BioVie Inc. — Form 10-Q Summary
Reporting period: Three months ended September 30, 2021 (the first quarter of fiscal 2022); filed November 10, 2021. BioVie is a clinical-stage biotechnology company and reported no revenue.
Financial performance and liquidity
| Metric | Quarter ended September 30, 2021 | Comparable 2020 quarter |
|---|---|---|
| Revenue | None | None |
| Operating expenses | $5.55 million | $0.39 million |
| Net income (loss) | $(5.54) million | $7.33 million |
| Net loss attributable to common stockholders | $(5.54) million | $(46.26) million |
| Basic and diluted loss per share | $(0.23) | $(7.75) |
| Net cash used in operations | $2.53 million | $1.08 million |
| Cash at quarter-end | $20.49 million | $13.20 million |
Research and development expense was $2.85 million, up from $0.10 million; selling, general and administrative expense was $2.64 million, up from $0.23 million. With no revenue, operating margins are not meaningful. The filing attributes higher expenses to neuroscience and BIV201 clinical development, expanded operations, and management compensation, including stock-based compensation.
Cash increased by $15.98 million during the quarter, principally from $18.51 million of net proceeds from common-stock issuance, partly offset by operating cash use. At September 30, working capital was approximately $19.3 million, total assets $21.98 million, total liabilities $1.74 million, and stockholders’ equity $20.23 million. The filing reports no revenue and does not identify material conventional borrowings; liabilities include accounts payable and accrued expenses and retention-bonus obligations.
Changes and notable items
- Compared with 2020, the quarter shifted from net income to a net loss. The prior-year result included an $8.28 million gain from the change in fair value of derivative liabilities and a $53.60 million related-party deemed dividend affecting the loss attributable to common stockholders. Interest expense declined from $559,000 to $1,000.
- Operating expenses increased by approximately $5.16 million. Management cited about $2.7 million more R&D expense and $2.4 million more selling, general and administrative expense. R&D included activity on NE3107 and BIV201; compensation and stock awards were significant expense drivers.
- August and September public-offering sales raised approximately $18.5 million net through issuance of about 2.6 million shares at $8 per share. Shares outstanding rose from 22.33 million at June 30 to 24.96 million at September 30.
- The company recorded $1.16 million of retention-bonus expense, payable in monthly installments over 24 months. Stock-option expense was $1.93 million and restricted-stock compensation was $287,000.
Programs, outlook and risks
- BIV201: The Phase 2b trial for refractory ascites was underway at nine U.S. centers. Top-line results were expected in mid-2022, with a proposed pivotal Phase 3 trial thereafter. BioVie also planned to initiate a Phase 3 HRS-AKI study in early 2022, subject to protocol revisions and FDA guidance.
- NE3107: The potentially pivotal Alzheimer’s Phase 3 trial began in August 2021, with top-line results targeted for late 2022. A Phase 2 Parkinson’s study was planned to start in early 2022. These are development expectations, not assurances of efficacy or approval.
- Funding and going concern: Management said the quarter-end cash balance might support operations for the next 12 months only if planned research spending were delayed and programs slowed; current planned operations were projected to use cash within that period. The filing states that substantial doubt exists about the company’s ability to continue as a going concern. Additional equity, debt, partnerships, licensing, or other strategic funding may be needed, with no assurance of availability.
- Dilution: The NeurMedix asset agreement may require up to 18 million additional shares upon specified milestones. Outstanding options, warrants and equity awards create further potential dilution.
- Patent and other risks: The patent board had revoked all claims of the company’s U.S. ‘945 Treatment of Ascites patent; the filing says this did not change the orphan-drug designations or affect a separate pending formulation patent application. Clinical, regulatory, financing, competition and COVID-19-related market risks remain. The company reported no material legal proceedings and no material off-balance-sheet arrangements.
Important facts for investors to verify
- Whether cash runway and financing needs have changed, given management’s warning that planned operations could deplete cash within 12 months.
- Enrollment, execution and timing of the BIV201 trials and NE3107 Alzheimer’s and Parkinson’s studies, including any updated FDA feedback.
- Potential share issuance under the NeurMedix milestones and the status of other options, warrants and awards.
- Clinical and intellectual-property developments, including the status of the pending terlipressin formulation patent application.