HCW Biologics(HCWB) - 2025 Q1 - Quarterly Results

Overview and Business Highlights This section covers the CEO's strategic financing and business development initiatives, recent equity offerings, and progress in regaining Nasdaq compliance CEO Statement and Financing Strategy The CEO announced a $5.0 million equity offering to fund the HCW9302 Phase 1 trial and is intensifying business development for TRBC platform licensing, including HCW9206 - Closed a $5.0 million equity offering on May 15, 2025, with a single institutional investor in a difficult market[3] - The funding will support the initiation of a Phase 1 clinical trial for HCW9302 in an autoimmune disorder and advance the business development campaign for licensing Immune-Cell Engagers[3] - The company plans to increase business development efforts in the second half of 2025, focusing on licensing its portfolio of over 50 compounds, with HCW9206 being a key candidate for commercialization to improve CAR-T manufacturing[3] Business Development Transactions HCW Biologics delivered its technology report for the HCW11-006 license to WY Biotech, anticipating a $7.0 million upfront fee after due diligence - On May 13, 2025, the Company provided its technology report to WY Biotech for the exclusive worldwide license of HCW11-006, a preclinical drug from the TRBC platform[4] - The Company expects to recognize revenue for a $7.0 million upfront licensing fee after WY Biotech completes its 30-day due diligence[4] Financing Transactions The company completed a $5.0 million equity offering and regained partial Nasdaq compliance, with full compliance required by June 16, 2025 - On May 15, 2025, the company completed a $5.0 million offering of 671,140 units at a price of $7.45 per unit[5] - The exercise price of certain existing warrants to purchase up to 167,925 shares was reduced from $41.20 to $7.45 per share[6] - On May 13, 2025, the company regained compliance with Nasdaq's bid price, public float, and market value of publicly held shares requirements, with a deadline of June 16, 2025, to comply with all remaining Listing Rules[6] Clinical Development Results FDA cleared HCW9302 Phase 1 trial for alopecia areata, expected Q3 2025, while HCW9206 commercialization targets CAR-T manufacturing improvement - Received FDA clearance on January 28, 2025, for its IND to start a first-in-human Phase 1 trial of HCW9302 in patients with moderate-to-severe alopecia areata[9] - The multi-site, company-sponsored trial for HCW9302 is expected to be initiated in the third quarter of 2025[9] - The company is commercializing its clinical-stage molecule, HCW9206, which has shown potential to generate CAR-T cells with a stem cell-like memory phenotype, enhancing persistence and lowering manufacturing costs[9] First Quarter 2025 Financial Results Q1 2025 net loss improved to $2.2 million from $7.5 million in Q1 2024, driven by reduced net legal expenses despite lower revenues and increased G&A Q1 2025 vs Q1 2024 Financial Highlights | Financial Metric | Q1 2025 ($) | Q1 2024 ($) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenues | $5,065 | $1,126,712 | -$1,121,647 | -99.5% | | R&D Expenses | $1.5 million | $2.1 million | -$0.6 million | -30% | | G&A Expenses | $2.2 million | $1.6 million | +$0.6 million | +42% | | Legal Expenses, net | ($1.7 million) | $4.4 million | -$6.1 million | N/A | | Net Loss | $2.2 million | $7.5 million | -$5.3 million | -70.7% | - The decrease in R&D expenses by 30% was mainly due to a decline in manufacturing, material, and preclinical expenses[9] - The 42% increase in G&A expenses was primarily due to the absence of officer bonus waivers that occurred in Q1 2024 and accretion of a fixed bonus related to Secured Notes[9] - Net legal expenses were negative ($1.7 million) in Q1 2025 due to a $2.0 million insurance reimbursement, compared to $4.4 million in legal fees incurred in Q1 2024 for an arbitration case[13] Financial Guidance As of March 31, 2025, HCW Biologics concluded substantial doubt exists about its going concern ability for the next 12 months, necessitating additional funding - As of March 31, 2025, the Company concluded that substantial doubt exists regarding its ability to continue as a going concern for at least 12 months from the financial statement issuance date[11] - The company requires additional funding or financial support, as its current financing plan is not assured to be fully successful in mitigating the going concern risk[11] Financial Statements This section presents the unaudited statements of operations and condensed balance sheets for Q1 2025, detailing the company's financial performance and position Unaudited Statements of Operations Q1 2025 net loss was $2.2 million ($0.05 per share), a significant improvement from Q1 2024's $7.5 million loss, primarily due to decreased net legal expenses Unaudited Statements of Operations (For the Three Months Ended March 31) | | 2024 ($) | 2025 ($) | | :--- | :--- | :--- | | Revenues | $1,126,712 | $5,065 | | Cost of revenues | ($511,965) | ($4,052) | | Net revenues | $614,747 | $1,013 | | Research and development | $2,123,284 | $1,478,711 | | General and administrative | $1,566,092 | $2,227,597 | | Legal expenses, net | $4,419,034 | ($1,739,493) | | Total operating expenses | $8,108,410 | $1,966,815 | | Loss from operations | ($7,493,663) | ($1,965,802) | | Interest expense | — | ($255,822) | | Other income, net | $25,602 | $24,749 | | Net loss | ($7,468,061) | ($2,196,875) | | Net loss per share, basic and diluted | ($0.20) | ($0.05) | | Weighted average shares outstanding | 37,223,588 | 44,675,656 | Condensed Balance Sheets As of March 31, 2025, total assets were $26.3 million, liabilities $34.8 million, and stockholders' deficit $8.6 million, with cash decreasing to $1.1 million Condensed Balance Sheet Highlights | | Dec 31, 2024 ($) | Mar 31, 2025 (Unaudited) ($) | | :--- | :--- | :--- | | ASSETS | | | | Cash and cash equivalents | $4,674,572 | $1,107,613 | | Total current assets | $5,698,482 | $1,894,708 | | Total assets | $30,236,578 | $26,285,406 | | LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | Total current liabilities | $29,628,885 | $27,142,090 | | Total liabilities | $37,006,750 | $34,847,454 | | Total stockholders' deficit | ($6,770,172) | ($8,562,048) | About HCW Biologics HCW Biologics is a clinical-stage biopharmaceutical company developing immunotherapies for chronic inflammation-driven diseases using its TOBI™ and TRBC platforms - HCW Biologics is a clinical-stage biopharmaceutical company developing immunotherapies for diseases promoted by chronic inflammation, including cancer, autoimmune diseases, and neurodegenerative diseases[12] - The company's lead product candidate, HCW9302, was developed using its legacy TOBI™ platform[12] - A second drug discovery platform, TRBC, has been used to construct over 50 molecules and can create multiple classes of immunotherapeutics, including Immune Cell Stimulators, Checkpoint Inhibitors, and Multi-Specific Targeting Fusions[12] Forward Looking Statements This section outlines forward-looking statements subject to significant risks and uncertainties, including going concern status, future capital, and clinical trial success - The press release contains forward-looking statements made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995[14] - These statements are subject to inherent uncertainties and risks, and are based on assumptions that may not prove accurate[14] - Key risks include the company's ability to continue as a going concern, its cash runway, ability to license its molecules, initiation of clinical trials, and future capital-raising plans[14]