PPBT

Business Context and Reporting Period

Company: Purple Biotech Ltd. (PPBT)
Filing Type: Annual Report on Form 20-F
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: Purple Biotech is a clinical-stage biotechnology company focused on oncology therapeutics. Its pipeline includes the CAPTN-3 platform (masked tri-specific antibodies IM1240 and IM1305), CM24 (a CEACAM1-blocking antibody), and NT219 (a dual IRS1/2 and STAT3 inhibitor). The company has no commercial revenue and relies on equity financing to fund operations.

Key Financial Metrics

Material Changes vs. Prior Period

• Significant Impairment Charge: The 2025 operating loss increased by 149% primarily due to a non-cash impairment loss of $20.5 million. This charge resulted from the write-off of in-process research and development (IPR&D) assets related to CM24 (acquired via FameWave) and NT219 (acquired via TyrNovo) following a reassessment of their future economic benefits.
• Reduced R&D Spend: Research and development expenses decreased by 53% (from $7.6 million to $3.7 million) due to the completion of the Phase 2 clinical study for CM24 in 2024, partially offset by increased Chemistry, Manufacturing, and Controls (CMC) activities for the CAPTN-3 platform.
• Financing Activity: The company raised approximately $6.0 million in gross proceeds in September 2025 via a public offering of ADSs and pre-funded warrants. In December 2024, it raised $2.8 million in a registered direct offering.
• ADS Ratio Change: Effective March 2, 2026, the company changed the ADS ratio from 1:200 to 1:2,000 ordinary shares per ADS (a 1:10 reverse split effect) to regain compliance with NASDAQ minimum bid price requirements.

Guidance, Outlook, and Risks

• Liquidity Outlook: Management believes current cash and short-term investments (~$9.6 million) are sufficient to fund operations for at least the next 12 months. However, the company expects to incur significant additional losses and will need to raise substantial additional capital to advance its therapeutic candidates.
• Development Milestones:
  • IM1240: Advancing toward the clinic; the company expects to submit an IND application to the FDA in 2026.
  • CM24: Phase 2 study completed with positive final data reported in December 2024. Further development is pending partnering or investment.
  • NT219: An investigator-initiated Phase 2 study was initiated in June 2025.
• Management Transition: CEO Gil Efron announced his intention to step down in August 2026 due to health considerations. A search for a new CEO has been initiated.
• Key Risks:
  • Capital Requirements: Failure to raise additional capital could force the company to delay or eliminate development programs.
  • Geopolitical Instability: Ongoing conflicts in Israel and the Middle East (including recent escalations in early 2026) pose risks to operations, supply chains, and the ability to raise capital, though the company currently reports no material disruption.
  • Regulatory Approval: No therapeutic candidates have been approved for marketing; clinical trials may fail to demonstrate safety or efficacy.

Investor Verification Checklist

• Cash Runway: Verify the sufficiency of the ~$9.6 million cash balance against projected burn rates, given the lack of revenue and the need for future financing.
• Impairment Rationale: Review the specific assumptions used in the $20.5 million impairment charge regarding CM24 and NT219 to understand the revised commercial outlook for these assets.
• CEO Succession: Monitor the progress of the CEO search process and the timeline for Gil Efron's departure in August 2026.
• Geopolitical Exposure: Assess the potential impact of ongoing regional conflicts on the company's Israeli-based operations and its ability to secure future funding.
• ADS Compliance: Confirm the trading status of the ADSs following the March 2026 ratio change and ensure continued compliance with NASDAQ listing standards.