Scorpius Holdings(SCPX) - 2022 Q1 - Quarterly Report

Financial Performance - For the three months ended March 31, 2022, the company recognized $0.2 million in grant revenue, a decrease from $0.5 million in the same period in 2021, primarily due to the expected timing of contract deliveries [144]. - Research and development expenses increased approximately 15.5% to $3.9 million for the three months ended March 31, 2022, compared to $3.4 million for the same period in 2021 [145]. - General and administrative expenses decreased to $3.8 million for the three months ended March 31, 2022, down from $4.8 million in 2021, primarily due to a $2.0 million decrease in stock-based compensation [146]. - Total non-operating loss was ($0.7) million for the three months ended March 31, 2022, compared to a non-operating income of $18,108 for the same period in 2021 [148]. - Net cash used in operating activities was $10.2 million for the three months ended March 31, 2022, compared to $4.8 million in the same period in 2021 [160]. - Net cash provided by investing activities was $16.8 million during the three months ended March 31, 2022, compared to $0.6 million in 2021, driven by an increase in net sale of short-term investments [164]. - The company incurred an accumulated deficit of $173.8 million through March 31, 2022, and expects to continue incurring significant expenses and losses from operations [166]. - The company has approximately $84.1 million in cash and cash equivalents and short-term investments as of March 31, 2022 [172]. Mergers and Acquisitions - The company closed the merger with Elusys Therapeutics on April 18, 2022, paying an upfront cash amount of $3 million and agreeing to additional milestone payments and earn-out payments over 12 years [136]. - The merger with Elusys included an upfront cash payment of $3 million and additional milestone payments related to future revenues [154]. - The company expects to incur an additional $2 million payment related to the acquisition of Elusys, along with $1.6 million in additional expenses [170]. - The company anticipates increased costs associated with the manufacture of Anthim due to the acquisition of Elusys [170]. Clinical Development - The company completed the enrollment of its Phase 2 trial for HS-110 in combination with either nivolumab or pembrolizumab for advanced non-small cell lung cancer (NSCLC) patients [125]. - PTX-35 is being evaluated in a Phase 1 clinical trial for advanced solid tumors, showing potential to enhance CD8+ T-cell activation [128]. - The proprietary gp96 platform is designed to induce immune responses against cancer and infectious diseases, leveraging the body's natural immune activation mechanisms [124]. - The RapidVax platform is designed for accelerated responses to biological threats, utilizing a flexible antigen expression system for T-cell activation [130]. Future Plans and Investments - The company plans to launch Scorpion Biologics as a CDMO to support biotherapeutics and discovery pipeline, with a focus on expanding manufacturing capabilities [132]. - The company is developing a new biodefense-focused large molecule and biologics biomanufacturing facility in Manhattan, Kansas, with over $300 million in funding sought for its development [141]. - The company plans to invest approximately $30.5 million to build out a new facility in San Antonio, TX, with operations projected to commence by the third quarter of 2022 [153]. - The company plans to invest approximately $30.5 million in building out a new manufacturing facility in San Antonio, TX, to enhance in-house capabilities and reduce reliance on third-party vendors [168]. - As of May 13, 2022, the company has spent $20.6 million on laboratory-related manufacturing equipment for the San Antonio facility [168]. - The potential value of tax credits and incentives for the San Antonio facility is estimated to be up to $4.5 million [168]. - Operations at the new facility are projected to commence by the third quarter of 2022, with plans to transition outsourced manufacturing in-house [168]. - The company is considering multiple financing alternatives, including equity and debt financings, to meet future capital needs [173]. - The company does not expect to use significant corporate resources for advancing its COVID-19 program and is seeking grant funding for clinical development [172]. - The company has sufficient funds to complete current clinical trials and expects to fund operations into 2024, but will need substantial additional funding for future initiatives [172].