Oragenics, Inc. — Q2 2022 Form 10-Q
Reporting period: Three and six months ended June 30, 2022. Oragenics is a development-stage biotechnology company focused primarily on its preclinical intranasal COVID-19 vaccine candidate, NT-CoV2-1, and a preclinical lantibiotics program. The company reported no material commercial revenue; grant revenue was limited.
Financial results and liquidity
| Metric | Three months ended June 30, 2022 | Six months ended June 30, 2022 | Comparable 2021 period |
|---|---|---|---|
| Grant revenue | $30,391 | $45,474 | $0 |
| Research and development | $3.03 million | $7.77 million | $2.47 million; $5.73 million |
| General and administrative | $1.04 million | $2.38 million | $1.37 million; $3.35 million |
| Net loss | $4.03 million | $10.07 million | $3.82 million; $9.04 million |
| Net loss per share, basic and diluted | $(0.03) | $(0.09) | $(0.03); $(0.08) |
| Cash used in operating activities | $9.02 million for the six months | $6.41 million for the six months |
At June 30, cash and cash equivalents were $17.87 million, down from $27.27 million at December 31, 2021. Working capital was $16.51 million, versus $26.26 million at year-end. Total assets were $18.47 million and shareholders’ equity was $16.79 million. Short-term notes payable were zero, compared with $303,416 at year-end; operating lease liabilities totaled $398,177. The filing reports no product-level margins; given minimal grant revenue and substantial development spending, conventional operating margins are not meaningful.
Changes versus the prior comparable periods
- For Q2, R&D expense rose 22.9% and net loss increased about 5.7% year over year. For the first six months, R&D increased 35.7% and net loss increased about 11.4%.
- Management attributed the R&D increase primarily to NT-CoV2-1 development, including preclinical, toxicology, manufacturing-preparation, testing, and related costs.
- First-half G&A declined 29.0%, mainly reflecting lower non-employee stock compensation and personnel costs. First-half operating cash use increased from $6.41 million to $9.02 million.
- No common shares were issued in the first half of 2022. In 2021, ATM sales and warrant exercises had generated substantial financing proceeds; there were no financing proceeds from equity issuance in the 2022 first half.
Outlook, risks, and other notable items
- Funding and going concern: Management expected available working capital to fund the business as then structured through Q4 2022, but stated there was substantial doubt about the company’s ability to continue as a going concern beyond that date. Additional financing is needed; no committed financing source was reported. Failure to raise funds could force delays, reductions, or termination of development programs.
- Vaccine program: The company said the rabbit GLP toxicology study had concluded, with the final data package still being completed to support an IND filing. The FDA indicated an IND could be filed after the final report is available. The company planned a Phase 1 study, subject to funding, and was exploring a parallel Canadian trial application, with feedback expected by year-end 2022. These are plans, not guaranteed milestones.
- Lantibiotics: The program remained preclinical. A $250,000 SBIR grant supports research, with revenue recognized as eligible grant costs are incurred. Future advancement depends on available financial and other resources.
- Financing and dilution: The company had $9.67 million remaining available under its shelf registration statement, but this was not committed funding. At June 30, 18.04 million warrants and 7.38 million options were outstanding; 16.02 million preferred shares were also outstanding. The company increased authorized common shares from 200 million to 250 million in February 2022.
- Other risks: Product development, clinical and regulatory outcomes, competition, manufacturing and trial delays, and the availability and terms of capital could materially affect results. Management noted potential COVID-19-related operational and clinical-trial disruptions. The company reported no material pending legal proceedings; management concluded disclosure controls were effective at June 30, 2022.
Key facts for investors to verify
- Cash burn and whether new financing, grants, partnerships, or licensing proceeds extend the stated Q4 2022 runway.
- Completion and contents of the final GLP toxicology report, timing of the IND submission, and any regulatory feedback or trial authorization.
- Actual spending and development progress for NT-CoV2-1 and lantibiotics relative to management’s plans.
- Potential dilution from warrants, options, preferred-stock conversion or redemption rights, and any future equity or debt financing.
- Grant eligibility and collections, and any material changes in lease obligations, licensing costs, or other commitments.