Imunon, Inc. quarterly report, Q1 FY2022

Business context and reporting period

Imunon, Inc. filed this Form 10-Q under its then-registered name, Celsion Corporation (Nasdaq: CLSN), for the quarter ended March 31, 2022. The clinical-stage biotechnology company reported development programs including GEN-1 for ovarian cancer, PLACCINE vaccine technology and ThermoDox.

Key financial results and liquidity

The larger Q1 2022 net loss primarily reflected $4.55 million of preferred-stock-related interest expense. R&D expense rose 20%, with higher GEN-1 and PLACCINE development costs; G&A was approximately flat. Loss per share is not directly comparable without considering the different weighted-average share counts (5.77 million versus 1.72 million) and the 15-for-1 reverse split.

At March 31, cash, short-term investments, accrued interest and restricted cash totaled $47.3 million, including $6.0 million restricted as collateral. Working capital was $37.3 million. Notes payable had a $5.9 million carrying value; the SVB facility requires the restricted-cash collateral and has variable-rate interest. Total liabilities were $18.1 million.

Material changes and notable items

• Operating expenses increased $0.46 million year over year, while operating loss increased $0.46 million. Net loss increased $4.79 million, driven chiefly by the preferred-stock expense.
• Operating cash use increased by $3.24 million year over year. Investing activities provided $16.75 million, mainly from investment-security maturities and sales; financing cash flow was zero overall, notwithstanding the preferred-stock issuance and subsequent redemption.
• The company issued $28.5 million gross through Series A and B preferred offerings in January, then redeemed all preferred shares for cash on March 3 at 105% of stated value. The company recorded $4.55 million of related expense, including the redemption premium, placement fees and legal fees.
• A 15-for-1 reverse stock split took effect March 1, 2022, in part to address Nasdaq’s minimum-bid-price requirement. The filing reported a May 31, 2022 deadline to regain compliance.
• On April 8, 2022, after quarter-end, the company completed a common-stock offering of 1,328,274 shares for $7.0 million gross, before fees and expenses.

Outlook, clinical programs and risks

Management estimated that available resources, the April offering proceeds and approximately $3.5 million of planned future New Jersey NOL sales would fund operations into the second quarter of 2025. This is an estimate dependent on assumptions; the company stated it may need additional financing sooner or in greater amounts. It expects operating losses to continue and has not generated significant revenue.

• GEN-1: In February 2022, the OVATION 2 safety-monitoring board recommended continuing treatment at 100 mg/m² and reported satisfactory safety. As of May 15, 2022, enrollment was 85% of the planned 110 patients. No patient in the Phase II treatment arm had received all 17 protocol doses; implications were to be assessed alongside the primary progression-free-survival endpoint.
• PLACCINE: Management described encouraging preclinical findings and an ongoing non-human-primate SARS-CoV-2 challenge study, with results expected in Q2 and durability results in the second half of 2022. These are development-stage findings, not evidence of approved or established clinical efficacy.
• ThermoDox: The Phase III OPTIMA study was discontinued after a futility recommendation; the company said independent analyses did not justify further follow-up. Other investigator-sponsored studies were underway.
• Risks and contingencies: Key risks include clinical and regulatory uncertainty, patient enrollment, capital-raising and dilution risk, competition, and potential COVID-19-related disruption. The filing disclosed securities, derivative-shareholder and books-and-records litigation; the company intended to defend the matters and could not estimate a possible loss or range.

Most important facts for investors to verify

• Whether cash burn and actual financing needs remain consistent with management’s estimated runway into Q2 2025, including the timing and proceeds of planned NOL sales.
• OVATION 2 enrollment, treatment completion, safety and eventual primary-endpoint results; interim surgical outcomes do not establish trial success.
• Progress and results of the PLACCINE non-human-primate study and whether management’s anticipated reporting timelines were met.
• Nasdaq bid-price compliance following the reverse split and the effect of subsequent equity issuance on share count and dilution.
• Developments in the disclosed lawsuits and any change in the company’s ability to estimate potential exposure.