BioVie Inc. — Form 10-Q Summary
Reporting period: The filing covers the quarter and nine months ended March 31, 2021, for BioVie’s fiscal third quarter, and was signed May 10, 2021. This differs from the request metadata’s “2020 Q3.”
Business context
BioVie is a clinical-stage biotechnology company with no product revenue. Its principal program was BIV201, continuous-infusion terlipressin for ascites associated with cirrhosis. The company reported that Phase 2 study sites had been activated in the first calendar quarter of 2021 and patient screening was underway. In April 2021, it also agreed to acquire assets including NE3107, a candidate being developed for potential Alzheimer’s and Parkinson’s disease applications.
Financial performance and position
| Metric | Three months ended March 31, 2021 | Three months ended March 31, 2020 | Nine months ended March 31, 2021 | Nine months ended March 31, 2020 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Operating expenses | $3.00 million | $699,253 | $6.45 million | $2.12 million |
| Loss from operations | $3.00 million | $699,253 | $6.45 million | $2.12 million |
| Net income (loss) | $(2.99) million | $(366,402) | $1.28 million | $2.48 million |
| Net income (loss) attributable to common stockholders | $(2.99) million | $(366,402) | $(52.32) million | $(14.62) million |
| Basic and diluted loss per share | $(0.22) | $(0.07) | $(4.64) | $(3.02) |
- The nine-month net income figures include noncash gains from changes in derivative fair value; common-stockholder results were further reduced by deemed dividends of $53.60 million in 2021 and $17.10 million in 2020. These figures should not be read as evidence of operating profitability.
- Research and development expense was $1.76 million for the nine months, up from $1.00 million, reflecting preparation and launch of Phase 2 clinical work. Selling, general and administrative expense rose to $4.52 million from $941,000, including $2.34 million in stock-based compensation and about $1 million in NeurMedix-related due-diligence legal and consulting costs.
- No operating margin is meaningful because the company reported no revenue. Nine-month cash used in operations was $3.44 million, versus $1.27 million in the prior-year period. Financing provided $14.76 million, primarily from common-stock issuance, warrant exercises and related-party financing activity.
- At March 31, 2021, cash was $11.35 million, working capital was about $10 million, total assets were $12.89 million and stockholders’ equity was $11.40 million. Total liabilities were $1.49 million, including $1.43 million of accounts payable and accrued expenses and a $62,500 PPP loan. The PPP loan’s forgiveness application was pending.
- Cash increased from $37,195 at June 30, 2020, principally following equity financing. Common shares outstanding increased from 5.20 million at June 30, 2020 to 13.96 million at March 31, 2021.
Material changes, outlook and risks
- Management stated that the company had not generated revenue and did not expect revenue in the foreseeable future. It said continued operations depend on development progress and obtaining additional financing, with no assurance financing will be available on acceptable terms. The filing states that these conditions raise substantial doubt about the company’s ability to continue as a going concern.
- The April 27, 2021 NeurMedix asset purchase agreement, amended May 9, was a material subsequent event involving related-party affiliates. At closing, BioVie was to issue 8,361,308 shares and pay about $3 million for documented program expenditures. The company estimated total closing cash needs, including transaction expenses, at about $7.4 million, stating these would materially affect cash available for operations over the next 12 months.
- Additional contingent consideration includes an approximately $7.3 million cash payment if NE3107 meets specified pivotal-trial endpoints and BioVie raises at least $50 million, plus up to 18 million shares tied to four clinical, regulatory or commercial milestones. The transaction was anticipated to close in the second calendar quarter of 2021; completion and final obligations were not yet established in the filing.
- BioVie disclosed that the USPTO Patent Trial and Appeal Board had found all claims of its ’945 “Treatment of Ascites” patent unpatentable, leaving it invalid or unenforceable. The company said its orphan-drug designations and pending application for a liquid terlipressin formulation were unaffected; future patent protection remains uncertain.
- Other risks include clinical-trial results and timing, regulatory approval, competition, capital-raising conditions, COVID-19-related market and operational disruptions, and potential dilution from equity funding and the NeurMedix consideration. The filing provided no numerical operating or financial guidance.
- Management concluded disclosure controls were effective at a reasonable assurance level and reported no material change in internal control over financial reporting during the quarter.
Important facts for investors to verify
- Whether the NeurMedix transaction closed, the cash paid and shares issued, and the final terms of its contingent consideration.
- Cash burn, remaining liquidity after transaction-related payments, and the company’s ability and need to raise additional capital.
- Phase 2 trial enrollment, progress, costs and results for BIV201, and any subsequent clinical or regulatory updates for NE3107.
- Potential ownership dilution from the 18 million milestone shares, future financing, options and warrants, and related-party transaction governance.
- Status of the PPP loan forgiveness application and the company’s patent strategy following the ’945 patent decision.