BioVie Inc. — Form 10-K Summary
Reporting period: Fiscal year ended June 30, 2020, with fiscal 2019 comparisons. This is an annual report, not a standalone 2019 Q4 report. The filing was signed August 6, 2020.
Business context and development
BioVie is a clinical-stage biotechnology company with no approved products or product revenue. Its lead candidate, BIV201, is continuous-infusion terlipressin being developed for ascites associated with liver cirrhosis. The company reports FDA Fast Track status and Orphan Drug designations for ascites and hepatorenal syndrome.
In a six-patient Phase 2a study, four patients had 71%–414% increases in the interval between paracenteses; three patients received 28 days of infusion and remained hemodynamically stable. These are early, small-study results and do not establish efficacy.
Financial results and liquidity
| Metric | FY2020 | FY2019 |
|---|---|---|
| Revenue | None reported | None reported |
| Operating expenses | $2.693 million | $2.497 million |
| Research and development | $1.151 million | $1.008 million |
| Selling, general and administrative | $1.313 million | $1.259 million |
| Net loss | $16.677 million | $2.444 million |
| Net loss attributable to common stockholders, including deemed dividends | $33.776 million | $2.493 million |
| Net cash used in operating activities | $1.628 million | $2.502 million |
The increase in net loss mainly reflected a $9.212 million non-cash change in the fair value of derivative liabilities and $4.772 million of interest expense. A $17.099 million deemed dividend related to financing shares and warrants increased the loss attributable to common stockholders. With no revenue, gross margin and revenue-based margins are not applicable.
At June 30, 2020, cash was $37,195, total assets were $2.084 million, and total liabilities were $23.583 million, including $21.412 million of derivative liabilities and an $848,543 related-party debenture, net of discount. Stockholders’ deficit was $21.499 million; accumulated deficit was $41.038 million. Financing activities provided $1.326 million during the year. The company also received a $62,500 PPP loan at 1% interest; forgiveness was not assured.
Changes, outlook, and material risks
- Operating expenses rose modestly, while reported net loss increased sharply due primarily to derivative valuation and financing-related interest, rather than a comparable increase in operating costs.
- The company had drawn approximately $1.3 million of a potential $2.0 million convertible bridge facility from controlling stockholder Acuitas by year-end. The debenture carries 10% interest and a 6% additional-principal feature; its conversion and warrant terms, along with related-party share issuances, created substantial derivative liabilities and dilution risk.
- Management planned a randomized 24-patient Phase 2 study in 2020, subject to funding, and targeted a larger pivotal Phase 3 trial in 2021. FDA guidance indicated that positive Phase 2 results followed by a sufficiently large, well-controlled Phase 3 trial could potentially support a marketing application. These are plans, not assurances.
- A new prefilled liquid formulation had demonstrated six months of room-temperature stability; longer stability and use in a trial remained subject to further testing and FDA clearance.
- The PTAB ruled all claims of BioVie’s U.S. ’945 ascites-treatment patent unpatentable in November 2019. The company reported pursuing restricted claims and separate formulation patent applications; patent protection remains uncertain.
- The auditor and management cited substantial doubt about the company’s ability to continue as a going concern. BioVie had recurring losses, minimal cash, no product revenue, and no committed financing sufficient to fund its plans. Failure to raise capital could delay or halt trials. COVID-19 could further disrupt recruitment, supply chains, and financing.
- Related-party financing and equity arrangements with Acuitas, controlled by the CEO, included significant warrants, potential share issuances, and ownership protections. The company also disclosed royalty obligations on future product sales or licensing revenue.
Most important facts for investors to verify
- Whether BioVie secured enough financing to run the Phase 2 study and whether trial timing, enrollment, and design proceeded as planned.
- The full terms and potential dilution from Acuitas’ debenture, warrants, conversion provisions, and committed or contingent share issuances.
- Whether the reported Phase 2a observations are confirmed in a randomized controlled study and whether safety or efficacy findings alter the development plan.
- The status and scope of remaining patent applications after the ’945 patent decision, and any competing terlipressin programs or exclusivity claims.
- Whether the PPP loan was forgiven and whether subsequent cash, debt, and going-concern disclosures changed materially.