MyMD Pharmaceuticals, Inc. — Form 10-Q Summary
Reporting period: Quarter and six months ended June 30, 2021; filed August 16, 2021. MyMD is a clinical-stage biopharmaceutical company developing MyMD-1 and Supera-CBD. The April 16, 2021 merger was accounted for as a reverse recapitalization, with MyMD Florida treated as the accounting acquirer. As a result, comparative periods and the reported business reflect predecessor entities and are not fully comparable.
Financial results and liquidity
| Metric | Three months ended June 30, 2021 | Six months ended June 30, 2021 | Comparable 2020 period |
|---|---|---|---|
| Revenue | $0 | $0 | $0 |
| Research and development expense | $1.49 million | $2.67 million | $0.37 million; $0.53 million |
| Administrative expense | $1.71 million | $2.96 million | $0.48 million; $1.16 million |
| Net loss | $18.09 million | $21.18 million | $1.09 million; $2.08 million |
| Basic and diluted loss per share | $0.50 | $0.66 | $0.04; $0.07 |
The filing reports no product revenue or gross profit; margins are therefore not meaningful. Second-quarter operating loss was $18.28 million. A $15.04 million stock-option modification charge related to assumed pre-merger options was a major noncash expense. Six-month net loss also included $0.19 million of other income, principally debt-forgiveness gains.
- Cash and marketable securities: $2.13 million and $19.50 million, respectively, at June 30, 2021.
- Cash flows, six months: $8.26 million used in operations, $11.35 million provided by investing activities, and $1.12 million used in financing activities; cash increased by $1.98 million.
- Working capital: $19.03 million; stockholders’ equity $31.07 million and accumulated deficit $69.85 million.
- Debt and liabilities: No notes, PPP loan, or related-party line of credit remained on the June 30 balance sheet. Total liabilities were $3.37 million, including $3.30 million of trade and other payables.
Material changes and transactions
- R&D spending rose substantially year over year as the company expanded development activity after the merger. Administrative costs also increased, including merger-related legal and accounting costs, added personnel, investor-relations costs, and listing fees.
- The merger issued 28.55 million post-split shares to former MyMD Florida stakeholders; the filing states they owned approximately 77.05% of the combined company on a fully diluted basis, versus 22.95% for former Akers holders. The company also assumed 4.19 million options and recorded the $15.04 million modification expense.
- The company contributed $1.50 million and Cystron’s COVID-19 vaccine assets to Oravax for a 13% fully diluted interest and a potential 2.5% royalty on specified future net sales. The $1.50 million contribution was paid July 1, 2021; $0.30 million remained payable to Premas at quarter-end.
- The company settled related-party aircraft lease debt for $517,384 against a $627,042 balance, recognizing approximately $109,658 of forgiveness; its $70,600 PPP loan was also forgiven.
Outlook, risks, and unusual items
- Management said available resources were sufficient to fund the current operating budget and contractual obligations for 12 months from issuance of the financial statements. The company nevertheless expects continued losses and substantial funding needs to advance development; future financing may not be available on acceptable terms.
- MyMD-1 had completed Phase 1; Phase 2 studies were planned. Supera-CBD remained preclinical, with further preclinical work expected to advance. The filing provides plans, not quantified revenue or earnings guidance.
- COVID-19 had delayed clinical supplies from India and patient recruitment. A dosing study took four and a half months versus an expected two months, delaying results and preparation for the next study. Further clinical, regulatory, and supply-chain delays remain possible.
- Key risks include clinical failure or delay, regulatory approval uncertainty, reliance on third-party manufacturers and research organizations, financing and dilution, competition, intellectual-property protection, and risks specific to synthetic CBD regulation.
- Eight of nine merger-related disclosure lawsuits had been dismissed; one remained pending. A separate whistleblower-retaliation action had not yet been served. Management said it did not expect either matter to materially affect financial condition or results.
Important facts for investors to verify
- Clinical milestones, timelines, trial enrollment, and the impact of COVID-related supply and recruitment delays.
- Cash burn and runway after the July 1 Oravax payment, and the assumptions underlying management’s 12-month liquidity assessment.
- The potential dilution from assumed options, warrants, the equity incentive plan, and merger milestone shares.
- Oravax’s progress and the terms and likelihood of any future royalties or value from the 13% investment.
- Period comparability and reported expense details: the filing reflects a reverse merger, and its MD&A and financial statements contain some differing expense figures.