Anixa Biosciences, Inc. — Q1 FY2023 10-Q
Reporting period: Three months ended January 31, 2023. Financial statement amounts are in thousands of dollars unless stated otherwise. Anixa is a clinical-stage biotechnology company developing cancer vaccines and therapies; it reported no revenue.
Financial results and liquidity
| Metric | Q1 FY2023 | Q1 FY2022 |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $1,068 | $1,838 |
| General and administrative expense | $1,488 | $2,042 |
| Total operating expenses | $2,556 | $3,880 |
| Operating loss | $(2,556) | $(3,880) |
| Interest income | $202 | $1 |
| Net loss | $(2,354) | $(3,879) |
| Net loss attributable to common shareholders | $(2,322) | $(3,829) |
| Basic and diluted loss per share | $(0.08) | $(0.13) |
| Cash used in operating activities | $(1,988) | $(1,197) |
At January 31, 2023, cash and cash equivalents were $9.790 million and short-term investments were $17.912 million, totaling $27.702 million. Total current assets were $28.105 million against current liabilities of $1.232 million. Total liabilities were $1.394 million, primarily including operating lease liabilities; the filing reports no borrowings. No revenue means gross margin is not meaningful.
Material changes and business developments
- Operating expenses fell $1.324 million year over year, primarily because share-based compensation declined by $1.291 million. Expenses excluding non-cash share-based compensation were $1.493 million versus $1.526 million.
- Interest income increased to $202,000, primarily reflecting higher rates on cash and investments.
- Cash, cash equivalents and short-term investments declined about $1.985 million from fiscal year-end 2022. Operating cash use was partly offset by investment maturities; financing provided $3,000 from stock-option exercises.
- Common shares outstanding were 30,922,830 at January 31, 2023. The company issued 7,364 shares to pay for investor-relations services during the quarter.
Outlook, programs and risks
- Management said available cash, cash equivalents, short-term investments and expected cash flows should fund operations for at least 12 months from March 16, 2023. It cautioned that estimates may differ from actual needs and additional financing may be required; equity or convertible financing could dilute shareholders. Up to $100 million remained available under its at-the-market program, with no shares sold under it during the quarter.
- The company reported reaching the maximum tolerated dose in its Phase 1 breast cancer vaccine trial and was expanding dose cohorts, analyzing data and recruiting for a second stage involving participants with certain genetic mutations. It anticipated presenting immunological data in April 2023.
- Its ovarian cancer vaccine preclinical work is supported by the NCI PREVENT program, which the company said is expected to cover virtually all preclinical and IND-enabling costs. Its ovarian cancer CAR-T Phase 1 trial had treated its first patient in August 2022; recruitment continued.
- On March 9, 2023, Anixa paused further development of its COVID-19 antiviral after animal studies indicated insufficient oral bioavailability. It cited limited prospects for an injectable treatment and the need to prioritize resources; it will continue prosecuting related U.S. patent applications and may revisit development.
- Anixa does not expect near-term revenue from its vaccine or therapeutic programs; future licensing could take years, may not occur, and may depend on successful clinical results. Clinical, funding, and commercialization uncertainties remain.
- Other than patent-enforcement lawsuits, the company reported no material pending legal proceedings and no material changes to risk factors disclosed in its prior Form 10-K. Management concluded disclosure controls were effective and reported no material change in internal control over financial reporting.
Important facts for investors to verify
- Whether the company’s projected funding runway remains adequate as clinical-trial and development spending evolves.
- Progress, safety, immune-response data and recruitment for the breast cancer vaccine and CAR-T trials.
- The consequences of pausing the antiviral program, including any future research spending or decision to restart.
- Potential dilution from stock compensation, the at-the-market program or other future financing.
- Timing and likelihood of future revenue or licensing, given the company’s current lack of product revenue.