Annovis Bio, Inc. — Q3 2021 Form 10-Q
Reporting period: Three and nine months ended September 30, 2021. Annovis is a clinical-stage biotechnology company developing ANVS401 for Alzheimer’s disease (AD), Parkinson’s disease (PD), and Down syndrome-associated AD. It has no product revenue and remains pre-profit.
Financial results
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Revenue | No product revenue | No product revenue | No product revenue | No product revenue |
| Research and development | $1.38 million | $0.72 million | $5.59 million | $1.64 million |
| General and administrative | $1.47 million | $0.88 million | $3.02 million | $3.09 million |
| Net loss | $2.85 million | $1.01 million | $8.57 million | $3.76 million |
| Loss per share, basic and diluted | $0.35 | $0.15 | $1.15 | $0.61 |
Margins are not meaningful because the company had no product revenue. Grant income was $36,754 for the first nine months of 2021, down from $952,602 a year earlier; the NIH grant for toxicology work had no funds remaining as of September 30.
- Cash and liquidity: Cash and cash equivalents were $47.46 million at September 30, 2021, versus $8.07 million at December 31, 2020. Current liabilities were $1.12 million; total liabilities were also $1.12 million.
- Cash flow: Net cash used in operations was $7.36 million for the first nine months, compared with $3.20 million in 2020. Financing provided $46.74 million, primarily from the May 2021 equity offering.
- Debt and equity: No debt was reported at period end. Convertible notes had converted to common stock in 2020. The May 2021 offering raised $50.0 million gross and approximately $46.65 million net. Shares outstanding were 8,100,570 at September 30.
Material changes and operating update
Year-to-date R&D expense rose by $3.95 million, mainly from clinical-trial spending and personnel costs, partly offset by lower toxicology costs. Q3 G&A expense increased by $0.59 million, while nine-month G&A decreased slightly, primarily reflecting lower share-based compensation. The higher year-to-date net loss and operating cash use reflect increased development spending and lower grant income.
The Phase 2a AD/PD Trial finished treating patients in August 2021; the filing provides no clear full-trial results. The company also described an ADCS study in 24 early-AD patients, with NIH funding the remaining trial costs other than study supplies. In July 2021, Annovis gave notice terminating a license agreement. Two securities class-action complaints filed after disclosure of interim AD/PD trial results were voluntarily dismissed without prejudice.
Outlook, risks, and contingencies
Management said available cash was expected to fund operations and capital requirements for at least 12 months. The filing also discusses funding a potential Phase 3 study, but states that additional capital will be needed for additional planned Phase 3 trials; there is no assurance financing will be available on acceptable terms. Management expects continued losses and higher 2021 R&D and G&A spending. Key risks include clinical and regulatory uncertainty, reliance on third parties, future financing needs, and potential COVID-19 effects on trials. The company reported no material pending legal proceedings and no off-balance-sheet arrangements.
Important facts for investors to verify
- Complete Phase 2a AD/PD results, interpretation, and implications for subsequent trials.
- Phase 3 scope, timing, cost, and whether the stated cash runway includes those plans.
- Actual cash burn and financing needs as clinical development progresses.
- Status and implications of the terminated license agreement and the dismissed lawsuits.
- Clinical, regulatory, and COVID-19-related risks affecting trial execution and timelines.