Annovis Bio, Inc. — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021; filed March 2, 2022. This is an annual report, not a standalone fourth-quarter report. Annovis is a clinical-stage biotechnology company with no product sales or commercialized products.
Business context and development
The company’s lead candidate, oral buntanetap (formerly ANVS401), is being developed for Alzheimer’s disease (AD), Parkinson’s disease (PD), and other neurodegenerative conditions. The company says the drug is designed to reduce production of multiple neurotoxic proteins. Its other programs are ANVS405 for acute brain injury and ANVS301 for advanced AD; these remain earlier-stage programs.
Annovis reported completing two Phase 2a trials: an AD/PD trial involving 14 AD and 54 PD patients, and an ADCS trial involving 16 early-AD patients. The AD/PD study lasted approximately 25 days and met its primary and secondary endpoints, according to the company. The company also reported exploratory biomarker and cognitive or functional improvements. The ADCS trial lasted four weeks; results were expected in the first half of 2022.
Financial results and liquidity
| Metric | FY2021 | FY2020 |
|---|---|---|
| Product revenue | None | None |
| Research and development expense | $8.48 million | $3.05 million |
| General and administrative expense | $6.06 million | $3.59 million |
| Total operating expenses | $14.54 million | $6.64 million |
| Net loss | $14.49 million | $5.46 million |
| Basic and diluted loss per share | $1.90 | $0.87 |
| Cash used in operating activities | $9.13 million | $3.97 million |
R&D expense rose primarily with clinical-trial and production costs and stock-based compensation; G&A also increased, including stock-based compensation and professional fees. Grant income fell to $0.04 million from $1.16 million as the NIH-funded toxicology studies were substantially completed in 2020. Margins are not meaningful for a pre-revenue company.
At year-end, cash and cash equivalents were $45.69 million, total current liabilities were $1.51 million, and stockholders’ equity was $44.49 million. The company reported no debt outstanding and no off-balance-sheet arrangements. Financing cash flow was $46.74 million, mainly from a May 2021 common-stock offering that generated $46.65 million net. Shares outstanding at December 31, 2021 were 8.10 million, versus 6.89 million a year earlier.
Management said available cash was expected to fund operations and capital requirements for at least 12 months, and elsewhere estimated funding through at least March 31, 2023. It cautioned that additional capital would be needed for further planned Phase 3 trials; no committed external funding source was identified.
Outlook, risks, and unusual items
- The company planned to start a Phase 3 study in early PD in the first half of 2022, then consider an advanced-PD Phase 3 study after an interim analysis. It planned to advance AD after FDA feedback, with three pivotal studies and one NDA targeted by the end of 2024. These are company plans, not assured outcomes.
- Management expected R&D and G&A spending to increase in 2022 and subsequent years as clinical development and staffing expand. The filing provides no revenue or earnings guidance.
- Phase 2a findings are preliminary evidence, not proof of efficacy in pivotal trials. The AD/PD study was short and not powered for efficacy; the filing emphasizes exploratory results. Clinical, regulatory, manufacturing, enrollment, reimbursement, competition, intellectual-property, and financing risks are substantial.
- COVID-19 temporarily affected ADCS enrollment and delayed opening AD/PD trial sites; the company said recruitment and treatment resumed. Two securities class-action complaints filed after interim trial disclosures were voluntarily dismissed without prejudice; no material legal proceeding was pending at year-end.
- The company terminated its Horizon Therapeutics-related license effective October 14, 2021, stating the licensed patents were not necessary for continued development of buntanetap. Its financial statements were audited with an unqualified opinion; management reported effective disclosure controls and internal control over financial reporting. The auditor did not attest to internal controls.
Important facts for investors to verify
- Review final, complete Phase 2 datasets and subsequent FDA feedback, especially the basis for Phase 3 design, endpoints, and timing.
- Track enrollment, interim analyses, safety, and results in planned pivotal trials; distinguish exploratory findings from confirmatory evidence.
- Assess cash burn against the stated runway and the cost and funding plan for all planned trials; monitor potential dilution from future financing.
- Confirm the status and scope of patent protection, manufacturing readiness, and any changes in the company’s dependence on third-party providers.
- Reconcile future disclosures with the filing’s differing runway descriptions and its planned end-2024 development milestones.