Filing summary
Entity and period: The supplied filing is DelMar Pharmaceuticals, Inc.’s unaudited Form 10-Q for the quarter and six months ended December 31, 2018 (fiscal Q2 2019), not a filing identified as Tuhura Biosciences, Inc. Investors should verify the issuer and filing before relying on this summary.
Business context and reporting period
DelMar is a clinical-stage cancer drug developer focused on VAL-083, including Phase 2 studies in glioblastoma (GBM). The company reported no revenue to date. Financial statements are in U.S. dollars and prepared under U.S. GAAP.
Key financial metrics
| Metric | Three months ended Dec. 31, 2018 | Six months ended Dec. 31, 2018 |
|---|---|---|
| Revenue | None reported | None reported |
| Research and development expense | $947,249 | $1,966,369 |
| General and administrative expense | $874,884 | $1,861,354 |
| Net loss | $1,809,697 | $3,801,501 |
| Loss per share, basic | $0.08 | $0.16 |
| Cash used in operations | Not separately stated for the quarter | $3,049,876 |
At December 31, 2018, cash and cash equivalents were $3,702,902; working capital was $2,751,675; total assets were $4,037,552; current liabilities were $1,268,212; and stockholders’ equity was $2,769,264. The filing reports no borrowings or conventional debt balance. Accumulated deficit was $56,299,291.
Material changes versus comparable periods
- Six-month net loss improved to $3.80 million from $5.83 million a year earlier; operating cash use fell to $3.05 million from $4.51 million.
- Six-month R&D expense declined 52% to $1.97 million, mainly reflecting the parking of the STAR-3 Phase 3 study, lower clinical and manufacturing activity, personnel and preclinical costs, and lower share-based compensation.
- Six-month G&A expense increased 6% to $1.86 million, principally due to higher noncash share-based compensation, including performance stock units. Excluding share-based compensation, G&A declined to $1.51 million from $1.59 million.
- Cash fell by $2.27 million from June 30, 2018. Financing provided $780,783 in the six-month period, including $784,961 net proceeds from warrant exercises, compared with $8.95 million of net offering proceeds in the prior-year period.
Outlook, risks, contingencies, and unusual items
- Going concern: Management stated that substantial doubt exists about the company’s ability to continue as a going concern. Additional funding is needed for trials, R&D, and operations; management was pursuing equity financing and/or strategic partnerships, with no assurance of success. Programs may be tailored to available funding.
- Clinical progress: As of January 31, 2019, 46 of up to 48 patients were enrolled in the MD Anderson Phase 2 recurrent GBM study, and 14 of up to 30 in the China Phase 2 newly diagnosed GBM study. The company forecast full enrollment in the MD Anderson study in Q1 2019 and expected to provide China study updates during 2019; these are forward-looking statements, not results.
- Study and safety considerations: The MD Anderson protocol’s starting dose was reduced from 40 to 30 mg/m² and the screening platelet threshold raised from 100,000 to 125,000/µL. Myelosuppression, particularly thrombocytopenia, was identified as the main dose-limiting toxicity. The company was reassessing its ovarian cancer program and considering strategic options.
- Nasdaq: On February 4, 2019, the company received an extension through June 25, 2019 to regain the $1.00 minimum bid-price compliance, subject to meeting the requirement for at least ten consecutive business days by that date and maintaining other listing requirements. A reverse split might be needed; delisting could impair liquidity and financing access.
- Controls: Management concluded disclosure controls and procedures were not effective at period end because of a material weakness previously reported in the 2018 Form 10-K. No material changes in internal control were reported during the quarter.
- Capital structure: The company reduced the exercise price of certain investor warrants from $1.25 to $0.40 to induce exercises, receiving $726,481 net cash, and exchanged other warrants for common shares. These transactions and preferred-stock dividends contributed to dilution. At December 31, 2018, 9,403,525 warrants, 2,926,829 options, 1,200,000 performance stock units, and Series B preferred shares convertible into 2,102,792 common shares were outstanding.
- No legal proceedings were reported. The filing states there were no off-balance-sheet arrangements. Subsequent to quarter-end, 4,874 common shares were issued for services.
Important facts for investors to verify
- Confirm the issuer: the submitted metadata says Tuhura Biosciences, but the filing names DelMar Pharmaceuticals, Inc.
- Review the company’s available cash, ongoing burn rate, financing needs, and whether any subsequent financing or partnership was secured.
- Check actual clinical enrollment, safety findings, and outcomes against the filing’s forecasts and study descriptions.
- Verify Nasdaq compliance status and any reverse stock split or other listing developments after the filing date.
- Assess the reported material weakness, remediation progress, and potential dilution from outstanding warrants, options, preferred shares, and performance units.