Immix Biopharma, Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022; filed May 13, 2022. Immix is a clinical-stage pharmaceutical company developing therapies for cancer and inflammatory diseases. It reported no revenue from operations.
Financial results and liquidity
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Revenue | None reported | None reported |
| General and administrative expense | $700,507 | $137,680 |
| Research and development expense | $629,531 | $24,840 |
| Operating loss | $1,330,038 | $162,520 |
| Net loss | $1,332,048 | $1,016,655 |
| Operating cash used | $1,494,822 | $266,446 |
| Cash at period end | $19,060,684 | $17,644,478 at Dec. 31, 2021 |
| Total current liabilities | $365,086 | $202,039 at Dec. 31, 2021 |
Cash flow from financing was $2,913,750, primarily net proceeds from the IPO underwriters’ over-allotment exercise. Investing cash flow was zero. Working capital was approximately $19.6 million. The company had a $50,000 related-party note payable, due September 14, 2022, bearing 2.5% interest. Profit margins are not applicable given the absence of revenue.
Changes and management commentary
- Net loss increased year over year as G&A and R&D spending rose substantially. Management attributed higher G&A to professional services, officer salaries, and stock compensation following the IPO; higher R&D reflected the ongoing Phase 1b/2a trial and related clinical research organization and site costs.
- The prior-year comparison included $825,000 of expense from a change in the fair value of a derivative liability; there was no such charge in Q1 2022. Prior-year interest expense also included convertible notes that converted in connection with the December 2021 IPO.
- Management expects increased R&D spending as product development expands. It said cash on hand was expected to fund planned operations through at least May 15, 2023; the filing also describes this as at least 12 months from filing. Immix expects to need additional financing and has no credit facility or committed capital sources.
- The company is conducting a Phase 1b/2a clinical trial and has a collaboration with BeiGene for a Phase 1b combination trial of IMX-110 and tislelizumab. BeiGene bears the cost of tislelizumab manufacture and supply under the agreement.
Risks, contingencies, and unusual items
- Going-concern and funding risk: Immix had an accumulated deficit of $31.1 million, recurring losses, and negative operating cash flows. It may need to delay, reduce, or discontinue programs if financing is unavailable.
- Clinical, regulatory, manufacturing, third-party, intellectual-property, competition, and COVID-19-related uncertainties could affect development timelines, costs, or prospects. The filing says the COVID-19 impact could not be quantified.
- Disclosure controls and procedures were deemed ineffective because of a material weakness in internal control over financial reporting, attributed to limited personnel and insufficient formal accounting and review procedures. Remediation steps were underway, but had not operated long enough to demonstrate remediation. Management stated the financial statements fairly presented the periods shown.
- No material pending litigation was reported. A royalty agreement with AxioMx could require royalties on qualifying future sales; none had been paid or accrued through March 31, 2022.
- Subsequent events: Immix issued $50,000 of restricted stock for investor-relations services on April 14, 2022. On May 9, the board authorized a discretionary share repurchase program of up to $1 million; the program does not require purchases and may be suspended or discontinued.
Key facts for investors to verify
- Whether cash and projected spending support the stated runway, given the increase in quarterly operating cash use and anticipated R&D expansion.
- Clinical-trial progress, costs, timing, and any material developments in the BeiGene collaboration.
- Whether additional capital will be required and on what terms, including potential dilution or other financing conditions.
- Progress and evidence of effective remediation of the disclosed material weakness in internal controls.
- Whether the authorized share repurchase is executed and how it affects cash available for development.
- The maturity and repayment or extension of the $50,000 related-party note in September 2022.