Bio-Path(US:BPTH)2020-03-05 21:11Part I Business Bio-Path Holdings is an oncology company developing RNAi nanoparticle drugs using its DNAbilize® platform, with three candidates in clinical and preclinical stages - The company's core technology is DNAbilize®, a novel RNAi nanoparticle drug delivery platform designed for systemic, target-specific protein inhibition with a strong safety profile16 Drug Development Pipeline | Drug Candidate | Target Protein | Key Indications | Development Stage | | :--- | :--- | :--- | :--- | | Prexigebersen | Grb2 | Acute Myeloid Leukemia (AML), Myelodysplastic Syndrome (MDS), Chronic Myeloid Leukemia (CML), Solid Tumors | Phase 2 (AML/MDS), Phase 2a planned (CML), Phase 1 planned (Solid Tumors) | | BP1002 | Bcl-2 | Lymphoma, Chronic Lymphocytic Leukemia (CLL) | Phase 1 (IND cleared) | | BP1003 | Stat3 | Pancreatic Cancer, Non-Small Cell Lung Cancer (NSCLC), AML | IND-enabling studies | - The company's strategy focuses on developing its lead candidates for multiple indications, expanding the DNAbilize® platform beyond cancer, and establishing partnerships for co-development and licensing444950 - Bio-Path relies entirely on third-party manufacturers for its clinical drug supplies and currently has no internal manufacturing, sales, or marketing capabilities125126 - The company has strengthened its intellectual property portfolio with two issued U.S. patents for its DNAbilize® technology, covering its use in treating cancers, autoimmune diseases, and infectious diseases129 Risk Factors The company faces significant risks including operating losses, capital needs, intense competition, uncertain drug development, reliance on third parties, and stock price volatility - The company is a clinical-stage entity with no significant revenue, a history of operating losses ($56.3 million accumulated deficit as of Dec 31, 2019), and expects to incur future losses; profitability is not guaranteed182183 - Substantial additional capital is required for future operations; failure to raise funds may force the company to delay, reduce, or eliminate drug development programs186189 - The success of the business hinges on completing extensive and costly clinical trials to demonstrate the safety and efficacy of its drug candidates, a process with a high risk of failure233234 - The company relies on third-party manufacturers for its clinical drug supplies, which poses risks related to regulatory compliance, quality assurance, and potential supply disruptions267268 - The company's common stock is thinly traded and has been highly volatile, with a price range from $1.61 to $270.00 (split-adjusted) between Jan 2017 and Dec 2019; failure to maintain a minimum stock price of $1.00 could lead to delisting from The Nasdaq Capital Market320322332 Unresolved Staff Comments There are no unresolved staff comments reported by the company - There are no unresolved staff comments334 Properties The company leases office and lab space in Bellaire, Texas, with leases extending to October 2024 and April 2022, respectively - The company leases office space in Bellaire, Texas, with the lease term extended to October 31, 2024335 - The company also leases lab space in Bellaire, Texas, for research and development, with the lease term extended to April 30, 2022336 Legal Proceedings The company reports no legal proceedings - There are no legal proceedings to report338 Mine Safety Disclosures This item is not applicable to the company - Not applicable339 Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock trades on Nasdaq under "BPTH," with 3.69 million shares outstanding as of February 2020, and no cash dividends have been paid or are anticipated - The company's common stock trades on The Nasdaq Capital Market under the symbol "BPTH"342 - As of February 27, 2020, there were 3,691,857 shares of common stock outstanding342 - The company has never paid cash dividends and does not plan to in the foreseeable future343 Selected Consolidated Financial Data This item is not applicable to the company - Not applicable346 Management's Discussion and Analysis of Financial Condition and Results of Operation In FY2019, the company reported no revenue, a net loss of $8.6 million, stable R&D, increased G&A, and a significant cash increase to $20.4 million from financing activities Results of Operations (in thousands) | Metric | FY 2019 | FY 2018 | Change | | :--- | :--- | :--- | :--- | | Revenue | $0 | $0 | - | | Research & Development Expense | $4,585 | $4,603 | ($18) | | General & Administrative Expense | $4,108 | $3,379 | $729 | | Net Operating Loss | ($8,693) | ($8,590) | ($103) | | Net Loss | ($8,599) | ($8,583) | ($16) | | Net Loss Per Share | ($3.24) | ($14.38) | $11.14 | - The company's cash balance increased significantly from $1.0 million at the end of 2018 to $20.4 