Tenax Therapeutics, Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. This is an annual report, not a standalone fourth-quarter filing. Tenax is a clinical-stage biopharmaceutical company with no approved products for sale.
Business context and development
- Tenax prioritized LEVEL, a Phase 3 study of oral levosimendan (TNX-103) for pulmonary hypertension associated with heart failure with preserved ejection fraction (PH-HFpEF), over imatinib (TNX-201) for pulmonary arterial hypertension (PAH). Sites began initiating in Q4 2023; patient enrollment began in early 2024. The trial includes an open-label extension.
- The earlier Phase 2 HELP study did not meet its primary endpoint for exercise pulmonary capillary wedge pressure. The company reported favorable secondary findings, including a 29-meter improvement in six-minute walk distance versus placebo (p=0.0329), and improvements in certain combined hemodynamic measurements.
- Plans for an imatinib Phase 3 trial are suspended. The company has five full-time and one part-time employee and relies substantially on contractors and third parties.
Financial results and liquidity
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | No product revenue reported | No product revenue reported |
| Operating expenses | $8.23 million | $11.05 million |
| Research and development | $3.23 million | $5.38 million |
| General and administrative | $5.01 million | $5.68 million |
| Net loss | $7.71 million | $11.05 million |
| Net cash used in operations | $5.90 million | $11.39 million |
| Cash and cash equivalents at year-end | $9.79 million | $2.12 million |
- Operating expenses fell $2.82 million year over year, largely because of lower clinical and preclinical development spending, including reduced imatinib activity; LEVEL trial costs increased during 2023. Net loss narrowed by $3.34 million. Other income increased to $547,235, primarily from money-market interest.
- At December 31, 2023, current assets were $11.68 million, current liabilities $3.59 million, and working capital approximately $8.1 million. Total liabilities were $3.59 million, including a $500,903 short-term insurance-premium financing note bearing 9.95% interest. The company reported no long-term liabilities at year-end.
- Financing provided $13.57 million of net cash in 2023, principally from the February 2023 public offering and warrant exercises. The company reported an accumulated deficit of $297.25 million.
- After year-end, a February 2024 offering generated approximately $9.0 million gross and $8.0 million net. Management said year-end resources plus this financing were expected to fund operations through 2024; additional funding is required beyond 2024 to continue planned development.
Outlook, risks, and unusual items
- Going concern: The auditor’s report contains an explanatory paragraph stating substantial doubt about Tenax’s ability to continue as a going concern. The company has recurring losses and negative operating cash flows and depends on new capital, collaboration or licensing income, or another strategic transaction. There is no assurance funding or a transaction will be available; failure could lead to reduced or discontinued development or possible dissolution and liquidation.
- The company continues to evaluate strategic alternatives, including financing, a sale, merger, licensing, or co-development. No outcome or timetable is assured. Imatinib development is on hold while resources are focused on levosimendan.
- In February 2024, an amendment to the Orion license expanded specified oral and subcutaneous levosimendan rights worldwide and reduced royalty rates. It also set a $10 million FDA-approval milestone, a $5 million Japan-approval milestone, and commercialization milestones of up to $45 million tied to worldwide sales.
- Key risks include clinical-trial enrollment, results and cost; regulatory approval; reliance on Orion as the sole current source of oral levosimendan; dependence on CROs and other manufacturers; limited staff; dilution or restrictive financing terms; and continued Nasdaq listing compliance. Tenax regained compliance with cited Nasdaq bid-price and public-float requirements in January and February 2024, respectively.
- A 1-for-80 reverse stock split took effect January 2, 2024; share and per-share figures in the filing are retrospectively adjusted. Management reported effective disclosure controls and internal control over financial reporting; the auditor did not provide an internal-control attestation.
- The filing provides no revenue guidance or quantified forecast. It describes anticipated enrollment through 2024 and at least the first half of 2025, subject to funding and trial execution.
Important facts for investors to verify
- Cash runway and actual cash burn after the February 2024 financing, including the funding needed to complete LEVEL and its open-label extension.
- LEVEL enrollment, trial design and milestones, and how the randomized-phase results compare with the prior HELP study’s failed primary endpoint.
- Fully diluted share count and potential dilution from the February 2024 pre-funded and common warrants, in light of the post-split share count.
- Current strategic-process status, financing or partnering prospects, and whether the company can fund operations beyond 2024.
- The amended Orion license’s final royalty and supply terms, milestone obligations, and manufacturing continuity.
- Near-term debt payments, Nasdaq listing status, and any changes to the company’s going-concern assessment.