Coya Therapeutics, Inc. — 2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a standalone fourth-quarter earnings release; the filing does not provide a clear Q4-only financial comparison. Filed March 29, 2023.
Business context
Coya is a clinical-stage biotechnology company developing treatments intended to enhance regulatory T-cell function in neurodegenerative, autoimmune, inflammatory and metabolic diseases. It had no approved products and no product-sales revenue. Its pipeline uses three approaches: Treg-enhancing biologics (COYA 301 and COYA 302), Treg-derived exosomes (COYA 201 and COYA 206), and autologous Treg cell therapy (COYA 101).
Financial results and liquidity
| Metric | FY 2022 | FY 2021 |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $4.41 million | $2.54 million |
| In-process research and development expense | $0.53 million | — |
| General and administrative expense | $4.85 million | $2.31 million |
| Total operating expenses / operating loss | $9.81 million | $4.87 million |
| Net loss | $12.24 million | $4.89 million |
| Cash used in operating activities | $7.24 million | $3.90 million |
Net loss per common share was $4.73 in 2022 versus $1.89 in 2021. The company reported no revenue, so a revenue margin is not meaningful. The increased net loss included a $2.50 million non-cash expense from the change in fair value of convertible notes. The $0.53 million in-process R&D expense related to the ARScience license.
At year-end, cash and cash equivalents were $5.93 million, current assets $7.18 million, current liabilities $3.82 million, total liabilities $16.79 million, and accumulated deficit $17.87 million. The $10.47 million principal amount of 2022 convertible notes was carried at a fair value of $12.97 million at year-end; the notes converted into common stock after the IPO closed in January 2023. Coya reported no conventional debt facility or committed additional financing.
Financing activities provided $9.36 million in 2022, mainly from the convertible notes. After year-end, the IPO and partial underwriter over-allotment generated approximately $14.54 million in net proceeds in total. Management expected year-end cash plus those proceeds to fund operations into the second quarter of 2024, subject to assumptions that may prove inaccurate. The auditor’s report and management both state that substantial doubt exists about the company’s ability to continue as a going concern.
Material changes and developments
- Net loss rose from $4.89 million to $12.24 million. R&D expense increased by $1.87 million, largely with greater clinical-trial activity and staffing; G&A increased by $2.54 million as the company expanded and prepared for public-company costs.
- The company began trading on Nasdaq on December 29, 2022. Its January 2023 IPO raised approximately $13.43 million net, and the January 25 over-allotment raised approximately $1.11 million net. The IPO also triggered conversion of Series A preferred stock and convertible notes.
- In March 2023, Coya entered an exclusive license and supply agreement with Dr. Reddy’s Laboratories for a proposed abatacept biosimilar used in COYA 302. The agreement includes a $350,000 upfront payment, potential milestones and single-digit royalties.
- The Houston Methodist sponsored research arrangement was being renegotiated after Coya gave notice of termination in September 2022; the company anticipated a reduced annual research budget, but reported that a finalized agreement was pending.
Pipeline outlook, commentary and risks
- COYA 301: Low-dose IL-2 biologic being developed for frontotemporal dementia. Coya was conducting CMC and IND-enabling toxicology work and expected an initial Phase 1 trial in 2023.
- COYA 302: Low-dose IL-2 combined with a fusion protein, intended for ALS and other conditions. The company expected to start a Phase 2 ALS trial in the second half of 2023. It also described academic open-label studies: three Alzheimer’s patients and four ALS patients. The four-patient ALS study reported no or minimal average functional decline through 48 weeks, but was very small and uncontrolled; the company said full biomarker evaluation was ongoing. These observations are preliminary and do not establish efficacy.
- COYA 101: Autologous Treg therapy completed Phase 1 and Phase 2a investigator-led studies in ALS. Coya’s goal was a Phase 2b trial, contingent on approximately $3 million in non-dilutive funding or a suitable partner; absent funding or a partner, development could be delayed or stopped. The Phase 2a double-blind portion enrolled only six patients, limiting meaningful efficacy analysis; reported open-label observations were also based on a small group.
- COYA 201: Treg exosome candidate remains preclinical. In a mouse lupus-nephritis dose-escalation study, six of 12 animals died at the highest dose administered twice weekly; the primary proteinuria endpoint was not met. Coya reported biological activity in an in-vitro liver model and was evaluating a mouse scleroderma study.
- COYA 206: Next-generation targeted exosome program using Carnegie Mellon technology; characterization and target validation were planned. The company had an option arrangement and disclosed that it had not exercised the option as of December 31, 2022.
Key risks include clinical and regulatory failure, limited cash and need for further capital, dilution, reliance on licensed intellectual property and third-party research and manufacturing, and a small workforce of six employees. The company has no commercial revenue, and all candidates require substantial further development. Its financial statements were audited with an unmodified opinion, but the auditor highlighted going-concern uncertainty. Management reported that a previously identified material weakness in internal controls had been remediated; its disclosure controls were considered effective at the reasonable-assurance level.
Most important facts for investors to verify
- Whether cash use, subsequent financing and development spending support the stated runway into Q2 2024, and what additional financing may be required.
- Current regulatory status and actual timing of COYA 301 and COYA 302 trials, including whether the anticipated 2023 milestones occurred.
- Full, independently assessable clinical data for COYA 302 and COYA 101, including study size, controls, endpoints, adverse events and statistical limitations.
- Follow-up on COYA 201’s high-dose animal toxicity, its unmet primary endpoint, and the resulting dose-selection and development plans.
- Terms, obligations and status of the Methodist, ARScience and Dr. Reddy’s agreements, including milestone, royalty, supply and sponsored-research costs.
- Post-IPO share count, outstanding warrants and options, and potential dilution; the filing reported 9,947,915 common shares outstanding as of March 16, 2023.