Inhibikase Therapeutics(IKT) - 2024 Q4 - Annual Report

PART I Business Inhibikase Therapeutics, a clinical-stage pharmaceutical company, prioritizes IKT-001 for PAH, leveraging third-party manufacturing and recent financing - The company's primary focus is advancing its lead program IKT-001, a prodrug of imatinib mesylate, for the treatment of Pulmonary Arterial Hypertension (PAH)[14] - Development of risvodetinib (IkT-148009) for Parkinson's disease has been paused following the completion of the Phase 2 '201 Trial' in October 2024, allowing the company to allocate resources to the IKT-001 program[14][32] - In February 2025, the company acquired CorHepta Pharmaceuticals, Inc. for $15.0 million in stock to expand its product pipeline and strengthen its scientific leadership[32] - The company secured approximately $110 million in gross proceeds from a private placement in October 2024 to finance the initiation of a Phase 2b trial for IKT-001 in PAH[20][32] Company Overview and Pipeline This clinical-stage firm focuses on cardiopulmonary diseases with lead candidate IKT-001 for PAH, confirmed for the 505(b)(2) pathway - IKT-001 is a prodrug of imatinib mesylate designed to improve oral absorption and reduce GI side effects, targeting the PAH market[14][15] - A bioequivalence study completed in 2023 established dose relationships, with 300 mg of IKT-001 bioequivalent to 230 mg of imatinib mesylate, and 500 mg equivalent to 383 mg[15] - The FDA confirmed the 505(b)(2) pathway is appropriate for IKT-001 approval, viewing it as a New Molecular Entity (NME) for potential market exclusivity[16][20] - The IND for a Phase 2b trial in PAH was cleared by the FDA on September 9, 2024, after studies showed neither IKT-001 nor imatinib inhibit the hERG ion channel[20] Strategy and Management The company aims for IKT-001 FDA approval in PAH, strengthening its leadership with new CEO Mark Iwicki and Chairman Amit Munshi - New leadership includes Mark Iwicki as CEO and Amit Munshi as Chairman of the Board, effective February 14, 2025, bringing extensive biopharmaceutical industry experience[24][25][27] - The leadership team was strengthened by the addition of Dr. Chris Cabell and Dr. John Adams from CorHepta, enhancing drug development and cardiovascular expertise[28][29] History, Financing, and Government Funding Founded in 2008, the company went public in 2020, securing over $17 million in federal grants and recent private placements totaling $114 million for IKT-001 Recent Financing Activities | Date | Event | Gross Proceeds | | :--- | :--- | :--- | | May 2024 | Registered direct offering | $4,000,000 | | Oct 2024 | Private placement | $110,000,000 | - The company received significant non-dilutive funding from U.S. federal sources, including six NIH grants totaling $10,053,365 for RAMP™ and two NIH grants totaling $2,286,778 for its prodrug platform[31][33] - A Department of Defense (DoD) contract provided $7,129,614 for Medical Counter Measures (MCMs), with inventions developed under federal funding subject to government 'march-in' rights[31][34] Material Agreements and Manufacturing The company holds exclusive IKT-001 commercialization rights via an agreement with Pivot Holding LLC, paying $0.5 million upfront and $4.4 million upon FDA approval, while outsourcing all manufacturing to CMOs like WuXi AppTec - The Sphaera Agreement, now with Pivot Holding LLC, grants exclusive commercialization rights for IKT-001, with a September 2024 amendment stipulating a $500,000 upfront payment, a $4.4 million payment upon FDA approval, and a low single-digit royalty on net sales[35] - The company outsources all manufacturing, relying on third-party CMOs for preclinical and clinical drug supply without owning or operating its own facilities[41][42] - Key manufacturing partners include STA Pharmaceutical US LLC and STA Pharmaceuticals Co., Ltd., both subsidiaries of China-based WuXi AppTec Co., Ltd., for cGMP manufacturing of active pharmaceutical ingredients[39][42] Competition and Intellectual Property The company faces intense competition in the PAH market and relies on its IKT-001 patent portfolio, protected until 2033-2034 with potential extensions, while all federally funded compounds are subject to government march-in rights - Competitors in the PAH market include major pharmaceutical companies such as GlaxoSmithKline, Johnson & Johnson, United Therapeutics, Gilead Sciences, and Merck & Co[46] - The patent portfolio for IKT-001 includes issued U.S. patents expiring between 2033 and 2034, with potential extensions until 2045 for new methods of use[21][51] - The patent portfolio for the IkT-148x program includes seven issued U.S. patents expiring in 2036, with potential extensions to 2045[52] - All novel compounds developed with U.S. government funding are subject to federal march-in rights, granting the government certain non-exclusive license rights[50] Government Regulation The company's products are subject to extensive FDA regulation, pursuing the 505(b)(2) pathway for IKT-001 and