BioVie Inc. — Form 10-Q Summary
Reporting period: Fiscal third quarter and nine months ended March 31, 2024; filed May 14, 2024. The filing is for 2024 Q3, notwithstanding the request metadata stating 2023 Q3. BioVie is a clinical-stage biopharmaceutical company with no revenue.
Financial results and liquidity
- Revenue and margins: No revenue was reported; management does not expect revenue in the foreseeable future. Operating and gross margins are not meaningful for this pre-revenue company.
- Three months ended March 31: Operating expenses were $7.73 million, down from $13.77 million a year earlier. Net loss was $8.07 million versus $15.04 million; net loss attributable to common stockholders was $8.95 million, including an $886,423 deemed dividend related to a warrant ratchet adjustment. Basic and diluted loss per share was $0.20 versus $0.43.
- Nine months ended March 31: Operating expenses were $27.39 million versus $34.10 million. Net loss was $27.18 million versus $41.14 million; net loss attributable to common stockholders was $28.07 million, including the same $886,423 deemed dividend. Basic and diluted loss per share was $0.70 versus $1.32.
- Cash flow: Nine-month cash used in operations was $23.94 million, compared with $28.97 million. Investing activities provided $14.53 million, principally from Treasury bill maturities. Financing activities provided $20.30 million, including net equity proceeds, partly offset by $7.50 million of debt repayment. Cash and cash equivalents increased $10.89 million to $30.35 million.
- Balance sheet at March 31: Current assets were $30.54 million and current liabilities $12.48 million, for working capital of approximately $18.1 million. Total assets were $31.77 million, total liabilities $12.85 million, and stockholders’ equity $18.93 million. Accumulated deficit was $329.29 million.
- Debt: The Avenue loan had $7.5 million of remaining principal, classified as current, with maturity on December 1, 2024. The loan bears interest at the greater of 7% plus prime or 10.75%; the filing reports an effective interest rate of 25%. The loan is secured by company assets, including intellectual property. The company repaid $7.5 million during the nine-month period.
Changes versus the prior comparable period
- Lower net losses reflected reduced R&D and selling, general and administrative expenses, lower interest expense, and favorable changes in the fair value of derivative liabilities. The nine-month derivative fair-value change was a $1.80 million gain, compared with a $4.15 million loss in the prior-year period.
- Nine-month R&D expense declined to $21.05 million from $25.00 million, mainly as prior clinical studies concluded or were paused; spending on new study planning, clinical staff, consultants, and manufacturing development partly offset the reduction.
- Nine-month SG&A declined to $6.17 million from $8.93 million, mainly due to lower director stock compensation and investor-relations expense.
- Common shares issued increased to 61.02 million from 36.45 million at June 30, 2023. The March 2024 offering raised approximately $21.0 million gross, with approximately $2.5 million in placement-agent fees and offering expenses; it included common shares, pre-funded warrants, and warrants.
Business, outlook, and material risks
- Bezisterim (NE3107): BioVie reported protocol deviations and suspected current Good Clinical Practice violations at 15 sites in its Phase 3 Alzheimer’s study. It excluded patients from those sites and referred them to the FDA’s Office of Scientific Investigations. The remaining study was underpowered for its primary endpoints. Descriptive results in the 57-patient per-protocol population appeared to suggest slower cognitive loss, but the company cautions that the results do not establish efficacy. It is considering discussions with FDA about continued enrollment under the protocol’s adaptive feature and/or a new Phase 3 study. A Phase 3 Parkinson’s study remains on hold pending funding.
- Long COVID: In April 2024, after the quarter end, the company announced a Department of Defense award of up to $13.1 million for a Phase 2b bezisterim trial. The award may provide up to two years of non-dilutive funding; BioVie anticipates trial commencement by early 2025.
- BIV201: The company is finalizing Phase 3 protocol plans for continuous-infusion terlipressin for cirrhosis-related ascites after receiving FDA guidance. The Phase 2 study had paused enrollment. BIV201 has FDA Fast Track and Orphan Drug designations; it is not approved for this indication.
- Going concern: Management estimates available cash will fund operations for the next nine months from March 31, 2024. It says runway could be extended by delaying research and clinical spending, but that would slow development. The company expects to seek equity, loans, or strategic financing; there is no assurance funding will be available. The filing states these conditions raise substantial doubt about the company’s ability to continue as a going concern.
- Litigation and execution risks: A shareholder class action alleges misstatements or omissions concerning the company, including the bezisterim trial. BioVie says it will defend the case; outcome and potential damages cannot be estimated, and no accrual was recorded. The company also highlights dependence on third-party clinical sites and CROs, clinical and regulatory uncertainty, financing needs, possible dilution, and cash held above federally insured limits. The litigation insurance has a $2 million deductible.
Important facts for investors to verify
- Whether the FDA investigation and site exclusions affect the reliability or regulatory usefulness of the Alzheimer’s trial data, and what FDA feedback or further trial plans follow.
- Whether the Department of Defense award is finalized on terms that fund the planned Long COVID trial, and whether the expected early-2025 start remains achievable.
- Cash burn, near-term financing requirements, and the remaining Avenue loan repayment obligations through its December 2024 maturity.
- Potential dilution from outstanding warrants, options, and restricted stock units; the filing lists 19.32 million warrants, 4.02 million options, and 0.54 million restricted stock units at March 31, 2024.
- Developments in the shareholder litigation, potential costs beyond the insurance deductible, and any resulting financial or operational impact.