Anixa Biosciences(ANIX)2025-01-10 22:18Clinical Trials and Development Programs - Certainty has treated six patients in Phase 1 clinical trials for ovarian cancer CAR-T therapy, with two patients showing anecdotal signs of efficacy, including tumor necrosis and one patient being 20 months past initial treatment[17] - The Phase 1 clinical trial for ovarian cancer CAR-T therapy is expected to be completed in two to three years, involving 24 to 48 patients[18] - The breast cancer vaccine Phase 1 trial has shown antigen-specific T cell responses in vaccinated women at all dose levels, with no adverse side effects other than injection site irritation[21] - The company plans to initiate a Phase 2 clinical trial for the breast cancer vaccine in 2025, focusing on the neo-adjuvant setting[21] - The company entered into a Joint Development and Option Agreement with Cleveland Clinic in May 2024 to develop additional cancer vaccines targeting high incidence malignancies in the lung, colon, and prostate[25] - The company is developing a CAR-T therapy for ovarian cancer and vaccines for breast and ovarian cancers[238] - The Phase 1 CAR-T ovarian cancer clinical trial is enrolling patients with late-stage ovarian cancer who have failed conventional treatment[93] - The Phase 1a breast cancer vaccine clinical trial is enrolling patients who have undergone standard of care treatment for TNBC[93] - The Phase 1b breast cancer vaccine clinical trial is enrolling healthy women with BRCA1, BRCA2, or PALB2 gene mutations who have elected prophylactic mastectomies[93] Financial Performance and Expenses - Research and development expenses increased by $1.627 million to $6.396 million in fiscal year 2024, driven by CAR-T and breast cancer vaccine programs[172] - General and administrative expenses rose by $1.144 million to $7.435 million in fiscal year 2024, primarily due to investor relations and employee compensation costs[173] - Research and development expenses for cancer vaccines and CAR-T therapeutics were $3.748 million and $2.648 million, respectively, in fiscal year 2024[171] - Research and development expenses increased to $6.4 million in 2024 from $4.8 million in 2023, reflecting a 34.1% year-over-year growth[231] - Net loss attributable to common shareholders widened to $12.6 million in 2024 from $9.8 million in 2023, a 28.0% increase[231] - Total operating costs and expenses increased to $13.8 million in 2024 from $11.2 million in 2023, a 23.3% rise[231] - Net loss per share increased to $0.39 in 2024 from $0.32 in 2023, a 21.9% increase[231] - Net loss for the year ended October 31, 2024, was $12.7 million, compared to $9.9 million in 2023[236] - Net cash used in operating activities for 2024 was $7.3 million, compared to $6.2 million in 2023[236] - Disbursements to acquire short-term investments in 2024 were $63.8 million, compared to $44.4 million in 2023[236] - Proceeds from maturities of short-term investments in 2024 were $68.0 million, compared to $38.8 million in 2023[236] - Net cash provided by financing activities in 2024 was $3.4 million, compared to $0.4 million in 2023[236] - Cash and cash equivalents at the end of 2024 were $1.3 million, compared to $0.9 million in 2023[236] - The company reported a net loss of $12.7 million for the year ended October 31, 2024, with Cancer Vaccines and CAR-T Therapeutics segments contributing $7.39 million and $5.26 million, respectively[307] - The company had no revenue in 2024, compared to $210,000 in 2023, which was solely generated from the Other segment[308] - The company raised approximately $2.96 million through an at-the-market equity offering in 2024 and may sell up to $97 million of common stock under its current equity program[67] - The company believes its existing cash and short-term investments will fund operations for at least the next twelve months, but may require additional funding through equity sales or debt, potentially diluting stockholders[67] - The company had approximately $19,924,000 in cash, cash equivalents, and short-term investments as of October 31, 2024[68] - The company does not generate any revenue from its therapeutics or vaccines and expects no significant revenue in the foreseeable future[68] - The company may need additional funding sooner than anticipated due to rapid resource consumption[68] - Interest income increased to $1,133,000 in fiscal year 2024, up from $1,081,000 in fiscal year 2023, driven by higher interest rates and increased average short-term investment holdings[174] - Cash and cash equivalents rose to $1.3 million in 2024 from $0.9 million in 2023, a 38.9% increase[228] - Short-term investments decreased to $18.7 million in 2024 from $22.9 million in 2023, a 18.6% decline[228] - Total current assets decreased to $21.4 million in 2024 from $25.4 million in 2023, a 15.7% decline[228] - Total liabilities increased to $2.7 million in 2024 from $2.2 million in 2023, a 25.7% rise[228] - Additional paid-in