Anixa Biosciences, Inc. — Form 10-Q Summary
Reporting period: Three and six months ended April 30, 2024 (fiscal second quarter and first half). Comparative periods ended April 30, 2023. Amounts are in U.S. dollars; financial statement amounts are in thousands unless noted.
Business context
Anixa is a clinical-stage biotechnology company developing cancer vaccines and CAR-T therapies. Its vaccine programs include breast and ovarian cancer, with a new discovery effort focused on lung, colon and prostate cancers. Its CAR-T program initially targets ovarian cancer. The company has not generated revenue from these programs and says it does not expect near-term program revenue; a potential path to profitability is licensing technologies, contingent on development and clinical results.
Financial performance and position
| Metric | Three months ended Apr. 30, 2024 | Three months ended Apr. 30, 2023 | Six months ended Apr. 30, 2024 | Six months ended Apr. 30, 2023 |
|---|---|---|---|---|
| Revenue | $0 | $210 | $0 | $210 |
| Research and development | $1,646 | $998 | $2,995 | $2,066 |
| General and administrative | $1,821 | $1,611 | $4,081 | $3,099 |
| Total operating costs and expenses | $3,467 | $2,770 | $7,076 | $5,326 |
| Operating loss | $(3,467) | $(2,560) | $(7,076) | $(5,116) |
| Interest income | $287 | $253 | $606 | $455 |
| Net loss attributable to common shareholders | $(3,139) | $(2,288) | $(6,394) | $(4,610) |
| Basic and diluted loss per share | $(0.10) | $(0.07) | $(0.20) | $(0.15) |
Revenue was absent in 2024; the prior-year $210,000 came from a one-time technology license. Gross margin is not meaningful in the absence of current-period revenue. The six-month net loss was $6.47 million, including $2.52 million of non-cash stock-based compensation in operating costs.
At April 30, 2024, cash and cash equivalents were $995,000 and short-term investments were $22.244 million, totaling $23.239 million, down from $23.844 million at October 31, 2023. Current assets were $24.214 million and current liabilities $1.681 million. Total liabilities were $1.774 million, primarily lease liabilities; the filing reports no borrowing debt. Shareholders’ equity was $23.623 million, with total equity of $22.581 million including noncontrolling interest.
For the six months, operating cash use was $3.765 million; investing activities provided $685,000 net, mainly from short-term investment maturities; financing provided $3.160 million. The company raised $3.029 million net through its at-the-market (ATM) offering, issuing 785,290 shares. It had approximately $97 million of remaining capacity under the $100 million ATM program at April 30.
Changes and operating developments
- Compared with the prior-year quarter, R&D increased $648,000 and G&A increased $210,000. For the first half, R&D rose $929,000 and G&A rose $982,000. Management attributed much of the increases to outside program research, compensation, investor and public relations, consulting and other corporate costs.
- The breast cancer vaccine Phase 1 trial continued across dose escalation and additional patient groups. The company reported that immunological data showed antigen-specific T-cell responses at tested dose levels; it had begun higher-dose cohorts and was enrolling Phase 1b and Phase 1c participants.
- The ovarian cancer CAR-T Phase 1 trial treated the first patient in its second dose cohort in February 2024 and another in May 2024. The company said treatment appeared well tolerated to date. The study is planned for 24–48 patients and may take two to four years, depending on enrollment, dose escalation and study design.
- On May 3, 2024, after the reporting date, Anixa entered a joint development and option agreement with Cleveland Clinic for additional cancer vaccine research. An option fee and first development payment were paid in May; two further tranches are due by January 2025 and January 2026. The filing does not provide clear payment amounts, but says they are not expected to materially affect results or financial condition.
Outlook, risks and contingencies
- Management believes available cash, cash equivalents, short-term investments and expected cash flows will fund activities for at least the next 12 months, based on information available June 4, 2024. Actual cash needs may differ; further funding may be required, and equity or convertible financing could dilute shareholders or be unavailable on acceptable terms.
- Potential future payments under R&D vendor agreements may total approximately $3.7 million over up to five years, subject to development activities and results. Cleveland Clinic and Wistar license agreements also contain milestone-based obligations.
- The company relies on clinical results, external collaborators and future licensing opportunities; it cautions that licensing may take years or may not occur. Clinical development, enrollment, regulatory outcomes and funding availability are key uncertainties.
- Anixa reported no material change in risk factors from its fiscal 2023 Form 10-K. Other than patent-rights enforcement matters, it reported no material pending legal proceedings. It also reported effective disclosure controls and no material change in internal control over financial reporting.
- Short-term investments are principally U.S. Treasury securities held to maturity. The stated market risk is that returns may change upon reinvestment. The San Jose office lease is scheduled to expire September 30, 2024, with a two-year extension option management is reasonably certain to exercise.
Important facts for investors to verify
- Whether cash and investment balances, operating burn and the stated 12-month funding runway remain consistent with subsequent spending and clinical commitments.
- Clinical trial progress, safety, immune-response findings, enrollment pace and any regulatory updates for the breast cancer vaccine and ovarian cancer CAR-T programs.
- Future ATM usage, share dilution and the impact of outstanding options and warrants; 32,006,460 common shares were outstanding on June 4, 2024.
- The amounts and timing of Cleveland Clinic agreement payments, as well as the conditions and expected cash timing of the approximately $3.7 million vendor commitments.
- Any development of revenue-generating licensing activity, since current programs have produced no revenue and management does not expect near-term program revenue.