Traws Pharma, Inc.(TRAW) - 2023 Q2 - Quarterly Report

PART I — FINANCIAL INFORMATION Financial Statements (Unaudited) This section presents Onconova Therapeutics' unaudited condensed consolidated financial statements for Q2 and H1 2023, detailing financial position, operations, and cash flows Condensed Consolidated Balance Sheets As of June 30, 2023, the balance sheet shows total assets decreased to $30.5 million from $39.4 million, primarily due to reduced cash, while stockholders' equity significantly declined Condensed Consolidated Balance Sheets (in thousands) | | June 30, 2023 (unaudited) | December 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $29,729 | $38,757 | | Total current assets | $30,450 | $39,347 | | Total assets | $30,468 | $39,372 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $8,666 | $8,046 | | Total liabilities | $11,570 | $11,063 | | Total stockholders' equity | $18,898 | $28,309 | | Total liabilities and stockholders' equity | $30,468 | $39,372 | Condensed Consolidated Statements of Operations For Q2 and H1 2023, the company reported increased net losses of $4.3 million and $10.0 million, respectively, primarily driven by higher research and development expenses Condensed Consolidated Statements of Operations (unaudited, in thousands) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | :--- | :--- | | | 2023 | 2022 | 2023 | 2022 | | Revenue | $57 | $57 | $113 | $113 | | Research and development | $2,456 | $2,038 | $6,536 | $4,040 | | General and administrative | $2,211 | $2,139 | $4,324 | $4,325 | | Loss from operations | ($4,610) | ($4,120) | ($10,747) | ($8,252) | | Net loss | ($4,250) | ($4,024) | ($10,025) | ($8,146) | | Net loss per share, basic and diluted | ($0.20) | ($0.19) | ($0.48) | ($0.39) | Condensed Consolidated Statements of Cash Flows For H1 2023, net cash used in operating activities increased to $9.0 million, resulting in a decrease of cash and cash equivalents from $38.8 million to $29.7 million Condensed Consolidated Statements of Cash Flows (unaudited, in thousands) | | Six Months Ended June 30, | | :--- | :--- | :--- | | | 2023 | 2022 | | Net cash used in operating activities | $(9,033) | $(8,510) | | Net decrease in cash and cash equivalents | $(9,028) | $(8,537) | | Cash and cash equivalents at beginning of period | $38,757 | $55,070 | | Cash and cash equivalents at end of period | $29,729 | $46,533 | Notes to Condensed Consolidated Financial Statements These notes detail the company's accounting policies, business nature, and key financial disclosures, including going concern issues and revenue recognition - The company is a clinical-stage biopharmaceutical firm focused on cancer treatments, with two main clinical programs: narazaciclib (a multi-kinase inhibitor) and oral rigosertib[14] - The company has incurred recurring operating losses since inception, with an accumulated deficit of $473.7 million as of June 30, 2023. Management has concluded that substantial doubt exists about the company's ability to continue as a going concern, as current cash is only sufficient to fund operations into the second quarter of 2024[15][16] - All revenue for the three and six months ended June 30, 2023 and 2022, was derived from the license and collaboration agreement with SymBio[28] Stock-Based Compensation Expense (in thousands) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | :--- | :--- | | | 2023 | 2022 | 2023 | 2022 | | General and administrative | $168 | $72 | $334 | $259 | | Research and development | $105 | $169 | $275 | $278 | | Total | $273 | $241 | $609 | $537 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition, operational results, and outlook, emphasizing clinical program progress, increased R&D, and ongoing going concern issues Overview Onconova, a clinical-stage biopharmaceutical company, faces substantial doubt about its going concern ability due to recurring losses and limited cash runway into Q2 2024 - The company's two clinical-stage programs are narazaciclib (a multi-targeted kinase inhibitor) and rigosertib (for various cancers)[61] - As of June 30, 2023, the company had an accumulated deficit of $473.7 million and cash and cash equivalents of $29.7 million[62][63] - Management believes current cash is sufficient to fund operations only into the second quarter of 2024, which raises substantial doubt about the company's ability to continue as a going concern[63] Product Candidates / Compounds This section details the company's key product candidates, narazaciclib and rigosertib, highlighting their clinical trial progress and potential indications - Narazaciclib: A multi-kinase inhibitor differentiated from other CDK4/6 inhibitors by also targeting ARK5 and CSF1R. It