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Entero Therapeutics, Inc.(ENTO) - 2023 Q4 - Annual Report
ENTOEntero Therapeutics, Inc.(ENTO)2024-03-29 20:16

Merger and Acquisitions - The company announced the closing of a merger with ImmunogenX, Inc. on March 13, 2024, which is expected to enhance its therapeutic pipeline for celiac disease [420][425]. - The merger involved the issuance of 36,830 shares of Common Stock and 11,777.418 shares of Series G Preferred Stock to IMGX stockholders [426]. - The merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes [425]. - The company has agreed to hold a stockholders' meeting to approve the conversion of Series G Preferred Stock into Common Stock [429]. Clinical Trials and Product Development - The company plans to enter Phase 3 clinical trials for its Latiglutenase program in the first half of 2025 after a successful End-of-Phase 2 meeting with the FDA [421]. - The Adrulipase program aims to provide a non-animal derived therapy for exocrine pancreatic insufficiency, with a Type C meeting with the FDA planned for 2024 to discuss next steps [422]. - The Capeserod program, in-licensed from Sanofi, is expected to initiate a Phase 2 clinical development program for pediatric ulcerative colitis or gastroparesis [423]. - The company is no longer actively pursuing two Phase 2 clinical programs of Niclosamide formulations for COVID-19 GI infections and ulcerative proctitis [424]. Financial Performance - As of September 30, 2023, IMGX reported total stockholders' equity of 3,278,805,upfrom3,278,805, up from 881,960 as of June 30, 2023 [445]. - IMGX has not generated any revenue from product sales to date, but plans to seek revenue from product sales and other sources in the future [459]. - Research and development expenses for the year ended December 31, 2023 totaled approximately 5.0million,adecreaseofapproximately5.0 million, a decrease of approximately 3.8 million, or 43%, compared to approximately 8.8millionfortheyearendedDecember31,2022[477].−GeneralandadministrativeexpensesfortheyearendedDecember31,2023totaledapproximately8.8 million for the year ended December 31, 2022 [477]. - General and administrative expenses for the year ended December 31, 2023 totaled approximately 10.7 million, a decrease of approximately 1.3million,or101.3 million, or 10%, compared to approximately 12.0 million for the year ended December 31, 2022 [480]. - The net loss for the year ended December 31, 2023 totaled approximately 15.8million,anincreaseofapproximately15.8 million, an increase of approximately 1.2 million, or 8%, over the net loss of approximately 14.6millionrecordedfortheyearendedDecember31,2022[483].−NetcashusedinoperatingactivitiesduringtheyearendedDecember31,2023wasapproximately14.6 million recorded for the year ended December 31, 2022 [483]. - Net cash used in operating activities during the year ended December 31, 2023 was approximately 12.4 million, primarily attributable to the net loss of approximately 15.8million[484].FundingandFinancing−Thecompanyhasenteredintoanon−bindingtermsheettosellitsNiclosamideprogram,whichincludesalowseven−figureupfrontpaymentandfuturemilestoneeconomics,expectedtocloseinthefirsthalfof2024[421].−IMGXenteredintosecuredpromissorynotestotaling15.8 million [484]. Funding and Financing - The company has entered into a non-binding term sheet to sell its Niclosamide program, which includes a low seven-figure upfront payment and future milestone economics, expected to close in the first half of 2024 [421]. - IMGX entered into secured promissory notes totaling 1 million with shareholders Jack Syage and Peter Felker, maturing on October 13, 2025 [443]. - The company raised aggregate gross proceeds of approximately 4.0millionfromaMarch2024RegisteredDirectOffering[468].−Thecompanyexpectstoincursubstantialexpendituresforthedevelopmentofproductcandidates,includingLatiglutenase,Adrulipase,Capeserod,andNiclosamide,andwillrequireadditionalfinancingtosupporttheseefforts[470].−Thecompanyisfocusedonexpandingitsproductpipelinethroughcollaborationsandacquisitions,andmayraiseadditionalequitycapitalorincuradditionaldebttofinancesuchacquisitions[471].ComplianceandRegulatoryMatters−ThecompanyreceivedaletterofreprimandfromNasdaqforfailingtocomplywithlistingrequirements,butnodelistingactionisdeemedappropriate[447].−Thecompany’sabilitytoissuesecuritiesissubjecttomarketconditionsandiscurrentlyrestrictedbythe"babyshelfrules"duetoitspublicfloatbeingbelow4.0 million from a March 2024 Registered Direct Offering [468]. - The company expects to incur substantial expenditures for the development of product candidates, including Latiglutenase, Adrulipase, Capeserod, and Niclosamide, and will require additional financing to support these efforts [470]. - The company is focused on expanding its product pipeline through collaborations and acquisitions, and may raise additional equity capital or incur additional debt to finance such acquisitions [471]. Compliance and Regulatory Matters - The company received a letter of reprimand from Nasdaq for failing to comply with listing requirements, but no delisting action is deemed appropriate [447]. - The company’s ability to issue securities is subject to market conditions and is currently restricted by the "baby shelf rules" due to its public float being below 75.0 million [473]. - IMGX's research and development expenses consist of personnel-related costs, fees to third parties, and costs associated with clinical trials and product development [460]. - The company has entered into agreements to reduce the exercise price of Series B Warrants to $1,050.00 per share for certain holders [458]. - IMGX's stockholders ratified the entry into a July Offering, which required prior shareholder approval due to compliance issues [447].