capital grew to $260.4 million in 2024 from $252.2 million in 2023, a 3.3% increase[234] - Accumulated deficit expanded to $240.8 million in 2024 from $228.2 million in 2023, a 5.5% increase[234] Intellectual Property and Licensing - The company relies on licenses from Wistar for CAR-T technology and Cleveland Clinic for cancer vaccine technologies, with potential risks if these licenses are terminated[117] - The company faces risks related to intellectual property disputes, which could impact its ability to commercialize products[116] - The company's revenue recognition policy involves complex judgments, particularly regarding technology licensing and intellectual property transfers[183] - Failure to maintain licenses could result in litigation, damages, and potential product sales restrictions, adversely affecting the company's operations and financial condition[122] - Disclosure or misappropriation of proprietary technology could erode the company's competitive position in the market[123] - Uncertainty regarding the issuance, validity, and enforceability of patents could impact the company's ability to protect its product candidates[124][125] - Delays in clinical trials could reduce the patent-protected marketing period for the company's product candidates[126] - Noncompliance with patent maintenance requirements could result in the loss of patent rights, enabling competitors to enter the market[127] - Changes in U.S. patent law, including recent Supreme Court rulings, could diminish the value of the company's patents and weaken its ability to enforce them[130] - Limited intellectual property rights outside the U.S. may hinder the company's ability to prevent competitors from using its technologies in foreign jurisdictions[131] - Enforcement of patent rights in foreign jurisdictions, particularly in China and developing countries, could be costly and ineffective[132] Equity and Stock Information - The company's common stock had 307 record holders as of January 8, 2025, with a closing price of $2.25 per share[159] - Equity compensation plans approved by security holders include 11,171,094 securities to be issued with a weighted average exercise price of $3.74[161] - The company has issued 13,488,062 shares of common stock with a weighted average exercise price of $3.53, and has the authority to issue an additional 645,000 shares annually, which may dilute stockholders' ownership and exert downward pressure on the stock price[141] - The company's common stock trades under the symbol "ANIX" on the NASDAQ Capital Market[158] - The 2018 Share Incentive Plan allows for the issuance of up to 5,000,000 shares initially, with an annual replenishment of 2,000,000 shares starting January 2019[163] - The 2018 Share Incentive Plan provides for various equity-based awards, including stock options and performance awards, and is administered by the Compensation Committee[163] - Future issuance or sale of shares, including an at-the-market equity offering of up to $97 million, could dilute ownership and reduce the market price of the company's common stock[133] - Fluctuations in quarterly operating results, driven by clinical trial progress and regulatory developments, could cause volatility in the company's stock price[137] - Weighted average fair value of stock options granted in 2024 is $2.94, compared to $3.29 in 2023[275] - Expected volatility for stock options decreased to 76.48% in 2024 from 100.27% in 2023[275] - Risk-free interest rate remained constant at 3.87% for both 2024 and 2023[275] - Excluded from Diluted EPS calculation for 2024 are options to purchase 12,158,062 shares and warrants to purchase 300,000 shares[278] Regulatory and Compliance Risks - The company faces risks of failing to enroll sufficient patients, meet clinical trial endpoints, or secure necessary materials for trials[74] - The company relies on strategic collaborations for manufacturing and commercialization but faces challenges in timing and establishing partnerships[75] - The company's product candidates, including CAR-T therapies and cancer vaccines, face significant development and regulatory challenges[83][84] - The company may incur substantial liabilities from product liability lawsuits, potentially limiting commercialization[76] - The company's biotechnology and pharmaceutical products are in early stages, with no revenue generated and significant uncertainty regarding profitability[79] - The company relies on third parties, including universities and medical institutions, to conduct pre-clinical studies and clinical trials, which may lead to delays and increased costs[88] - Failure to comply with cGCP regulations by third parties could result in unreliable clinical data and require additional trials, delaying regulatory approval[88] - Switching or adding third parties for clinical trials involves substantial costs and can cause delays, impacting development timelines[90] - The company is responsible for ensuring