CNTN

Business Context and Reporting Period

Company: Tharimmune, Inc. (formerly Hillstream BioPharma, Inc.)
Filing Type: Form 10-Q (Unaudited)
Period Ended: June 30, 2024
Business Overview: Tharimmune is a clinical-stage biotechnology company developing therapeutic candidates for rare, inflammatory, and oncologic conditions. Key assets include TH104 (for chronic pruritis in Primary Biliary Cholangitis) and an immuno-oncology pipeline targeting HER2, HER3, and PD-1. The company is classified as a smaller reporting company and an emerging growth company.

Key Financial Metrics

Material Changes vs. Prior Period

• Operating Expenses: Total operating expenses for the six months ended June 30, 2024, decreased by approximately $0.36 million (7%) compared to the same period in 2023. This was driven by a decrease in pre-clinical vendor expenses, partially offset by increased clinical trial costs for TH104 and licensing fees.
• Interest Income: Interest income increased significantly by $83,061 (125%) for the six-month period, primarily due to higher cash balances resulting from the November 2023 public offering and the June 2024 PIPE offering.
• Capital Structure: The company effectuated a 1-for-15 reverse stock split on May 24, 2024. All share and per-share data in the filing have been retroactively adjusted to reflect this split.
• Financing Activity: In June 2024, the company closed a Private Investment in Public Equity (PIPE) offering, raising approximately $1.8 million in net proceeds.

Guidance, Outlook, and Risks

Management Commentary and Outlook

• Clinical Progress: On June 10, 2024, the company reported positive Phase 1 results for TH104, demonstrating a 45.9% absolute bioavailability and a safety profile comparable to intravenous nalmefene. On June 17, 2024, the FDA provided positive feedback for a Phase 2 trial design, with initiation anticipated in late 2024.
• Pipeline Strategy: The company is advancing TH3215 (HER2/HER3 bispecific) and TH1940 (PD-1 Picobody) toward IND-enabling studies. It has deprioritized the preclinical candidate HSB-1216.
• Liquidity and Going Concern: Management has concluded that prevailing conditions raise substantial doubt about the company's ability to continue as a going concern for at least one year following the issuance date. The company requires substantial additional funding to support operations and clinical trials.

Risks and Contingencies

• Capital Needs: Failure to obtain sufficient additional funding could result in delays or termination of clinical trials.
• Regulatory Risk: No assurance exists that product candidates will receive necessary regulatory approvals or achieve market acceptance.
• License Agreements: The company has entered into significant license agreements (Avior, ABSI, Enkefalos) involving substantial milestone payments (up to $24.25 million for Avior) and royalties, which represent future contingent liabilities.

Investor Verification Checklist

• Cash Runway: Verify the current cash burn rate against the $7.9 million cash balance to estimate the runway before additional financing is required.
• Financing Terms: Review the terms of the June 2024 PIPE offering and the ATM agreement to understand potential dilution and future capital raising capacity.
• Clinical Milestones: Monitor the timeline for the initiation of the TH104 Phase 2 trial and the associated costs.
• License Obligations: Assess the impact of upcoming milestone payments under the Avior and Enkefalos agreements on future cash flow.
• Reverse Split Impact: Confirm the trading volume and liquidity of the stock following the 1-for-15 reverse stock split.