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Scinai Immunotherapeutics .(SCNI) - 2024 Q4 - Annual Report
SCNIScinai Immunotherapeutics .(SCNI)2025-05-07 11:42

Financial Performance - As of December 31, 2024, the company had cash and cash equivalents of 1.9million,downfrom1.9 million, down from 4.9 million as of December 31, 2023[41]. - The company reported an operating loss of 8.6millionforthetwelvemonthsendedDecember31,2024,comparedtoalossof8.6 million for the twelve months ended December 31, 2024, compared to a loss of 9.7 million for the same period in 2023[35]. - The accumulated deficit as of December 31, 2024, was 117.6million,slightlyimprovedfrom117.6 million, slightly improved from 122.5 million as of December 31, 2023[40]. - The current cash resources are insufficient to fund projected cash requirements for at least the next 12 months[41]. - The company has implemented a cost-saving plan, including layoffs and postponing capital expenditures[36]. - The company has not paid any cash dividends on the ADSs since inception and does not anticipate doing so in the foreseeable future[209]. Business Strategy and Development - The company has suspended further development of its COVID-19 NanoAb program due to decreased market interest and funding[47]. - The focus has shifted to developing NanoAbs targeting Interleukin-17 (IL-17) for conditions like plaque psoriasis and psoriatic arthritis, with a licensing agreement established in June 2023[47]. - The company is exploring an acquisition of the Italian biotech company Pincell srl, which owns a fully human monoclonal antibody[47]. - The option agreement for acquiring Pincell includes a requirement to secure 3millionbyDecember31,2025,tofundthedevelopmentofPC111,amonoclonalantibody[55].−Thecompanyplanstocommenceapre−clinicaltoxicologystudyforanovelVHHantibodyforpsoriasisin2026[180].−ThecompanyhasestablishedaCDMObusinessunittoleverageitslaboratoryandmanufacturingcapacityatitscGMPfacilityinJerusalem[227].RegulatoryandComplianceChallenges−ThecompanyisfocusingonthedevelopmentofIL−17NanoAbfortreatingpsoriasisandpsoriaticarthritis,facingsignificantregulatorychallengesduetothenoveltyofthetechnology[51].−ThecompanymayfacedelaysinregulatoryapprovalsduetotheextensiverequirementssetbytheFDAandotherauthorities,whichcansignificantlyimpactcommercializationtimelines[59].−Regulatoryauthoritiesmayimposeongoingrequirementsevenafterapproval,whichcouldleadtolossofapprovalsifnotcompliedwith[62].−Thecompanymustnavigatecomplexregulatoryenvironments,whichmayleadtoincreasedcostsanddelaysinproductdevelopmentandapproval[60].−Thecompanyissubjecttoextensivegovernmentregulation,whichincreasesthecostandriskofdevelopingandsellingproducts[96].−Thecompanymustcomplywithvariousfederalandstatehealthcarelaws,withnon−compliancepotentiallyresultinginsignificantpenaltiesandoperationalrestrictions[100].MarketandCompetitiveLandscape−Thecompanyfacescompetitionfromotherproductstargetingthesameconditions,includingbiosimilars,whichcouldaffectmarketshare[64].−Thecompanyhaslimitedmarketingcapabilitiesandmaystruggletodevelopitsownsalesforce,impactingthecommercializationofitsproductcandidates[50].−Marketacceptanceandsalesofproductcandidatesdependheavilyoncoverageandreimbursementpoliciesfromgovernmentauthoritiesandthird−partypayors[89].−IntheU.S.,reimbursementforpharmaceuticalproductsvariessignificantlyamongthird−partypayors,impactingsalespotential[90].−Thecompanyfacessignificantcompetitionfromfullyintegratedpharmaceuticalcompaniesandsmallerbiotechfirms,whichmayhavegreaterfinancialresourcesandexperience[120].ClinicalTrialsandDevelopmentRisks−Thecompanyacknowledgesthehighrateofattritioninclinicaltrials,indicatingthatsuccessinearlytrialsdoesnotguaranteelatersuccess[59].−Participantenrollmentinclinicaltrialsiscritical,anddelayscouldsignificantlyincreasedevelopmentcostsandhindertimelyregulatoryapprovals[80].−Thecompanymayfacechallengesinachievingprimary/secondaryendpointsinclinicaltrials,whichcouldnecessitateadditionalstudiesandfurtherdelaycommercialization[68].−Ifclinicaltrialsproducenegativeresults,thecompanymayberequiredtoconductadditionaltrials,impactingtheabilitytoobtainregulatoryapproval[77].−TheFDAmaynotacceptdatafromclinicaltrialsconductedoutsidetheU.S.,potentiallyleadingtocostlyandtime−consumingadditionaltrials[74].OperationalandFinancialRisks−Theabilitytocontinueoperationsishighlydependentonobtainingadditionalfinancing,whichmaynotbeavailableunderfavorableterms[41].