Neuphoria Therapeutics Inc. annual report, Q4 FY2022

Filing and reporting period

The supplied filing is Bionomics Limited’s Form 20-F annual report for the fiscal year ended June 30, 2022, filed October 14, 2022—not a 2021 Q4 report. The filing identifies Bionomics Limited, not Neuphoria Therapeutics Inc. Financial statements are prepared under IFRS in Australian dollars (A$); U.S.-dollar translations use the filing’s stated June 30, 2022 exchange rate.

Business context

Bionomics is a clinical-stage biopharmaceutical company with no approved products or product-sales revenue. Its lead candidate, BNC210, is being developed for acute treatment of social anxiety disorder (SAD) and chronic treatment of post-traumatic stress disorder (PTSD). The company also has partnered and earlier-stage CNS programs and legacy oncology assets.

Financial performance and position

Revenue was licensing income from CTx; the company reported no product sales. Other income was predominantly Australian research and development incentives. The filing does not present a meaningful gross margin for this clinical-stage, pre-commercial business.

Current assets were A$41.810 million and current liabilities A$3.356 million at June 30, 2022. Total assets were A$65.310 million, total liabilities A$8.397 million and net assets A$56.913 million. Bank and equipment borrowings had been fully repaid in April 2021. Remaining lease liabilities were A$0.694 million; contingent consideration was A$2.699 million.

Investing activities provided A$0.622 million and financing activities provided A$26.996 million in FY2022. Financing included A$27.2 million net proceeds from share issuance, including the U.S. IPO and related offering; the IPO’s total net proceeds were approximately US$21.4 million. The company reported no dividends and no off-balance-sheet financing arrangements.

Material changes versus FY2021

• Net loss widened to A$21.759 million from A$8.697 million, chiefly as R&D expense rose 178% to A$15.999 million with the start of the ATTUNE PTSD and PREVAIL SAD trials.
• Operating cash use increased to A$21.755 million from A$7.539 million.
• Other income increased, primarily because recognized R&D incentives rose to A$5.792 million from A$0.928 million.
• Other gains and losses shifted from a A$4.273 million gain to a A$0.582 million loss, including a A$0.936 million increase in the fair value of contingent consideration.
• Administration and compliance expenses rose, including higher share-based compensation, U.S. public-company costs and insurance. Finance expense fell substantially after debt repayment.

Outlook, commentary and risks

Management said existing cash was expected, under its operating plan, to fund development activities through October 31, 2023; it cautioned that assumptions could prove wrong and additional financing would be needed beyond that point. The company expects continued losses and higher R&D costs and has no assurance of obtaining financing on acceptable terms.

• Clinical outlook: At the filing date, management expected PREVAIL topline results by year-end 2022 and ATTUNE results in mid-2023. These are forward-looking expectations, not reported outcomes.
• Prior trial result: The Phase 2 RESTORE PTSD trial using a liquid suspension formulation did not meet its primary endpoint. Management cited lower-than-expected exposure in the outpatient setting and developed a tablet formulation for subsequent trials.
• Safety: Across completed BNC210 trials, commonly reported adverse events included headache, somnolence and nausea, mostly mild. The filing describes two serious adverse events considered possibly or probably related by investigators, including hypotension and elevated liver function tests.
• Funding and incentives: The company depends on capital raising, collaborations and Australian R&D incentives. Eligibility or changes to the incentive program, and availability of future financing, could affect liquidity.
• Execution risks: Clinical failure or delay, regulatory uncertainty, reliance on third-party trial operators and manufacturers, supply constraints, competition, and intellectual-property risks could delay or prevent development or commercialization. COVID-19 had not materially affected operations to the reporting date, but trial screening and enrollment had been postponed in some instances.
• Partnerships and contingent items: Merck controls development of its partnered alpha-7 PAM programs; milestone and royalty receipts are uncertain. Carina Biotech may owe future milestones and royalties, but no Carina payments had been made by the reporting date. A low-single-digit royalty to Ironwood would be due on BNC210 net sales if commercialized.

The financial statements received an unqualified audit opinion under IFRS. Management concluded disclosure controls were effective as of June 30, 2022; the report did not include management’s assessment or auditor attestation on internal control over financial reporting, citing the applicable transition period.

Most important facts for investors to verify

• Confirm that this Bionomics FY2022 filing is the intended company and period, given the request metadata naming Neuphoria Therapeutics and 2021 Q4.
• Check subsequent PREVAIL and ATTUNE trial results, safety findings, timelines and any changes to development plans; the stated dates were expectations in the 2022 report.
• Assess cash burn against the A$33.565 million year-end cash balance and management’s October 31, 2023 runway estimate, including later financing and dilution.
• Verify receipt and continued eligibility of R&D incentive amounts. The report records A$6.720 million as receivable at year-end and says approximately A$2.085 million relating to FY2021 was received after year-end.
• Review potential dilution from outstanding options and warrants, and the ownership and governance influence of major shareholders, including Apeiron.
• Review the full audited financial statements and notes for assumptions behind goodwill impairment and contingent consideration valuations, and the terms of collaboration and royalty arrangements.