RenovoRx, Inc. — Q3 2022 Form 10-Q
Reporting period: Three and nine months ended September 30, 2022. RenovoRx is a clinical-stage biopharmaceutical company developing local treatments for solid tumors. Its lead candidate, RenovoGem, combines intra-arterial gemcitabine with the RenovoCath delivery device; the company reported no product revenue.
Financial results and position
| Metric | Q3 2022 | Q3 2021 | Nine months 2022 | Nine months 2021 |
|---|---|---|---|---|
| Revenue | None | None | None | None |
| Research and development expense | $0.85 million | $0.77 million | $3.53 million | $1.94 million |
| General and administrative expense | $1.32 million | $0.63 million | $4.26 million | $1.38 million |
| Total operating expenses | $2.16 million | $1.40 million | $7.78 million | $3.32 million |
| Net loss | $2.14 million | $1.51 million | $7.73 million | $3.97 million |
| Basic and diluted loss per share | $0.24 | $0.27 | $0.86 | $1.09 |
| Cash used in operating activities | Not provided for the quarter | $7.13 million | $3.36 million |
At September 30, 2022, cash and cash equivalents were $3.09 million and short-term U.S. Treasury securities were $5.02 million, totaling $8.11 million. Total assets were $9.25 million, liabilities $1.10 million, and stockholders’ equity $8.15 million. The company reported no outstanding debt. Gross margin is not applicable because there were no product sales. For the nine-month period, investing cash outflow was $5.01 million, primarily from Treasury purchases; financing cash inflow was $0.04 million.
Changes versus comparable periods
- Q3 operating expenses rose about 55% year over year, while net loss increased about 41%. The increase reflected higher G&A costs, including public-company, consulting, employee-benefit and directors’ and officers’ insurance expenses.
- Nine-month operating expenses increased about 135% and net loss increased about 95%. R&D spending rose with clinical-trial consulting, preclinical work and development of a secondary RenovoCath manufacturer; G&A increased with post-IPO support and public-company costs.
- Cash and cash equivalents plus short-term securities declined from $15.19 million at December 31, 2021, to $8.11 million at September 30, 2022. In 2021, financing included IPO proceeds; there was no comparable IPO financing in 2022.
- Per-share loss narrowed despite the larger net loss, as weighted-average shares increased substantially following the 2021 IPO.
Outlook, risks and unusual items
- Liquidity and going concern: Management said available funds as of November 14, 2022 were not expected to fund operating, investing and financing needs for at least the next 12 months under current plans. The filing concludes substantial doubt exists about the company’s ability to continue as a going concern. Additional financing is needed, with no assurance it will be available on acceptable terms; failure to raise funds could force delays, reductions or termination of programs.
- Phase III TIGeR-PaC: The company’s modified statistical analysis plan proposes studying SBRT patients only, reducing the target randomized population from 200 to 114, adding a second interim analysis and reducing statistical power from 90% to 80%. The company stated it had not discussed the changes with FDA and could not assure FDA agreement. As of November 14, 2022, 37 of 114 planned SBRT patients had been randomized; management anticipated enrollment in 2024 and final readout in 2025, subject to trial progress and regulatory feedback.
- eCCA program: A Phase II/III protocol for extrahepatic cholangiocarcinoma had been submitted to FDA. If FDA did not object, the company anticipated trial launch and first enrollment in Q4 2022 or Q1 2023.
- Management expects significant and increasing losses and negative operating cash flows for the foreseeable future, with no product revenue expected for several years, if ever. No formal revenue or earnings guidance was provided.
- COVID-19-related recruitment, site-visit and vendor disruption, inflation and workforce costs, reliance on third-party clinical and manufacturing providers, and dependence on a single RenovoCath source are identified risks. Management reported no material supply-chain disruption to date.
- Disclosure controls were deemed ineffective because of a previously identified material weakness involving accounting expertise, formal policies, review controls and segregation of duties. Management was implementing remediation measures; effectiveness had not yet been established.
- No material legal proceedings were reported. The company reported $13,000 of unrealized gains on available-for-sale Treasury securities in other comprehensive income for the nine-month period.
Key facts for investors to verify
- Available cash and securities, expected cash runway, and the timing, amount and terms of any additional financing.
- FDA feedback or objections to the TIGeR-PaC protocol and modified statistical plan; subsequent enrollment versus the stated 2024 target.
- Whether and when the eCCA trial launched and enrolled its first patient.
- Progress and evidence of remediation of the material weakness in financial reporting controls.
- Whether the filing’s stated trial timelines and development plans remain current; they are forward-looking and subject to substantial clinical, regulatory and financing risks.