clinical trials comply with legal, regulatory, and scientific standards, despite reliance on third parties[88] - The company faces challenges in obtaining regulatory approval for T cell therapies due to limited regulatory experience with such treatments[87] - Establishing sales and marketing capabilities is crucial for gaining market acceptance of novel therapies post-regulatory approval[87] - The FDA regulatory approval process for the company's product candidates is lengthy, uncertain, and costly, with potential delays due to the novel nature of T cell therapies and cancer vaccines[107] - Clinical trial delays may occur due to financial constraints, patient recruitment challenges, site deviations, or manufacturing issues, which could harm the company's business prospects and delay revenue generation[108][110] Operational and Strategic Risks - The company's subsidiary, Certainty, holds a 4.4% equity stake in Wistar as of October 31, 2024, due to dilution from company funding[16] - The company does not expect to generate revenue from its vaccine or therapeutics programs in the near term and aims to license technologies to large pharmaceutical companies[27] - The company leases 2,000 square feet of office space in San Jose, California, with a base rent of approximately $5,000 per month and an option to extend the lease until September 30, 2029[153] - The company has not experienced any cybersecurity threats that have materially affected its operations[148] - The company is a smaller reporting company (SRC) and may remain so until its market value exceeds $250 million or it achieves over $100 million in annual revenues with a market value exceeding $700 million[143] - The company's operating lease liability as of October 31, 2024, has a present value of $232,000, with future minimum lease payments totaling $312,000 over the next five years[299] - The company has committed approximately $150,000 under technology license agreements for therapeutic and vaccine development programs over the next twelve months[301] - Future payments under research and development agreements, including for a breast cancer vaccine Phase 2 trial and CAR-T technology development, may total approximately $4.2 million over up to five years[302] - The company has federal tax net operating loss carryforwards of approximately $99.87 million and tax credit carryforwards of $1.95 million as of October 31, 2024[303] - California tax net operating loss carryforwards amount to approximately $60.62 million, expiring between 2025 and 2044[304] - The company's ability to use net operating loss carryforwards may be limited due to potential ownership changes[71] - The company's CAR-T ovarian cancer therapeutic and cancer vaccines are in early development stages, requiring significant resources for FDA approvals[72] - The company faces risks related to reliance on a single or limited number of suppliers for raw materials, which could disrupt production if suppliers go out of business or are acquired by competitors[105] - The company may pursue strategic alliances, joint ventures, or licensing arrangements, but these could lead to increased costs, dilution of stock, or integration challenges, with no guarantee of successful outcomes[106] - The company's investment policy includes diversified financial instruments, such as U.S. government debt securities and Bitcoin Assets, with Bitcoin Assets measured at fair value based on active market prices[260][261] - As of October 31, 2024, the company's financial assets measured at fair value totaled $19.8 million, including $1.2 million in Level 1 cash equivalents and $18.7 million in Level 2 U.S. treasury bills[266] - Research and development expenses for 2024 and 2023 included $4.4 million in stock-based compensation for employees and directors, with $4.8 million in unrecognized compensation costs as of October 31, 2024[272] - The company recorded $125,000 in consulting expenses related to stock options granted to consultants in 2024, with $180,000 in unrecognized consulting expenses as of October 31, 2024[273] - The company uses the Black-Scholes pricing model to estimate the fair value of stock options, with grants during 2024 and 2023 having 5-year and 10-year terms vesting over 12 to 36 months[274] - The company's short-term investments as of October 31, 2024, included $18.7 million in U.S. treasury bills and certificates of deposit, compared to $22.9 million in 2023[268] - FASB issued Accounting Standards Update 2023-07, effective for fiscal years beginning after December 15, 2023, requiring more disaggregated expense information[281] - FASB issued Accounting Standards Update 2023-09, effective for fiscal years beginning after December 15, 2024, requiring disaggregated information about effective tax rate reconciliation[282] - FASB issued Accounting Standards Update 2024-03, effective for fiscal years beginning after December 15, 2026, improving disclosures about expense types[283]