Business context and reporting period
This is Virios Therapeutics, Inc.’s unaudited Form 10-Q for the quarter ended March 31, 2022. The request identifies Dogwood Therapeutics, Inc., but the filing names Virios Therapeutics, Inc. as the registrant; verify the intended company and filing.
Virios is a pre-revenue, development-stage biotechnology company developing antiviral therapies for diseases associated with viral-triggered immune responses. Its lead candidate, IMC-1, is a fixed-dose combination of famciclovir and celecoxib for fibromyalgia.
Financial and operating highlights
| Metric | Q1 2022 | Q1 2021 or comparison |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $2.77 million | $1.71 million |
| General and administrative expense | $1.19 million | $1.35 million |
| Total operating expenses | $3.96 million | $3.06 million |
| Net loss | $3.96 million | $3.06 million |
| Basic and diluted loss per share | $0.48 | $0.37 |
| Net cash used in operating activities | $2.66 million | $5.11 million |
| Cash and cash equivalents | $11.35 million | $14.01 million at Dec. 31, 2021 |
| Total liabilities | $1.88 million | $1.28 million at Dec. 31, 2021 |
| Debt | None outstanding | None outstanding |
The company reported no product revenue and no income tax provision. It had no financing cash flows in Q1 2022. No operating margin is meaningful given the absence of revenue.
Changes versus the prior comparable period
- R&D expense increased by about $1.1 million, primarily due to a $1.4 million increase in clinical trial costs, partly offset by lower toxicology and drug development/manufacturing expenses.
- G&A expense declined by about $0.2 million, primarily due to lower legal and accounting fees.
- Net loss increased by about $0.9 million year over year, while operating cash use declined by about $2.5 million, partly reflecting changes in prepaid expenses and operating liabilities.
- Cash declined by $2.66 million from year-end 2021. Accrued expenses increased to $1.55 million from $0.92 million, including higher accrued clinical research costs.
Outlook, risks and unusual items
- The company completed enrollment of 425 women in its Phase 2b FORTRESS fibromyalgia trial and expected top-line results in September 2022. It estimated available cash would fund completion of FORTRESS and planning for a Phase 3 study.
- Chronic toxicology studies in two species were progressing as planned, with completion expected in Q3 2022.
- A February 2022 collaboration with the Bateman Horne Center will study IMC-2 for Long COVID symptoms. Recruitment was expected to begin in Q2 2022, with results expected in the first half of 2023.
- Management said additional capital would be needed within nine to twelve months. The company had no committed external funding sources and stated that substantial doubt existed about its ability to continue as a going concern twelve months from issuance of the financial statements.
- Risks include inability to raise capital on acceptable terms, clinical-trial timing and outcomes, reliance on third parties, possible pandemic-related disruption, and economic and capital-market volatility, including effects from the Russia-Ukraine conflict.
- The filing disclosed no material pending litigation, no off-balance-sheet arrangements, and no Q1 2022 equity or debt financing.
Important facts for investors to verify
- Confirm that Virios Therapeutics, Inc., rather than Dogwood Therapeutics, Inc., is the intended issuer and filing.
- Check subsequent disclosures for FORTRESS results, toxicology completion, and progress toward Phase 3.
- Verify the company’s financing plans and cash runway in subsequent filings, given the stated nine-to-twelve-month capital need and going-concern uncertainty.
- Assess whether the IMC-2 Long COVID study began on schedule and whether results were reported as expected.