Anixa Biosciences, Inc. — Q1 FY2022 Form 10-Q
Reporting period: Three months ended January 31, 2022. Financial statement amounts below are in millions of dollars unless otherwise noted. Anixa is a development-stage biotechnology company focused on cancer therapies and vaccines and COVID-19 antiviral candidates; it reported no revenue from these programs.
Financial performance and liquidity
| Metric | Q1 FY2022 | Q1 FY2021 |
|---|---|---|
| Revenue | $0 | $0.513 |
| Operating expenses | $3.880 | $2.746 |
| Operating loss | $(3.880) | $(2.233) |
| Net loss | $(3.879) | $(2.232) |
| Net loss attributable to common shareholders | $(3.829) | $(2.208) |
| Basic and diluted loss per share | $(0.13) | $(0.09) |
| Cash used in operating activities | $(1.197) | $(1.170) |
- At January 31, cash and cash equivalents were $29.781 million and short-term investments were $4.749 million, totaling $34.530 million, versus $35.727 million at October 31, 2021. Cash and equivalents alone increased to $29.781 million from $29.128 million.
- Current assets were $34.994 million; current liabilities were $1.787 million. Total liabilities were $1.996 million, primarily operating lease liabilities. The filing reports no conventional borrowings.
- Research and development expense was $1.838 million, up from $0.828 million; general and administrative expense was $2.042 million, up from $1.533 million. No revenue was reported, so a revenue margin is not meaningful.
- Non-cash share-based compensation totaled $2.354 million, compared with $0.986 million a year earlier. Operating expenses excluding this compensation were $1.526 million, versus $1.760 million.
Material changes and developments
- Revenue fell from $0.513 million to zero. The prior-year amount came from a one-time legacy technology license; the company says its legacy licensing activity is not expected to be a significant ongoing revenue source.
- Higher R&D costs reflected chiefly increased employee stock-option compensation, employee costs and ovarian-vaccine research, partly offset by lower license fees. Higher G&A was primarily due to employee option compensation and investor/public-relations and warrant expenses.
- Operating cash use was $1.197 million. Investing activities provided $1.850 million, mainly from short-term investment maturities net of purchases; there were no financing proceeds in the quarter. The prior-year period included $6.061 million of financing proceeds, largely from an at-the-market stock offering.
- Shares outstanding increased from 30.051 million at October 31 to 30.132 million at January 31. Weighted-average shares for the quarter were 30.125 million, compared with 25.165 million a year earlier.
Programs, outlook and risks
- CAR-T: The FDA authorized a Phase 1 ovarian-cancer trial in August 2021. The company said it anticipated starting enrollment and treatment in calendar Q1 2022; the filing does not clearly confirm that the trial had started by the filing date. The planned study is 24–48 patients, with an estimated two-to-four-year duration.
- Breast cancer vaccine: A Phase 1 trial for patients with early-stage triple-negative breast cancer began dosing in October 2021. The filing estimated completion in calendar Q3 2022. The study is funded by a U.S. Department of Defense grant.
- Ovarian cancer vaccine: The NCI PREVENT program is supporting preclinical and IND-enabling work; the company said this work was expected to require no material company expenditure.
- COVID-19 antiviral: The company reported preclinical work and an in-vitro comparison suggesting its compounds may inhibit the viral main protease five times more effectively than nirmatrelvir. This is an early research finding, not evidence of clinical effectiveness; the program was still in drug-development work.
- Management believed cash, cash equivalents, short-term investments and expected cash flows would fund activities for at least 12 months from March 11, 2022. It cautioned that additional capital could be needed and may not be available on acceptable terms; equity or convertible-debt financing could dilute shareholders. The company does not expect near-term revenue from current therapy or vaccine programs.
- Risks include uncertain clinical and development outcomes, possible delays or disruptions at collaborators related to COVID-19, and the possibility that licensing programs may take years or never generate revenue. The company reported no material change in risk factors from its FY2021 Form 10-K and no material pending legal proceedings other than patent-enforcement matters.
- After quarter-end, on March 10, 2022, the compensation committee approved salary increases and cash bonuses for the CEO and COO/CFO and options for 500,000 shares each, vesting monthly over three years. The filing also notes bonuses approved and received in January 2022.
Important facts for investors to verify
- Whether the ovarian CAR-T Phase 1 trial actually began in calendar Q1 2022 and whether enrollment and treatment are proceeding on schedule.
- Clinical progress and safety findings for the breast vaccine trial, and progress toward clinical testing of the ovarian vaccine.
- Further validation, development plans and funding needs for the COVID-19 antiviral; the reported comparison is preclinical/in vitro.
- Cash burn and remaining liquidity relative to management’s 12-month funding assessment, including whether new financing or dilution becomes necessary.
- The impact of substantial non-cash stock compensation and post-quarter executive compensation awards on expenses and potential shareholder dilution.