AIM ImmunoTech Inc. — Q3 2021 Form 10-Q
Reporting period: Three and nine months ended September 30, 2021. Unless otherwise indicated, financial figures are in millions of dollars. AIM is a clinical-stage immunopharma company focused primarily on Ampligen; the company reported minimal revenue and continued operating losses.
Financial results and liquidity
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Revenue | $0.033 | $0.036 | $0.085 | $0.121 |
| Operating loss | $(3.929) | $(3.355) | $(11.393) | $(10.002) |
| Net loss | $(3.826) | $(3.306) | $(13.281) | $(10.466) |
| Loss per share, basic and diluted | $(0.08) | $(0.08) | $(0.28) | $(0.36) |
| Research and development expense | $2.006 | $1.102 | $4.749 | $3.445 |
| General and administrative expense | $1.799 | $2.085 | $6.055 | $6.070 |
- Q3 net loss increased $0.520 million year over year, mainly reflecting higher R&D expense. Nine-month net loss rose $2.815 million, primarily due to a $2.701 million loss on extinguishment of the facility financing obligation and increased R&D expense.
- Cash used in operating activities was $8.220 million for the nine months, versus $7.514 million in 2020. Cash and cash equivalents were $37.349 million at September 30; cash, cash equivalents and marketable securities totaled $53.659 million, down from $54.378 million at December 31, 2020.
- Cash provided by financing activities was $8.063 million, including $12.917 million net proceeds from common-stock sales, partly offset by $4.732 million paid to repurchase the New Brunswick facility. The company issued 5.679 million net shares during the nine-month period; shares outstanding rose from 42.154 million to 47.849 million.
- Total assets were $63.080 million and stockholders’ equity was $62.047 million at September 30. The sale-leaseback financing obligation and current portion were eliminated following the property repurchase. Remaining reported liabilities included $0.144 million of operating lease liabilities and $0.158 million of redeemable warrants.
- Production costs exceeded the very small reported revenue in both periods; the filing does not present a meaningful operating margin. Cash and marketable securities are the company’s principal liquidity resources.
Business developments, outlook and risks
- Programs and regulatory status: Ampligen is not FDA-approved or marketed in the United States; it is approved in Argentina for severe chronic fatigue syndrome, but commercial distribution remained subject to final ANMAT inspection and release testing. Alferon N Injection is FDA-approved for a U.S. indication, but was not being manufactured, and renewed commercial sales require manufacturing and release steps.
- Clinical programs: In October 2021, after quarter-end, AIM and its CRO submitted an IND and Fast Track application to the FDA for a planned Phase 2 pancreatic cancer study. The planned study was described as approximately 250 subjects. A Phase 1 intranasal Ampligen study in 40 healthy volunteers reported no serious or severe adverse events, according to the filing. A proposed hVIVO human challenge study had ethics committee approval, while the UK regulator requested additional information; the company intended to resubmit.
- Funding outlook: Management stated that available funds were expected to cover anticipated operating needs and current clinical trials for approximately 24 months from issuance of the financial statements. It also said there were no material operating revenues expected in the near term and that additional funding could be needed. Further equity financing could materially dilute existing shareholders. No formal revenue or earnings guidance was provided.
- Key uncertainties: Product efficacy and safety remain unproven for investigational uses; clinical trials may be delayed, unsuccessful, or require further funding. Regulatory approvals, manufacturing validation and capacity, the delayed Argentina launch, reliance on partners and vendors, and the ability to obtain development partners or financing are material risks. The company also cited possible COVID-19-related disruption to trials and commercialization.
- Unusual and other items: The facility repurchase produced the $2.701 million extinguishment loss. AIM disclosed an immaterial revision to previously reported income-tax footnote information concerning approximately $37.9 million of federal NOL carryforwards; it said the adjustment did not affect previously reported financial statements. Management reported disclosure controls were effective and no material change in internal controls. No new legal proceedings were reported for the quarter.
Important facts for investors to verify
- Whether the FDA accepts the pancreatic cancer IND and grants Fast Track status, and the timing, funding and enrollment plan for the proposed trial.
- Whether ANMAT completes final inspection and release testing for Ampligen in Argentina, and whether commercial sales begin.
- Updated trial results, regulatory feedback and safety data for Ampligen’s cancer, antiviral, ME/CFS and post-COVID programs.
- Actual cash burn and remaining runway, including the approximately $3.398 million hVIVO agreement balance and other clinical commitments.
- Future financing needs and the impact of additional share issuance or other potentially dilutive securities.
- Plans and required regulatory steps to resume Alferon manufacturing and commercial sales.