Anixa Biosciences, Inc. — Q1 FY2024 Form 10-Q
Reporting period: Three months ended January 31, 2024; balance-sheet comparisons are to October 31, 2023. Dollar amounts below are in millions unless otherwise noted.
Business context and reporting period
Anixa is a clinical-stage biotechnology company developing cancer vaccines and CAR-T therapies. Its principal programs include a preventive triple-negative breast cancer vaccine, an ovarian cancer vaccine, and a CAR-T therapy initially targeting ovarian cancer. The company reported no revenue in the quarter and has not generated revenue from its vaccine or therapeutic programs.
Financial results and liquidity
| Metric | Q1 FY2024 | Q1 FY2023 |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $1.349 | $1.068 |
| General and administrative expense | $2.260 | $1.488 |
| Total operating expenses | $3.609 | $2.556 |
| Interest income | $0.319 | $0.202 |
| Net loss | $3.290 | $2.354 |
| Net loss attributable to common shareholders | $3.255 | $2.322 |
| Basic and diluted loss per share | $0.10 | $0.08 |
| Operating cash used | $2.309 | $1.988 |
At January 31, 2024, cash and cash equivalents were $0.998 and short-term investments were $22.800, totaling $23.798 in cash and short-term investments. Total current assets were $25.219 and current liabilities were $1.660. Total liabilities were $1.768, principally lease liabilities and operating payables; the filing reports no debt borrowings. Stockholders’ equity was $24.605, with total equity of $23.604 including noncontrolling interest.
Investing activities provided $0.129 net as investment maturities slightly exceeded purchases. Financing activities provided $2.263, including $2.196 net from an at-the-market (ATM) stock offering and $0.067 from option exercises. Cash and short-term investments together decreased by approximately $0.046 from fiscal year-end. The company recorded $1.260 of non-cash share-based compensation. With no revenue, operating margins are not meaningful.
Material changes versus the prior comparable period
- Net loss increased by $0.936, while operating expenses rose by $1.053. R&D expense increased $0.281, mainly from higher outside research spending on breast cancer vaccine and CAR-T programs and higher employee costs.
- G&A expense increased $0.772, principally due to investor and public relations costs, compensation, and legal and professional fees.
- Interest income increased $0.117, attributed to higher interest rates and a greater amount held in short-term investments.
- Operating cash use increased by $0.321. The company raised $2.196 net through its ATM offering, issuing 555,820 shares during the quarter.
Outlook, developments, and risks
- Management stated that, based on information available March 12, 2024, existing cash, cash equivalents, short-term investments, and expected cash flows should fund activities for at least the next 12 months. This is an estimate, not a guarantee.
- The ATM program permits up to $100 million of stock sales; approximately $98 million remained available at January 31, 2024. Future equity or convertible-debt financing could dilute shareholders, and financing may not be available on acceptable terms.
- The breast cancer vaccine Phase 1 trial had observed antigen-specific T-cell responses among tested participants. The company was enrolling additional higher-dose cohorts and had begun Phase 1b and 1c segments.
- After quarter-end, in February 2024, the first patient in the second dose cohort of the ovarian cancer CAR-T trial received a three-times-higher cell dose than the first cohort; management said treatment appeared well tolerated. The early clinical findings do not establish efficacy or safety.
- The ovarian cancer vaccine’s preclinical work is supported by the NCI PREVENT program; the company said it expects no material financial expenditures for that work. The company does not expect near-term revenue from its current programs; potential licensing may take years and depends in part on clinical results.
- Potential future payments under R&D agreements may total approximately $3.6 million over up to five years, depending on development activities and results. Technology-license commitments for the remainder of FY2024 were approximately $14,000.
- Other than patent-rights enforcement matters, the company reported no material pending legal proceedings and no material changes to the risk factors in its FY2023 Form 10-K. It also reported effective disclosure controls and no material change in internal control over financial reporting.
Important facts for investors to verify
- Whether the reported 12-month liquidity outlook remains supportable as clinical-trial and development spending evolves.
- Actual cash burn, investment maturities, and any additional ATM issuance or other financing, including resulting dilution.
- Clinical-trial enrollment, dose-escalation progress, safety, immune-response data, and whether preliminary tolerability translates into meaningful outcomes.
- The timing and amount of contingent R&D-agreement payments and any future license milestones.
- Potential changes in operating expenses, especially investor-relations and other G&A costs, given the absence of recurring product revenue.