NeuroSense Therapeutics Ltd. — FY2022 Form 20-F
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a standalone fourth-quarter filing. Financial statements are prepared under IFRS as issued by the IASB and reported in U.S. dollars.
Business context
NeuroSense is a clinical-stage biotechnology company with no approved products and no revenue to date. Its lead candidate, PrimeC, is an extended-release combination of ciprofloxacin and celecoxib being developed for ALS. The company also has preclinical programs targeting Alzheimer’s disease and Parkinson’s disease.
Financial performance and liquidity
| Metric (US$ millions, except per-share data) | 2022 | 2021 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | 6.416 | 3.082 |
| General and administrative expense | 7.136 | 2.505 |
| Operating loss | (13.552) | (5.587) |
| Net loss | (12.340) | (4.041) |
| Basic and diluted loss per share | (1.07) | (0.65) |
| Net cash used in operating activities | (7.586) | (1.539) |
- Cash and cash equivalents were $3.543 million and short-term deposits were $3.547 million at year-end, together approximately $7.09 million.
- Working capital was $5.6 million; accumulated deficit was $20.786 million. Total assets were $7.710 million, total liabilities $2.091 million, and shareholders’ equity $5.619 million.
- Cash used in investing activities was $3.541 million, principally reflecting investment in short-term deposits. Financing provided $3.695 million, including $3.870 million from warrant exercises. Cash and cash equivalents fell by $7.520 million during the year.
- No material conventional borrowings were reported. Liabilities included $211,000 of lease obligations and $218,000 of warrant liability at year-end. The filing does not present meaningful operating margins because the company had no revenue.
Changes versus 2021
- Net loss more than tripled, increasing by $8.299 million. Operating loss widened by $7.965 million.
- R&D expense rose 108%, mainly from clinical-program subcontractor and consultant costs and increased staffing. G&A expense rose 185%, including higher share-based compensation, public-company insurance, salaries, and professional fees.
- Operating cash use increased by $6.047 million. Financing cash inflow declined from $11.902 million in 2021, when the IPO generated substantial proceeds, to $3.695 million in 2022.
- Financing income was $1.257 million versus $2.732 million, largely reflecting lower warrant revaluation gains; 2021 also included significant IPO issuance costs.
Outlook, management commentary, and risks
- Going concern and funding: The auditor’s report is unmodified but highlights substantial doubt about the company’s ability to continue as a going concern. Management said year-end resources would not fund operations for at least 12 months from approval of the financial statements, dated March 20, 2023, assuming the planned development program continues. Additional financing is required; no committed external funding source was identified. If financing is unavailable, the company may cut costs, delay or reduce programs, or cease operations.
- PrimeC development: The Phase IIb PARADIGM trial planned to enroll 69 ALS patients; more than half had been enrolled at the time of the report. Interim results were expected in the second half of 2023. Management intended to discuss pivotal-trial design with the FDA in 2023 and said a pivotal trial could begin as early as 2024, subject to FDA agreement and trial results. Enrollment delays related to regulatory backlogs following COVID-19 had shifted the expected interim-results timing.
- Evidence and regulatory uncertainty: The completed Phase IIa study involved 15 patients and met its safety and tolerability endpoint. Clinical comparisons with virtual or historical controls were not statistically significant; biomarker findings are preliminary and do not establish efficacy. PrimeC has FDA and EMA orphan-drug designation, but no product candidate has marketing approval.
- Other programs and studies: The company reported positive 2022 pharmacokinetic and rat toxicology results for PrimeC. Alzheimer’s and Parkinson’s candidates remain preclinical; an early Alzheimer’s clinical study outside the U.S. was planned for 2023.
- Principal risks: Dependence on PrimeC, uncertain clinical and regulatory outcomes, financing and dilution risk, reliance on third-party manufacturers and CROs, intellectual-property challenges, competition, and exposure to Israeli political/security conditions and NIS exchange-rate movements. The company said it did not hedge foreign-currency risk.
- Other items: No material legal proceedings or off-balance-sheet arrangements were reported. Management assessed disclosure controls and internal control over financial reporting as effective; the auditor did not attest to internal controls because of the company’s emerging-growth-company status.
Important facts for investors to verify
- Current cash, deposits, burn rate, financing plans, and whether funding covers operations and planned clinical trials.
- PARADIGM enrollment, interim results, safety findings, and whether FDA discussions establish a feasible pivotal-trial design and timeline.
- Whether PrimeC’s biomarker signals translate into statistically persuasive clinical benefit in controlled studies.
- Potential dilution from future equity or convertible financing, outstanding warrants, and share-based compensation.
- Supply readiness, manufacturing costs, patent scope and enforceability, and any material changes in the company’s Israeli operating environment.