potentially seeking Orphan Drug Designation for seven years of market exclusivity - The FDA drug approval process involves preclinical studies and a three-phase clinical trial process to establish safety and efficacy before an NDA submission[55][56][57][66] - The company is pursuing the 505(b)(2) regulatory pathway for IKT-001, allowing reliance on existing data from studies not conducted by the applicant, potentially expediting development[78] - The company may seek Orphan Drug Designation for products targeting rare diseases, which, if granted, provides seven years of market exclusivity upon approval[79][80] - Post-approval, the company must adhere to continuous FDA regulation, including cGMP for manufacturing, record-keeping, advertising restrictions, and adverse event reporting[81][83] Risk Factors The company faces substantial risks from its limited operating history, dependence on IKT-001, need for capital, clinical trial uncertainties, third-party reliance, competition, and intellectual property protection - The company is a clinical-stage entity with a limited operating history, no approved products, and significant net losses ($27.5 million in 2024), making future success difficult to predict[125][126][147] - Future operations are highly dependent on raising additional capital to fund clinical trials and product development; failure to do so could threaten long-term viability[125][129][151] - The business is highly dependent on the success of its lead candidate, IKT-001, which requires significant further development and regulatory approval[125][158] - The company relies on third-party contractors for manufacturing, including suppliers in China, and for conducting clinical trials, introducing risks related to supply chain, quality, and regulatory compliance[130][292][305] - Intellectual property protection is critical but uncertain, facing risks of patent challenges, failure to obtain patents, and government 'march-in' rights on federally funded technology[130][309][336] Unresolved Staff Comments The company reports that it has no unresolved staff comments from the SEC - None[410] Cybersecurity The company manages cybersecurity risk via an external IT vendor, employing a distributed data model and Board oversight, and has not experienced a material breach - The Board of Directors oversees the cybersecurity risk management program, reviewing mitigation plans and approving policies and budgets annually[413] - The company uses an external vendor for IT infrastructure management, employing a distributed data model to mitigate breach impact, with no single server storing all information[415][416] - The company states that cybersecurity threats have not materially affected, and are not reasonably likely to materially affect, its business, operations, or financial condition[412] Properties The company leases its corporate headquarters in Atlanta, Georgia, and additional office space in Lexington, Massachusetts, sufficient for its needs - The company leases office space in Atlanta, Georgia (corporate headquarters) and Lexington, Massachusetts[417] Legal Proceedings The company is not currently a party to any material litigation or legal proceedings - The company is not currently involved in any material legal proceedings[418] Mine Safety Disclosures This item is not applicable to the company - Not applicable[419] 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 "IKT" since December 2020, with no history or future plans for cash dividends - Common stock has been traded on the Nasdaq Capital Markets under the symbol "IKT" since December 23, 2020[421] - The company has never declared or paid cash dividends and does not anticipate doing so in the foreseeable future[423] Reserved This item is reserved Management's Discussion and Analysis of Financial Condition and Results of Operations Net loss increased to $27.5 million in FY2024 due to higher R&D and SG&A expenses, but a $110 million private placement boosted liquidity to $97.5 million, sufficient for the next twelve months Results of Operations (FY2024 vs. FY2023) | Metric | 2024 ($) | 2023 ($) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Grant Revenue | $0 | $260,501 | ($260,501) | (100.0%) | | Research & Development | ($17,210,548) | ($13,618,348) | ($3,592,200) | 26.4% | | Selling, General & Admin | ($11,378,520) | ($6,731,945) | ($4,646,575) | 69.0% | | Loss from Operations | ($28,589,068) | ($20,089,792) | ($8,499,276) | (42.3%) | | Net Loss | ($27,519,886) | ($19,028,883) | ($8,491,003) | (44.6%) | - The increase in R&D expenses was primarily due to a $4.5 million increase in stock-based compensation and a $1.7 million increase in expenses for the PAH program[450] - The increase in SG&A expenses was mainly driven by a $3.1 million increase in stock-based compensation and a $2.0 million increase in legal, consulting, and compliance fees[451] - As of December 31, 2024, the company had $97.5 million in cash, cash equivalents, and marketable securities and an accumulated deficit of $94.4 million. Management