Annovis Bio, Inc. — Q2 2022 Form 10-Q
Business context and reporting period
For the quarter and six months ended June 30, 2022. Annovis is a clinical-stage biotechnology company developing buntanetap for Alzheimer’s disease, Parkinson’s disease and other neurodegenerative conditions. It reported no product revenue and has not achieved profitability.
Financial results and liquidity
| Metric | Three months ended June 30, 2022 | Three months ended June 30, 2021 | Six months ended June 30, 2022 | Six months ended June 30, 2021 |
|---|---|---|---|---|
| Research and development expense | $6.82 million | $1.82 million | $9.63 million | $4.21 million |
| General and administrative expense | $1.94 million | $0.71 million | $5.04 million | $1.55 million |
| Net loss | $8.72 million | $2.52 million | $14.61 million | $5.72 million |
| Loss per share, basic and diluted | $1.07 | $0.34 | $1.79 | $0.80 |
| Operating cash used | Not presented quarterly | Not presented quarterly | $9.72 million | $5.62 million |
At June 30, 2022, cash and cash equivalents were $35.97 million, down from $45.69 million at December 31, 2021. Total current liabilities were $1.30 million; the filing reports no debt. Total assets were $36.53 million and stockholders’ equity was $35.23 million. The company has no meaningful revenue-based operating margin.
Material changes versus the prior comparable period
- Quarterly operating expenses rose to $8.75 million from $2.53 million; six-month expenses rose to $14.67 million from $5.76 million.
- Management attributed higher R&D costs principally to clinical-trial activity and materials, including preparation for an early-Parkinson’s study. Six-month R&D stock-based compensation was $1.91 million, versus none in the prior-year period.
- Six-month G&A stock-based compensation increased to $3.43 million from $0.03 million. Total six-month stock-based compensation was $5.34 million, compared with $0.03 million a year earlier.
- Operating cash use increased by $4.10 million year over year. The prior-year period included about $46.67 million in net equity-offering proceeds; 2022 financing cash flow was only $4,613 from option exercises.
Outlook, risks and unusual items
- Management believed available cash would fund operations and capital requirements for the next 12 months, including a six-month Phase 3 trial in early Parkinson’s patients and a second, short-term early-Alzheimer’s study. It also said additional capital will be needed for operations and further clinical trials.
- The company has no committed external funding. Future equity, debt, collaboration or licensing financing may not be available on acceptable terms, or at all. Management expects operating losses, cash use, R&D spending and G&A expenses to increase.
- Key risks include clinical-trial execution and cost, regulatory approval, product commercialization, reliance on third parties, and the uncertainty of raising capital. The filing notes that COVID-19 could affect current or future trials, but the impact was uncertain.
- The company had no pending legal actions or material legal proceedings at the reporting date. Maximum aggregate executive severance payments under employment agreements were approximately $986,000. The NIH toxicology-study grant had no remaining funds as of June 30, 2022.
Important facts for investors to verify
- Whether the planned Parkinson’s and Alzheimer’s trials proceed on the expected timetable and within the cash runway assumed by management.
- How trial enrollment, clinical costs and materials spending affect cash use, and when additional financing may be required.
- Whether buntanetap’s clinical evidence supports further development and eventual regulatory approval; the filing’s discussion of earlier studies reflects company-reported results, not a guarantee of future outcomes.
- The scale and potential dilution of future equity financing, given the company’s stated lack of committed external funding.