Akari Therapeutics plc — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023; this is an annual filing, not a standalone fourth-quarter report. Akari is a clinical-stage biotechnology company with no approved products and no product-sale revenue. Its lead candidate, nomacopan, targets complement C5 and leukotriene B4 pathways.
Financial performance and position
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $5.45 million | $9.56 million |
| General and administrative expense | $11.36 million | $13.53 million |
| Operating loss | $16.81 million | $23.09 million |
| Net loss | $10.01 million | $17.75 million |
| Net cash used in operating activities | $16.43 million | $21.50 million |
| Cash at year-end | $3.85 million | $13.25 million |
Gross margin and operating margin are not meaningful because the company reported no product revenue. The lower net loss partly reflects a $6.60 million non-cash gain from remeasuring warrant liabilities; FY2022 included a similar $6.95 million gain and a $1.96 million warrant-related expense. Operating expenses fell 27%, including a 43% reduction in R&D. R&D changes included a $1.07 million credit for final close-out costs on the discontinued bullous pemphigoid program, while HSCT-TMA development spending increased.
At December 31, 2023, total liabilities were $4.58 million and shareholders’ equity was a deficit of $0.23 million. The balance sheet included a $1.25 million warrant liability. The company reported no long-term debt at year-end; it entered into $1.1 million of short-term insurance-premium financing in January 2024, payable through November 2024. It also disclosed approximately $3.5 million of non-cancellable manufacturing-related payments expected in the third quarter of 2024.
Liquidity, capital needs and going concern
The auditor’s report and management state that recurring losses, negative operating cash flows, a net capital deficiency and reliance on further financing raise substantial doubt about Akari’s ability to continue as a going concern. The company said year-end cash was insufficient for the following 12 months. As of the filing, it expected available cash, including proceeds from a March 2024 private placement, to fund operations only through April 2024. The March placement generated approximately $2.0 million gross and $1.7 million net. Akari says further financing is required; it may need to reduce or delay programs, seek partners, license or sell assets, or cease operations if funding is unavailable.
FY2023 financing activities provided $7.02 million, versus $25.29 million in FY2022. Akari raised funds through equity offerings and private placements, with potential further dilution from additional share issuance and warrants. It was not in compliance with Nasdaq’s $2.5 million shareholders’ equity requirement at year-end and said it expected a Nasdaq notice after filing. It had previously regained compliance with the minimum bid-price requirement following an ADS ratio change.
Programs, outlook and material developments
- Nomacopan for pediatric HSCT-TMA: The Phase 3 study’s dose-confirmation Part A had enrolled 10 patients across age cohorts. Management said it expected to decide in 2024, after FDA discussions and a combined-pipeline review, whether to initiate pivotal Part B and an adult HSCT-TMA study. The filing describes one patient case, but does not establish trial-level efficacy.
- PAS-nomacopan for geographic atrophy: Development remained preclinical. Akari selected a candidate in July 2023 and described a potential IND and Phase 1 program, subject to IND clearance. The company cited preclinical evidence, including an estimated 7.4-to-8.4-day half-life in the eye and a possible dosing interval of three months or longer; these are not established clinical outcomes.
- Proposed Peak Bio merger: Under the March 4, 2024 agreement, Peak Bio would become a wholly owned subsidiary, with Peak holders expected to receive ADSs representing approximately 50% of Akari’s outstanding ADSs, subject to net-cash adjustments and other terms. Closing was anticipated in late Q2 2024 but remained conditional, including on shareholder approvals, an effective Form S-4, Nasdaq listing authorization and a simultaneous PIPE yielding Akari at least $10 million net. Either party may terminate in specified circumstances, including if the merger is not completed by September 4, 2024. The merger would add Peak Bio programs, but management planned to reassess and prioritize the combined pipeline.
Orphan Drug and Fast Track designations and Rare Pediatric Disease designation for nomacopan are not marketing approvals and do not assure approval or a priority review voucher. The rare pediatric voucher program has statutory timing limits; the filing notes approval would need to occur by September 30, 2026 for potential eligibility under current law. Akari relies on third-party manufacturers and research organizations, has no commercial sales infrastructure and identifies financing, trial enrollment, clinical outcomes, manufacturing scale-up, intellectual-property protection and merger execution as significant risks. Management reported disclosure controls and internal control over financial reporting were effective as of December 31, 2023. No material legal proceedings were reported.
Most important facts for investors to verify
- Current cash, monthly cash burn and actual runway, including the effect of the March 2024 financing and subsequent obligations.
- Availability and terms of additional financing, including whether the merger-linked PIPE closes and whether it meets the stated net-proceeds condition.
- Nasdaq compliance status, particularly the shareholders’ equity requirement and any resulting listing actions.
- FDA feedback and Akari’s actual 2024 decisions and funding for pediatric Part B and adult HSCT-TMA development.
- Progress toward PAS-nomacopan IND clearance, and whether preclinical results translate into clinical safety and efficacy.
- Merger completion, final exchange-ratio and dilution effects, and the combined company’s program priorities and financing needs.
- Potential dilution from future equity issuance, warrants and the very large ordinary-share and award overhang; confirm share and ADS figures against the filing’s ratio-adjusted disclosures.