believes current cash is sufficient to fund operations for at least the next twelve months[453][454][459] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Inhibikase is not required to provide this disclosure - Disclosure is not required as the company qualifies as a smaller reporting company[479] Financial Statements and Supplementary Data Audited consolidated financial statements show total assets of $98.6 million in 2024, a net loss of $27.5 million, and increased cash from financing activities Consolidated Balance Sheet Data (as of Dec 31) | Account | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $56,490,579 | $9,165,179 | | Marketable securities | $41,052,949 | $4,086,873 | | Total current assets | $98,451,309 | $14,211,048 | | Total assets | $98,599,846 | $14,506,647 | | Liabilities & Equity | | | | Total current liabilities | $3,733,566 | $3,438,601 | | Total liabilities | $3,733,566 | $3,528,725 | | Accumulated deficit | ($94,420,611) | ($66,900,725) | | Total stockholders' equity | $94,866,280 | $10,977,922 | Consolidated Statement of Operations Data (Year Ended Dec 31) | Account | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Grant revenue | $0 | $260,501 | | Research and development | $17,210,548 | $13,618,348 | | Selling, general and administrative | $11,378,520 | $6,731,945 | | Loss from operations | ($28,589,068) | ($20,089,792) | | Net loss | ($27,519,886) | ($19,028,883) | | Net loss per share | ($1.16) | ($3.16) | Consolidated Statement of Cash Flows Data (Year Ended Dec 31) | Account | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | ($19,148,067) | ($18,085,043) | | Net cash (used in) provided by investing activities | ($37,004,201) | $11,656,666 | | Net cash provided by financing activities | $103,477,668 | $8,405,003 | | Net increase in cash and cash equivalents | $47,325,400 | $1,976,626 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[481] Controls and Procedures Management concluded the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2024, with no material changes reported - As of December 31, 2024, the principal executive and financial officers concluded the company's disclosure controls and procedures were effective[483] - Management concluded that as of December 31, 2024, the company's internal control over financial reporting was effective based on the COSO 2013 framework[484] - The annual report does not include an attestation report from the registered public accounting firm on internal controls, as the company is an emerging growth company under the JOBS Act[485] Other Information No directors or officers adopted or terminated a Rule 10b5-1 trading plan during the fourth quarter of 2024 - No directors or officers adopted or terminated a Rule 10b5-1 trading plan during the fourth quarter of 2024[487] Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to the company - Not applicable[488] PART III Directors, Executive Officers and Corporate Governance Information on directors, executive officers, and corporate governance will be provided in the definitive proxy statement for the 2025 Annual Meeting of Stockholders - Information is incorporated by reference from the definitive proxy statement for the 2025 Annual Meeting of Stockholders, to be filed within 120 days of the fiscal year-end[491] Executive Compensation Executive compensation information will be provided in the definitive proxy statement for the 2025 Annual Meeting of Stockholders - Information is incorporated by reference from the definitive proxy statement for the 2025 Annual Meeting of Stockholders[493] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Security ownership information for beneficial owners and management will be provided in the definitive proxy statement for the 2025 Annual Meeting of Stockholders - Information is incorporated by reference from the definitive proxy statement for the 2025 Annual Meeting of Stockholders[494] Certain Relationships and Related Transactions, and Director Independence Information on certain relationships, related transactions, and director independence will be provided in the definitive proxy statement for the 2025 Annual Meeting of Stockholders - Information is incorporated by reference from the definitive proxy statement for the 2025 Annual Meeting of Stockholders[495] Principal Accountant Fees and Services Principal accountant fees and services information will be provided in the definitive proxy statement for the 2025 Annual Meeting of Stockholders - Information is incorporated by reference from the definitive proxy statement for the 2025 Annual Meeting of Stockholders[496] PART IV Exhibits, Financial Statement Schedules This section indexes financial statements and exhibits filed with the Form 10-K, with schedules omitted due to non-applicability or inclusion elsewhere - This item lists the financial statements, which are indexed on page F-1, and provides an index of all exhibits filed with the report[628][629] Form 10-K Summary The company has not provided a summary for its Form 10-K - None[635]