Greenwich LifeSciences, Inc. — Q2 2021 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2021. Financial statements are unaudited. Greenwich is a clinical-stage biopharmaceutical company developing GP2, an immunotherapy intended to prevent breast cancer recurrence after surgery. The company reported no revenue.
Financial performance and position
| Metric | Q2 2021 | Q2 2020 | Six months 2021 | Six months 2020 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Research and development | $556,534 | $150,804 | $838,511 | $300,695 |
| General and administrative | $196,911 | $59,626 | $515,540 | $154,376 |
| Total operating expenses | $753,445 | $210,430 | $1,354,051 | $455,071 |
| Net loss | $749,745 | $210,430 | $1,346,753 | $455,071 |
| Basic and diluted loss per share | $0.06 | $0.02 | $0.11 | $0.05 |
For Q2, R&D expense rose 269% and G&A rose 230% year over year. For the first half, R&D rose 179% and G&A rose 234%. Management attributed the increases primarily to compensation and manufacturing costs for R&D and capital-raising costs for G&A. The filing reports no gross margin, as there was no revenue.
| Balance sheet metric | June 30, 2021 | December 31, 2020 |
|---|---|---|
| Cash and total current assets | $29,800,632 | $28,660,375 |
| Total assets | $29,815,053 | $28,676,602 |
| Total liabilities | $652,594 | $1,045,492 |
| Stockholders’ equity | $29,162,459 | $27,631,110 |
Current liabilities consisted of $627,577 in accounts payable and accrued interest and $25,017 in unreimbursed expenses. The $275,154 related-party/shareholder advance outstanding at year-end was repaid during the first half. The filing does not report conventional long-term debt at June 30.
For the six months, operating cash used was $1,132,589, compared with $0 in the comparable 2020 period as reported. Financing provided $2,272,846 net, including $2,548,000 of net proceeds from the underwriter’s exercise of an offering option and $275,154 of related-party loan repayments. Cash increased $1,140,257. The company had no investing cash flows in either period.
Outlook, risks and other notable items
- Management planned to commence a Phase III clinical trial in 2021. The filing gives no quantified operating or earnings guidance.
- The company expects continuing losses and significant expenses as it develops GP2, conducts clinical trials, prepares for possible commercialization, and builds operating infrastructure. It says additional capital will be required and that future equity or debt financing is not assured. The financial statements were prepared on a going-concern basis.
- Management cited prior Phase IIb results: no recurrences in the HER2/neu 3+ adjuvant setting after a median five-year follow-up among patients receiving six primary intradermal injections over six months. These are reported study results, not a guarantee of future outcomes.
- The company relies on third-party manufacturers for clinical-trial materials and product candidate. Its HJF license for GP2 carries annual maintenance fees, milestone and royalty obligations, and patent-cost reimbursements. In July 2021, it paid HJF $434,732 for maintenance fees and patent expenses.
- Outstanding warrants covered 100,870 shares at a stated exercise price of $7.1875 per share; the filing reported aggregate intrinsic value of $4,533,098 using the June 30 closing share price. Warrants expire September 24, 2025. The filing also notes a $6.9718 cash-exercise price during the first six months of the exercise period.
- Disclosure controls were deemed ineffective as of June 30 due to material weaknesses: inadequate segregation of duties because of limited personnel, and insufficient written accounting, IT, financial-reporting and record-keeping procedures. Management was developing a remediation plan. No material changes in internal control were reported during the quarter.
- The company reported no material legal proceedings and no material changes to the risk factors in its 2020 Form 10-K. It reported no off-balance-sheet arrangements.
Key facts for investors to verify
- Whether the planned Phase III trial began in 2021, and the trial’s design, enrollment, timeline and funding needs.
- Cash use and financing needs relative to the clinical-trial and manufacturing plans; management warns that additional capital may be needed.
- Progress in remediating the disclosed internal-control material weaknesses.
- Clinical evidence underlying the reported Phase IIb outcome and its applicability to the planned Phase III study.
- Future HJF license, patent, manufacturing and other clinical-development obligations, including the effect of the July 2021 payment.