Phio Pharmaceuticals Corp. — Q2 2021 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2021. Financial statements are unaudited. Phio is a clinical-stage biotechnology company developing immuno-oncology therapeutics using its self-delivering RNAi INTASYL platform. The filing reports no revenue; it provides no gross-margin figures.
Financial overview
Amounts below are in millions of dollars except per-share data.
| Metric | Q2 2021 | Q2 2020 | Six months 2021 | Six months 2020 |
|---|---|---|---|---|
| Research and development expense | $1.663 | $0.779 | $4.284 | $1.997 |
| General and administrative expense | $1.021 | $0.890 | $2.038 | $2.028 |
| Total operating expenses / operating loss | $2.684 | $1.669 | $6.322 | $4.025 |
| Net loss | $2.687 | $1.672 | $6.094 | $4.023 |
| Basic and diluted loss per share | $0.20 | $0.34 | $0.50 | $1.19 |
- At June 30, cash was $29.425 million, versus $14.244 million at December 31, 2020; restricted cash was $0.050 million. Current assets were $31.155 million and current liabilities $2.578 million, giving working capital of $28.577 million.
- Six-month operating cash use was $6.288 million, compared with $4.208 million in 2020. Investing cash use was $0.021 million. Financing provided $21.490 million, primarily from equity offerings and warrant exercises; cash and restricted cash increased $15.181 million.
- Total liabilities were $2.812 million, including $0.354 million of lease liabilities. Long-term debt was zero; the $0.231 million PPP loan was forgiven in February 2021, producing a $0.233 million gain recognized in the first half.
- The company reported recurring operating losses and negative operating cash flows. Management said existing cash should fund operations for at least 12 months from the financial statements’ release date. No profitability or revenue guidance was provided.
Changes versus the prior comparable period
- Q2 operating expenses rose $1.015 million year over year; first-half expenses rose $2.297 million. R&D drove most of the increase, primarily due to manufacturing and required preclinical work supporting planned PH-762 trials. Management expects R&D spending to continue increasing as clinical work begins.
- First-half net loss increased $2.071 million, although the $0.233 million PPP forgiveness gain partially offset the higher operating loss.
- Common shares outstanding increased from 5,780,973 at December 31, 2020 to 13,534,389 at June 30, 2021. First-half financing included net proceeds of $12.669 million from a January private placement and $6.908 million from a February registered direct offering, plus $2.146 million from warrant exercises. The filing listed 6,567,303 outstanding warrants at June 30.
Outlook, risks and other notable items
- Phio expected to start a PH-762 adoptive-cell-therapy trial with AgonOx’s DP TIL technology in Q2 2022, and a PH-762 intratumoral trial for advanced melanoma in Q1 2022. Both timelines were subject to delays from limited availability of third-party services and supplies related to COVID-19.
- Management said pandemic-related supplier and service constraints had significantly affected operations in Q2 and delayed clinical-program timelines. Further disruption could slow preclinical and clinical activities; the future financial impact was not predictable.
- The company depends on external financing to sustain operations. It warned that additional debt, equity or other funding may not be available on acceptable terms, or at all; failure to obtain funding could force it to scale back or terminate operations or pursue a merger or acquisition.
- Phio described INTASYL and its product candidates’ potential based on preclinical and other data; these are development-stage claims, not established clinical efficacy. Risk factors were reported as unchanged from the 2020 Form 10-K. The company reported no material legal proceedings and said disclosure controls were effective at a reasonable-assurance level.
Important facts for investors to verify
- Whether the planned PH-762 trials began on the stated timelines and whether supply or service constraints caused further delays.
- Cash consumption, spending increases, and whether management’s stated 12-month runway remains supported by updated financing needs and operating plans.
- Potential dilution from outstanding warrants and future equity financing, including the terms and remaining availability of the Lincoln Park purchase agreement.
- Progress from clinical studies and the evidence supporting the company’s preclinical claims and collaboration plans.