is being developed in partnership with HanX in China, where a Phase 1 study is ongoing[66][69][77] - Narazaciclib Clinical Trials: A complementary U.S. Phase 1 study in advanced cancers is ongoing, with the sixth dose cohort currently enrolling. A new Phase 1/2a trial in combination with letrozole for low-grade endometrioid endometrial cancer (LGEEC) began dosing patients in May 2023[79][100] - Rigosertib in RDEB-SCC: An investigator-initiated study in patients with recessive dystrophic epidermolysis bullosa-associated squamous cell carcinoma (RDEB-SCC) has shown encouraging results, including a sustained complete remission in one patient. The company met with the FDA and plans to design a registrational trial for this indication[104][107][108] - Rigosertib in KRAS-Mutated Cancers: An investigator-initiated Phase 1/2a study is exploring oral rigosertib in combination with nivolumab for patients with checkpoint inhibitor-resistant, KRAS-mutated non-small cell lung cancer (NSCLC)[101] Results of Operations Revenue remained flat, while increased R&D expenses, particularly for narazaciclib, led to higher net losses of $4.3 million for Q2 and $10.0 million for H1 2023 Comparison of Three Months Ended June 30, 2023 and 2022 (in thousands) | | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Revenue | $57 | $57 | $— | | General and administrative | $2,211 | $2,139 | ($72) | | Research and development | $2,456 | $2,038 | ($418) | | Loss from operations | ($4,610) | ($4,120) | ($490) | | Net loss | ($4,250) | ($4,024) | ($226) | - For Q2 2023, R&D expenses increased by $0.4 million (21%) due to higher clinical development and manufacturing costs for narazaciclib[114] Comparison of Six Months Ended June 30, 2023 and 2022 (in thousands) | | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Revenue | $113 | $113 | $— | | Research and development | $6,536 | $4,040 | ($2,496) | | Loss from operations | ($10,747) | ($8,252) | ($2,495) | | Net loss | ($10,025) | ($8,146) | ($1,879) | - For the six months ended June 30, 2023, R&D expenses increased by $2.5 million (62%), primarily due to a $1.7 million increase in clinical development and a $0.9 million increase in manufacturing costs for narazaciclib[119] Liquidity and Capital Resources With $29.7 million in cash as of June 30, 2023, the company faces critical liquidity issues, projecting funds only into Q2 2024, raising substantial doubt about its going concern ability - At June 30, 2023, the company had cash and cash equivalents of $29.7 million and an accumulated deficit of $473.7 million[125] - The company believes its cash will only be sufficient to fund operations into the second quarter of 2024, leading to substantial doubt about its ability to continue as a going concern[125] - The company plans to explore various dilutive and non-dilutive funding sources to alleviate the going concern issue, but there is no assurance of success[126] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Onconova Therapeutics, Inc. is not required to provide this information - The Company is not required to provide this information as it qualifies as a smaller reporting company[135] Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal controls during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2023[136] - No material changes to the company's internal control over financial reporting occurred during the fiscal quarter ended June 30, 2023[137] PART II — OTHER INFORMATION Legal Proceedings The company is not a party to any pending material legal proceedings, nor is it aware of any contemplated by governmental authorities - The company is not party to any pending material legal proceedings[139] Risk Factors The company faces significant risk of delisting from Nasdaq due to potential non-compliance with continued listing requirements, particularly the minimum bid price rule - A significant risk is the potential failure to comply with Nasdaq's continued listing requirements, particularly the minimum bid price rule[141] - The company has a history of non-compliance with Nasdaq's minimum bid price and minimum stockholders' equity requirements. The closing price on August 11, 2023, was $0.96[142] - Delisting from Nasdaq could impair the stock's liquidity and the company's ability to raise capital[143] Unregistered Sales of Equity Securities and Use of Proceeds This item is reported as not applicable for the period - Not applicable[145] Exhibits This section lists the exhibits filed with the Form 10-Q, including required certifications and XBRL data files - The report includes certifications from the Principal Executive Officer and Principal Financial Officer as required by Rule 13a-14(a)/15d-14(a) and Section 1350[146]