million at the end of 2019368 - Net cash provided by financing activities was $27.8 million in 2019, primarily from multiple registered direct offerings, an underwritten offering, and warrant exercises371 - Management believes that the available cash of $20.4 million as of December 31, 2019, is sufficient to fund operations and capital requirements for at least the next 12 months368 Quantitative and Qualitative Disclosures About Market Risk This item is not applicable to the company - Not applicable398 Financial Statements and Supplementary Data This section refers to the consolidated financial statements and the independent auditor's report, located starting on page F-1 - The company's consolidated financial statements and the independent auditor's report are included beginning on page F-1400 Changes and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no changes or disagreements with accountants on accounting and financial disclosure - There were no disagreements with accountants on accounting and financial disclosure400 Controls and Procedures Management concluded disclosure controls and internal control over financial reporting were effective as of December 31, 2019, having remediated a prior material weakness - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2019402 - A material weakness in internal control over financial reporting, identified in the prior year related to clinical trial expense accrual, was remediated through improved processes and communication between clinical and finance personnel406 - Based on its evaluation, management believes that the company's internal control over financial reporting was effective as of December 31, 2019407 Other Information The company reports no other information - None409 Part III Directors, Executive Officers and Corporate Governance The company's Board of Directors has five members, including CEO Peter H. Nielsen, with three independent directors and standing committees composed of independent members - The Board of Directors is comprised of five members, with Peter H. Nielsen serving as Chairman, CEO, President, and CFO411413 - Three of the five directors are independent: Heath W. Cleaver, Paul D. Aubert, and Martina Molsbergen419 - The Board has three standing committees: Audit, Compensation, and Nominating/Corporate Governance, each composed of independent directors421 Executive Compensation In FY2019, CEO Peter H. Nielsen received $734,734 in total compensation, while non-employee directors receive cash retainers, meeting fees, and stock option grants NEO Compensation (Peter H. Nielsen) | Year | Salary | Option Awards | Total Compensation | | :--- | :--- | :--- | :--- | | 2019 | $490,000 | $244,570 | $734,734 | | 2018 | $490,000 | $181,711 | $671,927 | - Non-employee director compensation includes annual cash retainers, fees for board and committee meeting attendance, and an annual stock option grant for 1,000 shares of common stock459464 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters As of February 27, 2020, CEO Peter H. Nielsen beneficially owned 1.17% of common stock, with all executive officers and directors as a group owning less than 1% - As of February 27, 2020, CEO Peter H. Nielsen beneficially owned 43,401 shares, representing 1.17% of the class466 - All executive officers and directors as a group beneficially owned less than 1% of the company's common stock466 Certain Relationships and Related Party Transactions, and Director Independence The Audit Committee reviews related party transactions, with no material transactions reported beyond standard compensation, and three directors are deemed independent - The Audit Committee reviews and pre-approves all related party transactions; no material related party transactions were disclosed for the last two fiscal years, aside from compensation and indemnification agreements474476477 - The Board has identified Heath W. Cleaver, Paul D. Aubert, and Martina Molsbergen as independent directors479 Principal Accounting Fees and Services In FY2019, the company paid $225,000 in audit fees to BDO USA, LLP, a decrease from $230,000 in FY2018 Accounting Fees (in thousands) | Fee Type | FY 2019 | FY 2018 | | :--- | :--- | :--- | | Audit Fees | $225 | $230 | | Audit-Related Fees | $0 | $0 | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 | | Total | $225 | $230 | Part IV Exhibits and Financial Statement Schedules This section confirms the inclusion of financial statements and the omission of schedules, along with a list of filed exhibits - The required financial statements are included in the report, starting on page F-1486 - All financial statement schedules are omitted because they are not applicable or the required information is already included elsewhere487 Form 10-K Summary The company reports no Form 10-K summary - None519