GT Biopharma, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024. GT Biopharma is a clinical-stage biopharmaceutical company developing TriKE and Dual Targeting TriKE immune-oncology therapies. It has no approved products and generated no revenue.
Financial results and liquidity
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $0.777 million | $1.650 million |
| Selling, general and administrative expense | $2.314 million | $2.015 million |
| Loss from operations | $3.091 million | $3.665 million |
| Net loss | $2.266 million | $0.227 million |
| Basic and diluted loss per share | $1.64 | $0.21 |
| Net cash used in operating activities | $4.163 million | $2.906 million |
Amounts are in U.S. dollars; financial statement amounts are generally in thousands except per-share data. As the company had no revenue, revenue-based margins are not meaningful. Net loss increased despite lower operating loss, largely because the prior-year period included larger noncash gains from changes in warrant fair value and a gain on extinguishment of debt.
- March 31, 2024 liquidity: Cash and cash equivalents of $1.950 million and short-term investments of $7.857 million, or approximately $9.8 million combined; working capital and stockholders’ equity were each $5.3 million.
- Cash flow: Operating cash use was $4.163 million. Investing activities provided $5.034 million, principally from investment sales; there was no financing cash inflow in the quarter.
- Liabilities: Total liabilities were $4.600 million, including $3.213 million of accounts payable, $0.963 million of accrued expenses, and a $0.394 million warrant liability. The balance sheet reports no debt at quarter-end.
Material changes and notable items
- R&D expense decreased $0.873 million year over year, primarily from lower raw-material purchases and consulting costs. SG&A increased $0.299 million, mainly due to higher legal and professional fees, partly offset by lower stock compensation.
- Operating cash use rose year over year, including a $1.347 million decrease in accounts payable and accrued expenses. The company paid $1.8 million toward amounts owed to its contract manufacturer; the manufacturer payable fell from $3.515 million to $1.983 million.
- A 1-for-30 reverse stock split became effective February 2, 2024. Share and per-share figures in the filing are retrospectively adjusted. Common shares outstanding were 1,380,633 at March 31, 2024; 1,416,651 were outstanding as of May 15, 2024.
- On April 30, 2024, the company issued 36,018 common shares to settle $278,500 of vendor payables.
Outlook, risks and contingencies
- Management expects its cash and short-term investments to fund operations for more than 12 months from the filing date. For the following 12 months, it anticipates cash use of $3.0–$3.5 million for SG&A and $3.5–$4.0 million for R&D. The company has a history of operating losses and may need additional financing; management says no assurance exists that financing can be obtained on acceptable terms.
- GTB-3650: The company filed an IND in December 2023 and reported ongoing dialogue with the FDA. It anticipated approval to begin enrollment in a relapsed/refractory AML and high-grade MDS study in the second half of 2024.
- GTB-5550: GMP manufacturing was underway; the company anticipated an IND submission in the fourth quarter of 2024 and a study in B7-H3-positive solid tumors in the first half of 2025, dependent on manufacturing clinical materials.
- R&D and clinical spending may rise as programs advance. Risks include financing needs, clinical and regulatory uncertainty, manufacturing execution, inflation and broader economic disruption. The company relies on a third-party manufacturer and disclosed concentration of expenses and payables with that vendor.
- Legal matters include a former interim CEO’s SOX whistleblower claim, for which the company could not estimate the probability or potential loss; a New York interpleader dispute concerning shares claimed by TWF and Z-One; and an arbitration against a former CFO. In the latter, a March 2024 interim award favored the company for $409,000 and directed return of 13,903 shares, with attorney fees and costs still to be determined.
Important facts for investors to verify
- Whether the stated runway remains adequate as quarterly operating cash use and planned clinical spending evolve, and whether additional financing is needed.
- FDA progress and actual enrollment timing for GTB-3650, and manufacturing and IND timing for GTB-5550.
- Resolution and financial consequences, if any, of the disclosed legal matters and vendor-payable arrangements.
- Share-count changes and potential dilution from outstanding options and warrants; the filing lists 431,227 anti-dilutive options and warrants at March 31, 2024.