Cocrystal Pharma, Inc. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023. Cocrystal is a clinical-stage biopharmaceutical company developing antiviral drug candidates. It reported no revenue and has no products approved for sale.
Financial performance and liquidity
| Metric | Q1 2023 | Q1 2022 / comparison |
|---|---|---|
| Revenue | None reported | None reported |
| Research and development expense | $3.907 million | $2.872 million; up $1.035 million |
| General and administrative expense | $1.204 million | $1.333 million; down $0.129 million |
| Total operating expenses | $5.111 million | $4.205 million |
| Net loss per financial statements | $5.189 million; $0.64 per share | $4.208 million; $0.52 per share |
| Net cash used in operating activities | $3.111 million | $3.910 million |
| Cash and restricted cash at quarter-end | $34.056 million, including $33.981 million unrestricted | $54.839 million at March 31, 2022 |
| Total assets / total liabilities | $37.841 million / $3.172 million | At December 31, 2022: $40.840 million / $1.273 million |
Operating expenses rose primarily with preparation for the CC-42344 influenza Phase 2a trial and advancement of COVID-19 and norovirus programs. Lower G&A reflected reduced stock-option, litigation, financial/listing, and D&O insurance costs. The company had no material conventional debt disclosed; lease liabilities were $234,000 at quarter-end. Margins are not meaningful because the company reported no revenue.
Cash declined by $3.163 million during the quarter. Accounts payable and accrued expenses rose to $2.937 million from $0.976 million, contributing to cash-flow movements. On April 4, 2023, the company raised $4.0 million in a private placement by selling 2,030,458 shares at $1.97 per share. It said existing cash and the financing would support planned operations for more than 12 months. Shares outstanding were approximately 10.174 million as of May 12, versus 8.143 million at March 31.
Programs, outlook, and material developments
- Influenza: CC-42344 completed Phase 1 with favorable safety and tolerability reported; the company planned a Phase 2a human-challenge trial in the UK in 2023. Merck continued development of partnered influenza A/B compounds and may earn milestone payments and royalties; the agreement provides for up to $156 million in potential milestones, but Merck may terminate before first commercial sale.
- COVID-19: CDI-988 was selected for clinical development; the company planned to begin a Phase 1 study in 2023.
- Norovirus: The company expected to select a preclinical lead in the first half of 2023.
- Clinical-trial commitment: A contracted influenza Phase 2a trial was estimated to cost approximately $7.2 million, including a $1.7 million reservation fee already paid and recorded in prepaid expenses.
- Liberty insurance litigation: The Third Circuit ruled for Cocrystal on March 29, 2023, vacating the prior summary judgment for Liberty. The case returns to district court for trial on coverage claims. Cocrystal had deposited $1.6 million with the court to stay the judgment and intended to seek its return; recovery is not assured.
Management identified ongoing losses, dependence on future financing, clinical and regulatory uncertainty, competition, potential supply and CRO disruptions, and foreign-exchange exposure as risks. It reported that inflation had not materially affected operations to date, but could increase costs. Disclosure controls were assessed as effective, with no material changes in internal control reported for the quarter.
Key facts for investors to verify
- The MD&A states Q1 2023 net loss was $5.452 million, while the financial statements report $5.189 million. The filing text does not reconcile this discrepancy; verify the authoritative figure.
- Confirm the April 4 private placement proceeds, share issuance, and resulting dilution against subsequent filings.
- Track actual start, enrollment, and results of the planned CC-42344 Phase 2a and CDI-988 Phase 1 trials, and the norovirus lead-selection milestone.
- Monitor cash burn and whether management’s greater-than-12-month liquidity expectation remains valid as trial spending advances.
- Follow the Liberty case, including the outcome of the remanded coverage claims and any return of the $1.6 million court deposit.