31, 2024.
• Management believes current cash will fund operations through the fourth quarter of 2024 and into the first quarter of 2025.
• The company is actively pursuing additional equity or debt financing to fund future clinical trials.

Sentiment

Score: 4

Explanation: The document presents a mixed picture. While there are positive clinical updates and promising preclinical data, the company's financial situation and internal control weaknesses raise significant concerns. The going concern warning and the need for additional capital are major negatives.

Positives

• The IDMC's recommendation to continue the VIRAGE trial indicates confidence in the safety and potential of VCN-01.
• The positive topline data from the retinoblastoma trial suggests a potential new treatment option for this disease.
• The overall survival results from the head and neck cancer trial are encouraging.
• The preclinical data on VCN-01 with liposomal irinotecan and VCN-11 show potential for future development.
• The company has a strong intellectual property portfolio with numerous patents and applications.

Negatives

• The company reported a net loss of $5.2 million for the first quarter of 2024.
• The company has an accumulated deficit of $314.5 million as of March 31, 2024.
• The company's independent auditor has raised substantial doubt about its ability to continue as a going concern.
• The company has identified material weaknesses in its internal controls over financial reporting.
• The company's cash and cash equivalents of $18.3 million may not be sufficient to fund operations for the next twelve months.

Risks

• The company's ability to continue as a going concern is dependent on raising additional capital.
• There is no assurance that additional funding will be available on acceptable terms or at all.
• Failure to obtain additional funding may force the company to delay or cease certain development activities.
• The company's internal controls over financial reporting are not effective.
• The company's stock price may decline due to the material weaknesses in internal controls and the going concern uncertainty.
• The company may experience dilution if it raises additional capital through equity offerings.
• The company's future clinical trials will require significant financing or a significant partnership.
• The company is subject to risks related to the uncertain financial markets, disruptions in supply chains, and increasing inflation.

Future Outlook

The company anticipates research and development expenses to increase as it continues enrollment in the VIRAGE trial, advances its VCN-01 program in retinoblastoma, expands GMP manufacturing activities for VCN-01, and continues supporting its VCN-11 and other preclinical and discovery initiatives. The company believes its current cash will fund operations through the fourth quarter of 2024 and into the first quarter of 2025. The company is actively pursuing additional equity or debt financing to fund future clinical trials.

Management Comments

• Management believes its plan, which includes the advancement of VCN-01 and the additional testing of SYN-004 (ribaxamase) will allow us to meet our financial obligations, further advance key products, and maintain our planned operations.
• Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Industry Context

The company's focus on oncolytic virotherapy aligns with the growing interest in novel cancer treatments that harness the power of the immune system. The development of intravenous delivery methods for oncolytic viruses is a significant advancement in the field. The company's efforts to address unmet needs in pancreatic cancer and retinoblastoma are also relevant to current industry trends.

Comparison to Industry Standards

• The company's Phase 2 trial of VCN-01 in pancreatic cancer is comparable to other clinical trials evaluating oncolytic viruses in combination with chemotherapy.
• The company's Phase 1 trial of intravitreal VCN-01 in retinoblastoma is a novel approach to treating this rare pediatric cancer.
• The company's research on VCN-11 and albumin shield technology is at the forefront of oncolytic virus development, aiming to improve delivery and efficacy.
• The company's intellectual property portfolio is robust compared to other companies in the oncolytic virus space.
• The company's financial situation is similar to other clinical-stage biotech companies that are dependent on raising capital to fund their operations.

Management Changes

Legal Proceedings

• The company is not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition or cash flows.

Related Party Transactions

• On December 14, 2023 the Company approved the retention of MaryAnn Shallcross for compensation of $152,000, a bonus of $70,000 and the grant of an option to purchase 75,000 shares of common stock having a value of $30,000.

Stakeholder Impact

• Shareholders may experience dilution if the company raises additional capital through equity offerings.
• Employees may be affected by potential delays or cessation of development activities if the company fails to secure additional funding.
• Patients may benefit from the company's development of new cancer therapies, but clinical trials may be delayed if funding is not secured.
• Creditors may be at risk if the company is unable to continue as a going concern.

Next Steps

• The company will continue enrollment in the VIRAGE Phase 2b clinical trial of VCN-01 in pancreatic cancer.
• The company will continue patient follow-up in the Phase 1 trial of intravitreal VCN-01 in retinoblastoma.
• The company will prepare a Clinical Study Report for the Phase 1 Trial of intravenous VCN-01 in combination with durvalumab in subjects with recurrent/ metastatic squamous cell carcinoma of the head and neck (mSCCHN).
• The company will continue enrollment in the Phase 1 trial of intravenous VCN-01 in patients prior to surgical resection of high-grade brain tumors.
• The company will continue enrollment in the Phase 1b/2a clinical trial of SYN-004 (ribaxamase) in allogeneic HCT recipients.
• The company will continue to explore strategic options for its SYN-004 and SYN-020 assets.
• The company will continue to pursue additional equity or debt financing.

Key Dates

Keywords

Oncolytic Virus, VCN-01, Pancreatic Cancer, Retinoblastoma, Clinical Trial, Ribaxamase, SYN-004, Intestinal Alkaline Phosphatase, SYN-020, Immunotherapy, Cancer Therapy, Microbiome, Albumin Shield, VCN-11