Theriva Biologics, Inc. — FY 2023 Form 10-K
Reporting period: Year ended December 31, 2023; filed March 25, 2024. This is an annual report, not a standalone fourth-quarter earnings report. Theriva is a clinical-stage biopharmaceutical company with no approved products or product revenue. Following its 2022 acquisition of Theriva Biologics S.L., its primary focus is oncology, led by oncolytic virus candidate VCN-01; SYN-004 and SYN-020 remain GI-focused assets for which the company is exploring partnering or licensing options.
Financial results and liquidity
| Metric | FY 2023 / Dec. 31, 2023 | FY 2022 / Dec. 31, 2022 |
|---|---|---|
| Revenue | No product revenue | No product revenue |
| Research and development expense | $14.3 million | $11.7 million |
| General and administrative expense | $7.1 million | $9.9 million |
| Operating loss | $21.4 million | $21.6 million |
| Net loss | $18.3 million; $1.14 per share | $19.7 million; $1.31 per share |
| Net cash used in operating activities | $19.0 million | $19.1 million |
| Cash and cash equivalents | $23.2 million | $41.8 million |
| Current assets / current liabilities | $27.4 million / $6.7 million | $45.5 million / $7.1 million |
| Total liabilities | $15.5 million | $17.3 million |
| Loans payable | $0.2 million | $0.3 million |
Operating expenses totaled $21.4 million in 2023, compared with $21.6 million in 2022. R&D increased 22%, primarily due to VCN-01’s VIRAGE pancreatic cancer trial; G&A decreased 28%, largely reflecting lower contingent-consideration remeasurement expense and lower personnel, investor-relations and other costs. Interest income rose to $1.4 million from $0.5 million. The 2022 loss attributable to common stockholders also included a $0.3 million deemed dividend related to preferred stock adjustments. Profit margins are not meaningful because the company had no product revenue.
Cash, cash equivalents and restricted cash declined by $18.6 million during 2023. Financing cash flow included approximately $2.2 million of net ATM proceeds from sales of about 2.0 million common shares. At year-end, the company had $6.3 million of non-current contingent consideration and $1.9 million of operating lease liabilities. Stockholders’ equity was $37.0 million, down from $51.8 million.
Material changes and business developments
- VCN-01 became the principal development priority. R&D expense directly attributable to VCN-01 rose to $8.2 million from $4.3 million in 2022.
- The randomized Phase 2b VIRAGE trial is evaluating VCN-01 with gemcitabine/nab-paclitaxel as first-line treatment for metastatic pancreatic cancer. The company reported that 14 patients had received a second VCN-01 dose; the February 2024 independent monitoring committee recommended continuing enrollment without protocol changes and reported no safety concerns. Management said enrollment remained on track for completion in the first half of 2024.
- VCN-01 has also been studied in early-stage trials for retinoblastoma, head and neck cancer, and other solid tumors. In the retinoblastoma Phase 1 study, nine patients had been treated; follow-up was expected to continue into Q1 2024.
- The company reported no impairment of acquired goodwill or in-process R&D, despite a sustained decline in its share price triggering impairment reviews.
Outlook, risks and unusual items
- Going concern and funding: The auditor’s report includes a going-concern explanatory paragraph, citing recurring losses and negative operating cash flows that raise substantial doubt about the company’s ability to continue without additional capital. Management estimated that cash of $19.0 million in early March 2024 could fund operations through Q4 2024 and into Q1 2025, but stated it would not cover 12 months from the filing date. The company has no committed financing; later-stage trials require substantial financing or a partner. Failure to raise funds could delay, reduce or end development programs.
- Spending outlook: Management expects R&D expense to increase as it continues VIRAGE enrollment, advances retinoblastoma work, expands VCN-01 manufacturing, and supports VCN-11 and discovery programs. No financial earnings or revenue guidance is provided.
- Development risk: All candidates remain investigational and require further clinical development and regulatory review. Trial outcomes, patient enrollment, manufacturing supply and regulatory decisions are uncertain. The company relies on third-party manufacturers and service providers.
- Historical safety event: In an earlier intratumoral VCN-01 pancreatic cancer study, one patient died following a severe intra-abdominal fluid collection considered treatment-related. The filing also reports that the VIRAGE monitoring committee identified no safety concerns in its review as of February 2024.
- Controls: Management concluded that disclosure controls and internal control over financial reporting were ineffective at December 31, 2023. Reported material weaknesses involved review controls for certain financial statement areas and complex transactions, IT access and change-management controls, segregation of duties, and validation of data used in controls. Remediation was ongoing and had not yet been demonstrated effective.
- Potential dilution: The company issued about 2.0 million shares through its ATM in 2023. Series C and D preferred stock remained outstanding at year-end and was convertible into approximately 2.46 million common shares, subject to terms and limitations. Outstanding options and shares reserved for future equity awards add further potential dilution.
Most important facts for investors to verify
- Available cash, actual cash burn and financing needs, including whether the stated runway changes after the filing date.
- VIRAGE enrollment progress, timing and results, as well as whether additional VCN-01 doses remain tolerable in larger patient groups.
- Whether planned partnering or licensing for SYN-004 and SYN-020 produces funding or changes development plans.
- The status and effectiveness of remediation for the disclosed material weaknesses in financial reporting controls.
- Potential share dilution from ATM sales, convertible preferred stock, options and other equity awards.