Purple Biotech Ltd. — FY2022 Form 20-F
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a standalone Q4 report; the filing does not provide a separate Q4 financial results table. Financial statements are prepared under IFRS in U.S. dollars.
Business context
Purple Biotech is an Israel-based clinical-stage oncology company. Its clinical pipeline comprised CM24, being studied in combination with nivolumab and chemotherapy for pancreatic cancer, and NT219, in Phase 1/2 studies as a single agent and with cetuximab. Neither candidate is approved or generating product sales. The filing also describes IM1240 as a preclinical candidate acquired through Immunorizon in February 2023, after the reporting period.
Financial performance and position
| Metric (USD millions, except per-ADS data) | FY2022 | FY2021 |
|---|---|---|
| Revenue from continuing operations | No material revenue reported | No material revenue reported |
| Research and development expense | 16.3 | 11.8 |
| General and administrative expense | 6.3 | 6.1 |
| Operating loss | 22.6 | 17.9 |
| Net loss | 21.8 | 18.5 |
| Net loss per ADS | $1.20 | $1.01 |
| Net cash used in operating activities | 16.7 | 14.9 |
| Cash and short-term deposits at year-end | 31.7 | 47.2 |
Research and development costs rose 38%, primarily from ongoing NT219 and CM24 clinical trials and supporting CMC work. Operating loss increased 26%. Net finance income was $0.8 million in 2022, including $0.5 million of interest income from bank deposits. The company reported no borrowings at year-end; lease liabilities totaled approximately $0.5 million, including current and non-current portions.
Year-end total current assets were $33.3 million and current liabilities were $7.1 million. Management stated that available cash and cash equivalents were sufficient for the next 12 months, while also warning that additional substantial funding would be needed to advance development and that future financing may not be available on acceptable terms. No operating margin is meaningful given the absence of material continuing revenue.
Changes, outlook, risks and unusual items
- Net loss widened from $18.5 million to $21.8 million, mainly reflecting higher operating costs; improved finance income and the absence of the prior-year discontinued-operation loss partly offset the increase.
- Consensi was discontinued in 2021 after commercialization failed to produce significant sales prospects. The company assigned related intellectual property to Dexcel in September 2022. Consensi contributed $1.0 million of revenue in 2020 and none in 2021; it was reported as a discontinued operation.
- Management expected interim CM24 Phase 2 results in the second half of 2023 and an overall-study topline report by the end of 2024. NT219 Phase 1 topline results were expected in the second half of 2023. The company expected to reach an IND submission for IM1240 in approximately two years. These are forward-looking expectations, not assurances.
- In February 2023, the company completed its acquisition of Immunorizon for $3.5 million cash and $3.5 million in ADSs, with up to $94 million of development, regulatory and sales milestones and royalties on net sales. This occurred after year-end and is not included in 2022 financial results.
- Additional financing, clinical-trial outcomes, regulatory approval, third-party manufacturing and collaboration performance are key risks. The company depends heavily on external providers and has no manufacturing facilities of its own.
- IIA grants supporting TyrNovo technology carry contingent royalties and restrictions on transferring funded know-how or manufacturing outside Israel. The disclosed maximum grant-related royalty principal was approximately NIS 5.5 million ($1.56 million), excluding interest; no royalties had been paid by year-end.
- Material legal matters include pending Israeli class-action proceedings and the Atzmon claim seeking approximately NIS 9 million ($2.56 million). The company disputes the claims; outcomes and potential exposure were not estimable with certainty. The BIRAD patent ownership lawsuit was dismissed with prejudice in May 2022.
- The company reported effective disclosure controls and effective internal control over financial reporting as of December 31, 2022. The independent auditor issued an unqualified opinion on the IFRS financial statements and identified valuation of intangible assets as a critical audit matter; the impairment analysis uses significant assumptions, including a 19.4% discount rate.
Important facts for investors to verify
- Confirm cash runway against the pace of clinical spending, current trial plans and the company’s stated need for substantial future financing.
- Review the full audited statements and notes for cash restrictions, deposit maturities, lease obligations, and the valuation assumptions supporting $20.7 million of intangible assets.
- Track CM24 and NT219 trial enrollment, safety, efficacy and timing against the stated expectations; assess the uncertainty inherent in early-stage clinical data.
- Review the Immunorizon acquisition terms, including milestone triggers, royalties, ADS issuance and potential dilution, and subsequent integration and development costs.
- Monitor dilution from the ATM and shelf registration. The company reported a potential $200 million shelf capacity and had sold approximately $2.2 million gross under its ATM through March 3, 2023.
- Follow the status and possible financial consequences of pending litigation, IIA obligations and restrictions, and the company’s ability to maintain its Nasdaq listing.