Phio Pharmaceuticals Corp. — FY2021 Form 10-K
Business context and reporting period. This annual report covers the fiscal year ended December 31, 2021. Phio is a clinical-stage immuno-oncology company developing INTASYL self-delivering RNAi therapeutics for adoptive cell therapy and direct treatment of the tumor microenvironment. It reported no commercial product revenue.
Financial performance and position
| Metric | FY2021 | FY2020 |
|---|---|---|
| Revenue | No commercial product revenue; reported revenue value is not clearly stated in the supplied filing text | Not clearly stated |
| Research and development expense | $8.886 million | $3.716 million |
| General and administrative expense | $4.625 million | $5.077 million |
| Total operating expenses / operating loss | $13.511 million / $(13.511) million | $8.793 million / $(8.793) million |
| Net loss | $(13.287) million | $(8.794) million |
| Net loss per share | $(1.04) | $(1.92) |
| Net cash used in operations | $(11.858) million | $(8.802) million |
| Cash and restricted cash at year-end | $24.107 million | $14.294 million |
| Total liabilities | $3.238 million | $2.722 million |
Cash provided by financing was $21.722 million, primarily reflecting equity offerings and warrant exercises. Investing activities used $0.051 million. The PPP loan was forgiven in February 2021, producing a $0.233 million gain on extinguishment of debt; no long-term debt remained at year-end. With no product sales, operating margins are not meaningful.
Material changes versus FY2020
- Operating expenses rose $4.718 million, or approximately 54%, as R&D expense increased $5.170 million, driven mainly by PH-762 and PH-894 manufacturing, preclinical work, and clinical-trial preparation. G&A expense declined $0.452 million.
- Net loss increased $4.493 million. Other income improved by $0.225 million, principally due to PPP loan forgiveness.
- Operating cash use increased $3.056 million. Year-end cash and restricted cash increased $9.813 million, supported by financing proceeds.
- Shares issued and outstanding increased from 5,780,973 to 13,534,996, largely reflecting 2021 equity offerings and warrant exercises.
Outlook, commentary, and risks
- Management stated that year-end cash was expected to fund planned operations for at least 12 months from the release of the financial statements. The company also cautioned that it expects recurring losses and negative operating cash flows and will need additional funding; financing may not be available on acceptable terms.
- In January 2022, Phio received French authorization for a first-in-human Phase 1b PH-762 melanoma study and expected enrollment to begin in Q1 2022. It expected an AgonOx collaboration trial using PH-762-treated DP TILs to start in Q2 2022, and PH-894 IND-enabling studies to be completed in H2 2022. These are forward-looking expectations, not reported outcomes.
- COVID-19-related supply and service constraints delayed clinical-program timelines. Other key risks include early-stage development and regulatory uncertainty, dependence on collaborators and contract manufacturers, competition, intellectual-property risks, and the need for substantial additional capital.
- Phio reported no material legal proceedings. The auditor issued an unqualified opinion on the financial statements and identified accounting for warrants from the January 2021 equity offering as a critical audit matter. Management concluded disclosure controls and internal control over financial reporting were effective.
Important facts for investors to verify
- Actual trial initiation, enrollment, safety, and efficacy updates for PH-762, including the AgonOx collaboration.
- Cash burn, current liquidity, and financing needs relative to management’s stated 12-month runway; assess potential dilution from future equity or warrant issuance.
- Whether COVID-19 or other manufacturing, supply, or clinical-site constraints further affect development timelines.
- Commercial and development rights, milestones, royalties, and funding obligations under collaboration and license agreements.
- Usability of tax-loss and tax-credit carryforwards: the company identified multiple ownership changes that impose substantial Section 382/383 limits.