Phio Pharmaceuticals Corp. — Q1 2022 Form 10-Q
Business context and period: Unaudited results for the three months ended March 31, 2022. Phio is a development-stage immuno-oncology company advancing INTASYL RNAi therapies; it reported no revenue in the presented statements.
Financial performance and liquidity
| Metric | Q1 2022 | Q1 2021 |
|---|---|---|
| Research and development expense | $1.586 million | $2.429 million |
| General and administrative expense | $1.054 million | $1.209 million |
| Total operating expenses / operating loss | $2.640 million | $3.638 million |
| Net loss | $2.642 million | $3.407 million |
| Basic and diluted loss per share | $0.19 | $0.32 |
| Net cash used in operating activities | $3.469 million | $3.266 million |
- Cash was $20.459 million at March 31, 2022, down from $24.057 million at year-end 2021; cash plus restricted cash was $20.509 million.
- Total assets were $22.162 million; total liabilities were $2.711 million, including $265,000 in lease liabilities. No outstanding debt balance was reported; the PPP loan had been forgiven in 2021.
- Stockholders’ equity was $19.451 million. The filing gives no revenue or gross-margin figures; margins are not meaningful for the reported period.
- Management believes existing cash should fund operations for at least 12 months from the financial-statement release date, while anticipating continued operating losses and negative operating cash flows.
Changes versus prior period
- Operating expenses declined $998,000, or about 27%, and net loss narrowed by $765,000. R&D expense fell 35%, mainly because PH-762 preclinical and manufacturing costs incurred in the prior-year period were lower; increased CRO preparation costs and personnel expense partly offset the decline. G&A fell 13%, primarily due to lower legal and patent fees, partly offset by higher stock compensation.
- Other income/expense shifted from $231,000 of income in Q1 2021 to $2,000 of expense in Q1 2022. The prior-year period included a $233,000 gain from PPP loan forgiveness.
- Operating cash use increased by $203,000 despite the lower net loss, largely reflecting prepayments for PH-894 IND-enabling studies and payments for PH-762 clinical supply manufacturing. Q1 2021 financing included $21.7 million of proceeds from securities offerings and warrant exercises; Q1 2022 had no comparable fundraising proceeds.
Outlook, programs, and risks
- Management expected the AgonOx collaboration’s PH-762/DP TIL clinical trial to begin in Q3 2022. Phio committed to reimburse eligible costs up to $4 million; no reimbursable costs had been incurred by March 31, 2022.
- The PH-762 melanoma Phase 1b site in France was open for enrollment; the company anticipated initial top-line data in Q1 2023. It expected to complete PH-894 IND-enabling studies in the second half of 2022. These timelines may be affected by enrollment or operational delays.
- Phio cited risks from ongoing clinical development, financing needs, potential supply and trial-enrollment disruptions related to COVID-19, and broader economic and supply-chain uncertainty connected to the Russia-Ukraine conflict.
- Nasdaq notified Phio on February 25, 2022 that its share price did not meet the $1 minimum bid requirement. The stated deadline to regain compliance was August 24, 2022; failure could lead to delisting and impair access to capital.
- The company’s $10 million Lincoln Park equity purchase agreement had not been used and was due to expire in May 2022, subject to agreement terms and issuance limits. The filing reported no material legal proceedings and no material changes to existing risk factors beyond those noted.
- Management reported disclosure controls were effective at the reasonable-assurance level and no material change in internal control over financial reporting during the quarter.
Key facts for investors to verify
- Whether cash burn, trial spending, and the stated 12-month cash runway remain consistent with current operating plans and financing availability.
- Actual enrollment and milestone timing for the PH-762 melanoma and AgonOx trials, and progress on PH-894 IND-enabling work.
- Whether Phio regained Nasdaq minimum-bid compliance by the deadline and the status or replacement of the unused Lincoln Park financing arrangement.
- Potential dilution: 6.544 million outstanding warrants and 886,784 unvested restricted stock units at March 31, 2022; compare these with 13.659 million common shares outstanding.