−Thecompanyfaceschallengesinidentifyingpotentialproductcandidatesduetoresearchmethodologylimitations[88].−ThecompanymaystruggletofindpartnersforthedevelopmentofitsCOVID−19NanoAbprogram,whichiscurrentlysuspendedduetolowinterestandfunding[78].−Thecompanyisexposedtopotentialproductliabilityrisks,whichcouldresultinsubstantialliabilitiesandaffectitsabilitytomarketcurrentandfutureproductcandidates[126].−Thecompanymayfacechallengesinobtainingadequateinsurancecoverage,whichcouldadverselyaffectitsfinancialconditionandabilitytorecruitqualifiedpersonnel[130].IntellectualPropertyandLegalRisks−Thecompanymayfacechallengesinprotectingitsintellectualpropertyrights,whichcoulddiminishitscompetitivepositionandfuturerevenues[151].−Thecompanymayneedtoengageincostlylitigationtoprotectitsintellectualpropertyrights,whichcoulddivertmanagementresourcesandattention[163].−Thereisariskthatthecompanymaybeunabletoobtainexclusivelicensesforco−ownedpatents,potentiallyallowingcompetitorstomarketsimilarproducts[159].−Thecompany’srelianceonproprietaryknow−howandconfidentialityagreements,butthesemaynotprovideadequateprotectionagainstunauthorizeduseordisclosure[161].−Thecompanymayfacesignificantexpensesandliabilitiesfromclaimsallegingviolationofthird−partyintellectualpropertyrights,whichcouldharmitsbusiness[165].ExternalFactorsandMarketConditions−TheemergenceofnewCOVID−19variantsposesongoingriskstothecompany′soperationsandfinancialstability,potentiallydisruptingsupplychainsandaccesstocapital[105].−Theongoingconflictmaydisruptthecompany′soperationsandsupplychain,impactingbusinesscontinuity[186].−Moody′sdowngradedIsrael′screditratingfromA1toA2,withanegativeoutlook,whichmayaffectthecompany′sabilitytoraisecapital[185].−ThepoliticalandsecuritysituationinIsraelmayleadtodelaysinbusinessagreementsandaffectsupplychainlogistics[178].−ThecompanyisexposedtocurrencyfluctuationrisksduetooperationalexpensesincurredincurrenciesotherthantheU.S.Dollar[198].NasdaqComplianceandShareholderIssues−FailuretomeetNasdaq′scontinuedlistingrequirementscouldresultindelisting,adverselyaffectingmarketliquidityandshareprice[199].−OnNovember1,2023,thecompanyreceivedanoticeofnon−compliancefromNasdaqregardingtheminimumbidpricerequirementof3 million by December 31, 2025, to fund the development of PC111, a monoclonal antibody[55]. - The company plans to commence a pre-clinical toxicology study for a novel VHH antibody for psoriasis in 2026[180]. - The company has established a CDMO business unit to leverage its laboratory and manufacturing capacity at its cGMP facility in Jerusalem[227]. Regulatory and Compliance Challenges - The company is focusing on the development of IL-17 NanoAb for treating psoriasis and psoriatic arthritis, facing significant regulatory challenges due to the novelty of the technology[51]. - The company may face delays in regulatory approvals due to the extensive requirements set by the FDA and other authorities, which can significantly impact commercialization timelines[59]. - Regulatory authorities may impose ongoing requirements even after approval, which could lead to loss of approvals if not complied with[62]. - The company must navigate complex regulatory environments, which may lead to increased costs and delays in product development and approval[60]. - The company is subject to extensive government regulation, which increases the cost and risk of developing and selling products[96]. - The company must comply with various federal and state healthcare laws, with non-compliance potentially resulting in significant penalties and operational restrictions[100]. Market and Competitive Landscape - The company faces competition from other products targeting the same conditions, including biosimilars, which could affect market share[64]. - The company has limited marketing capabilities and may struggle to develop its own sales force, impacting the commercialization of its product candidates[50]. - Market acceptance and sales of product candidates depend heavily on coverage and reimbursement policies from government authorities and third-party payors[89]. - In the U.S., reimbursement for pharmaceutical products varies significantly among third-party payors, impacting sales potential[90]. - The company faces significant competition