Tuhura Biosciences, Inc. quarterly report, Q3 FY2020

Filing identity and reporting period

Important discrepancy: The request identifies Tuhura Biosciences, Inc. and 2019 Q3, but the supplied filing is DelMar Pharmaceuticals, Inc.’s Form 10-Q for the quarter and nine months ended March 31, 2020 (fiscal 2020 Q3). This summary reflects the supplied filing, not the company or period in the request. Financial amounts are in U.S. dollars.

Business context

DelMar is a clinical-stage drug-development company with no revenue to date. Its lead candidate, VAL-083, is being studied in Phase 2 trials for MGMT-unmethylated glioblastoma (GBM), including studies at MD Anderson Cancer Center and Sun Yat-sen University Cancer Center. The statements are unaudited interim statements.

Financial performance and liquidity

• Quarterly net loss increased about 18% year over year; nine-month net loss decreased about 3%. Quarterly operating expenses rose about 18%; nine-month operating expenses fell about 2%.
• At March 31, 2020, cash and cash equivalents were $4,973,378, working capital was $3,716,827, total assets were $5,102,241, total liabilities were $1,381,755, and stockholders’ equity was $3,720,486. Cash was $3,718,758 at June 30, 2019.
• Operating cash use increased about 18% year over year. Financing provided $6,603,249, primarily from an August 2019 public offering that generated $6,582,966 net proceeds; cash increased by $1,254,620 over the nine months.
• The balance sheet lists accounts payable, accrued liabilities and related-party payables, but no borrowings or debt line. No gross margin is available because the company has no revenue.
• Common shares issued were 11,427,132 at March 31, 2020 and 11,429,228 at May 12. At March 31, 10,209,456 warrants were outstanding; Series B preferred stock was convertible into 162,177 common shares. These securities represent potential dilution.

Material changes, outlook and risks

• Management reported cash sufficient for planned operations into the fourth quarter of calendar 2020, but stated that additional funding would be needed. It is pursuing equity financing and/or strategic partnerships; success is not assured, and the filing states that substantial doubt exists about the company’s ability to continue as a going concern.
• COVID-19 had not significantly disrupted the trials as of the filing, and patient visits and treatments were reported to be proceeding per protocol. However, site-monitoring access was limited, and future effects on trial operations and access to capital were uncertain.
• Management reported enrollment completion at SYSUCC (29 patients). As of May 5, 2020, MD Anderson had enrolled 72 of 83 planned recurrent-arm patients and 22 of 24 planned adjuvant-arm patients. These are post-quarter updates disclosed in the filing.
• Company-reported interim results included median progression-free survival of 9.9 months in 22 evaluable newly diagnosed patients and median overall survival of 7.5 months in 60 evaluable recurrent patients. The filing cautions these are not head-to-head comparisons with historical treatment results. Myelosuppression, particularly thrombocytopenia, is a key safety risk.
• The ovarian-cancer IND was inactivated while the company reassessed the program and potential study designs. Other tumor indications are potential future opportunities, subject to resources.
• Nasdaq extended the deadline to regain the $1.00 minimum bid-price compliance until December 7, 2020; failure to comply with bid-price or other listing requirements could result in delisting and impair access to capital.
• Disclosure controls and procedures were concluded to be ineffective due to a material weakness previously reported in the 2019 Form 10-K. The company reported no legal proceedings and no off-balance-sheet arrangements.

Key facts investors should verify

1. Confirm the intended issuer and period: the supplied filing is DelMar Pharmaceuticals, Inc., quarter ended March 31, 2020—not Tuhura Biosciences, Inc. or 2019 Q3.
2. Assess financing needs, cash runway, and whether equity or partnership funding was obtained after the filing; financing could dilute shareholders or fail to materialize.
3. Check subsequent clinical-trial enrollment, efficacy and safety updates, and whether interim results are supported by completed analyses and appropriate comparators.
4. Review the warrant and option overhang, preferred-stock rights and potential dilution, including stock options subject to stockholder approval.
5. Confirm Nasdaq listing compliance status and remediation of the disclosed material weakness in internal controls.