Phio Pharmaceuticals Corp. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. This is an annual filing; it does not provide standalone fourth-quarter results. Unless noted, financial amounts below are in millions of dollars.
Business context
Phio is a clinical-stage biotechnology company developing cancer immunotherapies using its INTASYL self-delivering RNAi platform. Its lead candidate, PH-762, is being studied in U.S. Phase 1 trials; PH-894 remains preclinical, with its planned IND submission deferred as resources were prioritized for PH-762.
Financial performance and liquidity
| Metric | FY2023 | FY2022 |
|---|---|---|
| Commercial product revenue | None reported | None reported |
| Research and development expense | $6.332 | $7.012 |
| General and administrative expense | $4.366 | $4.450 |
| Total operating expenses | $10.824 | $11.462 |
| Operating loss | $(10.824) | $(11.462) |
| Net loss | $(10.826) | $(11.480) |
| Net loss per share | $(5.20) | $(10.10) |
| Operating cash used | $10.749 | $12.129 |
| Cash at year-end | $8.490 | $11.781 |
Revenue and profit margins are not meaningful for this development-stage business; the filing reports no commercial product revenue and continuing losses. Cash and cash equivalents were $8.490 million at year-end, against current liabilities of $1.634 million. Total liabilities were $1.634 million, primarily accounts payable, accrued expenses, and lease liabilities; no borrowing debt balance is reported. The company raised $7.452 million net through 2023 equity and warrant financings. It reported substantial doubt about its ability to continue as a going concern, stating that current resources may not fund operations for at least 12 months from the financial statements’ release.
Material changes versus FY2022
- Total operating expenses fell $0.638 million (about 6%); net loss narrowed $0.654 million (about 6%).
- R&D expense declined $0.680 million, mainly from completion of PH-894 IND-enabling studies and lower lab costs, partly offset by higher costs for the two U.S. PH-762 trials.
- Operating cash use declined $1.380 million, while year-end cash fell $3.291 million. Financing provided $7.413 million net cash, versus $0.026 million used in FY2022.
- Common shares outstanding increased from 1.139 million to 3.747 million during the year, reflecting financings and warrant exercises. The company completed a 1-for-12 reverse split in January 2023; per-share figures are adjusted for it.
Outlook, risks and unusual items
- Management redirected savings from a roughly 36% reduction in discovery-research headcount and the planned closure of its Marlborough facility toward the PH-762 skin-cancer trial. It planned to operate remotely with a small Worcester laboratory beginning in April 2024.
- The U.S. PH-762 Phase 1b dose-escalation trial targets up to 30 patients with cutaneous squamous cell carcinoma, melanoma, and Merkel cell carcinoma; the first patient was dosed in November 2023. An AgonOx-led PH-762-treated TIL Phase 1 trial dosed its first patient in August 2023. The filing provides no financial or timing guidance for trial results.
- Approximately $2.757 million of costs remained unincurred under the AgonOx co-development agreement at year-end. The company also disclosed $0.600 million in future annual license-fee commitments and $0.035 million in remaining payments on its existing lease.
- A $0.126 million impairment charge was recorded after the decision not to renew the Marlborough lease. The auditor issued an unmodified opinion but highlighted the going-concern uncertainty.
- On January 24, 2024, Nasdaq notified Phio that it did not meet the $1.00 minimum bid-price requirement; the stated deadline to regain compliance was July 22, 2024. Failure could lead to delisting.
- Key risks include the early and unproven status of the platform and candidates, clinical-trial and enrollment uncertainty, reliance on collaborators and contract manufacturers, and the need for additional financing, which could dilute shareholders. The company also reported a 2023 ownership change that substantially limited tax-loss and credit carryforwards.
Important facts for investors to verify
- Current cash runway, financing needs, and the assumptions behind management’s going-concern assessment.
- Enrollment, safety, and emerging efficacy data from both PH-762 trials, and the status and timing of the deferred PH-894 IND.
- Potential dilution from the outstanding warrants: 6.331 million at December 31, 2023, as well as subsequent share issuances and the fully diluted share count.
- Nasdaq bid-price compliance status and any subsequent listing notices or extensions.
- Actual costs and obligations under the AgonOx agreement, license commitments, and post-year-end laboratory arrangements.