from fully integrated pharmaceutical companies and smaller biotech firms, which may have greater financial resources and experience[120]. Clinical Trials and Development Risks - The company acknowledges the high rate of attrition in clinical trials, indicating that success in early trials does not guarantee later success[59]. - Participant enrollment in clinical trials is critical, and delays could significantly increase development costs and hinder timely regulatory approvals[80]. - The company may face challenges in achieving primary/secondary endpoints in clinical trials, which could necessitate additional studies and further delay commercialization[68]. - If clinical trials produce negative results, the company may be required to conduct additional trials, impacting the ability to obtain regulatory approval[77]. - The FDA may not accept data from clinical trials conducted outside the U.S., potentially leading to costly and time-consuming additional trials[74]. Operational and Financial Risks - The ability to continue operations is highly dependent on obtaining additional financing, which may not be available under favorable terms[41]. - The company faces challenges in identifying potential product candidates due to research methodology limitations[88]. - The company may struggle to find partners for the development of its COVID-19 NanoAb program, which is currently suspended due to low interest and funding[78]. - The company is exposed to potential product liability risks, which could result in substantial liabilities and affect its ability to market current and future product candidates[126]. - The company may face challenges in obtaining adequate insurance coverage, which could adversely affect its financial condition and ability to recruit qualified personnel[130]. Intellectual Property and Legal Risks - The company may face challenges in protecting its intellectual property rights, which could diminish its competitive position and future revenues[151]. - The company may need to engage in costly litigation to protect its intellectual property rights, which could divert management resources and attention[163]. - There is a risk that the company may be unable to obtain exclusive licenses for co-owned patents, potentially allowing competitors to market similar products[159]. - The company’s reliance on proprietary know-how and confidentiality agreements, but these may not provide adequate protection against unauthorized use or disclosure[161]. - The company may face significant expenses and liabilities from claims alleging violation of third-party intellectual property rights, which could harm its business[165]. External Factors and Market Conditions - The emergence of new COVID-19 variants poses ongoing risks to the company's operations and financial stability, potentially disrupting supply chains and access to capital[105]. - The ongoing conflict may disrupt the company's operations and supply chain, impacting business continuity[186]. - Moody's downgraded Israel's credit rating from A1 to A2, with a negative outlook, which may affect the company's ability to raise capital[185]. - The political and security situation in Israel may lead to delays in business agreements and affect supply chain logistics[178]. - The company is exposed to currency fluctuation risks due to operational expenses incurred in currencies other than the U.S. Dollar[198]. Nasdaq Compliance and Shareholder Issues - Failure to meet Nasdaq's continued listing requirements could result in delisting, adversely affecting market liquidity and share price[199]. - On November 1, 2023, the company received a notice of non-compliance from Nasdaq regarding the minimum bid price requirement of 1.00 per share, with a 180-day period to regain compliance[200]. - The company appealed the delisting determination and approved a reverse split of 1 for 10, increasing the number of Ordinary Shares represented by each ADS from 400 to 4,000, which allowed it to regain compliance with the Minimum Price Rule[200]. - On November 20, 2023, the company announced it had regained compliance with the Minimum Stockholders' Equity Rule after receiving formal notification from Nasdaq[201]. - A delisting from Nasdaq would likely negatively impact the price of the ADSs and impair shareholders' ability to trade their securities[205].